A joint checking account is an account owned by two or more people. More often than not, joint accounts are usually opened by couples. The procedure for opening a joint account is quite straightforward and is very similar to opening a single account, the only difference is that the account will be owned by two individuals.
While the process of opening one is easy, the decision to open one is a little more complicated. There are several things that couples need to consider before deciding to share a bank account. These considerations include the advantages and disadvantages associated with a joint checking account. Listed below are some of the benefits and drawbacks that couples may experience while using a joint account. These can help advise your decision on whether or not this account type is the way to go.
It is easy and convenient
One of the biggest benefits of a joint checking account is that it makes it very easy for couples to keep a close eye on their finances. With everything in one place, you and your partner can easily monitor what’s coming in and going out, and in so doing, take better control of your cash flow. It also makes it easier to budget for things you need.
Division of Labor
In many relationships, one spouse is better at sorting bills and filing taxes than the other. Having access to their money and records means that these spouses can pay the bills on time, and without having to wait for the other partner.
In situations where spouses agree that one person works while the other focuses on taking care of the children, things can feel a little lopsided because one spouse makes all the money. However, with a joint account, they can both have access to the funds, even if the input is unequal. That can help bring a sense of balance to the financial dynamic in the relationship.
Having equal access to the money also means that either spouse can withdraw money without the input or knowledge of the other spouse. This behavior can lead to disagreements and quarrels down the road. That’s why couples need to agree on a procedure for withdrawing money, as well as how to handle disagreements when they arise.
With a joint account, both partners are liable to the debts and obligations that one partner incurs. When couples have a separate bank account, they can handle obligations like credit card debt and phone bills without having to saddle the other partner with the responsibility. With a joint account, however, both partners will invariably contribute to the payment, even if only one person is responsible for the debts. This can lead to resentment and grudges among couples. Here too, a comprehensive plan for handling joint and individual bills should be agreed upon.
Joint financial goals
Even though a joint checking account has pros and cons, the decision of whether or not to open one depends on the goals of the couples. Sometimes, a joint account is the most effective way to meet financial goals. Pooling money together can help partners compensate for each other’s weaknesses and achieve their personal and family objectives much faster.
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