Signing Up for a Joint Bank-Account? Don’t Forget These 3 Critical Rules

One of the most complicated aspects of early marriage is how to merge finances.  And to be honest, this issue also affects couples who’ve been together for years.  Getting a joint bank account should be a straightforward process.  But when couples misuse joint banking, or when they misunderstand it, the stage is set for chaos.  Joint banking doesn’t have to be contentious.  Not if couples take the initiative to approach it in a thoughtful way.

Joint Banking Needs Structure

Money Expert Tony Armstrong suggests that, “Joint bank accounts are checking accounts that belong to multiple people, each of whom can contribute to, and use the money in the account. Such accounts are a good fit for couples, parents and their teenagers, and adults assisting their aging parents. On paper — and in an ideal world — joint accounts provide easy collaboration for spending and saving. But realistically, they require more self-awareness and trust than the typical bank account.”

Here are a few tips on how to use joint banking effectively:

1) Set Disciplined Purchase Limits

Instead of using joint bank accounts as unlimited piggy banks, it’s much more beneficial for couples/designated account-holders to set planned spending limits.  For example, setting a $500 spending limit per month can prevent the temptation to buy expensive things randomly.

2) Review Monthly Statements Together

The only way to figure out if the money in a joint account is being used wisely, is if couples take the time to understand their monthly statements.  Especially in a collaborative way.  Strange or excessive transactions are easier to lose track of when statements are ignored.

3) Bank with Institutions Which are Too Big to Fail

Over time, joint bank accounts can end up holding larger amounts of cash than individual accounts.  As this happens, it’s important to make sure that your nest egg is properly secured.  A good way to do this is by banking with institutions which have established brands, and guaranteed FDIC Insurance.

Conclusion

Joint banking is certainly complicated and sensitive.  But it isn’t impossible to manage when couples decide to be organized.  When joint banking is approached in a disciplined way, it’s practically impossible to make any disastrous mistakes.

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