By Natasha Hatherall-Shawe
My husband and I have been together for nearly ten years and our finances remain firmly separate and I honestly anticipate they always will be.
I always air on the side of caution in every area of my life, but no more than my finances. Instilled from a young age by my mother who’d been burnt by divorce and seen many of her friends similar, I’m big on financial independence. After all, I’ve achieved a lot and have assets I’d worked hard for, so I don’t want to put them at risk. However much in love I am today and regardless of the trust I have in my husband, we’ve all heard many stories about when relationships deteriorated or went bad literally overnight, finances were merged and the fall out that followed.
Today, it definitely seems there is a growing nervousness about joint bank accounts, particularly when the rate of divorce is so high, the seemingly transient nature of relationships and then throw in specific nuances of the UAE and frozen bank accounts and assets should something terrible happen to your other half. So, is a joint bank account in this day and age ever really a good idea?
Like everything, there are different options and ways to look at joint accounts and there is definitely a time and a place for them. But ultimately, if we had one message to anyone, it would iterally be don’t put all your eggs in one basket! Always keep your own personal bank account that only you have access to and that your own emergency personal fund is kept safely in. However unromantic it sounds, look after you and ensure that if the worst scenario was to happen that you (and your children even) are protected.
Joint accounts can be very useful in different scenarios, so they definitely still have a place. If you share a home, then a joint current account can be very useful to cover shared expenses such as household bills. That said, our suggestion would always be for you and your other half to have your own personal current accounts that your salary/own personal money goes into, then open a joint current account where you each transfer in an agreed amount of money on pay day, with standing orders and direct debits for your rent, mortgage and utility bills coming out of here, as well as grocery shopping and other joint expenses you agree on.
If you do enter into a join account and whilst we hate to air on the negative, have the conversations upfront and agree in writing the “rules’ of the joint bank account, including what happens if you split up. How will you split any money left in it, what will happen to outstanding direct debits and even any debts. It doesn’t leave you risk free as we’ve all heard the stories about love rats clearing our bank accounts and leaving their exes liable for huge amounts of money, but it does means you’ve tackled it head on and had those important conversations.
If you don’t want to enter into a joint account, like my husband and I, we split the outgoings and pay the agreed ones from our own personal accounts – being clear on who is responsible for what. If your incomes are not similar and paying 50/50 isn’t an option, you may want to consider splitting the outgoings as a % of earnings. For example, our circumstances I pay the mortgage and my husband pays the utility bills and most of the grocery, which works out 2/3 to me and 1/3 to him, in line with our earnings.
If you’re in a long term relationship, perhaps you’re working to a common financial goal such as a deposit on a home, a holiday of a lifetime, then opening a joint savings account may make total sense for you. A joint savings account is different to a current account with different opening and maintenance requirements and you don’t need to commit to either of you putting your salary in each month which is a requirements of many current accounts, but perhaps this is the best way for you at this time if you have a target in mind? It can also be useful if one member of the couple is not currently earning, perhaps they’re on maternity leave or taking time out to help with childcare – but both joint account holders have access to withdraw the money. This is a great option depending on your need and goals.
When it comes to mixing finances, there are of course other considerations too. As soon as you enter into a joint account with anyone, your credit scores are tied, so you need to think about that and whether you feel truly comfortable signing on the dotted line with anyone. One bad decision here can see you paying the price for many years to come, being unable to get credit in the future when you need it, or worse still being left liable for someone else’s debts. These are the type of questions you do need to be asking of your significant other when you start having these conversations – do they have any chronic debt problems? Are they always living in an overdraft? Do they have loans or credit cards? Have they bought on BNPL (buy now pay later) agreements? If they share yes to any of these, or if you have any doubts, then don’t go there.
When it comes to finances, if you have any niggling doubt or concern, keep your finances separate. That is the best advice we have for anyone. Whilst it may not play into the old fashioned notion of “what’s mine is yours”, the reality is we don’t live in the same world that we used to and this approach doesn’t apply in the modern day world which can be complex and messy and where the days of having one main breadwinner are gone.
Regardless of what is the best scenario for you and your current circumstances at this time, and only you can know that, the most important thing is financial literacy and having a head out of the sand approach to your money, where we get our finances in order and know what we’re getting into helping us in making the best decisions for us and our lives.