5 Things To Consider Before Opening A Joint Bank Account

When the word “us” is introduced into any relationship, you know things are getting serious. What we don’t realise is that “us” isn’t really that big of a deal. It only becomes a big deal when you begin making shared purchases like a holiday, a pet, or when you move into together. Long term things, when your spending and plans become so intertwined it starts getting awkward to ask whether it’s your turn or theirs to pay for dinner. Soon, a joint bank account starts to sound like a great thing.

It’s easy to do, and sounds like it can solve a lot of problems, but Melissa Browne

, Chief Executive of accounting firm A&TA and financial planning firm The Money Barre, warns there are serious considerations you need to think through before jumping into it.

Money is the one of the most common things couples fight about. The last thing you want is to become one of those statistics.

Here are some things to think about before opening a joint account.

#1 Sharing is caring

“We need to talk” is a phrase no one wants to hear. But in a situation involving finances, Browne says everything needs to be laid out including understanding where your partner’s money comes from, how each of you value money, and what their spending history is like.

“Unless you have that conversation and willingly identify the parameters around where you’re going to behave jointly, it’s kind of difficult to avoid the arguments because you haven’t set any boundaries for yourselves,” she says.

“If their wealth creation is all about live now and have great experiences, and yours is more about safety and security then you might need to have that discussion of, ‘Well, the only money I’m prepared to put into that joint account is for the essentials because I don’t think we agree on than anything else’.”

#2 Look for red flags

As part of the transparency conversation, Browne suggests to look out for any potential red flags that may put your own personal financial position at risk, especially because Australians have a track record of being secret spenders. If you’re not careful, you may end up inheriting debt from your partner.

It’s important that everyone should have a bit of money of their own.

“It might be that you open up a bank account, and one partner goes and spends without permission and drains the account,” she says.

Aside from spending without having the conversations, Browne says other potential red flags include anyone who may have an addiction history, such as alcohol or gambling.

“I think there’s risk in people’s past, even though they acknowledge their addictive behaviour,” says Browne. “You’ve got be really careful in that situation.”

That’s not to say that you should dump your partner because they’re big spenders – just know what each of your attitudes and habits are when it comes to money.

#3 Put a positive spin on talking about money

While few couples feel totally comfortable talking about money there are emotional benefits for both of you – financial stress is among the top causes of break-ups.

Browne says it’s important to reframe the conversation about money so that it’s positive, rather than a chore.

“You can reframe it with, ‘How are we going to have the best year yet?’ as a couple and what the money part will look like,” she says. “By reframing you’re less likely to get the reaction of, ‘Oh god we’re talking about money again’, to actually, ‘How can money be awesome for us?’”

joint bank account 2

#4 Introduce safeguards

In the worst-case scenario where you and your partner break-up, especially if it’s an ugly one, no wants to fight over finances. For those situations, Browne says it’s important that when couples open a joint bank account they also introduce safeguards, whether it’s something as “unsexy as a binding agreement like a prenup, or it might simply be just sitting down and working it out”.

“The middle ground to ensuring financial safety for both you and your partner is to put safeguards in place, so you’re both protected,” she says.

#5 Don’t ditch your own bank account

In addition to essentially having what would be a contract in place as a safeguard, the final tip Browne offers is for everyone to have their own bank account, even if you open a joint bank account.

She says it’s important that everyone should have a bit of money of their own.

“I think part of it is that safety,” she says.”[This means] one person doesn’t have all the control in the relationship and the financial power.”

Find out more in our guide about how couples answer life’s big money questions.

Aimee Chanthadavong is a Sydney-based journalist and content producer. When she’s not writing about politics and technology, she spends her time consumed in food, travel and lifestyle stories. Find her occasional tweets at @achanthadavong.
Main image: How I Met Your Mother / CBS Broadcasting Inc

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