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If you believe that marriage means two becomes one (cue Spice Girls refrain), then you might subscribe to the belief that a married couple’s bank accounts also need to merge as cheesy music plays in the background.
But before you start happily transferring over all your money, if you have any left over after the engagement ring and the wedding, that is, you need to first be aware that a joint account isn’t quite the same as getting her a bouquet of roses or giving him a backrub at the end of a long day. It could cost you a lot more.
While the administrative convenience of joint accounts is clear—no more splitting bills down the middle!—here are some reasons you might want to think twice before giving your other half access to all your money.
1. Your spending habits go under the microscope
If you thought it was bad that your spouse checks what time you get back each night and asks who it is who’s constantly texting you, you ain’t seen nothing yet.
Opening a joint account without clearly defined rules as to what it can be used for is a recipe for disaster.
When both parties are privy to every last detail pertaining to their spouse’s spending habits, things can get a little hairy. No matter how well you think you know a person, it’s always a surprise to discover he spends $200 every time he goes out for a drink, or that her facials cost more than this year’s pay increment.
Unless you’re lucky enough to have a spouse who couldn’t care less what you spend on, exposing all your financial activities can feel a little like being on a reality show. Your dirty little secrets get exposed, and you’d better get ready for some drama.
2. One spouse is going to spend more than the other
You might be a penny pincher and proud of it, but if your spouse isn’t exactly a beacon of financial responsibility, get ready for the fur to fly.
No matter how tolerant you think you are, if your spouse is constantly betting all your hard-earned salary at the MBS casino or channelling your funds into his or her shoe collection, you’re going to end up feeling used and bitter. Unless your spouse is 20 years younger and married you for your money, in which case you may ignore this point.
In reality, one spouse is probably going to spend more than the other, and once resentment starts to build, things are going to get ugly.
Futhermore, it’s one thing to chide your spouse about a single expensive purchase. It’s another if your spouse is in debt and has to make recurring repayments right out of your joint account.
While joint accounts are useful when you’ve got joint debt, like a housing loan on your marital home, you might not be too pleased when you realise you’re contributing to your spouse’s study loan repayments for that degree in Egyptology she took 10 years ago, or his credit card debt incurred through all those “business meetings” at KTV lounges.
3. Piss your spouse off and you might lose your money
Even if you’ve been the one contributing 90 per cent of the funds to your account, as a joint account holder your spouse is also regarded as the rightful owner of the funds. This means he or she can legally do anything he or she wants to, with all the funds in the account.
This is one thing few couples don’t really think about, as they tend to view a joint account as a 50-50 sharing arrangement. In reality, when you open a joint account with your spouse, you give him or her the rights to all the money in the account.
This means there’s nothing stopping him or her from withdrawing all the money and closing the account if you push him or her over the edge with your nagging and the marriage falls apart.
Even if you have set ground rules about the use of the account (eg. only using it to pay utility bills or groceries), none of that will be able to save you if your spouse decides to take the money and run.
Is there no way to make it work?
Clearly, joint accounts are a tricky matter, and if your spouse had a nickname containing the word “psycho” back in university, you might want to think twice before taking the plunge.
This is not to say it is impossible to make joint accounts work. Here are some tips:
Maintain separate accounts in addition to your joint account – Unless your spouse is Mother Theresa, it’s probably wise to maintain separate accounts in addition to your joint account, and this is what many couples in Singapore do. That way, if your spouse goes on one shopping spree too many or decides to run away, you won’t lose everything. Each spouse also gets a little bit of independence and privacy, so you won’t find yourself having to explain why your drinks session that night cost $500.
Strictly delineate what the joint account is to be used for – Unless yours is one of those tycoon-tai tai relationships, it’s probably best to set up your joint account for a specific purpose, such as paying for utilities or kid-related expenses. This stops either party from treating the account as a subsidised shopping fund and also prevents each stock-taking exercise from devolving into a police interrogation.
Determine the contribution amounts – Decide how much each person has to contribute and stick to the plan. If you’ve decided to contribute $600 each month and your spouse $300, each party knows what to expect, as opposed to both parties vaguely agreeing to transfer an unidentified portion of their salary each month. Your plan should also take emergencies into account. For instance, in the event that your spouse loses his or her job, unless you have a hole where your cold, cold heart used to be, you probably shouldn’t expect him or her to contribute the same amount as before.
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