Fewer Aussie couples want a joint bank account
Surprising new data reveals that fewer Australians are choosing to open joint bank accounts, savings accounts and credit cards with their loved ones. Traditionally a couple might share a transaction banking and/or a savings account and probably a credit card account as well. Later they may share a home loan.
Sometimes couples join their finances when they are saving for a house or other big expense so many couples open a joint savings account first. Often couples open joint accounts when they are approved for a joint home loan.
But now less than half of Australian couples share their banking arrangements. A big new survey of 2,000 Aussies from ME Bank found that only 49 per cent of people in a committed relationship have a joint everyday transaction account, down seven per cent in just three years.
48 per cent of people in a couple have a joint credit card and 39 per cent have a joint savings account.
What are the pros and cons of joint accounts?
Joint accounts require trust and a willingness to be open and honest about money. If you are thinking about opening a joint account, consider these pros and cons:
1) Homemakers – When one member of a couple is working and earning while the other person is caring for kids or homemaking, a joint everyday transaction account helps to share money. You can compare and research everyday transaction accounts from all of Australia’s major banks and credit unions here.
2) Savers – Young people saving for a house or other big expense may like to open a joint savings account to pool their savings. Some couples set up joint accounts when one is earning money while the other person is staying home to care for family. Compare high interest savings accounts here.
3) Managing family spending – Joint credit cards help couples manage their spending together and have a backup if they individually don’t have money on any particular day. Sometimes couples will get a joint credit card when they get a joint home loan or joint bank account. Check out hundreds of great credit card deals here.
4) Breaking up – Joint accounts and ex-partners – The big downside of joint accounts is what happens when we break up? Coupes who split need to close their joint accounts and manage their money for themselves again. This can be tricky.
5) You could be liable for the whole debt – Debts, like credit cards, personal loans and account overdrafts, that are in two people’s names, are owed by both partners equally. However, did you know that if one person fails to repay their share of the debt, the other person is liable for the entire balance outstanding? That’s right. You are not liable for just 50 per cent of the debt. According to Australians banks and credit unions, you are both liable for 100 per cent of the debt. Many failed romances have left one ex-partner repaying the joint debts of their former relationship.
Why are Australians turning against joint accounts?
Increasingly Australians are not sharing their banking accounts and keeping at least some of their finances separate. This could be due to the increased financial independence of women. Today’s young couples do not expect that one partner will make all the important decisions alone. Modern couples share a sense of independence and don’t want to give that up for the convenience of shared accounts.
Another reason why most Australian couples no longer join their accounts and debts together is the big issue of untangling their arrangement if the relationship fails.
Sharing finances and sharing accounts requires openness and trust according to ME Bank’s Nic Emery.
“There needs to be a degree of trust and understanding on how you are going to both spend,” said Nic.
Nic told Fairfax media that couples need dialogue, trust, and willingness to compromise to keep their money disagreements to a minimum.
Still thinking about a joint account? Compare your saving account options today.