So you’re ready to take your relationship to the next level. But have you thought about how you’ll manage your financial responsibilities as a couple? Whether you’re just moving in together or you’ve been married for ages, a joint account can help you streamline your finances at any stage of the game. So, if you’re wondering whether or not to take the plunge and open a joint bank account together, here are some advantages to consider.
Joint accounts are good for your mental health
Money is the number one reason couples fight and takes the number 3 spot for biggest relationship stressor. Based on that, you might think sharing a chequing account will only make things worse. But actually, the opposite is true. Several studies have shown that well over half the couples who share a joint bank account feel happier and more secure in their relationships. Couples who bank together, stay together.
Joint accounts are cost-effective
No one likes paying fees, but banks haven’t gotten the hint. There’s nothing more annoying than having to pay transactions fees to use your own money. By sharing an account, your combined cash may be enough to meet the minimum balance requirements to waive pesky fees. That immediately puts more money back in your shared wallet so you can have more date nights.
Joint chequing accounts are easier to manage
Tracking income, expenses, spending habits, and savings goals is already a tedious task. Multiply that over a few different bank accounts, and you’re each spending a lot of time balancing the chequebook. A joint account streamlines your accounting activities by keeping it all in one place. Instead of wasting time budgeting, you’ll have more time for other things like arguing over how to load the dishwasher.
Having a joint account where you pool your income and share expenses can actually help you get a mortgage. The bank will already have access to a lot of financial information they need for your application like your combined total income and payment obligations. Some banks also require couples who buy a house together to open a joint account for mortgage payments.
If you’re a fan of zero-based budgeting, a type of budgeting that gives every penny a purpose, a joint account is the perfect way to stay on track. Once you combine your finances into one account and categorize your dollars, you’ll quickly uncover spending pitfalls and savings opportunities. This will help the two of you reach joint savings goals a lot faster. Teamwork makes the dream work.
When you open a joint account you’ll both get debit cards and online banking access. Almost every bank in Canada has a banking app. With all the money going into and out of one account, coupled with instant real-time access, you are far less likely to get hit with any major surprises. Since you can see each other’s spending habits, the lines of communication remain open. This makes it easier to establish expectations, responsibilities and create a plan you can both stick to. Not to mention the built-in accountability.
Having a joint account can help eliminate stress
It’s not very often that two people make the exact same amount of money and can share everything 50/50. Pooling your resources ensures everyone is contributing their fair share according to what they make. It’s not really cool for one person to pay half of everything when their income is only a fraction of their partners. Joint accounts can help eliminate points of contention by ensuring one person isn’t giving up disproportionately more than the other.
Joint accounts give you flexibility
Flexibility is a good thing when it comes to your finances. They help you retain some financial independence but let you share expenses quickly and easily. It’s not a zero-sum situation. Each person can link their personal account to the joint account. This allows you to quickly and easily transfer money in and out of the shared account while maintaining privacy and independence with individual accounts. So yes, you can still plan surprises for each other.
Stay out of debt
Not only are you more likely to maintain a high enough minimum balance to waive fees, but there’s another side to that coin. A joint account with pooled funds also means you are less likely to dip into your overdraft. Thus avoiding debt, overdraft fees, and ensuring your bills are always paid on time. Better yet, never missing a bill payment from an account that always has money is likely to boost your credit score as well!
Joint accounts help with emergencies
In the event one of you passes away, your partner still has access to the money in the account. A sudden death is already traumatic, but there can be added distress when it comes to finances. It is common practice for banks to freeze accounts and other assets upon notification of a client’s passing. This is extremely problematic for the surviving partner to cover costs of living and can be especially upsetting if there are children to care for. Most joint accounts are opened with a “right of survivorship” clause, ensuring the other account holder will not be frozen out of the account if one of you passes away.
Joint accounts are convenient
If you have a long-distance relationship, or maybe you travel for work, a joint account makes communicating with the bank a heck of a lot easier. If any issues arise while one partner is away, the other can discuss the details with the bank or make needed changes to the account without the need for the other person’s authorization or signature. Further to that, the same is true in the case of a medical emergency, or any unforeseen circumstance, that would prevent one person from being physically present to authorize access or make modifications.
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