Merging bank accounts when you get married is a common practice. A joint bank account is co-signed by two individuals, with shared access to the account, funds and checks. It can streamline certain aspects of personal finance, although it might not be the best approach for every couple.
Here are some things to consider when deciding if a joint bank account will work for you. Once you can decide what account type is best for you and your spouse, make sure to find the best bank for your joint checking account. Then you will be ready to combine forces to strengthen your finances.
Benefits of Joint Bank Accounts
Merging bank accounts when you get married is "absolutely the most successful way" to be joined financially, said Mary Claire Allvine, a certified financial planner and author of "The Family CFO," a financial planning book for young couples. When she was interviewing couples for her book, Allvine said that those who struggled to be good financial partners had separate accounts; those who were successful had joint accounts.
Having a joint bank account can make it easier to budget and plan for expenses. It encourages communication between about spending and saving. Joint account access also helps in the event of illness or death.
Consider these joint bank account benefits:
1. Simplify Bill Paying With a Joint Account
One of the great benefits of a joint bank account is that couples who merge their finances don't have any confusion about who pays for what. It's easier to track your cash flow when there's money coming in and going out of only one account. With separate accounts, "the cascade of confusion is enormous," Allvine said.
If you have a joint account, there are steps you can take to ensure there's enough money in the account to cover bills. Your bank might allow you to set up separate accounts for specific goal savings or for spending. Most banks also will allow you to set up alerts to be notified by text message or email if your joint account balance dips below a certain amount, which can be helpful if both spouses are making purchases at separate locations.
2. Pay Fewer Fees With a Joint Account
Many checking accounts charge fees, which can really add up if you don't have a free checking account. If you have two separate checking accounts with fees, that might double your monthly charges.
Also, many bank accounts require a minimum balance requirement to avoid monthly maintenance fees. Having two incomes entering one account can help boost your balance, making this one of the best joint account benefits.
3. Achieve Shared Goals With a Joint Account
As a couple, you should agree upon goals you want to achieve together, such as retirement, buying a house or sending your kids to college. A joint bank account can play a vital role in achieving those goals because you'll likely view the money as "ours" rather than "mine" or "yours." Allvine said that every couple she interviewed for her book who had achieved their financial goals had joint bank accounts.
4. Remain Accountable With a Joint Account
If you have a joint account, each spouse can see what the other is spending, which means you are accountable for any purchases you make. If you see the account as "our" money, you might be more willing to discuss purchases with your spouse to make sure they fit within your budget and don't jeopardize your joint goals. If you have separate accounts, you might see the money only as "yours" and not feel the need to consult with your partner about purchases.
5. Troubleshoot a Crisis With a Joint Account
Allvine has found that couples with joint bank accounts tend to weather crises better than those who keep separate accounts. For instance, if one of you loses your job, you won't have to scramble to merge finances during an already stressful period.
6. If Your Spouse Dies, You'll Have Access to a Joint Account
Joint bank account rules state that when one spouse dies, the surviving partner can access the money in the account. With separate accounts, the surviving spouse will likely have to go through probate court — which can be a lengthy and costly process — if he or she wasn't named a payable-on-death beneficiary of the account.
When one spouse dies, ownership of the entire account vests automatically with the surviving partner. You would typically have to provide the bank with a copy of the death certificate to have the deceased's name removed from the account.
When You Might Need Separate Bank Accounts
Should couples have joint bank accounts? "Anything we can do to cement the 'us' is a good thing," said Ted Klontz, a financial behavioral consultant and founder of Your Mental Wealth. That's why he advocates joint accounts. Klontz said each couple's situation is different, however, so that approach might not work for everyone.
Couples might want to keep their finances separate for different reasons. For instance, if one spouse is involved in a divorce or lawsuit, or has debts or a bad credit history, you might not want to merge your money. And if your spouse has a bad history with joint accounts and is hesitant to merge finances again, you shouldn't take it personally if your partner is trying to keep history from repeating itself, said Klontz.
Once these issues are resolved, though, couples should make an effort to merge their bank accounts. If none of the reasons above apply to you, ask yourself what's preventing you and your spouse from getting a joint bank account.
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Open ‘Yours,’ ‘Mine’ and ‘Ours’ Accounts
If you and your spouse can't decide between a joint or separate bank account, consider opening "yours," "mine" and "ours" accounts. This compromise will enable you to merge your incomes to cover bills and save for joint goals and allow you to put aside money in a separate account for spending how you please. Klontz calls it "independence money."
You and your spouse should agree on the amount of money — whether that's a dollar amount or a percentage — that goes into your separate accounts, Klontz said. And it might be a good idea to agree to consult on any large purchases. Another option might be to open a joint savings account but keep your checking accounts separate. Or, couples could maintain separate credit card accounts if they don't want to track every dollar spent — just as long as they pay their credit card bills through their joint bank account, said Allvine.
Barri Segal contributed to the reporting for this article.