For most of the people we talk to, the number one frustration with money is keeping track of it all. Multiple checking and savings accounts leads to a lack of clarity on what’s coming in and what’s going out. The number of accounts only doubles when you’re in a relationship which leads to the question of consolidation. When it comes to money management, consolidation is a very important tool and one of the first things we look at when we create a financial plan.
Today, we wanted to touch on some of the signs that you might be ready to merge checking, savings and even credit card accounts. We'll start by saying that it’s a very personal decision. Even if you qualify as “ready” based on the signs below, it's equally important to feel emotionally ready to make this decision.
For some of us, it’s a very scary decision – scarier even than making the decision to move in together! For others, it’s not that we’re opposed to the idea; we’ve just never seen the benefit or maybe we’ve just never gotten around to it. Opening a joint account can lead to all kinds of efficiencies and benefits, some of which we highlight below.
Signs you’re ready for a joint credit card
When you get to the point that you’re doing more things together than apart, it’s a good time to discuss a joint credit card. I knew a couple that was married for a few years and still maintained separate credit cards that they used whenever they were together. The thing is, they were always splitting the bill 50/50. Once I explained that a joint card for joint expenses would yield the same result with better clarity of their overall financial picture, a joint card seemed like a no-brainer. There are so many time when an expense pops up when you can’t split the bill – i.e. filling the car with gas, buying groceries, etc. Having a joint card and a joint checking account can really help to manage household expenses. It’s much easier to know how much you’ve spent or how much is left to spend, when it’s all in one place. Let’s discuss checking accounts next.
Signs you’re ready for a joint checking
Our clients, we’ll call them Sara and Marc, had been married for three years and they were still venmo’ing each other for rent. We promise you, there’s a better way!
When you move in together, it’s likely that you will have a few new bills to split. Cable, internet, groceries, electric, etc. We encourage clients to have some of their paycheck direct-deposited into a joint account to manage household expenses.
Sign you’re ready for a joint savings account
One of our favorite conversations at Stash is the “goals conversation”. As your relationship progresses, you’re naturally going to start talking about joint goals or planning for larger expenses together. A trip to Mexico, a new couch for the apartment, maybe even dare we say….a wedding. Having a joint savings account is a great idea when you start saving for shared goals.
At Stash, we encourage couples to share accounts when they are ready. And it’s not just about being ready but also about setting expectations and ground rules with the person you’re going to be sharing accounts with. There is no right or wrong decision here, it’s more about efficiency and viewing yourself as a household (i.e. team) instead of an individual.