Checking Accounts For Your Relationship

Checking Accounts For Your Relationship

Mine, yours, and ours – no, it’s not quite Valentine’s Day yet! I’m referring to the checking accounts that you may have set up between you and your significant other.

  • Your account

  • Significant other’s account 

  • Joint account

If you are in a relationship you may be considering if having a joint account is the way to go. Here, I will provide some information on how you can structure your accounts. This may help you in deciding whether “sharing an account” is the right thing to do for your relationship.

Let’s get started!

Checking Accounts For Your Relationship

Joint Checking Account Structures

Couples may choose to utilize joint checking because their goal is to contribute to the household through a central account used by both parties. Let’s take a look at how the movement of money occurs.

There are two different ways to structure the movement of money. 

1.  Money is transferred from each person’s account to a joint account to be used for monthly expenses.

Checking Accounts For Your Relationship

2.  Money is transferred from the joint account to each person’s individual accounts. The balance left in the joint account is used to pay the monthly expenses.

Checking Accounts For Your Relationship

Checking Account Flow Examples

For the first scenario, each person withdraws a certain amount from their individual account and transfers it to the joint account in order to pay the bills each month. The amount that each person transfers to the joint account can vary based on the amount of income that is earned for the month.

Here’s an example. If Sally makes $6,000/month and Billy, her partner makes $5,000/month, the percentages would be 55% and 45%, respectively. These percentages can then be applied to the total bill amounts. The transfers would then be made to the joint account accordingly. There are many variations to this type of plan, but the execution is the same.

Below is a visual of the types of accounts that both Sally and Billy are utilizing.  For simplicity, let’s assume that the bills for the month are equal to $5,550.

Checking Accounts For Your Relationship
Account set-up for Sally and Billy

For my purposes, although there are three accounts, it works in reverse. In my household, I use the joint account to hold all incoming deposits and all payments are deducted from that account. Any money that is allocated between me and my husband is then deducted from the joint account.

Here’s a visual of what I explained. Please note that these are not actual figures.

Checking Accounts For Your Relationship
Account set-up for Mr. FTD and me

A Joint Account Works For My Household

Why do I structure my accounts like this? One of my household’s main goals with managing money is to accumulate funds in various investing accounts in order to diversify our holdings. 

Each month, every dollar has a purpose. Therefore, having all the funds in a joint account simplifies the process of transferring those funds into either a savings or brokerage account for short-term or long-term investing. This way there is no room to use the money for unnecessary purchases.

My husband and I opened a joint account very early on in our relationship. It has always worked for us, but I can imagine why it would not work for everyone. The next points I make will give you a few ideas to ponder and ultimately make the decision that is right for the relationship stage you are in.

Will A Joint Account Work For YOU?

stack of money

Generally, if there is a joint checking account in place, there is more transparency in the relationship. In this case, both people would be on the account and have the password. 

Each person would be able to log into the account and view the transactions if they choose. Here are a few reasons how joint accounts would be a viable option in your relationship.

  1. A committed relationship + trust between partners: If you both have similar money values and are working towards the same goals. Also, trusting your partner and being on the same page is a must. 
  2. One person is the breadwinner: If one person is making all the money, the non-working person should also be included on the account.
  3. All incoming funds are already accounted for: When the money is budgeted and each person knows how much can be spent, having a main account will not change the dynamic since there are already money “structures” in place.

Checking Accounts For Your Relationship

In Review

Overall, I left you with some aspects to consider and a breakdown of how joint accounts can be utilized. Now, you can readily determine if the structure is right for your relationship.

Currently, I have my accounts through a local bank, but if I were to open up an online account, I would use Capital One 360 Checking*. They do provide “linked accounts” so you would be able to use it in conjunction with your current checking account set-up. That being said, there are a variety of joint account options both online or in your local area that you can use!

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Readers, what approach are you currently utilizing? Is it working for you?

Original photo credit:  Pixabay

*I have no affiliation with Capital One 360 Checking at the date of this edit – 10/14/2017



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