By Charlene Oldham
Many couples claim to live by the axiom of, “What’s mine is yours and what’s yours is mine.”
Opening a joint bank account represents one way to put that into practice. With a joint account, both partners have access to the funds and can make deposits and withdrawals. Both are also liable for bounced checks, overdraft fees or any other charges and expenses associated with the account.
Sometimes having a joint account makes sense for couples, since covering shared expenses is easier. And, for couples on the same banking and budgetary page, a joint checking account can help build trust, accountability and bank balances toward mutual monetary goals. But there are cases when opening a joint account can be a bad idea.
YOU AREN’T MARRIED
“I hate to sound old fashioned, but there are legal ramifications beyond the warm fuzziness of sharing your names on checks.
If you’re not married, and this is the way you’re showing a commitment to each other, reconsider the show of affection,” said April Masini, an author and relationship expert at AskApril.com. “Jewelry is a nice gesture that isn’t going to require two signatures to close the account. So are shared goldfish. Or a fern.”
While Masini’s tone is playful, her advice is anything but. Married couples can rely on the legal system to untangle their finances in the event of a divorce, but unmarried partners usually don’t have the same protections.
Relying on candid conversations, and even a contract, if you elect to open a joint account without being married is the best you can do.
The decision to open a joint checking account should come only after numerous discussions of your money management techniques and the concerns and details that might come with a combined account. Then, according to Money Under 30, couples should create a simple contract that outlines which accounts and investments belong to a particular partner and which are to be divided equally.