Marriage is a huge and important step for many couples. When you decide to get married, you are likely to merge two lifestyles into one. This might mean taking two homes worth of furniture and miscellaneous items and putting them into one home, or starting all over again as a couple.

Another big consideration is the future of your finances. Will you still maintain two separate bank accounts, or do you hope to merge them and share one? There are benefits to both sides, as well as downfalls.

The benefits of a joint account

Keeping track

A joint account makes it easy to monitor and maintain cash flow. Both partners can see what goes into the account and what goes out of the account. It is easy to track who is contributing to what, and it makes it easier to budget your household expenses.

Build a strong relationship

When you enter a marriage, it is likely that you share almost everything. A joint bank account enforces the idea of “what’s yours is mine and what’s mine is yours.” 

Starting a relationship with the idea that everything is shared in equal proportions regardless of input can strengthen the relationship and increase positivity. Sharing a joint account in this way also makes sure that your financial relationship is positive.

Fewer expenses

Sharing a bank account comes with a special discount. Chances of both you and your spouse having bank accounts with no fees are very low. Sharing a bank account means sharing banking fees. While the monthly saving might not look like much, in the long term, it could be quite significant.

Constant accountability

When you have a joint account, it is easy to hold one another accountable for their spending. While you might not grant one another permission to make purchases, you are less likely to make big purchases without discussing it first. This helps to ensure that all money spent is first carefully considered, reducing wastefulness.

The drawbacks of a joint account

Impact on credit score

A joint bank account does not mean you now have a joint credit score. Much like a social security number, each individual gets scored on their own. 

If one partner overspends and sends the joint account into overdraft, both of your credit scores will be affected. If you are hoping to build credit fast, you can use Kikoff to help get a positive credit score without risking too much money.

Divorce complications

Nobody considers divorce or separation at the beginning of your happy new life together. However, divorce is reasonably common and could be the number one reason to avoid joint banking. In the divorce, a joint account offers the opportunity for one partner to claim the account and cut the other off from accessing their money.

Debt collectors

If one partner ends up in financial trouble, debt collectors and creditors will take the funds from an account they have authority on. Since your joint account holds both of you as signatories, both of your credit scores could take a knock when they claim the money your partner owes them.

Potentially inheriting debt

You are not usually responsible for the debt of a deceased person. However, in the case of a shared account, you may be held responsible for the debt. 

If you co-sign or share an account with someone who passes away, you can be held responsible for any outstanding bills on that account. If you fail to pay for the debt you have inherited, your credit score could fall and the debt collectors will claim repayments from you.

 

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