The Pros and Cons of a Joint Bank Account
“Should we have a joint banking account or separate banking accounts?” It’s a major question that most newlyweds and co-habiting couples will eventually have to answer. Here you’ll find the pros and cons of a joint bank account. I hope the information helps you decide the best option for your family.
The Pros of a Joint Bank Account
- It encourages regular communication about finances.
- All the money is in one spot, so managing your finances is easier.
- With a larger sum of money in your savings account, you can earn interest money faster.
- You would still have access to the money if you or your spouse were to pass away.
- You get an accountability partner on your spending and vice versa.
- You’re more likely to work together to meet financial goals.
- All money is “our” money.
- No conflict or administrative work of splitting up the bills.
- There are no secrets with a joint bank account.
The Cons of a Joint Bank Account
- If you don’t inform the other person of a deposit or withdrawal, it could cause tension and confusion.
- It could put the responsibility of money management on one person, rather than splitting responsibility equally.
- A lack of communication about spending could result in a negative balance or a bounced check.
- If there are problems in the relationship, one partner could clear out the account without the other knowing.
- You might feel like you can’t spend a dime without telling the other person.
- Updating separate checkbook ledgers can be a pain if you use checks or debit cards often.
- You must pick one bank. If both people are well-established with their own banks, making the decision to move to another can be difficult.
If going to a full-out joint bank account doesn’t sound ideal, there are some options that are comparable: the “yours, mine and ours” and the “yours and mine” accounts. Let’s take a quick glance at both.
Yours, Mine and Ours
This type of account means that each person has a separate account, and then there is an additional joint account. This is for people who like the idea of separate accounts, and usually use the joint account to pay the bills.
Yours and Mine
With this type of account, each person has their own bank account. There is no additional joint account. Usually, the bills will be divided between both parties, or one party will pay the bills.
Which will you choose?
No two people are the same. That means that you will need to communicate with the person you might be sharing a joint bank account with about the pros and cons. Then, you can decide which option is best for you both.
Do you know of any more pros or cons of a joint banking account? Do you have experience with any of the other types of banking accounts mentioned? Let us know by commenting below!