Why College Grads Should Think Twice before Joining Checking Accounts with a Significant Other

Friday, August 24, 2012

Why College Grads Should Think Twice before Joining Checking Accounts with a Significant Other

The decision to share your finances with another person can have significant impact on your future. And, unfortunately, those of us just out of school are often more likely to make the kind of decision that seem like they will save us tons of money, but end up hurting us financially down the road. Maybe you have a live-in boyfriend or girlfriend who you've known and trusted throughout college and, because both your pay checks are going towards roughly the same expenses, it seems like an obvious step to combine forces upon graduation. 

Or maybe you are thinking about getting married someday, so joining accounts will be somewhat inevitable. Regardless of the reason for taking the plunge, though, it’s first important to know exactly where your significant other is coming from as far as their finances are concerned. There is no time more important for starting off on the right financial foot than directly after graduation. Before heading to the bank to join your accounts with someone you love, the first thing to do is answer some valuable questions about your partner’s financial past: 

1.       Do You Have Similar Financial Ideals?

Before you decide to join your finances with another person, you need to know whether or not you both have similar outlook when it comes to handling finances. If you prefer to, say, save money by cooking at home, but your significant other would rather eat out and save in other areas, the two of you could end up overspending in both areas without realizing.

Does your significant other feel that it’s better to save money for future expenses or use the money you have available now to invest in things that will bring in more earnings in the future? It doesn’t matter whether or not your goals are perfectly aligned before you join your accounts, but you do need to be on the same page about how you will spend money as a unit and have an understanding of where the other is coming from.

2. Do They Have Savings?

Having a sound savings account that you put money towards every month is a very good indication that a person is financially responsible. If you decide to join your account with someone who is living pay check to pay check, then that mentality will creep into your own finances, as well. Maybe your significant other has never thought about creating a savings account or doesn’t see a need, while you have been saving a little every month since college. These are two drastically different financial outlooks, so you either need to come to an understanding or keep finances separate for a while.

3. Do They Have Debt?

The amount of debt your significant other owes may not be obvious when you first take a look at the amount of money he/she has in their accounts. However, it is worth noting that a person’s total assets are only as valuable as the amount they own after subtracting what they owe. You may think that you and your partner are on about the same page financially, when, in fact, you are much better off because you have less significant debt. Everyone has some amount of debt, so this is to be expected, but if the amount owed feels alarming, it could be a good idea to back out of a shared account.

About the author:

Maria Rainier writes for onlinedegrees.org. Please share your comments with her.

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