The joys of opening a joint account
Whether you’re just moving in with your partner or taking that big step to purchasing your first home together, opening a joint savings or transaction account can have many benefits (if you have the right attitude).
Your personal journeys as a couple relies on commitment and openness, and in many ways this is the same for sharing an account. Being receptive to each other’s attitudes towards money is integral to making sure it works.
To begin with it’s important to gauge the ‘feel’ of the relationship as each couple will come to this decision at different points.
Melanie Schilling, graduate of Deakin, Melbourne and Victoria Universities and a relationship expert, recently stated that “when approaching the decision of whether or not to open a joint account, the first question to ask yourself is 'what stage of the dating journey are we up to?’”
She further believes that there are 3 stages of dating; Attraction, Confusion, and Commitment. “Some people don't ever get out of that stage (Confusion) and Commitment is the phase I would typically expect people to start considering a joint account, and definitely not before."
Opening a joint account can have a range of benefits such as lower account fees (in most cases) and ease of access for both parties. The account synchronicity can help increase the efficiency of your household and ensure that your finances are in order.
Many of the household costs are shared (amenities, internet, food) but there are also many personal discretionary expenses – such as mobile phone bills, various subscriptions and so on – which may not be. Try to implement synchronicity in these payments, for example: pay your phone bills at the same time and shop for clothes together. Getting into the habit of synchronising these payments with your partner can help create a better understanding of your financial situation. Another useful idea is to set limits to personal spending beyond which you’ll need to consult your partner before making the additional purchases.
Delegation can be an unlikely ally in reaching your financial goals. It may be hard to admit that your partner (or vice versa) is better suited at dealing with a particular situation, but it is important to capitalise on the strengths that each of you bring to the relationship. There are many different methods to delegating finances in a relationship which can help manage the household. For example, if one of you has a background in accounting then they may be better suited at completing tax returns, or if one of you is a foodie then that knowledge may be applied to grocery shopping.
Along with delegating responsibilities, the splitting of bills may be important if you each earn different salaries. One example could be that if one partner earns 60% of the household income then they pay 60% of the rent. Or perhaps you can simplify the process by paying 50/50 regardless of income. Figure out what system works best for your relationship and also leaves you both satisfied with the outcome.
With a combined income and a joint savings or everyday account comes the ability to meet goals faster than you could on your own. Setting long term goals is not only good for your financial health but also for the strength of your relationship. Sit down and talk about what each of you want to do with your lives, where you want to go, experiences you want to have and then set goals to make them happen. With two people working towards a common goal it will not only happen faster but will be all the more satisfying to enjoy together.
Whilst there are many benefits to opening a joint account it is important to gauge your own situation and make sure you are both ready. As always, we have a team of financial advisors that can consult with you and assist in working out the best solution to your specific situation.
Contact us to set up a planning session or open a joint account today.
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