As a couple, do you talk a lot about money with your significant other? Is managing money as a household a breeze or a nightmare for the both of you? No matter if you’re the sole breadwinner or equal contributing party to the household income, the thought of managing your money through a joint or separate bank account must have crossed your minds.
According to the Prudential Relationship Index in 2017, they found that 37% of couples in Asia were affected by arguments regarding money. Now, that’s a lot of couples if you were to look at it closely. 37 couples out of a 100 (that’s 74 people out of 200, or almost 1/3 of all the couples!). The marriage counselor’s office will be having a field day accommodating all your appointments. But hey, we don’t need that. If money is the issue, you gotta tackle the root of the problem – which is the way you manage your money.
Of course, managing your finance as a couple has many facets to it. Today, we will be sharing our two cents on just one aspect – is it better for couples to have a joint or separate bank account?
First of all, most probably you already know what a joint bank account is. But in case you don’t, a joint bank account is pretty much like a regular savings account. Except – there are two people who have access to managing and withdrawing the money for payments etc. In many cases, a joint bank account is also known as a shared account.
So why exactly should you consider a joint bank account with your spouse?
When you are planning to spend the rest of your life with someone, chances are you would have set some relevant financial goals for the both of you. It can be for your dream holiday, getting your ideal home, or even saving funds for your future children.
Having both of you contributing to the shared account would also mean that your goals can be achieved much easier. Essentially, you are pooling resources from both parties instead of doing it alone.
In any case, consistency of commitment is necessary for achieving any desired financial goal. A shared account would allow couples to keep their spending habits in check. All your transaction history will be transparent to both parties and this prevents any misunderstanding.
If something doesn’t look right or it’s not working towards the common goal, hold a discussion to address the issue. By sweeping the underlying problem under the carpet would only jeopardize your progress and relationship.
Since both of you will have access to the pooled money in the shared account, in case if there are instances where either of you is unavailable, the other partner can still proceed with settling whatever bills or proceedings that are pending. This would ensure that all the necessary transactions are made on time and your records will be kept clean with the cooperation of both partners.
Even if you do decide to marry your soul mate, it is still a fact that sharing your financial details with each other is no easy feat. It takes a lot of trust and courage to open up to the other person about your spending habits and allowing them into your financial making decisions. This is especially true for ‘spender-type’ individuals. It may not be easy for them to admit that they have the tendency to overspend. This in return can sow discord between their ‘saver-type’ spouse and themselves due to their opposing beliefs and habits when it comes to money.
Therefore, by having a shared account and through open communication, couples are proactively signalling that the trust level between them is high. This will then continue to promote more trust towards each other because of the transparency in the marriage.
That being said, there are still couples who prefer not to have a joint bank account with each other. Here are some of the reasons why:
Although ideally, we would want our relationship to be perfect, sometimes life doesn’t work the way we want it to. In the event that a breakup or a divorce is the only option left, having an individual bank account instead would save each other a lot of time (and effort) in
arguing deciding who the money belongs to.
When you’re married, the definition of ‘privacy’ is sometimes blurred. It will be hard to establish what is considered ‘private’ and what should be shared as a couple, including money. Obviously, this is really up to the couple to decide for themselves. We’re not here to dictate what is right or wrong for you. At the end of the day, marriage is built on trust. And trust itself is earned by being open, truthful and vulnerable with each other.
If either partner due to whatever reasons were to get into a drastic situation of amounting a large sum of debt, all the money in the joint account might be drained just to cover the liability. The other half would lose everything that he/she has been pouring into the account because of another person’s mistake.
Nevertheless, having a shared account requires a full 100% commitment and trust from both parties. The benefits of having a joint bank account are only valid if couples are ready for the option. Hold frequent, open discussions to set expectations for each other before making any decisions. Plus, it helps to avoid any unnecessary arguments in the future.
Assuming that you and your partner are both ready for a joint bank account, there is always a third option:
Why not just get both a joint bank account and a separate bank account?
Not only you will be able to leverage the benefits of having a joint bank account; at the same time you would still keep your financial autonomy with this option.
If you are still unsure whether if you and your partner are truly ready for this, you can always seek professional advice from your local financial advisory. We are always available and ready to help.
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