Should married couples have joint bank accounts?
- Bankrate explains that the money in a joint bank account “belongs to both owners. Either person can withdraw or spend the money at will — even if they weren’t the one to deposit the funds.”
- An American Psychological Association study found that “couples who pool all of their money (compared to couples who keep all or some of their money separate) experience greater relationship satisfaction and are less likely to break up.”
- Experian explains that although often thought of as affecting one’s individual credit rating, joint bank accounts “are not part of your credit history, so they do not impact credit scores. Your credit report only includes information about your debts, and accounts have the same effect on your credit whether you are associated with the account as an individual or as a joint owner.”
- A creditcards.com survey found that older generations tend to be more likely to have joint bank accounts among spouses, “48 percent of Gen Xers (42 to 57 years old) and 49 percent of baby boomers (58 to 76 years old) who are married or live together only have shared accounts, compared to 31 percent of millennials (26 to 41 years old).”
Marriage was originally intended to safeguard and build a family's assets and legitimize that the offspring was biological. Love didn't come into the picture until the Middle Ages. Sadly, the first divorce in US history was recorded in 1643 and has since become common practice. Experts say 45% of marriages could end in divorce.
No one marries with the intention of divorce, but with the odds stacked against us, it's essential to know you will be able to provide for yourself. Investopedia says, 'When getting a divorce, establishing your own financial identity is critical. Opening your own bank account, if you don't already have one, is the first step'. Without a crystal ball, we have no idea what will happen in the future. Making sure you are self-sufficient, just in case, is good practice.
All marriages have rocky moments. We each have our own set of values that are not always shared with our spouses. If you like to splurge on experiences, shopping, or gifts and your spouse is frugal, separate accounts could help avoid some major arguments. Within that same theme, buying small gifts for your spouse is an excellent way to let them know you're thinking of them, helping to keep the spark alive. Having joint accounts takes away that element of surprise.
Another benefit of separate accounts is maximizing debit card rewards. With each spouse having their own debit card, they can separately accrue points, cash-back rewards, and even build up their own credit.
Having separate bank accounts allows couples to have the financial freedom and financial perks not available to those with joint accounts.
One of the impactful decisions a married couple can make is setting up a joint bank account. And based on a survey by Creditcards.com, many couples favor this decision.
According to the platform, 43% of US adults have only joint accounts. Of the remaining 57%, 34% of respondents have both joint and separate accounts.
What may drive some couples to take this step is their belief that this may be “the ultimate symbolic gesture” of their financial union. However, there are many practical benefits to having a joint bank account.
Joint accounts allow partners to pay shared household expenses from the same place, simplifying financial tasks, especially for spouses staying at home.
Similarly, these accounts add a level of transparency to couples’ transactions, reducing the temptation to splurge or make secret purchases. This, in turn, prevents misunderstandings stemming from money secrets. It further builds trust in a relationship, benefiting the marriage itself.
The results of a recent Stockholm University study support this conclusion. Researchers revealed that joint economics result in more substantial stability and communication.
Another advantage of having a joint account is reduced red tape and streamlined legal affairs. Take, for instance, accounts that have the right of survivorship. This right ensures that surviving account owners automatically become sole owners of funds after the death of the joint account holder.
Therefore, if a couple is on the same page regarding finances, a joint bank account can be a sound decision for the sake of the couple’s finances and relationship.