Saturday 11 April 2015

Why bother with a joint bank account?

Image by Hin255 from Free Digital Photos. Net

It really is true that children learn what they live. Growing up as a child my parents made all spending decisions in consultation with each other and they only had one joint bank account that was used for everything. I don't know why they choose to have a joint account, if it was what was done in those days, if it just seemed like the logical thing to do or if it was because both of my parents came into their relationship without any real earthly riches and were starting from scratch together.

I grew up knowing that what was Dads was also Mums and vice versa. there were never tense conversations about money and they were both very sensible and only spent when they could afford it. We didn't have abroad holidays or new cars as those things were beyond their means but we always had everything we needed and more importantly lots of fun and love.

I thought every family worked in the same way so I was super surprised when I found out from friends that many of their parents still had individual accounts. It seemed there were lots of different sets-ups within families, like totally separate accounts and no joint account at all or a joint account were a proportion of each salary went in and then separate accounts too. One partner might pay all insurances and the other for the holidays that year but I have to be honest this way makes no sense to me. What happens when one car is written off and the insurance won't cover it, would they just let one partner suffer alone?

Over the years many of my girlfriends have questioned why I would want a joint account with dh, I often got asked questions like 'why would I give up my independence?' or 'do you really want him to see everything you spend?' but for me it is all about trust and honesty. Yes there have been times over the years when he has felt I've spent too much (and on the wrong items) and I've had to face the music and we have talked about it and come to a compromise but it feels like it would be far more hassle to try and sort things from separate bank accounts and to hide things away from each other.

I've been with my husband for nearly 21 years and we made the decision to buy a house just three years after becoming an item. It was at this point that I started to ask him about having a joint current account so we could sort all our bills out from one place and with minimal fuss. It is quite amusing to think back to it now but I remember being hurt and insulted at the time, as my husband said he didn't want a joint account with me as he could not trust me with his money. I was gutted but realistically knew he was completely right. There were many times at university when my parents had bailed me out with a couple of hundred pounds and there was nothing I liked better than a good shopping spree. Spending really was something that made me very happy.

So the compromise was that we would have a joint account for all house-related bills and we would both put a set amount in there each month, We both earned around the same salary but of course the difference was dh saved and I spent. In fact we could never of purchased that first house if he had not had the deposit to place down for it. Over the next few years I proved myself with money and grew up an awful lot in relation to spending and being mindful of what was affordable.

By the time we married in 2002 we had a joint account where both of our wages were directly paid into and all bills and spending came out of. We both kept separate current accounts for a while but soon closed them down as they became a bit defunct without any money regularly being deposited. Now in 2015 we just have the one joint current account and no individual accounts for day-to-day spending. I only earn a minimal amount as predominantly I stay home and look after our family and I'm pleased to say never has dh pulled the 'it's my money' card. We both play valuable parts in our family life and therefore what we have in a monetary sense is shared and I'm so glad of our joint account as I'd hate to have to ask dh for money to pay for the kids clubs or to fill the car with petrol.

Our joint account gives me as a work-at-home mum independence and here are a few more reasons why I think joint current accounts are a great idea -
  • One bank account for all your income and expenditure makes life much easier to keep track of. You instantly know what your current monetary position is.
  • It also allows you to budget effectively together for shared costs such as food and holidays or save for bigger expenses such as a wedding. 
  • Either of you can manage/reconcile the account and keep an eye on what is happening. 
  • You are accountable to each other and therefore less likely to spend on a whim. 
  • It encourages open conversation around money, spending and saving and that is never a bad thing. 
  • It is good to be able to build up some savings in your joint account so that if you need to take a loan or mortgage you are able to prove your dual income and expenditure easily. 
  • The Financial Services Compensation Scheme protection limit of £85,000 is a per person limit, so you are protected for twice the amount in your joint account.

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