The Trouble With Sharing Accounts

Parents and children, siblings, and couples all may, at some point, choose to share a checking. Having an account with someone can be tricky and requires an extra amount of communication to be sure that you’re not overspending or creating problems that can affect your finances and your relationship.

Once you open an account with someone, they learn a lot about your finances: how much you make, how much you spend, and what you spend it on. It’s much harder to keep secrets about your money when you share an account. If you don’t want the other person knowing your financial life, sharing an account with them may not be a good idea.

You have less privacy when you share an account, which could make it hard to buy a gift for the person you’re sharing an account with. It also makes it harder to make purchases without judgment or scrutiny from your parent, sibling, spouse, or whoever the joint accountholder is. If your purchased are being unreasonably questioned, you may set some guidelines for how much you each are able to spend without having to run it by the other person.

If you break up or have a big fight, you’ll have the difficult task of figuring out how to split the funds left in the account. Since both of you have access, doing this fairly and equitably can be a problem depending on whether the split is friendly. Under a less amicable split, the other person could drain the account before you get a chance to discuss how much money each should withdraw.

Differing spending habits can also make it hard to share an account. If you’re a frugal person and the spouse with whom you share an account is a spendthrift, you may find yourself constantly worrying about whether the money is being spent wisely. On the other hand, if you prefer to spend freely, the frugal person may seem like a tightwad to you, always micromanaging and limiting your spending. Fights about money can put a strain on your relationship as sharing accounts can magnify differences in your financial principles.

If one of the joint account holders faces a lawsuit judgment that results in a bank account levy, the entire account balance is at risk of being seized. It can catch you completely unaware if you know nothing of the lawsuits or spousal debt.

In relationships, some people equate financial freedom to having separate accounts. Two partners or spouses can still effectively manage the household bills even with your money in different accounts. Or, you can each have separate accounts and a joint account that you use for household bills or emergencies. There’s not necessarily a right or wrong way, just the way that works best for you and is most beneficial for your relationship.

Sharing an account requires more communication about money than you may be used to. That’s not to say that it’s impossible, but you must be willing to work through some of the issues if you believe that account sharing is the ideal way to hold and manage your money.