If you are set to marry any time from now, you should be ready for that inevitable question, “Should we have a joint account?” This is one of the biggest decisions every couple get to face.
Where things are normal – and they hardly are, you can expect that since you are getting married, every party should also be ready to merge the money. After all, marriage is a union of two people. To simply paraphrase, it should be the union of two separate accounts. And we can reel off a plethora of benefits for couples who treat money as a joint asset. However, it is not always that simple.
A TD Bank survey released in March found that most couples will love to maintain their separate accounts because of issues bordering on independence, convenience and emergencies.
Marriage is between a man and a woman, who have lived a significant part of their lives separate from each other. At the point when they decide to come together the two would in most cases have accumulated substantial assets, income and even debt. All these need to be properly considered before deciding what account to have.
Stephen Okojie, a media consultant and recently married to Vicky Okojie told BusinessDay that the issue of joint account is based on the prevailing perspective in the society where you come from.
“Where I come from, it is not a discussion for married men. I have seen people who thought they were being civilized and went ahead to open a joint account only to create serious friction at home. For my wife and I, we operate separate accounts but when there is a need to embark on big projects like buy a house, children’s education we come up with a contributory strategy. That way, we maintain our independence and frictions are prevented,” Okojie said.
Ibikunle Olusola, a tech entrepreneur who is also married says he prefers a joint account because of the sense of bonding and trust that come with it. Majorly for him, the ability to control spending in the household makes a joint account a better option for couples.
Notwithstanding, he told BusinessDay, “In my home, we operate separate account because my wife is not forthcoming. She does not believe in it. A joint account is usually set up for a purpose – could be a house project, a land project and so on. It does not mean you should not maintain your separate accounts, you can.”
In the TD Bank survey, it was noted that many couples (about 42 per cent) with separate accounts also have joint account.
There are many reasons why couples could consider having a joint account. A team of financial planners were asked recently, why a couple would want to have a joint account and the responds came in words such as “openness”, “communication”, and “trust”.
Most financial planners believe that joint accounts help prevent money secrets between spouses and encourage them to communicate about their financial goals.
When couples open a joint account each account holder is provided with a debit card, a chequebook and the ability to make deposits and withdraw funds. Most banks will also provide each holder with online access to account information and tools, further simplifying the process of keeping track of money. By keeping track, both parties are fully aware of all income and where the money is spent.
A separate account on the other hand will ensure you retain your financial independence. This is particularly important for couples who married late and had been used to managing their financial affairs. However, a purely separate account situation may not work with a house payment where both names may be on the property and the combined income of both individuals is often needed to meet financial obligations.
Michael Chamberline a financial advisor with Forbes Magazine suggests that having account could be the best option in later-in-life marriages where there may be children from a prior marriage and because some people prefer to keep their assets separate. However, he said, there are no right or wrong approach. “It is up to each couple to decide on the best approach for them.”
A major challenge that may arise with a joint account is when one spouse enters the marriage with debts that must now be paid with joint funds. In some cases this could lead to feelings of resentment in the other spouse who feels forced with the responsibility of paying the debt as well. This is why it is critical to always disclose everything in detail before deciding on which kind of banking works best for them.
FRANK ELEANYA
