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Silver Spring, MD 20910

Jeffrey Settle, CFP®



Joint Checking Accounts

| March 05, 2015
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It may seem obvious to you, but for many people I come in contact with, this is a major point of contention.  I get asked all the time, "Should we have a joint checking account, or should we maintain separate accounts?"  I've seen every possible combination.  One joint account, two individual accounts, a series of extra or leftover money market accounts from college, or my most recent favorite, six checking accounts, four savings accounts, and a CD.  My suspicion is that this question has an underlying question.  I think that question is "how do I talk to my significant other about money?"

Mathematically, two dollars in one joint account is worth the same as two dollars spread across two accounts.  Emotionally, this can take on a different meaning.  I can't say that one way is right and one way is wrong, but I've found what works and what doesn't work. 

Having one joint account that acts as a hub for all direct deposits and all the regular monthly spending seems to work the best.  I've found that the biggest reason for this is shared accountability for the money being spent.  If he pays the mortgage from his checking account, and she's paying for the kids' activities and groceries out of her account, this often leads to problems.  What I've found is that there is a lack of communication as to who is paying for what and then we end up with resentment, distrust, or confusion.  I encourage my clients to have open dialogues about their finances.  If the transparency isn't there with "our money" then that's when trust, the foundation of any relationship can begin to erode. 

I have a married couple that I work with that told me that they have a joint account for almost everything but each of them has their own"no questions asked" account.  This account is specifically for one person to spend their money without having to answer questions later.  This can come in incredibly handy if one person wants to buy the other a birthday present and not see the transaction show up in the joint account.  I love this idea.  It doesn't need to be a lot of money.  But if each person has $100 a month that goes from checking into the "no questions asked" account, then this should go a long way towards keeping "our money" as well as maintaining some level of independence. 

The bottom line is there's no single answer for this problem.  It comes down to personal preference.  My best advice is to do what works best for you, but keep the lines of communication open with your spouse or significant other about your finances. 

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