Having a joint bank account if your finances are closely linked can be very useful, especially if you live together and share expenses. It is very convenient to be able to pay bills, or write cheques from one account. Many couples have a joint account which is used to pay for shared expenses like rent, food, electricity and telephone bills.
When you enter into a relationship, you have separate financial positions. But as you move towards a more serious partnership, it is natural to want to merge everything. You and your partner would have to decide how you would like to manage your finances going forward. A joint bank account can be a good idea if it is used with the right intentions. It’s about both partners being open about their personal situations, respecting the purpose of the joint account – not for one partner to do all the depositing and the other to feel entitled to all the withdrawals!
In the majority of relationships it’s common for one party to have different beliefs around money that the other does not. For instance one will be more of a spender and the other more of a saver. This can cause a lot of conflict. One is not more right that the other, rather its about being clear the values each of you have around money and manage your finances in line with this.
When you decide to open up a joint account, you must realise that it is a big step and the responsibility that you are taking on should not be taken lightly. There needs to be a lot of trust between the two of you. The risks involved are that either of you have the right to make unlimited withdrawals, regardless of who deposited the money. You can withdraw freely, without permission from your partner.
Before opening the account, you should set clear objectives of what the account is going to be used for and how you are going to manage it. Remember that by agreeing to a joint account, you are liable for any withdrawals and overdrafts that occur on the account, even if you were not the one who did it.
It’s also important to note that if you have been in a relationship more than 3 years all of your assets are joint unless you have contracted out of the Property Relations Act.