This article was originally on GET.com at: 4 Crucial Things To Consider If You're Thinking Of Opening A Joint Account
So, you recently got hitched with the love of your life in Singapore and you guys are considering if a joint savings account will be any good?
First things first, joint accounts are basically standard bank accounts where individuals jointly own the funds in them - no matter how much or how little one party contributes, he or she gets complete access to the money in there. No questions asked.
Joint accounts can be incredibly convenient as it simplifies things for the couple but things can go sour if either party lacks discipline, has terrible spending habits or isn't entirely truthful. Here at GET.com, we share with you the 4 vital things to consider if you're thinking of opening a joint account.
4 things to consider if you're thinking of opening a joint account
1. How much will each person contribute monthly?
I completely get it when you and your soul mate are so in love, the "what's yours is mine, what's mine is yours" mentality may cloud your heart and head altogether but honestly, doing the talk regarding your financial goals, savings and spending habits is a necessarily evil to prevent any unpleasant surprises down the road.
Communicate and discuss honestly with each other how much each party is going to contribute to the joint account monthly and make sure you guys stick to the agreed contribution amounts.
Plus, it's no fun to question your partner all the time why he or she hasn't been putting in the said amount when you've kept your words. Plus, it's always nice to be certain that both parties are constantly working hard to pool their savings together as a married couple, no?
2. Are you marrying all of your savings?
Before you combine every single cent of your savings from your personal accounts, do think twice (or even thrice) before plonking all your money into the joint account. Remember that either party has full access to the joint account once you've signed the papers at the bank.
It sure is nice to know that you love your significant other very much and have complete trust in him or her, so much so that you want to share all of your hard earned savings. But ask yourself whether you're okay with not having your own piggy bank where you get to use your own money however you want without asking for permission or being accountable to your partner. It's your own money after all.
Wouldn't it be embarrassing, or at least tiresome, if you're out with your friends and you don't have complete autonomy to decide how much you're supposed to spend on dinner and drinks after a long, dreary week at work?
Moreover, I don't suppose you'll be very happy when your spouse uses a huge chunk of the joint savings - without your permission because he or she doesn't need your permission - to splurge on branded bags or the latest tech gadgets, right?
3. What will the money be used for?
Yes, this is one pivotal question that you and your partner have to answer and come to an agreement even before making your way down to the bank.
Will the joint account be strictly be used for household expenses and bills? What about groceries and meals? What about wanderlusting vacations across the globe?
Until you and your partner decide what the joint account can and should be used for, any plans to open a joint account shouldn't come to fruition, yet.
And when you do have the the joint account up and running eventually, make sure to only use the pooled savings for their intended use, however tempting it might be to use it for your shopping sprees.
4. Who's in charge of checking statements and paying bills on time?
Like its name suggests, a joint account should ideally be the responsibility of all parties who jointly own the account.
One party can check through the credit card statements and receipts thoroughly while the other can be in charge of paying the bills on time. Or you can split who's going to pay which bill.
While cashback credit cards or rewards credit cards can help you save money by giving you cash rebates or reward points, it's very important for you to pay your credit card bills on time so that you do not incur any interest fees.
Whatever your arrangement is with your partner, always make sure that both of you know what's going on with the money, how both of you are faring tackling all these seemingly mundane facts of life, like saving and paying for shared expenses on time.
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