A joint checking account might be the best (or worst) thing for your relationship

When you and your partner are living together (or are on your way there), the topic of merging finances is likely to come up. The thought of opening a joint checking account with your partner is both exciting and kind of scary. Let’s be real, it’s a huge deal and a major step for any couple. But according to experts, it doesn’t have to be. Opening a joint checking account can be one of the best things to happen to your relationship.

But before you grab your partner to go to the bank and sign a bunch of papers, there are some really important things to be mindful of.  And what better time to become aware than during Financial Literacy Month? Whether opening a joint checking account is a good idea or not is really dependent on your spending and saving habits. Are your habits similar or are they completely different?

“Having a joint checking account makes sharing the bills much easier, but it also means you have someone you’re accountable to regarding your spending (and vice versa),” marriage and family therapist, Heidi McBain, MA, tells HelloGiggles. “As we all know, money arguments are one of the most common arguments that couples have in their relationship.”

So if you’re considering whether or not you and your partner are ready to open a joint checking account, here are reasons why it can be the best thing for your relationship…or quite possibly the worst.

The pros

1 Full transparency.

As Lori Atwood, CFP and founder of Fearless Finance, tells HelloGiggles, “Transparency in regards to finances is the number one reason why opening a joint checking account will be the best thing for your relationship.”

Both of you will have the ability to monitor what goes in and out of the account. You can keep each other accountable, especially if you’re saving up for something big. Basically, there are no surprises. Both of you are in the loop in terms of the money you have and what’s going out.

2 You’ll feel like equals.

When you’re sharing a checking account, Atwood says, there’s no such thing as “my” money and your partner’s money. If your income is going into the same account, it’s your shared money. Because of that, no one needs to feel bad if they aren’t contributing as much money as their significant other, nor does the S.O. need to feel cheated if they’re contributing more. “If all income just goes into a household account and all household expenses go out of it, each adult is equal in the household,” she says.

3 It builds companionship.

“Opening a joint account can help you both grow closer as a couple and approach life with the ‘we’ mentality as opposed to ‘me and you,’” Natasha Rachel Smith, personal finance expert, tells HelloGiggles. The more integrated you are in each other’s lives, the closer you’ll be. “Your goals in life will start to mingle and both of you will become more invested in each other’s success,” she says.

4 It can help you have better communication.

Money and finances are things people don’t typically like to talk about. How much you make, how much you owe, and what you spend money on is your business. But when you have a joint checking account, open and honest conversations with your partner need to happen regularly if you want to stay on the same page.

“Financial stress is one of the greatest tests of any relationship,” Dottie Herman, former financial planner and current CEO of Douglas Elliman, tells HelloGiggles. “Being well-prepared and having an open dialogue on how you handle money will make a huge difference in navigating through tough times.”

The cons

1 Lack of privacy.

Sometimes people will want privacy for purchases, especially in instances when they’re buying something for their partner as a surprise. But according to Atwood, there’s a simple solution to this. Keep the household checking account and transfer some “allowance” for each partner every month. “The key is that all the income comes into one joint account and all expenses are paid, then you can consider a small ‘allowance’ for each of you,” she says.

2 Your partner has access to your money.

As Atwood says, when you have a shared checking account, there’s no such thing as “my money and your money.” Although that can be a great thing for your relationship, it can also have its downsides.

As Ash Exantus, financial education and financial empowerment coach at BankMobile tells HelloGiggles, having equal rights to the money means just that. “There is nothing that can stop the other person from using money in any way they want to,” he says. 

In some cases, financial abuse of joint accounts can be “used as a weapon” instead of something that empowers the couple. Because all money and activities are accessible by both parties with a joint account, it can also be used as a way to monitor and control a significant other. 

Just to be clear, this won’t apply to every couple, but it can to some. It’s similar to cheating. You can trust your partner, but that doesn’t mean they won’t ever cheat. So it’s important to be aware that financial issues caused by one partner can happen.

3 There’s no such thing as a joint credit score.

“Anyone who has merged finances or cosigned a loan is aware that you don’t actually share a credit score, and joint accounts affect each individual involved,” Smith says. “Account activity will be reflected on both your credit reports.”

So any bad money habits your partner had before your financial merge will likely stay unless they’re working to actively change. Before you merge finances with your partner, Smith says, ensure their money habits won’t hurt your score. You can only imagine the kind of fights you’ll get into when you realize your spending habits are super different.

As you can see, there are both pros and cons to consider before deciding to open up a joint checking account with your S.O. It really is a big step for your relationship. But if you’re both on the same page financially, it can be one of the best things you can do together.