What questions should you ask before opening a joint transaction account?

What’s the reason for opening the account?

It’s a good idea to work out up front exactly why you’re opening a joint account. Perhaps you’ve moved in together for the first time and you’d like a combined account for paying bills. That’s a great start but its worthwhile drilling down further to how you’ll actually use the account.
 

If the purpose of the account is to manage household expenses, for example, establish with your partner what exactly will it cover? Some expenses might be obvious such as rent, power and gas but some might take a bit more dialogue. What if you have to buy a combined birthday present for a friend – would you pay for it out of this account as well? And what if the washing machine broke down and needed to be replaced – would that be a candidate for your joint account as well?
 

Having a discussion upfront about exactly what your joint account will be used for – and what it won’t be used for – can go a long way to avoiding confusion and disagreements later on.

 

Are we going ‘all in’ or keeping separate accounts?

When it comes to combining finances, it’s important to think about how much financial independence you want to maintain. Some couples might decide to combine all their finances into the one account, including having their salaries credited into it. Other couples however might choose to keep their own separate account as well.
 

Whereas there is no right or wrong reason, it’s important to take your own personal situation into account to decide what’s appropriate for you. Once again, having a conversation with your partner upfront about how much- or how little – you want to combine finances can help avoid issues in the future.

 

How much will we each put in?

It might seem straightforward to both put the same amount in. But what if there’s a sizeable difference between your incomes? If that’s the case you might want to adjust what you each contribute.
 

One way you could work out your contributions would be as a percentage of what your combined income is.

 

What are the guidelines for getting money out?

If there’s one area that’s likely to cause disagreements when it comes to joint accounts, it’s when it comes to spending the money in it. Therefore, setting out the ground rules upfront could save a lot of grief later on.
 

If the account is strictly for paying bills, then it could be a good idea to set up direct debits so you know the amount will go out automatically. Things can get a little bit more complicated though when the account is used for getting out money out at ATMS or for incidental expenses along the way, particularly if both of you have access to the money through your own debit card.
 

Once again, there’s no right or wrong answer, rather you need to set what works for both of you.