Last week, I discussed why I thought couples dating should keep their personal and credit products separate . Today, I want to discuss if married couples should have joint accounts or credit products together. The short answer is no. Getting married doesn’t require you to have a joint account with you spouse. But it’s generally better to work together when you’re on a team than to work in isolation.
How to deal with personal account
When it comes to the personal account, married couples should have at least one joint chequing account and one joint saving account. The joint chequing account should serve as your main payroll deposit account and also your primary bill payment account. Having your pay cheque and bills being paid out of the joint chequing account will create accountability.
While bills and your pay cheque are paid into your joint account. It’s important you both still maintain a separate individual chequing account. Once you’ve completed your budget, whatever amount you’ve decided as your individual personal spending money should be moved into your respective individual account. This ensures you don’t have the big brother feeling all the time and also maintain individual freedom on that portion of the money. Yes, you can buy as many Tim Hortons as you wish and never have to explain anything to your partner.
The joint saving account should serve as a place where you place your emergency fund. Again, the reason for having this joint is to ensure in the event of an emergency each partner can access this fund without the other person being present. You want to avoid your partner being in a difficult position and unable to access the entire savings funds as you have the other half. The key again is to make the account accessible, open, and accountable.
How to deal with investment
Registered investment accounts cannot be joint. A married couple can open a joint non-registered account if they wish. Since the main investment accounts such as TFSA and RRSP cannot be joint, the important thing is to coordinate your efforts. I recommend you view both your investment as one single account. Yes, I’m aware this might create some rebalancing issue but given you’re working towards the same goals, you want to avoid duplication when possible. Duplication means additional fees, additional fees mean lower return, and a lower returns means your less likely to reach your goals.
How to deal with credit product
When it comes to credit products, it’s okay to have a joint credit card or line of credit. It’s equally as important for each person to have their own individual credit card solely in the name.
When a joint credit product is opened with your partner, it’s based on both your credit. In the event that one of you should die that credit product will have to be canceled as the other credit holder is no longer alive. This is where couples run into trouble as the living couple might have no access to credit product or might run into difficult getting obtaining credit. Therefore, it’s important each of your builds a strong individual credit history while ensuring you have access to your own credit product.
I will end things off on this note. If you currently have a system that works for you and your partner, I suggest you keep it. At the end of the day, the important thing is you have a system in place that enables you and your partner to work towards achieving your financial goals.