Banking on Your Relationship: the Benefits of Joint Checking Accounts.

There are many smart reasons for a couple to open a joint checking account.

They’ve been linked to lots of positive relationship benefits—things like increased trust and communication, improved ability to track spending and saving together, and ensured access to communal funds in the event of illness or injury.¹ Joint checking accounts promote teamwork and equality, and allow both partners to participate in planning and paying for big-ticket items—like a house, a wedding, a college fund, a vacation, or any unforeseen expenses the future may hold. It turns out that joint checking accounts can be not only practical and convenient, they’re also kind of—dare we say?—romantic.

So, what is a joint checking account?

Any two (or more) people can share a checking account—spouses, romantic or business partners, friends, even parents and children.² One of the most common types of joint checking accounts is shared between spouses/long-term romantic partners. So, that’s what we’ll focus on here.
 

A joint checking account allows more than one person to own and manage it. This means anyone who shares the account can deposit or withdraw money, without having to figure out who pays for what, pay each other back, or transfer funds back and forth. It means more sharing—sharing the bills, the responsibilities, the fun purchases, and the exciting savings goals. You can spend your money together, but you can also save for things together, watching the deposits add up and cheering each other on.³
 

On the other hand, either owner of a joint account can spend those funds at will—everyone has equal access, no matter who deposited the money in the first place. So, it’s essential for both owners to have an honest conversation about goals, concerns, and needs before pooling finances.
 

How will you spend the money? How will you talk about it? Who will be responsible for what?²

And why get a joint checking account?

There are a lot of reasons we think joint savings accounts can be a good thing for your relationship:

• They promote teamwork. You and your partner have to figure out how you plan to spend and save together. Complete transparency about your spending ambitions and savings goals is crucial, and knowing what your shared vision is can bring you closer together.
• They have financial benefits. Each holder on the account is insured by the FDIC up to allowable limits, which means more overall coverage than that of a single holder. Plus, some joint checking accounts can help you save on penalties and fees. If there’s a minimum required balance for your account, chances are you can reach it more easily together.
• They can create a sense of equality. Let’s say one parent works while the other stays home with the kids. Or one spouse outearns the other. That’s when a joint account can lend a sense of equity to a partnership—instead of “my money” and “your money,” it becomes “our money.”
• They’re easier. When you have a full picture of your finances, it’s easier to budget. When you share money, it’s simpler to pay the bills. And in the event of illness or injury, you and your partner always have access to joint funds to pay any medical bills.^1,4

And just in case you need more evidence that joint checking accounts can benefit your relationship, we’ve got some. Studies conducted by researchers from University College of London, UCLA, and Notre Dame analyzing the 1970 British Cohort Study found that sharing a bank account encourages feelings of togetherness:
 

“Notably, the authors assert causation, not mere correlation. ‘Our findings are not simply the result of more satisfied couples being more likely to join their accounts. Rather, these results demonstrate that method of account management can also influence relationship quality.’”^5,6

Turns out, sharing finances might make your relationship even better. Very romantic.

Are there reasons why we shouldn’t get a joint checking account?

Realize that, as with anything, there are drawbacks to sharing a checking account. With two account holders, there are no secrets, so different approaches to spending will quickly become clear. For instance, one partner may be better at squirreling money away while the other spends more freely, which can lead to disagreements. And another thing to remember is that with a shared account, bad habits affect both partners. If one spends too much on something, neglects to pay off debt, or overdraws the account, both partners will be responsible for any fines or other financial repercussions. All of which means you need to be clear on your objectives and expectations before you start banking together.

What should we consider before we get a joint checking account?

Merging your money often makes sense when you’re merging (or have already merged) your lives. That means taking shared responsibility for paying bills or deciding on shared savings goals. For many couples, a joint bank account is the ultimate symbolic gesture of their financial union.

Talk openly. Discuss your views on finances. What is important to you? What do you want to save for? What kind of debt do you have? How much do you earn and what do you have to spend each month? Make sure you’re able to come to agreements about how to tackle these issues together.

Decide on your roles. Usually, the person with the most aptitude, interest, or time for a particular money task becomes responsible for it. Having one person tackle more of the money tasks makes perfect sense as long as both of you have a clear understanding of your overall financial situation. You can achieve that by going over your numbers together quarterly or monthly (even weekly).

 As stated in our breakdown of purchasing your first home as a couple,

 “The most important thing in deciding how to combine finances is to be honest about your feelings from the start and always keep an open line of communication. Money is frequently considered to be the biggest strain on relationships but working together to find solutions that work for everyone can reduce some of the stress.”⁷

How do we open a joint checking account?

Visit your nearest First Commercial Bank branch to discuss the right joint account option for you. Our bankers can address any questions or concerns you may have and put you on the path to your shared account.