Is Opening a Joint Bank Account A Smart Money Move For Spouses?

When you find your soulmate / partner (insert pet name here) - there’s the honeymoon phase where you want to share everything, do everything together and the idea of separate lives is almost unimaginable.

We should all be so lucky… 

However, real decisions and commitments are unavoidable. This is easily an advantageous ‘‘two heads are better than one’’ financial option, especially where there are multiple sources of income for increased savings amounts, shared expense / spending costs etc. 

To start we define what a joint bank account is:-

• According to financial experts, a joint bank account is a bank account shared between two or more individuals – allowing the account holders full control and access
  

It is important to note that a joint bank account is not just between spouses (relatives, business partners etc.) can too but for the purposes of this article, we’re addressing married couples.

Five Benefits Of A Joint Account For Married Couples

Now that you know what a joint account is, let’s dive into the benefits of opening a joint bank account. 

1. You gain a better understanding of you & your spouse’s ‘‘financial habits’’

As joint account owners, you each bring your personalities, often reflected in each person’s behaviours / actions (e.g. cautious, open-minded, assertive, patient etc.)

• This allows you and your spouse determine your compatibility as financial partners, by looking into each person’s finance history, attitudes and goals. Some important questions to ask include:- 

Do you have and use a budget? How disciplined are you about your expenses and savings? Do you have any debt, (and) what is your credit history? Are you an impulse shopper? If one of you is divorced – are you paying alimony or paying child-support? etc.

2. It gets easier to identify and plan long-term and short-term financial goals, in detail and in an amiable manner.

• By understanding your and your spouse’s ‘‘financial persona’’ you’re both able to set realistic goals and timelines to address current and future financial to-do’s (e.g.) setting savings target, setting self-audit timelines by you and your spouse, closing / terminating dormant or outdated financial services you’d signed up for etc.
  

3. It encourages a sense of accountability through the transparency required from joint owners of an account. 

• How? 

As joint owners, you have the equal chance to create customised rules to avoid-and-solve money squabbles. Consequently, increasing the likelihood of making informed financial consideration, based on your shared financial goals and the expert information you both access about joint bank accounts

4. Either spouse can access the account, in the event one person is unavailable or unreachable (especially if your spouse travels a lot or works in another location outside of your residential location)

• Custodian access is easily transferable and overseeing of assets tied to the joint account is a stress-free affair for each spouse. So, in the event of one account holder’s absence due to employment, illness, travel, demise – the available spouse will continue as custodian, with access to all associated benefits    
  

5. Better financial management is accomplished, thanks to the shared financial responsibilities feature of owning a joint account (e.g.) on how to divide expenses and on how much to contribute to a savings fund, when to review account statements for budget adjustments etc.

• Let’s get specific – If you bring in 40% of the household income and your spouse the remaining 60%, it’s a good idea for each to pay the bills equitably to the percentage each spouse contributes 

(i.e.) A household budget of Ksh.10000 means, one spouse’s contribution at 40% is Ksh.4000 and remaining Ksh.6000 contributed by your wife or husband

The percentage share is one way; however, there are other practical ways to allocate each spouse’s income, without creating any conflict. (e.g.) one person’s salary is for bill payments and the other goes into savings etc.

6. As joint account holders / owners, this often brings out the best in each spouse as you both learn to complement each other during seasons of financial gains, stalemates and losses. 

• This improved relationship between you and your spouse encourages and supports an ‘‘Ask. Listen. Solve Together’’ attitude, which:-

- Fosters trust and transparency that actually strengthens your relationship

- Boosts each spouse’s self-esteem and provides motivational proof that, ‘‘you can do it’’ 

7. ‘‘Team - Together Everyone Achieves More’’ 

You and your spouse’s combined resources and efforts, saves money and saves time, in achieving financial goals (e.g.) saving for a car, a vacation, paying bills etc.

• After all as one team, you have one mission to win 
  

8. Since no financial situation is a 100% perfect, when it comes to joint accounts, it’s a relief to share the financial lows’ too; another advantage of opening a joint account

•  ‘‘To Err Is Human’’ so the shared liability feature of a joint account means:-

• Management skill challenges of one spouse are off-set by your spouse’s management strengths 
• Losses, costs, risks and legal responsibility is shared by either / both you and your spouse. This makes it easier, psychologically and practically, to solve any mistakes and mismanagement effects that may occur, as effectively as possible

Teamwork Makes The Dream Work (go for it)

Opening a joint account is more than an emotional decision; its a sound, easy-to-setup joint asset option for you and your spouse. 

• So, whether you’re newlyweds or have been married for a while, a joint account is a reliable financial option that offers a clear picture of your finances, as well as, an opportunity to blend your financial lives and assets  
  

[or]

If you both decide that, a joint account is a fit for you:-

• Keep the conversation honest and timely. Do not exaggerate nor underestimate any financial changes, rather, discuss about them and continue on a cordial, effective adventure of what your money can do for you and others (have fun with it) 

If you both decide that, a joint account is not a fit for you:-

• That’s okay (every couple has a right to their own financial plan and goals). Whether you arrive to this decision because the timing was wrong, personality differences, uncertainty etc. – its important to remember this doesn’t in any way brand your marriage ‘doomed’ or a spouse ‘untrustworthy’. 

You can opt for these two options:-

Option 1 - Trial Run

• Open a joint account for one specific goal. This helps you and your spouse to focus and stay motivated by picturing a specific result (for example, for mortgage / rent payments, for student debt payment, for holiday savings, for medical savings). 

Select when to open a joint account and the equitable amount each spouse will contribute and set a timeline to determine if this was a ‘‘pass or fail’’

• Meanwhile, keep your separate checking / bank accounts too and agree on a specific date to revisit the success of your joint account and the impact on your personal finances

 Option 2 – Separate Accounts For Flexible Solutions

• If it’s clear that you’re both willing to keep separate accounts and a joint account is not an option, this works too (only if it’s a mutual agreement) 

Together, you can agree on what shared financial goals to set, their timelines and how to contribute to these goals (again, together!)