November 14, 2007, 7:00 am

Did You Say Joint Account?

by: The Financial Blogger    Category: Personal Finance
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I remember when I was 20, I registered for a student exchange in Europe. I always wanted to travel and my university was giving me this opportunity. It did not take much time to make my decision even considering the fact that my girlfriend was living with me in my parents’ basement. Since she could not come with me, I thought it would be easier if she could pay my bills while I am away. I did not want to carry much cash and I thought that using my credit cards was the best option. married
The big surprise
Back then, we did not have a joint bank account. So in order to make things easier for everybody, I went to my branch with my girlfriend in order to grant her full access to my account. The teller first starred at me, completely stoned by my request.I would like to grant full access of my bank account to my girlfriend, I repeated. I was already starting to get annoyed. The teller turned back and picked-up some forms. Then, she came back and sat down with us.

– Are you sure you want to fill in this form? She asked with a motherly tone.

– Yes, I am. That’s it, now I was really annoyed!

– But do you understand what it means? Do you really understand that the women besides you will be able to operate your bank account as it was hers? She insisted.

– Well that’s the whole plan! I then grabbed the form and sign it before she could take it away from me.

The concept

Being a banker myself, I now understand what was her motivation to outline the risk of having a co-applicant on a bank account or any other banking products. Technically, you should never trust anyone else but you when it comes down to finance. Technically. It is a fact that anyone who has access to your accounts could withdraw anytime they want and the bank would not be able to do anything. While I do not believe that personal finance should be personal, I also do not believe into separate bank accounts.

The team factor

I basically based myself on a very simple premise: when you are living with another person for a reasonable amount of time and you consider this person as being your serious boyfriend/girlfriend; you are then making a financial team. At this point, both of you are contributing to grow your assets and you might even plan on buying a property in a near future. If you can not trust your financial team mates enough to share your bank account, there is one really important question you should ask yourself: Do I really want to spend the rest of my life with this person? If the answer is yes, well do not waste your time and sign up for a joint account right now! If the answer is no, well you are completely wasting your time so you are better off reconsidering the choice of your partner.

Major objections

I can establish two major objections why two individuals would not share their bank accounts. The first one is the fear of being betrayed and left with nothing. I do not have much to say about this as it absolutely does not correspond to my perception of a relationship. The very first day I think by wife would steal money away from me or would cheat on me, I will not be with my wife anymore. The base of a relationship is trust. If you can not trust the person you are sharing your life with, you must find out why and clarify the situation.

The second objections is more rational. There are some advantages to have more than one bank account. As an example, if one spouse is a higher income and his tax on a higher marginal tax rate, it would make more sense that he pays from his own bank account for tax deductible expenses (such as an investment loan). On the other side, the spouse with the lower income is better off using his bank account to invest money into an investment account or earn interest on it.

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Comments

It drives me crazy when i hear a married couple or people in a serious relations living together talk about their money as “my money and your money”, and of course they each have their own accounts. I have friends who always say the other is spending too much on something, but its ok because it “his or her” money now mine. What? when your together I think the money should be pooled together, then you both set your goals about what you want to do with the money. You make a budget for what you can spend on frivilous things. When you save, you are both saving together, not “you save $50/mo in your act and I’ll $50/mo in mine”, how the heck does that work? Have one savings acount again that you pool you money into together. Having so many seperate accounts is also a nightmare when it comes time to organize everything.

If you can’t trust your partner not to “steal” all you money in a joint account, then why are you with this person in the first place? Money is a tool we use everyday to live our lives and plan for the future, it is something that you do together, not seperately.

Just my opinion…

by: The Financial Blogger | November 14th, 2007 (9:14 pm)

Stefan, I completely agree with you.
When I was young, I used to work in a Dollar Store. Once, a couple in the 40’s come to pay. The husband is paying the bill ($8 or so) and tell his wife ” you owe me $4″. I watch them leaving the store to get in their car… a brand new Mercedes…

While my husband and I do share accounts, we also give ourselves a cash allowance each pay period to be spent however we like. If we go out to dinner, we split the bill. It feels like we’re dating again. 🙂

So I’m sure, somewhere, someone has heard me say, “I owe you $20”. But we’re definitely not getting into a brand new Mercedes! 🙂

Good advice. I’ve recently found out my husband has been getting cash back from purchases made using our joint account for the past three years. As he never has money, I’d pay bills from my individual account to bridge the gap. As I’ve been trying to fill in the huge financial hole he had dug for himself, I’ve repeatedly found out he’s been taking out high interest loans and getting hidden credit cards and running them up. I’m exhausted from this and at the end of my rope. I don’t see any future for us and will probably file for divorce next month.