Financial Planning is a major part of every couple’s life as you begin your journey together it is important to have a deep and enriching conversation around finances, spending, funding, etc. You are two different individuals with different views on finances and choosing to merge your money in a joint account might not be the best decision or option for your relationship.
Joint accounts have an endless number of opportunities but there are also major issues to be considered when joining your money with your partner and these issues need to be addressed. More and more couples are opting not to merge their finances after marriage as they have realized the downside to this decision. Here are 10 reasons why should not open a joint account. For joint accounts to work well, you need a basic level of trust, shared goals, and a desire for transparency.
Read also: 10 Reasons Why You Should Open A Joint Account With Your Husband
- You handle money differently.
You were raised differently and so your values and ideals around money and finances will also be different. In joint account you should share the same values and when you do not handle money the same way then it is not for you. How you grew up plays a role in your money handling habits, too.
- It will hinder your financial independence
Being financially independent is a major goal and keeping separate bank accounts helps couples maintain individual freedom. Financial independence is also important if an emergency arises, so each partner needs access to funds and the ability to act independently.
- Debt Acquisition
Certain people are known to have little or no control over how they spend money and so acquire endless debt making the other party bankrupt and struggle financially.
- Inequity. In households where incomes between partners differ, one account holder could feel they’re contributing more or less. Without a good pattern of communication about financial issues, this could lead to arguments.
- Lack of privacy. With joint accounts, all account holders can see every transaction in the account. This might create a level of visibility that makes one or both potential account holders uncomfortable.
- Shared liability. If one account holder mismanages funds, the other account holders are liable. Creditors also can come after funds in a joint account to satisfy one account holder’s debts, regardless of who deposited the funds in the account.
- Reduced benefits. If parents open a joint bank account with their child, the assets in the account could reduce awards for college financial aid. The same applies to accounts that adult children have with aging parents because how money in a joint account is used could impact a parent’s eligibility for Medicaid.
- It makes separation/divorce difficult
When it is time to part ways splitting your finances might be an issue because adding up the numbers and defining how it will be split will become difficult.
- Lack of trust
A single account holder could drain the account at any time without permission from the other account holder.
Photo Credit: Getty
