Should You and Your Partner Open a Joint Checking Account?
Ramon Johnson is the gay lifestyle guide at About: Gay Life, a New York Times Company. The commentary, advice, and resources Ramon provides outlines the essentials of what it means to be gay and “how to live a better gay life.” These are his words…
Question: Should You and Your Partner Open a Joint Checking Account?
Financial management can make or break the strongest of gay relationships. Each couple is different, but practical money management decisions must be made in order to maintain the fabric of a relationship. Your partnership may not be centered around finances, but money does have the power to destroy a strong bond. Should you and your boyfriend open a joint checking account?
Answer: It’s not necessary for you and your boyfriend to share a joint account, even if you share all of the bills.
Opening a joint account and sharing finances may seem like a good idea at first, but you must consider each others’ spending habits, outstanding bills and loans, incomes, investment portfolios, future financial goals and debts.
According to relationship expert Dr. Phil McGraw, “Joint accounts are a bad idea, especially if you’re on a budget. For a joint account to work, both people have to be highly responsible with their finances. Very few people have the ability to be that financially disciplined.”
Sharing a joint account can also bring feelings of resentment when one partner is contributing more than the other or a loss of autonomy when one partner’s earnings are being shared.
Be candid about money matter with your partner and consider these financial sharing options:
1. Maintain separate accounts.
Divide up your household bills then come to a mutual agreement as to who is responsible for which bill. Each partner should pay their agreed upon bill from their separate accounts. This is the safest method should the relationship go sour. Take each others’ income and earning potential into consideration and be wary of any potential resentment. More than likely one of you will be contributing more than the other. Maintaining separate accounts will also allow each of you to keep some money for yourself.
2. Open a joint account just for bills.
Another option is to maintain individual accounts and open a joint account funded just for bills. Don’t deposit arbitrary amounts into this joint account: Fund the account based on the outstanding balances of your respective bills. This will help keep the accounting clean and your expectations clear.
3. Open a joint savings account.
Maintaining a joint savings account is quite risky. Who gets what portion if you should happen to break up? Also, who has primary control over the account? If you do decide to save together, be clear about your future goals and state in writing what stake you each have in the entire sum.
Love is a powerful phenomenon. It’s difficult to imagine a life apart in the heat of true romance, but life is unpredictable. Set your heart aside and consider a practical approach when it comes to money management. More Gay Life Q&A
To me the joint account (we have join and also separate accounts) is a matter of convenience. I don’t want to have to remember that I bought 78.54 worth of groceries and 21.88 of gas and she paid for dinner, etc. The joint account lets anyone go and buy some groceries or gas or whatever you deem joint.
Debra – agreed!
Even if you open a joint account for shared expenses and keep separate accounts for your personal spending, having a joint account can be helpful. I know Liberty Mutual provides discounts to same sex couples and all you need to prove it is a joint checking account.
I’m not sure how many other opportunities like this there are out there but that’s what my agent at LM told me.
Great article!
You can submit and vote for it at BankFiesta.com to share with others, hopefully will get you some additional visitors too.
Cheers,
FiestaMaster
I just want to add one point to this. My partner and I have been together for 14 years and always maintained seperate accounts. However, in several of my jobs where I can carry domestic partner benefits, I’ve had to show financial community with him. So we have one small savings account in both our names for just that purpose. We only keep minimum balance in it but can prove to HR the joint acount at anytime.
My partner and I have everything joint: car loans, mortgage, insurance, checking and savings accounts. I can’t imagine being partners in life any other way – I would feel separated and not “one”. Granted, this isn’t for everyone, but we are both professionals with common goals for the things we want in life. It also keeps down the “impulse” items since we are using “our” money for everything – we are less apt to splurge on a $300 pair of sunglasses if we need to explain it to the other half (trust me – he would! I would probably splurge on the latest electronic gadget.)
Jeanine and I have always kept our money separate. We divide up the bills and split the mortgage. We take turns at paying for things like dinners, movies and groceries when we’re out together. While it’s not always “exact” it typically evens out. This way works best for us… I’m a control freak when it comes to money and I’m afraid Jeanine would resent me if we used the joint approach. Our savings are in separate accounts as well, although we consult and communicate on major purchases and our longer term financial goals. Communication is really important here in order for there to be a “joint” mentality.
Two other notes of interest… one time this all broke down and we had our first big money fight. It’s not always paradise!
Also, some readers might learn something from this guest writer’s three-pot money system.
I’m with Scott on this one–I’m the only one who’s got much aptitude for paying down debt and keeping on top of bills, so I can’t see how it would benefit me or either of my partners if we had separate accounts, they made some mistakes, and we all had to adjust our lifestyles to make up for them. This way, we all know their money is being put to optimal use by the person most interested in finances. We all can see the account and give our input, but they don’t have to worry about the day-to-day operations of our budget unless they want to.
Never, ever, EVER open a joint checking or savings account!
It’s not that your spouse or partner is bad at money or anything like that, but I have seen people’s relationships dissolve over minor money infractions. I’ve also seen people basically ruined over the indiscretions of their partner with their joint checking or savings account.
If you want to save for a goal together, open a goal savings account or Living Trust account where you BOTH have to be there to withdraw (unless one of you is dead or incapacitated).
Such an interesting discussion. I think the posts so far show it is best for each couple to find out what works best for them. The important thing is that the couples come to an agreement about how assets are handled.
One problem though is that I find some couples don’t discuss what they each desire financially enough. Because finances are so taboo to so many. The result is that these couples default to a way of handling money that one or both resents but they aren’t admitting that to one another.
And, I’ve seen enough lesbian couples where one partner (often the partner who is older, more financially successful or more assertive) takes more control than the other wants and/or even takes advantage of the other partner, but the other partner isn’t courageous enough to do something about it. When you can’t legally marry, this puts these less powerful partners more at risk, during the relationship and if they should break up.
I’m single right now, but my ideal is either completely merged finances with my partner (like traditional marriage) or the three pot method (some together, some separate). I think it takes more trust and security in your partner to be okay with the yours and mine and nothing together plan.
And, one question – what do you do about assets you can’t split/separate, like a mortgage/deed for a house? I like the idea that all couples should have some shared assets. I think it does positively impact the bond they share – that they are responsible for something together. Thoughts?
Also – couples don’t discuss finances thoroughly enough because they haven’t developed the communication skills enough to handle the often charged emotions around money. But these skills can be practiced and learned….
For big household purchases, My partner and I have a joint savings account through ING and we’ve set the savings account up so that we each automatically contribute $50 per pay. When unexpected home repair issues pop up (like the water heater), instead of the hit coming from our personal accounts or having to put a major purchase on a credit card–money at ING is just waiting.
My partner makes more money than me. Because we are both contributing the same amount into our “household fund”, I know that it’s not an undue burden on her when big bills come up.
My ideal is completely merged finances, but I think it really depends on the couple – and also, the couple’s goals for the relationship. For me, sharing finances is one of the many things that being married is all about. Maybe that’s old school, though. 🙂