One of the many questions couples have to answer during their relationship is “Should we use a joint bank account?” Most of the time you hear about joint accounts when a couple is married, but it’s also an option for couples living together who want to streamline their finances. It’s also an option for family members to have the peace of mind that someone has access to their funds if needed.
Whether you’re newly married or in a committed relationship (or helping out a family member), here are six pros and cons to having joint financial accounts with someone else.
- Access to funds when needed. This allows you to have a debit card or access to the account to withdraw funds whenever it’s necessary.
- Legal affairs. In the case that someone passes away, the joint can have access to the account immediately, versus having to get permission through a will or the legal system.
- Peace of mind. Being able to see what’s going in and out of an account can be a huge benefit for some. There’s no change of surprise expenses and it’ll be easier to keep track of finances.
- Money management. As a joint on an account, it’s important to remember that if anything happens with the funds, it also falls on you. For example, if you didn’t agree to pay your spouse’s student loan debt, but it starts coming out of a joint account, that means you’re also responsible for it.
- Loss of financial freedom. Some couples might feel like a piece of their independence is gone when they merge their accounts.
- Separation issues. A joint account can cause issues down the road if the couple ever decides to split. Each individual on the account has the opportunity to withdraw money and close accounts without the consent of the other person, making it difficult to separate.
At the end of the day, it’s up to you and your relationships to decide if a joint account is the right thing to do. Do what makes sense for your budget, goals, and overall happiness.