The good, bad and ugly of joint accounts

Increasingly, many successful families are equally financed by both husband and wife. 

If you both are employed or have got other investments, it would be advisable to collectively get a central pool. This is none other opening up a joint bank account.

Joint budgeting

Some say joint budgeting is a step towards financial transparency. So, should a couple have a family joint account?

Again this is another contentious issue because joining finances raises several complex issues that can be difficult to navigate. In some cases, some couples may fail to see eye to eye over money!

Opening up a joint bank account could save you from worrying over where to source the money to manage your expenses and investments as a family.

From time immemorial, money squabbles among some couples who have joint accounts have been a stress factor especially when one of the spouses differs over how their funds should be used. Unfortunately, some have ended up separated or divorced.

Her money is hers, his money is ours

“We have seen numerous jokes thrown of the wife’s money being her money and husbands’ money being our money.

But stories of couples who have cheated each other out of their life’s savings do not make it easier for families to hold joint accounts which have considerable benefits.

Sharing his experience with Prosper Magazine, Mr Ali Kibuule, an accountant manager at one of the Private Hospitals in Kampala says, “Transparency is key in handling finances in a family.”

So, having a joint bank account helps couples to know the details of each other’s pay cheque.

“This creates openness and helps couples to spend within their means while strengthening the bond too,” he shares. 

Let us take a look at some of the merits and demerits of having a shared bank account as a couple to manage finances as a family.

Ms Lynda Nabayiinda Were, the co-founder Ascenify Uganda Ltd-a management and Consulting firm says: “Married couples are a team that should be working together at all times as such they shouldn’t have separate accounts.”

A couple with a joint account promotes trust, a remarkable trait required to sustain any relationship.

“I would recommend each party to have a personal account but also ensure that together, you have one family joint savings account,” Nabayiinda shares.

According to Nabayiinda, a joint account is where the family saves towards a big project such as a holiday, home refurbishment, children’s education or joint charity or community initiatives.

Besides, two people with two incomes, can borrow more than one person alone if there is a family investment that needs a capital injection.

Not to predict doom! Needless to say, no one knows what the future holds. Many people have been left grappling with debt and poverty while their departed or incapacitated spouses account remains liquid due to inaccessibility.

She says: “Joint accounts ensure both spouses can access money at any time if the need arises based on prior agreed reasons for withdrawals.”

If only one person’s name is on an account with the desired signing mandate and that spouse becomes injured or ill, their partner may be unable to pull out money needed for medical expenses or other bills.

Discuss what works

Money experts say all these benefits can be realistic if the financial discussions are held before marriage.

After all, relationship experts list money among the three top reasons why relationships fail together with sex and communication which indirectly stem from lack of trust.

Risks of joint account

So, what are the pitfalls of joint accounts?

Nabayiinda says: “The risk you take when opening a joint account is that the other party has equal access to the account and can empty the account if he or she so chooses.”

This, however, can be controlled with message alerts for both deposits and withdrawals performed.

It should also be noted that the account is associated with the co-owner and is subject to creditor action.

If you have joint accounts, both names should be on the accounts. This way, all money is shared.

In this arrangement, all money goes into the same pot and each member of the couple has equal access.

In a nutshell, experts advise couples to agree on the basics of how much each one will contribute, how often, what the savings are for to avoid money being used for another issue thus complicating and eroding the harmony in a relationship.

When you disagree

Stop money fights

Joining finances raises several complex issues that can be difficult to navigate. In some cases, some couples may fail to see eye to eye over money!

If you have joint accounts, both names should be on the accounts. This way, all money is shared.