Tips for Opening a Joint Bank Account

Even though love should be more important than money, many break-ups happen because of financial disagreements. You should always be on the same side as your partner – similar financial values, saving ideas, and budgeting. However, even if that is not the case, try to compromise. The best way to do so is to create a joint bank account, and these five tips will help you learn how to do that.

Talk to your partner and know their financial values

Even when you know your partner very well (which is a normal thing, obviously), you should still talk to them about financial values and affinities. According to Mozo’s report, four out of five people said that spending money on things such as alcohol, gambling, or smoking could be relationship enders.

That is the most significant reason to talk to your partner before opening a joint account. Also, if your partner is more financially savvy than you, avoid financial arguments, and give them the leading position and vice versa.

Set saving goals and budget together

After the initial conversation, it is essential to identify your mutual financial goals, and after that, to determine the budget. Hence, your financial goals should be at least similar (the same is ideal). You have to agree on expenses and costs because it is impossible to make an agreement otherwise.

The next step is setting up the budget. Agree on how much you will both contribute to your mutual saving goals and try to stick to it. Also, you should talk about using financial applications and budgeting tools such as MyFi since they could be beneficial for your overall finance. Finally, don’t bother if you can’t split the costs evenly. Go 55/45 or 60/40, depending on your income.

Do thorough research

Once you agree on mutual goals and a budget, you should start thinking about where to open your joint bank account. The first thing both of you should do is research and compare the benefits and limitations of all the options you have in your country or state. However, there are two basic kinds of joint accounts.

First, where both parties must sign. This option is a popular choice for business partners or flatmates for paying the rent. The second option allows either person to withdraw funds at any time without the permission of the other person. It is a good option for married couples since it is more flexible.

Understand all risks and behave responsibly

When it comes to finances, risks are always involved. Therefore, it is essential to consider them before opening the account. First of all, there is a potential loss of privacy since everyone who has the name on that account can see complete transaction history.

To prevent some unpleasant situations, each of you should have individual accounts at the same time. Use individual accounts for personal spendings, and the joint account for mutual goals and savings. Also, having a stash on your own account could be helpful if something unexpected occurs. Unfortunately, even the most beautiful relationships might end, and you don’t want to find yourself in a situation where you can’t cover rent or any other expense.

Finally, when you make your joint account, don’t forget to read the terms and conditions carefully. That’s the only way to be fully aware of all risks, as well as the potential conveniences you might not have been aware of before.

Remember, love is always more important, and it shouldn’t matter if you can’t contribute evenly. You shouldn’t feel bad if you have less income than your partner. The only essential thing is that you can agree easily on mutual financial goals and budgeting.