What are the Pros and Cons of opening a Joint Bank Account? This article will cover the good, the bad, and the opportunities. Our tools are only as useful as we use them, a Joint Bank Account is one of these tools. How can you maximize a Joint Bank Account?
Decide why you need one? Don’t get a joint bank account because that’s what couples do. Don’t follow a recommendation from a friend. Why am I warning you? A joint bank account gives both the account holders 100 percent control of the account. Which means if we own a joint bank account with your money in it, I can withdraw the full amount, legally.
If you open a joint bank account, don’t close your other accounts. Don’t put all your eggs in one basket. This is your income, not something to play around with. I would suggest that your Joint Account, is not your main account.
Look at the joint bank account as an opportunity for both you and the co-owner to accomplish the same goal. A joint bank account is most effective with Strategy. How are you going to use it?
Here are some effective ways to use a Joint Bank Account
- Pay off debt. If you are tackling your debt as a married couple, this is one of the best ways to do it.
- It’s easier to track bills. Not only does it give you one tracking system, but you can also see who pays for what bills to split them evenly.
- Saving for fun activities or funtivities. Most of us don’t budget or plan a budget when we vacation. We know around what we will spend but not to the exact dollar amount. A Joint Account can provide you with an account just for funtivities.
- Educating your children. Instead of giving an allowance, open a Joint Account with your kids, and teach them how to handle money young. This is an added bonus because you have control of the income going in and you can see the income going out.
It is highly suggested that you’re in a long-term relationship with this individual. Say you and I weren’t married, like my earlier example, I pulled out all of your money, and it’s perfectly legal. This is why trust is so important. Problems can arise for a relationship if the communication or ‘Strategy’ isn’t there.
Communicate your goals and how the joint bank account will be used. Both owners can see the activity in the account, so to avoid any problems, trust and communication are necessary.