Should you have a joint bank account?

There are pros and cons to joint bank accounts: they can be convenient but there are some things you should know before you open one with your life partner. Read on for some joint bank accounts essentials.

Why should you open a joint back account? It’s convenient, and allows you and the person you open it with to share bills and expenses. Both of you can pay in a proportion of your income each month to cover expenditure. You can build up some money together in your joint account for months like December where expenses are likely to be higher, and even open a joint savings account to help you provide a financial cushion for emergencies or save up for holidays.

While opening and using a joint accounts means sharing finances with someone, as long as you keep your own account too it also means that the rest of the money you earn is your own to spend as you want. Joint expenditure is visible to both of you, and anything you pay from your own account remains private, the best of both worlds.

Banks make it easy for you to open a joint bank account, and will need proof of ID for both of you. Should you still use cheques, you can choose whether a cheque requires one or both of you to sign.

What else should you take into account when thinking about opening a joint back account? Well, ask yourself if you really need an overdraft. With a joint account either one of you can spend the money in there, and use the overdraft facility. If you trust your partner and know they are good with money you may want an overdraft facility for emergencies. If, however, you have different attitudes to money, one of you watching the pennies while the other is happy to go overdrawn, avoid conflict and say no to the overdraft when you open the account. If all goes well as you decie that you need one down the line it is simple to approach your bank. If you do have any overdraft, you are jointly liable for repaying the debt. Should your partner be unable or unwilling to make repayments, you will be responsible for repaying the full amount to the bank. And do bear in mind that if your partner has a poor credit score, your credit score will become associated with theirs when you open a joint account (and when you share an address) which may affect your score.

The next thing to take into account applies to both bank accounts and good relationships. Communcate well! Build in time each month to review your expenditure together. Use this time to look at unusual expenses for the month ahead and review what you spent in the last month. Don’t leave it to one person to monitor the account as that can lead to resentment. Use a spreadsheet or app to monitor what is going ut and coming in. Some banks will send you notifications if your bank balance falls between a certain amount.

So, is a joint account for you? It certainly can be convenient and a good way to work towards shared goals and pay for monthly expenses with your life partner.

This article refers to joint bank accounts which you might hold with a life partner. A joint personal account such as this is different to a business bank account which you might hold with both yourself and a business partner as signatories. If you are unsure, talk to your bank and accountant before opening an account to make sure you have the right account for you.

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