Pros and Cons of Joint Checking Accounts for Couples
Maybe you’re recently married or just at the “moving in together” stage. Whether you’re exchanging wedding rings or key rings, your lives are now merged — but should your finances be? Joint checking accounts for couples may or may not suit your relationship and future.
Banking at a credit union gives you and your partner choices about mingling your money or keeping it apart. Start by discussing the pros and cons of joint checking accounts, then find a credit union near you using our handy Credit Union Locator Tool to get started.
Need some talking points for the discussion? Here is a breakdown of the key pros and cons of joint checking accounts.
What is a Joint Checking Account?
A joint checking account has more than one owner. Any account co-owner can deposit, withdraw, and use debit cards or checks tied to the account. There’s no differentiation between who deposited what money and who takes it out; it’s a collective pool.
Joint checking accounts for couples can help both partners manage their money responsibly. By nature, each person in the relationship and named on the account must trust that the other person will behave ethically and fairly in using any money in the account at any given time.
Financial management in relationships can be critical to building strong bonds of trust and commitment. However, if a joint checking account is abused, it can set a relationship up for failure. Here are the pros and cons of joint checking accounts.
Pros of Joint Checking Accounts
Plenty of people see being in a committed relationship as an automatic blurring of the lines between “yours” and “mine.” Sharing finances can go hand in hand with sharing love, intimacy, and trust. Here are some of the biggest benefits of having a joint checking account:
Shared financial responsibility
Pooling resources like income can make it easier to maintain an equal (or equitable) contribution to household expenses. Having a joint checking account makes it easier for each partner to add money according to their ability and understanding with the other half of the couple.
Having a single, easily accessible account also leads to simplified bill payments. Paying your rent, mortgage, utilities, and other everyday expenses is easier when you have a joint account where both parties contribute.
Enhanced financial transparency
With access to a shared financial overview, it’s easier to stay accountable to each other and stay on track to achieve short- and long-term financial goals. You can use mobile banking alerts and online statements to stay informed of your account status.
Better communication about spending can help reduce arguments about money. It's been estimated that 70% of married couples argue about money more than any other topic. Joint checking accounts for couples can drive transparency over spending and lead to honest, open discussions about budgeting.
Potential for increased savings
Mutual budgeting and goal-setting are also more straightforward with a joint checking account. When pooling resources for more significant financial goals, you can use online statements and mobile banking alerts to keep apprised of each other’s spending. Don’t forget to pay off your credit card bills monthly to avoid high-interest charges.
If both partners contribute their paychecks directly into a joint account, you can agree on a specific amount to be transferred each month to a savings account. By automating these deposits, you can quickly grow your savings to fund a honeymoon, a down payment on a home or auto loan, or even children’s college accounts.
Cons of Joint Checking Accounts
Of course, it’s not always that easy. Some couples come into a new partnership with baggage from an old one, a complicated financial situation, or simply a fierce sense of independence. Joint checking accounts aren’t for every couple. Here are a few main drawbacks of a joint checking account:
Loss of financial independence
Most couples commit to some shared financial goals, but that doesn’t eliminate their individual ones. A joint checking account can make it more difficult to maintain individual financial goals, like paying down personal debt.
Limited personal spending discretion can also make it harder for one or both partners to feel comfortable spending money, especially if a purchase is solely for themselves. If partners are constantly monitoring and questioning each other about every withdrawal, resentment can build quickly.
Risk of disagreements and conflicts
A joint checking account drives transparency, which means your partner can see right through you. An estimated 69% of cohabiting or married couples have argued about spending habits in the past year — a red flag when it comes to financial management. Specifically:
- 36% disagree on what constitutes a need versus a want.
- 28% can't find common ground on spending priorities.
- 22% get into an argument about purchases made without a prior discussion.
Accountability and trust issues can start piling up if you’re using a joint account but failing to communicate and work together toward shared financial goals.
Legal and financial implications
When you have a joint checking account, you may also be opening yourself up to shared liability for debts. Remember, all money in a joint account is considered to belong simultaneously to all account owners. If one person comes into the relationship with a bunch of debt, this can cause issues if money is automatically debited from the account.
Additionally, you might be in for a world of hurt in case of separation or divorce. If a split is acrimonious, it’s not uncommon for one partner to “clean out” a joint account as they exit the failing relationship. Since both of you have legal access to all the money in such an account, you’ll likely have no recourse if they choose this course.
Considerations for Success with Joint Checking
Based on these pros and cons of joint checking accounts, this option is best only for those couples who can implement the following regarding relationship finances:
Open and honest communication
Talk about money early on, and be honest about outstanding debt. It’s better to know exactly where everyone stands before pooling all resources, especially if automated debt payments, child support deductions, or other complications are waiting in the wings.
Establish shared financial goals
What will be important in the short-term and long-term for you as a couple? Maybe it’s saving for a car, a wedding, or a honeymoon, or perhaps it’s planning for your own home. It’s also never too soon to think about retirement, so make sure you are both on the same page on spending and saving.
Maintain individual financial autonomy
Being part of a couple doesn’t mean you lose yourself. Tackle the complex discussions, like what happens if you break up or one of you is in an accident. How will financial autonomy be maintained, especially if one of you trades working and career opportunities to stay at home?
Alternatives to Joint Checking Accounts
Not sure if a joint checking account is the best option for you and your partner? Don’t worry! You’ve got options.
Maintain separate accounts
One option is to keep your money strictly separate. Each of you maintains your own checking account and figure out how to split the bills appropriately. For example, one person might pay the rent and utilities, and the other would be responsible for groceries, internet, and cable subscriptions.
Other than that, your money remains yours, and theirs remains theirs. This might be the best option if you’re both independent and prefer to handle your own finances. It’s also a solid choice if you have separate debt that each of you wants or needs to handle on your own.
Take a hybrid approach
You can also use a hybrid approach to your banking. Nobody said that if you have a joint account, that has to be where all of your money is stored. You and your partner might decide to get a joint account but also contribute to and maintain individual checking accounts.
This allows mutual bills to be paid from a single account to which you both contribute regularly. The rest of your money remains under your management, so you can pay off debt, enjoy the freedom of spending, and save for the future on individual terms.
Further Resources on Joint Checking Accounts for Couples
There are a few other considerations regarding joint checking accounts for couples. Make sure you’re not ignoring these common risks:
- Protect your Social Security income. For the purposes of SSI, it’s assumed that half or all of the money in a joint account belongs to you. This can affect your payments unless you can prove otherwise.
- Ensure all your deposits are insured. The National Credit Union Administration provides insurance up to $250,000 across all your member accounts. If you have a joint account, it counts toward that limit.
- Create a joint spending plan. Most couples can successfully avoid money arguments simply by developing a spending plan together and sticking to it. A financial management course designed for couples can help.
Is Your Relationship Ready for a Joint Checking Account?
Whether you're in it until death do you part or are seeing where things go, a joint checking account is a big step. After considering all the pros and cons and having serious discussions with your partner, you'll have to decide if the joint approach fits you. Once you've resolved the best way to manage your money as a team, drop into your local credit union to "make things official."
