Should You Open a Joint Checking Account?

Joint checking account

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There are good arguments for both sides of this debate, but ultimately, it depends on the type of relationship you have and the amount of risk you are comfortable with. The No. 1 reason couples fight is over money, according to reliable sources on the subject. So embark on the discussion with the expectation that there will be conflict.

When couples are legally married, most often any assets acquired during the marriage belong to both spouses and would be split equally in the case of divorce. So if you have a secret account that your spouse doesn’t know about, you’re good until they either find out or one of you files for divorce. In the case of divorce, you are legally obligated to disclose all your assets — even the hidden ones — or face penalties.

If you have a prenuptial agreement, however, this protects any assets you had going in to the marriage.

Joint Checking Account = Free Money?

Even though you are not allowed to hide money from your spouse in cases of divorce, what about when you stay married? Some fiscally responsible halves of couples are concerned that whatever money goes into a joint checking account, their spouse will feel compelled to spend.

In this instance, a separate account doesn’t necessarily have to be secret, but it can be in your name only and you can explain to your spouse that you are saving money in it for an emergency. This idea will not sit well with everyone, but it may be the only way to keep your other half from spending all the money.

Most experts agree it is best in a committed relationship to have a mine, yours and ours. This way, you avoid the appearance of not trusting your spouse, even if you don’t. Each of you agrees beforehand to put a certain amount, or a percentage of your paycheck into a joint checking account to pay bills. You also may want to open a joint savings account to save for purchases like a house, car or vacation.

But what if you aren’t married? What if you just live together?

In that case, you must tread more carefully. No laws protect unmarried couples’ assets. If you move into your boyfriend or girlfriend’s house and pay half the mortgage for five years and then you split up, you have nothing but your boxes out on the curb and they have equity in their home.

Joint Checking Accounts Serve Multiple Purposes

A joint checking account is useful because it allows you to track where your money is going and work together as a couple to budget. For instance, if you each have a debit card, you may notice at the end of a month that one of you has spent $100 on coffee and lunches out. This can be an eye-opener.

But what if the spender thinks $100 a month on prepared snacks is no big deal, but the one who packs their lunch every day is annoyed? This is when communication and negotiating skills take center stage. If one of you won’t budge, or one of you agrees wholeheartedly to change their spending habits but in fact continues as if no discussion had taken place, problems can ensue.

Privacy Concerns with Joint Checking Accounts

Also, what if it’s not coffee the spouse is buying, but lingerie or flowers that the other spouse never sees? You probably wouldn’t want to avoid opening a joint checking account in order to preserve the ability to commit indiscretions, but you may want privacy yourself.

What if you quit smoking but sometimes break down and buy a pack of Marlboros? Showering and using mouthwash may not be enough to hide your secret if you use your debit card. What if your spouse shames you for buying lottery tickets or going to McDonald’s when you both promised to cut out junk food and get healthy?

Joint checking account
Maybe keep some cash on hand for purchases like this.

Steep Fees for Bounced Checks

Another issue would be the possibility of unaccountability or carelessness with a joint checking account. Most people have automatic deductions set up to pay bills like the rent or mortgage, electric bill, phone bill, etc. If one spouse writes a check for something to a vendor that doesn’t take credit cards without considering when the automatic deductions come out of the joint checking account, they could cause some checks to bounce.

Another potential problem is withdrawing money from the ATM. Taking even $40 could cause a check to bounce. If the scheduled automatic payment is for a lot of money — say $2,000 for the rent or mortgage — and you take out $40 and leave a balance of $1,990, your check will be returned.

Today, bouncing a check could cost you $60 or more — $30 to the bank and another $30 to the merchant. Even one of these a month is enough to test a spouse’s good will.

In a more serious scenario, if one spouse has debts that go to collection, their assets could be seized, including any money in your joint checking account.

Most people don’t keep huge amounts of money in their checking account because the interest is even lower than it is on a savings account. But allowing your average daily balance to fall below your bank’s minimum can cost you in fees.

So how can you find the best joint savings accounts? Time’s Money website did a roundup of banks that charge little to no fees for minimum balances and offer other perks for people without a lot of extra funds on hand. These may be your best bets for opening a joint checking account.

For other tips on making money and saving money, check out some of our blog posts.

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