So things have been going well. You’ve been dating for a while, you’ve said “I love you”, you got over your first fight, perhaps you’ve even moved in together and now you’re starting to wonder, “Should I open a joint account with my boyfriend?” After all, it would remove the need to spend time splitting bills or keep track of how much you owe each other. Well before you take the leap here are a few things you should be aware of when opening joint bank accounts.
Overview
What is a Joint Account?
A joint account is a bank account that is shared between multiple people. They are most commonly set up between partners. Both people have access to the account and can withdraw any funds contained within it.
It is only possible to get a debit card for a joint account. This means you need to transfer money into the account before you’ll be able to spend it.
What Do I Need to Know?
You’re Creating a Financial Link
When you open a joint bank account with someone you’re creating a financial link between your credit files. This means that you can influence each other’s credit scores. This may seem inconsequential now, but could have a significant impact in the future. Your credit rating is used by banks to determine your eligibility for credit cards, mortgages and other forms of borrowing. You wouldn’t want to get to your 30s and find out you’ve been turned down for a mortgage due to an ex missing a few credit card payments in their teens.
I’d therefore only suggest opening a joint account with someone who you are in a longterm relationship with. Ideally they should also have a credit rating similar to your own. For more on how to check your credit rating please see my post here.
Either Person Can Withdraw ALL of the Money
One of the key things to be aware of when considering whether to open a joint account is that it’s legally possible for one person to withdraw all of the money. You therefore need to have a high level of trust within your relationship.
It’s also important to familiarise yourself with the risks associated with joint accounts relating to financial abuse. For a good overview of these (along with what to do if you find yourself in an abusive situation), I’d suggest reading this post from Money Saving Expert.
I’d personally suggest keeping the amount of funds in the joint account to a minimum. Myself and my boyfriend keep our main current accounts and savings accounts separate, only using the joint account for bills. We each have a direct debit set up to automatically pay in the same amount at the start of the month, topping up manually when an unexpected expense arises.
Can I Get a Joint Credit Card?
It is possible to add a second cardholder to an existing credit account, but the debt will always remain with the primary cardholder. There is therefore a significant risk that a secondary cardholder could spend a large sum of money and their partner would be legally responsible for paying it back. I would therefore avoid adding your partner as an additional cardholder for your credit account.
What Other Ways Can Couples Manage Money?
If you’re not ready to take the plunge, there are plenty of ways for couples to manage money without opening a joint account. I personally managed for nearly 10 years with my boyfriend before opening one!
Here are a few suggestions you could try:
- Alternate who pays for what – this can work well for grocery shops and dining out
- Use an app such as Splitwise to record any expenses and request funds from your partner
My Experience
I really enjoy having a joint account in place with my boyfriend. We have a lot of the same expenses so it simplifies the need to keep track. It also means we don’t have to worry about splitting bills in restaurants. I’ve found it useful getting a joint account through Monzo, as we get instant notifications whenever any money is spent. We put a minimal amount of money into the account each month and we have a very similar spending mindset, so I never worry about where the money has gone.
For any big purchases over £100 (for which we’d want credit card protection) one of us will pay on our individual card and the other person reimburse them straight away. We also keep any personal purchases separate, only using the joint account for expenses we’ve both incurred.
I therefore think that joint accounts can be beneficial to those who have been together for a long time, have a lot of trust and have similar spending personalities.
Do you have a joint account with your partner or do you manage your money separately? Let me know in the comments.
