Human beings have evolved to a point where it is okay to touch them but very wrong to touch their phones, thanks to technology. There are secrets contained in those phones. This has spilled over to people who are dating or already married. Exactly at what point should people in a relationship draw the line? Should there be secrets between spouses or a boundary that the other person is not supposed to go beyond? Who draws the line? These are some of the questions that relationship and marriage counsellors will face probably on a daily basis.
There is no specific response to the above questions and what is deemed right or wrong is relative to the person responding or getting the response. The issue of privacy (or lack thereof) in relationships is one that has come under sharp scrutiny in the recent days, especially when it comes to finances for couples. Money can make or break a relationship and it is important to have money conversations before getting married. The decision on whether couples should pool their finances together and manage them jointly or each spouse should be allowed to exercise freedom when it comes to the management of their finances is a tricky one. It depends on the individuals, their attitude towards money and their family background among other things. That’s why we address the issue and leave it to you to make a rational decision on what you consider to be the best decision.
JOINT ACCOUNTS
This is where couples decide to bring their funds together and make financial decisions as one party. Some of the pros of running this type of account are:
Trust
Running a joint account with your significant other promotes trust and openness. Couples are able to communicate about their incomes freely and come up with a way of saving together. Since it is possible to withdraw money without the consent of the other, they have to communicate and agree. This ensures that no party withdraws money for individual use.
Budgeting
Joint accounts make it possible for couples to come up with a plan on how they intend on spending their money. They talk about their different needs, draw up financial goals and a plan as a family. This makes it possible to budget for these plans.
Accessibility
In the unfortunate event that one of the parties is befallen by a misfortune such as a long term illness or death, the member who survives is able to know exactly how much is in the account and following the right procedures, they can access this money.
While the idea of running joint accounts may be appealing to many, it comes with its fair share of drawbacks. For instance, couples may have had a debt before meeting and once they get married, this debt is brought into the relationship and the other party has to carry the burden brought by their significant others. Where one member earns more than the other, the one who earns more may feel overburdened by the other.
This article talks about Why the joint bank account is a must for married couples.
SEPARATE ACCOUNTS
For some couples, this may sound like the ideal way of saving and spending their money. Here are some of the pros of having separate accounts.
Privacy
By running separate accounts, couples are able to make independent financial decisions without having to consult the other. This is especially so for people who have always managed their money independently.
Harmony
Separate accounts promote harmony in the sense that if one needs money, they are guaranteed of getting it without overcoming barriers set by the other party in the relationship. Where one person feels that the other person is not spending, money as they should be, they may put restrictions on the other. However, separate accounts eliminate the chaos that may come about as a result of this.
Debt or Assets
Where one has accumulated a certain level of debt or amassed a certain amount of wealth, it would not be prudent to have the debt or the asset go into a joint account. The debt would threaten to eat into the efforts of the party without a debt while the assets brought would play a part in causing laxity on the part of the member who has less contribution.
Separate accounts may come out as easier to run but they also have their demerits. Separate accounts may lead to overspending as there is no limit put in place by the other spouse. This may cause wastage of money after which the spendthrift looks to the other party for money. This may lead to unnecessary fights in the family. Although there is privacy in these types of accounts, transparency is stifled as rarely will couples say how much they have in their accounts.
Hybrid System – Both joint account and individual accounts
Some couples have a hybrid of the two where they put money into a joint account for things they have agreed on like school fees, mortgage or money for a joint project. They are then free to use their money in their individual accounts as they please.
Whether you decide to share a bank account or not it is important to plan for the future and create a Financial Plan as a couple.
What are your thoughts on having a joint account as a couple?
