Would you get a joint savings account with your significant other?
June 28th, 2007 | by mbhunter |This MoneyCentral post took me aback a little:
Cohabitating? How to avoid money traps
The article provides financial advice for unmarried couples living together. I would think that financial advice would be a lot less important than other kinds of advice, like “Why on earth are you living together when you’re not married?” But the article disregards that rather important question and proceeds with the financial advice.
The advice taken by itself isn’t bad, and could be applied to married couples:
- Budget for joint expenses. Something that would need to be done if the couple is married.
- Yours, mine, and ours. Under most circumstances, it all becomes “ours” but sometimes it helps to have money set aside that’s “mine” or “yours.”
- Set mutual goals. Yeah, not doing this can cause major friction. Home ownership, kids, etc.
- Don’t avoid hard discussions. They don’t go away. Best to push through them sooner rather than later.
- Be straightforward about debts. Not surprising your honey is a good thing.
But throw “just living together” in the mix, and these tips become problematic, outside of discussing them as preparation for marriage. The tone of the article leads the reader to believe that these issues are tenable when the couple is not married. But I don’t think so. A boyfriend/girlfriend relationship or an engagement may be serious or not, but without the legal and covenant proclamation of marriage, it’s way too easy for the relationship to dissolve, and intermingled finances makes the dissolution even messier. It’s fine, even recommended, to discuss finances and budgeting at this stage of a relationship, but planning and pooling resources the way married couples do is putting the cart before the horse.
I can’t think of any time when a joint account with a fiance(e) or a significant other would be a good idea. This is just asking for the better-off partner to get stiffed if/when the relationship heads south. A falling out could lead to a drained account. It’s not theft as far as I know — it was a joint account! If the partner who makes less is pushing for the joint account, this is a big red flag, and the better-off partner would be making a rather poor financial decision by complying. It’s too easy for one partner to leave — with all of the money.
Before opening a joint savings account and funding it, before having kids and deciding whether they go to private school or not, before buying a house and moving in, I suggest this step: Get married!
14 Responses to “Would you get a joint savings account with your significant other?”
By Tyler on Jun 28, 2007 | Reply
Yes I agree, before a couple combines finances, make sure you are married. Any other time is not appropriate.
By VirginiaGal on Jun 28, 2007 | Reply
No, I don’t think it is prudent to get a joint account with a sig. other regardless how long you have been together.
But, being married will not prevent one person from cleaning out the bank account(s) and leaving the other high and dry if that is what they want to do.
By Patrick on Jun 28, 2007 | Reply
Agreed. I’ve only lived with my wife, but I wouldn’t have combined my finances with anyone until I was married. My wife and I have almost all of our funds in our joint account, but we each have a small ‘discretionary’ account of our own. We usually just use it for buying each other gifts around the holidays though (that way we can’t ruin the surprise!).
By Molly on Jun 28, 2007 | Reply
It seems like it’s worth reminding you that not all couples CAN get married. Many same-sex couples would like the “legal… proclamation of marriage” but are not afforded the rights and privileges that you refer to. Whether you agree with it or not, there are a lot of people who can’t follow your advice in the last paragraph of this post. And that sucks.
By Neely O'Hara on Jun 28, 2007 | Reply
Well, to follow on Molly’s post: Sure, some of the advice applies to gay couples just as much as straight. The issue of legal marriage is, of course, mucked up. In my house, we handle our finances *as if* we were a legally married straight couple — if we were straight, we would be legally married, so that’s how it’s all treated.
I think it gets a bit murky for gay couples because people live together without (of course) legal marriage — so that “line” that straight people cross never gets crossed. Unfortunately, that leads to a lot of gay couples getting trappd in complex financial situations whe they *do* want to break up.
Of course, many married straight couples face complex financial breakups, too, so again – the same issues often apply to everybody…
By flifla on Jun 29, 2007 | Reply
Can you say “Judge Judy”?
