subject: The Basics of Joint Savings Accounts [print this page] The Basics of Joint Savings Accounts The Basics of Joint Savings Accounts
Marriage is at its most fundamental a sharing of life. We agree to live as one when we take our vows. In the modern world that often means the merging of both assets as well as bills. Many couples struggle over how to share their assets. Most couples eventually decide to open at least one joint account. In fact, this is one of the most common markers of marriage in the modern world. However, joint accounts are not always the best idea. Here are a few things to consider.
A joint savings account should only be opened if the relationship is extremely stable. A new marriage is of course always stable on the surface, but these days more and more unmarried couples are deciding to merge their finances before they are joined in matrimony. This is almost always a bad idea unless the relationship is very stable and both plan on being with the other forever. A joint account can make everyday life a little more convenient, but if things go bad the account can be a major pain to both parties.
Often one partner will drain the account leaving the other with nothing. With this in mind, there need to be provisions on the account that large withdrawals can only be made with the consent of both parties. Though no one likes to consider a breakup, the truth is that there is more of a chance to split up than to stay together.
Once you open a joint account, you must ensure that you keep each other informed as to the state of the account. Many couples get into financial trouble simply because they don't communicate. It's a good idea to maintain a single register that is updated daily so that each person knows exactly how much is in the account.
When it comes to account access, there are several options available. The two basic forms are "either" and "both." With the either option, both sides can make transactions separate from the other. Under the both option, both parties must sign for the transaction. Though the both option suffers in convenience, it is much more secure should things go wrong.
Before opening the account, the couple should have a good conversation about the account. They should discuss exactly how the account will be used as well as how and how much money will be deposited. They should also discuss how they will track the account and make sure they are on the same sheet of music. Problems can arise when the couple does not share common financial habits. It may happen that one party will be responsible for tracking the account, but the other person has to agree to inform the record keeper of any transactions they make.
Joint bank accounts exist because of their convenience, but they can also be a burden if things aren't managed carefully. Both parties need to have clear expectations about how the account will be used and funded. As long as there is respect and responsibility, a joint account can be a good step in a relationship.
