February 17, 2021
A joint account with the spouse is a huge step for a relationship that helps them manage their finances together. Many couples are afraid because of the uncomfortable nature of the conversation it leads toward. Nevertheless, it is important to manage the finances together to split the expenses and save together for the shared goals.
You may still find some space for discretionary and personal spending. There are indeed some drawbacks to the idea. But the benefits can outweigh them as your finances and relationship are strengthened with it.
Here, we will discuss some reasons for the couples to open a joint account for their income, spending, and savings.
- Makes Budgeting Easy
After marriage, the budget no longer includes your individual spending and expenses. Both the partners manage the different components of the budget together. And a single account simplifies its management.
You don’t have to go through the different account statements to check the spending and available funds. You will have better control of the inflow and outflow of the cash. Moreover, it will help create a more effective strategy for debt repayment.
- Easy to Manage Finances as Parents
Your financial responsibilities will increase with the arrival of another member of the family. There will be endless expenses and some of them are impossible to predict. Therefore, it is easier to have a joint account to manage the different cost for the parents.
You can add your child as a co-owner of the account to monitor their spending. It will help to provide them with financial education at an early age. Also, you can use a joint account to save together for their college education and wedding.
- Set Shared Goals for Future
A married couple commonly has common long-term financial goals to secure their future. These include a house, retirement fund, and some investment of their choice. To achieve them, you need to put consistent efforts and track them at regular intervals.
Co-ownership of the account will also help you set a foundation for a combined effort to solve the financial problems. The lenders offer a better interest rate if you have a guarantor with good credit ratings. Nevertheless, you can still apply for personal loans in Ireland with bad credit history.
- Increased Trust in Relationship
Many people think a joint account is a step to complicate the relationship. On the contrary, it increases trust between the partners to strengthen their bond. Your commitment towards relationship is displayed with a bold move.
Not many couples are open enough to discuss their financial condition with each other. You are increasing the transparency in the relationship. There is nothing to hide in the relationship anymore with your every expense on the table.
- No Pressure of Balance Requirement
Many banks have a minimum balance requirement that people living on a tight budget struggle to maintain. They often find themselves charges with some fees from the banks. A joint account will have more money and fewer chances of dropping below the minimum requirement.
It can be useful during the month-ends when large payments are declined because of insufficient fund. A sudden expense will not require a call to your spouse for money transfer. And you may not use the credit card to attract more charges on the payment.
- Better Deals from Banks
Banks offer their customers special offers based on their profile. A joint account means more business as there will be more transactions. Therefore, expect better deals while selecting a bank for the joint account.
They might offer better interest rates on the deposit. You may get some cash back or extra loyalty points for the use of services. The impact is considerable on your finances in the long run.
- Maintain Positive Spending Habits
Spouses help their partner getting rid of the bad spending habits that negatively affect their financial condition. The support is extremely helpful since it is never easy to quit a habit. It might seem intrusive at times but the result is beneficial for both.
You will feel the responsibility to make wise financial decisions. This added responsibility and accountability will itself reduce unnecessary expenses. The individual contribution to savings will increase with better money management.
- Right of Survivorship
There is a long list of documentation to get the ownership of a deceased person’s account. You don’t want your partner to go through the troubles if anything unfortunate happens to you. In a joint account, the co-owner gets the ownership with the right of survivorship.
A sudden demise causes financial instability because the ownership process for the beneficiary takes some time to complete. Also, you can add someone else as your beneficiary if you want someone else to help your spouse. It could be your kid, parents, or trusted family member.
To sum up, a joint account is a step beneficial for your relationship and finances. You make the other person a part of your financial decisions and money management. However, it is okay if anyone of you is not ready to take such a big step.