By flifla on Jun 29, 2007 | Reply
Sorry, a disclaimer here. OBVIOUSLY, in States where same sex marriages are not allowed, yet the couple lives as one and carry on as any other married couple, with gripes and bills and kitchen renovations what not – why not have a joint account? This just doesn’t apply to same sex marriages, but other kinds of relationships as well.
It’s a touchy subject. I know many married couples who do not share a joint account – and that in itself creates an air of suspicion and jealousy.
The way I look at it is, lend money if you are prepared to lose it. Same with joint accounts. Joint accounts can be a can of worms, or a bouquet of roses. If you can afford to give your money away no questions asked, then that’s fine.
By plonkee on Jul 3, 2007 | Reply
Yep, I’m gonna try and respond to this again.
mbh said: I can’t think of any time when a joint account with a fiance(e) or a significant other would be a good idea. This is just asking for the better-off partner to get stiffed if/when the relationship heads south. A falling out could lead to a drained account.
Thing is, you can do this when you are married quite easily as well. Its not theft if its a joint account. You could argue that you can divorce and you should be able to get some of the money back. But not always, and not if they’ve spent it all.
You shouldn’t have primary joint accounts until you are committed to each other. But some roommates have joint accounts just to make the bills easier to pay, only putting in enough money to cover their individual shares. Would you argue against this too?
By Great Wolf 13 on Jul 3, 2007 | Reply
I think it is a matter of where you are in the relationship. If you are living together and not engaged then keep things seperate. However it is very important that you sit down and create a budget that incompasses all the debts and goals. This is the beginning of the learning experience of how each of you handles money.
Once you are engaged I think you should combine money. Your right the relationship could go bad and someone could clean out the account however what is the message that is being sent when you say, “I love you and want to spend the rest of my life with you but I am going to keep my money over here where you cant get to it.” It says I do not trust you.
It is very sad when I hear married couples say they have seperate checking accounts, is just screams distrust.
By Amanda on Apr 24, 2008 | Reply
Each to their own really. My parents have been happily married for 25 years and only recently got a joint account, simply because they saw no reason to. Yet my fiance and I have a joint account so we can save together for our wedding. If we think of it as our own money instead of teh both of ours, we are more likely to spend it. So, whichever is best for you.
By Theresa on Aug 13, 2008 | Reply
We are not married and both have separate savings and checking accounts. My question is, should we open another separate joint savings account with only a couple thousand in case of emergencies or in our case expensive surprise vet bills.
By margie on May 28, 2009 | Reply
is it allowed to have joint accounts even if you`re not yet married?
By Sarah on Jul 13, 2009 | Reply
“I would think that financial advice would be a lot less important than other kinds of advice, like “Why on earth are you living together when you’re not married?” ”
What a ridiculous comment. That’s not advice, that’s unwanted judgement – and very out of place in today’s society. Just because people are in love, does not necessarily mean that they want to get married [or that they can, in the case of gay couples], nor is it prudent to live apart until marriage. I don’t know a single person under the age of 35 who hasn’t lived with their partner before marriage – and personally, I think it’s a silly idea to do so. How much do you really know about a person without living with them? If people expect that marriage will make everything hunky-dory, they’re sadly mistaken.
While I was originally interested in reading this blog, that unnecessary and demeaning comment threw me off. Get off the internet, and get back to your church.
By mbhunter on Jul 14, 2009 | Reply
Sarah: Oh goodness, where do I start? How about at the beginning?
– It’s not a ridiculous comment. It’s a perfectly valid question. Asking it does not judge people. Only God can judge.
– We’re going down the tubes faster every day. Going back to good values is exactly what this society needs.
– It’s very prudent to live apart until marriage. That’s what we’re supposed to do. There’s a correct order to do things, and an incorrect one.
– I didn’t live with my wife before we were married. I was just under 30.
– I knew my wife well enough to propose to her. Seven years later, our marriage is stronger than it was at the start. Living together is only part of the picture, and a relatively minor one.
– When did I say that marriage would make things hunky-dory? If anything, it makes things more challenging.
– I’ll gladly go to my church. My wife invited me there shortly after we met, and it changed my life.