Money Mondays is your go-to guide for all the information you need to manage your finances. For this week’s Money Can’t Buy Me Love column, we asked a financial expert what you need to know before opening your first joint account.
In the hierarchy of commitments, opening a joint bank account trumps marriage, co-habitation and even having a baby in many couples’ eyes.
Is there ever a good time to shack up financially? And what do you need to discuss with your partner before taking the plunge? We asked Samantha Seaton, CEO of financial management app Moneyhub, for her tips on joining finances with your beau.
Have a practice run first
If you’re living together, try opening a joint bank account for your bills first. It’s a good way to test out shared financial responsibility and ensure that you’re both paying equal amounts for the rent or mortgage, as well other household finances.
Make a joint savings account for a shared goal
Whether it’s a house or a holiday to Hawaii, why not make your first joint account a savings account with a specific goal in mind? This is not only another good way of having a trial run, it can also help to create a sense of excitement around joining up with your partner as a financial team.
Remember your credit score can be affected
Living with a partner or being married won’t affect your credit score, but opening a joint bank account and sharing a mortgage will. This is because you’ll be co-scored together.
If one of you has a bad credit score, it’s worth thinking about keeping your money separate and taking steps to improve the score before becoming financially linked.
Iron out financial worries beforehand
Does your partner spend more than you do? Does one of you earn more (and should that partner therefore pay more towards your rent or mortgage?) What happens if one of you wants to buy something expensive for themselves? To what extent should you run your spending past each other? These are all questions you need to hash out before you take the plunge.
Be ready to be adaptable
Prepare to re-negotiate the agreements you made when you opened the account as you progress through different life stages. Having children, losing a job or getting a promotion can all change the status quo, and you have to be prepared to adapt as needed.