When a Joint Account Does (And Doesn't) Make Sense

There are plenty of good arguments for opening a joint account. For instance, it can be easier for two people to keep track of their cash when all of the bills, income and savings are in the same place. By definition, it’s also less expensive to maintain joint checking accounts since you don’t have to worry about getting hit with twice as many fees. Despite these advantages, joint accounts aren’t right for everyone. Here’s why a joint bank account may (or may not) be a good option to manage finances.

You could also consider sitting down with a financial advisor to draw up a financial plan and identify your long-term goals.

Evaluate Your Spending Habits

The first thing you need to look at before you pool your finances with someone is how well your individual spending habits match up. When one person has a serious shopping habit or spends carelessly on small things it can become a source of friction for both sides.

Before you set up a joint account it helps to have some boundaries in place to ensure accountability. For example, you may decide to have a joint checking account for paying off credit card bills but each maintain separate accounts for discretionary spending. If you choose to go this route, you should both be clear about what the guidelines are for each account. The goal is to allow both sides to have some autonomy with their money but it shouldn’t come at the expense of your budget.

Add Up Your Expenses

When you enter into a joint account with anyone you’ll need to figure out how to divide up your expenses. There’s no right or wrong way to do this. For instance, you may decide to divide the bills based on your individual income. Take a newly married couple for example. If one spouse earns 70% of the income and the other earns 30%, they would each pay the corresponding percentage of the bills. For some, it may make more sense to use one person’s salary to pay all the bills and save the other’s income.

Assess Your Savings Goals

Signs reading "spend" and "save," each pointing in an opposite direction.

A joint account also makes sense if you’re all aligned on savings goals. Before making the decision, talk about your goals to see if a joint savings account is the right move. If one of you wants to use the money for a down payment on a house while the other wants to splurge on a dream vacation, it’s likely to create conflict.

Before opening a joint account, you could also consider sitting down with a financial advisor to draw up a financial plan and identify your long-term goals. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs.

First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to three fiduciaries who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

When Separate Accounts Are Better

Even if both parties are on-board with the idea of joint accounts there are some situations where you’re better off keeping things separate.

Debt. Maintaining separate accounts can protect against debt collectors. If the indebted party passes away the entirety of the joint account may be claimed without proper estate planning.
Divorce. You should also think about separate accounts if one of you is paying alimony or child support so it’s easier to keep track of these obligations.
Addiction. Separate accounts are also a no-brainer if one party has a problem with spending stemming from an addiction to gambling, drugs or alcohol. Allowing them unlimited access to the money could add up to financial and emotional chaos.

How to Transition to a Joint Account

If you and your partner decide to manage money together, transitioning to a joint account can be done in a few clear steps. Start by opening a new joint checking account at a bank you both agree on, then decide how much each of you will contribute to the account. You may also want to set up direct deposits. From there, link any shared bills and recurring payments to the account, such as rent, utilities, or groceries.

Finally, keep an eye on the account activity together. Use a budgeting app or bank tools to track deposits, spending, and balances. Set a time each month to review how the joint account is working and discuss any changes that need to be made.

Bottom Line

A couple filling out paperwork for a joint account.

A joint bank account makes sense for people who need to manage shared expenses, build savings together, or simplify household finances. Sometimes a joint account doesn’t make sense when there’s differences in spending habits, income levels, and financial goals that call for separate accounts. Whether you combine everything or keep some accounts separate, the best setup is one that supports trust, transparency, and shared long-term financial goals.

Tips for Managing Your Money

A financial advisor can draw up a financial plan and identify your long-term goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Sometimes it’s not enough just to open bank accounts, fund them and leave them to their own devices. That can lead to unnecessary fees and wasted savings potential. It’s important to bank actively and responsibly. For starters, you should check whether your checking account charges a monthly fee for simply owning the account. If it does, see if you can meet certain qualifications to waive that fee. There are also a number of free checking accounts that you can choose from in order to avoid losing money to a pesky fee like that.
Another way to optimize your money and bank accounts is to place your money in high-earning accounts. For one, you don’t want most of your money unused in a non-interest-earning checking account. Moving what you won’t spend into an interest-earning checking account or a high-yield savings account will put your money to much better use.