When you and your spouse are struggling to manage your unified finances with ease, you might start wondering why joint bank accounts are bad or at least causing you trouble. In reality, bringing your financial lives together and using joint accounts isn’t necessarily an unwise move. However, you have to have a strategy in place to ensure you succeed. Otherwise, you’ll deal with far more trouble than you’d like. If you want joint finances without joint headaches, here are some tips for financial unity.
Embrace Open, Honest Communication
In the world of joint finances, few things are as crucial as open, honest communication. In many cases, headaches happen because one or both spouses aren’t clear about their needs, preferences, and priorities. As a result, their partner may unknowingly make a financial move that rubs their spouse the wrong way, leading to conflict.
When you’re dealing with joint finances, communication is the basis of financial unity. Sit down together and talk about your needs, address concerns, and work together to create a plan that respects both of your perspectives. That way, you have a strong foundation that’s built on honesty and transparency, making it far easier to avoid missteps that can lead to strife.
Combine the Right Accounts (and Leave Others Separate)
When you’re combining your finances, there’s nothing that says every account has to become a joint concern. Some couples find that maintaining separate accounts and also having a joint account for shared expenses is the better option. It gives them some autonomy and privacy while ensuring that broad household needs are properly met.
Similarly, some couples may want to keep debts brought into the relationship separate while handling those acquired together jointly. In some cases, this can prevent frustration from the spouse who didn’t acquire the obligation, as it ensures that the partner who did accrue the debt is the one paying it down.
Essentially, don’t assume that you have to bring your entire financial life together. If, through discussions, it’s clear that some separation makes sense, go that route instead.
Combine One Part at a Time
Even if you plan on bringing your entire financial lives together, starting slowly and only combining one part at a time is potentially the best strategy if you want to avoid conflict. It allows you to work on individual pieces instead of having to manage the entire picture simultaneously. As a result, it’s far easier to work out the minor kinks that will undoubtedly arise since you’re only dealing with them one at a time.
Functionally, this strategy ensures neither of you gets overwhelmed by the process. Plus, since you aren’t trying to do it all at once, your odds of making a mistake along the way may go down. It also makes talking about what’s happening easier, as you can focus on a single part of the broader equation instead of tackling everything right away.
Establish Budgets to Guide Payments and Spending
Budgets are formal plans that dictate what happens to your income every month, giving you both opportunities to ensure that bills get paid, savings goals are attained, and other objectives are met. If you fully combine your finances, having a single budget you build together keeps everyone on the same page, and it can help you avoid missteps that could lead to conflict.
However, if part of your financial life remains separate, consider having at least three budgets. One will address how much of each partner’s income goes toward joint obligations, while the other two will help plan for each spouse’s personal responsibilities and spending. That way, nothing is left to chance, making it far easier for everyone to manage all aspects of their financial lives.
Create an Emergency Fund (and Set Rules for Its Use)
Emergency funds are crucial for dealing with the unexpected, ensuring you have a stash of cash you can tap when unanticipated financial obligations arise. In most cases, you want to focus first on saving at least $1,000. After that, move toward one month of living expenses, followed by three, six, and nine months’ worth.
As you build up your emergency fund, work together to outline rules for how those funds are used. Talk about what constitutes an emergency and what doesn’t. Determine if you both need to approve pulling money from that account when an expense needs handling. Additionally, talk about how you’ll rebuild the balance if you do need to tap into that money. By doing so, you’re avoiding a lot of potential headaches.
Do you think that joint bank accounts are a good or bad idea? Can you think of any other tips that can help couples streamline their joint finances without causing headaches? Share your thoughts in the comments below.
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