Taking Your Relationship to the Next Level - The Joint Account (Part 2- The Cons)

Following up from the previous article “Taking Your Relationship to The Next Level: The Joint Account (Part 1)”, we shall now discuss its disadvantages.

In the first article of the series, we listed down the main advantages which were: convenience, lower costs, additional benefits, a more focused goal, able to help other family members as well as uninterrupted access to the account in the event of either partner’s death. While these are indeed significant advantages, there are several disadvantages you should consider before opening a joint account. By the end of this article, you will be able to identify the benefits and disadvantages of a joint account and make your own decision whether to put your money in a single or joint account in your relationship.

Cons

The perception that you have lost some financial freedom

• If you are accustomed to earning and spending your own money, a joint account may make it seem like you are being restricted from your normal spending habits. This is because in a joint account, you may become worried that anything you want to spend on may be called into question or subjected to long periods of discussion. In reality, this feeling is actually just a perception. If you are the type that has to be in 100% control of your money, a joint account might not work out well for you.

Transparency

• The fact that you and your spouse will be able to monitor or be alerted whenever money is taken out of the joint account can turn into a huge bone of contention! For example, if you ever wanted to reward yourself by buying a new handphone or treating yourself to an expensive dinner, would your spouse agree to it when she finds out? A lack of discreetness also means that the element of surprise is lost when you purchase something for your spouse’s anniversary, birthday or other special occasions.

Disagreements may be resolved in an improper manner via the account

• If you are going through a separation, or are planning to get divorced (or your relationship is coming to an end), there is a real chance that your partner or spouse will rush to empty the account and keep all the money for himself or herself. When emotions are running high, people sometimes behave in an impulsive, immature or unpleasant manner. Often times, depriving the other person of as much money as possible is the preferred “weapon of choice” to spite them.

Failure to keep to the budget may cause further problems

• Legally speaking, you are free to do whatever you want with the money in your joint account. Whatever and however you spend it is entirely up to you. The problem, however, is that disagreements and misunderstandings can occur if you spend more than your agreed upon share. Furthermore, if you don’t keep to the budget and fail to alert your partner about it, he or she may be in for a surprise when trying to make a payment through the account (insufficient balance)!

Keeping your ATM withdrawal slip is a hassle

• The convenience of an ATM withdrawal facility may be beneficial, but for some couples it can be a bane. The convenience becomes a hassle because both parties need to keep their ATM transaction slips. Moreover, if you love to withdraw money from the joint account without retaining the slip, the account could quickly become empty before you or your spouse realizes it. This may then lead to more disagreements and tension.

Liability

• If someone ever initiates legal proceedings against your spouse and he or she is required to pay money to a third party, your money (specifically your money in the joint account) will be included as part of the equation. This is because in terms of liability, a joint account has no separation. So even if

you have a personal agreement with your spouse that, for example, 40% of the money in the joint account belongs to you, this will not matter in a court of law. Your money in the joint account can be used to pay your spouse’s liability.

Conclusion

Ultimately, there are many good reasons for establishing a joint account with your partner or spouse. But remember, you should also beware of its disadvantages. As is normal when making big decisions in a relationship, we recommend that you extensively discuss and communicate honestly with your spouse before making your decision. At the very least, you should discuss your shared and individual expectations, goals, outcomes and responsibilities in the joint account. A decision undertaken after having had honest, constant consultation to reach a collective agreement will hopefully result in a better-managed financial situation and enhance your relationship with your spouse.

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