The notion of a joint account is that of an account held by more than one person with each individual having the right to deposit and withdraw funds with the consent of the other signatory.
Biblically, the fusion of a man and woman makes them one, hence it is expected that they should do everything together with finances or better put financial planning not excluded.
Therefore, couples operating a joint account would mean them sharing financial responsibilities in running the home, running a joint savings account, etc and these can be achieved when they commit all or part of their monthly salary and other incoming funds into a single account.
An account manager of a tier 2 bank who pleaded anonymity said the operation of joint accounts between couples have reduced greatly especially among the generation Y also known as the millennials compared to the time of the X generation.
Ajayi Funmilayo, a 27-year-old career wife strongly against the operation of a joint account said “my husband’s money belongs to the both of us but my money belongs to me, besides he is the head of the house, his money should be used to run the affairs of the home.”
Survey and interrogations by BusinessDay reveal the major Pros and Cons of couples operating a joint account as well as the most advisable form for couples to operate a joint account.
Cons of operating a joint account
- Less financial independence: this is largely feared among couples especially the ladies who believe they will not be opportune to spend as much as they wish to if they operate a joint account.
- Slow decision making: in case of an emergency where one of the signatories wants to make use of funds for something either personal or for the home, if the other person is against the idea reaching a final conclusion will require a lot of back and forth between the couple.
- Possible problems in case of a breakup: with the high rate of divorce and separation, there is the probability that 5 out of every 10 couples will opt for a divorce or separation at a point in their lives. In case of a breakup, reaching a consensus in splitting the account may cause disputes especially if expenses cannot be accounted for.
- Higher risk of bankruptcy amid prevailing cyber fraud: A report by the Nigerian Communications Commission (NCC), says Nigeria ranks third in global internet crimes loosing N127 billion in 2015 to cybercrimes. With the increasing rate of cyber fraud, couples operating joint accounts stands the risk of bankruptcy should the be victims of the crime.
Pros of operating a joint account
- Curbs unnecessary spending: operating joint accounts reduces the chance of frivolous spending habits, inhibiting wasteful and unnecessary expenses since both partners have to give consent to all expenditures in the home. Furthermore, this will improve the saving culture of the couple.
- Encouraging financial planning: contributing income in carrying out projects or running the affairs of the home will require a plan and a budget which will give room for judicious spending.
- Transparency: operating joint account will ensure accountability and transparency between the couple as each of them are aware of the other’s spending.
Managing a couple’s joint account
- Before making a decision regarding finances, the couple should explore different options, discuss extensively and settle on what works best for them.
- The couple can run a joint account and as well operate private accounts. This can be achieved if an agreed fraction of each person’s income is contributed into a single account which is used to run the home while the remainder is kept for personal use.
- Operating a joint account should be for a particular purpose either for special projects or paying bills, a move supported by both signatories.
- The funds for a joint account can be used for investments which will guarantee returns. These returns can be ploughed back into the joint account to grow it.
- Financial experts advise that managing joint accounts without hassles requires communication between the couple about their financial status and expenses.
