For new couples, financial arrangements are more than likely figured out after you’re all moved in. Bank accounts are never discussed first. And home bills are usually figured out as you go. But choosing how to manage your finances together is an important step for your future as a new couple. And paying bills starts with bank accounts. Here is Blogcastings’ best tip for new couples on banking.
Types of Banking For New Couples
Some couples will combine all of their expenses together and pay all of their bills from one joint account. And some couples will keep accounts separate and agree on certain bills that each will handle . Those two are the main options. But there is a third option that is not talked about as often as having separate or joint accounts.
At first, you and your significant other most likely have different banks that you keep your monies in. And it is easy to just leave that as-is. Some couples choose to have separate accounts and nothing wrong with that if it works.
A benefit to having separate accounts is that this method helps to grow trust within couples. Having separate banks allows for independence on spending. Each party can spend without judgement. If you go all out during lunch meals then the other party wouldn’t know right away.
You will trust that each is handling their own bills and their share of the agreement. Couples will have to assume that the other party is responsible enough to have enough money set aside for shared expenses. Certain assumptions must be made. If not, then things will not go very well and expect conflict. But if all goes well then your trust will grow as time passes and bills get paid.
Couples that decide to combine their paychecks and use just one bank will have to move all of their monies to the one bank that is decided on. And one of you will have to say goodbye to your old bank. A bank with a good easy-to-use checking account is all the you need. This will be your joint account and you will combine your monies in there for expenses. There’s many pros if you decide to use this method and one is that there’s transparency.
If things are still too new within couples and the trust has yet to grow then joint accounts helps to build that trust. Although, some might find it hard to splurge. Couples will find that they must earn that which they want to buy since their expenses can be tracked at any time.
Something to consider with having joint bank accounts is that if things do not go well between the relationship, then it becomes a big issue to separate your money again. Not fun.
Best Tip For New Couples On Banking – Hybrid Accounts
My best advice on bank accounts is to use both types. Using separate AND joint accounts requires using both at the same time. This method requires, at least, three checking accounts within the same bank. One account for each of you to use individually and a joint account that each of you will share. Your joint account should have money transferred into it every pay period that is sufficient enough for your home bills only. This one joint account will pay all of your home bills. Your personal expenses, like clothing and meals, will be paid through your personal separate bank account.
Using Both Methods Takes Planning
This method works by doing some quick math on your home bill expenses. Add up your monthly home expenses including rent. Split that amount into whatever proportion you agree on. Then each one will contribute to the joint account every month. And pay through that account every month.
There’s transparency on the joint account. All bills, rent, monthly subscriptions, can be viewed in one amount. You can use your joint account to pay for groceries also. You can even use this joint account to save up for vacations, invest in stocks, etc. Tweak your method until it works for the both of you.
The separate accounts that you each have are for your own use. But there’s no transparency on the separate accounts. Trust is the important thing here. If you trust your partner, then there’s no need to baby the other’s spending.
A cool thing about having both types is that you can always spend on gifts and the other wouldn’t notice.
Most banks will charge you a monthly fee for the joint account if you do not have a direct deposit for it. A trick is to convert one of your monthly transfers into a direct deposit for the joint account. This will save you about $100 a year of bank fees.
The hybrid method takes more time to plan compared to using the other two methods but it’s worth the time. Once you’re using it you will find it less stressful in the way that you’re kept in the know of your important expenses.
And whichever method you agree to go with, the most important thing is pay your bills. On time. Also, couples will save money once they live together. One light bill, one energy bill, one rent bill, etc. It’s normal and a must to combine most expenses. For example, it doesn’t make sense for each partner to own their own Netflix account so you’re dropping one for sure. Hulu, Amazon Prime, etc. are more examples of subscriptions that can be combined.
I hope you agree with my best tip for new couples on banking! Leave a comment.