Merging finances with your spouse or significant other is a big milestone in a relationship. It can also be an important step on the path to achieving your financial goals. Recent research from TD Bank’s Checking Experience Index indicates that 82 percent of married Americans share an account with their spouse or partner. Hitching your finances? Ask these three questions before you combine accounts.
Does the bank work for both of you?
According to the Checking Experience Index, checking account holders rank convenient bank locations, ATMs and hours as some of the most valuable elements of their financial institution. When choosing the bank that will hold your joint checking, think about your schedules and habits. Are there locations that are convenient to where both of you work? Does one or both of you have a job that would make evening banking hours a big benefit? Talk about what’s important and pick the bank that best meets both your needs.
Is the account aligned with your aspirations?
Merging finances may mean changes to your financial situation. A joint checking account may hold both of your paychecks and that could mean access to premium financial products. For example, TD Convenience Checking requires only a $100 minimum balance to avoid monthly costs, but if combining finances allows you to maintain a minimum balance of $2,500, it may make sense to look into TD Premier Checking, which offers high-end features like paying interest on your balance and reimbursing for any out-of-network ATM fees.
And if joining finances is a step on the way to other significant life events, then investigate how your checking account can help you get there. For example, if home buying is in your future, you could consider an account such as TD Relationship Checking, which offers a .125 percent rate discount to customers who link a checking account and mortgage. Rate discounts can add up, and a .125 percent change in your mortgage rate could equal hundreds of dollars a year in savings.
How do you manage money together?
The answer in 2014 is probably very different then it was in 1994. Millennials are starting joint accounts earlier in their relationships than previous generations: While 88 percent of people 55 and older waited until marriage to merge finances, only 70 percent of 18- to 34-year-olds did. Millennials are also increasingly banking online or via a smartphone app.
Technological solutions like online and mobile banking allow you and your partner to monitor your balance and review account transactions anytime. You can even set up text or email alerts so you won’t be caught off-guard if one of your partner’s transactions leads to a low balance. Free online bill pay also can help manage your joint monthly costs, giving all account holders one spot where they can review their monthly financial obligations. And with online bill pay, you’ll never need to ask your spouse whether they paid the electric bill.
If you’re one of the roughly 43 percent of people who maintain an individual account along with a joint account, then consider consolidating all your accounts with a single financial institution. It allows you to review and transfer money between accounts easily.
Taking the time to work with your partner to choose the right bank and the right account is a great step in successfully merging your money. But, just like you may have to get used to finding the cap off the toothpaste, there will likely be some adjustments to how you manage your finances once you join checking accounts. Benefit from banking technology and communicate openly with your partner about financial goals, habits and needs as you walk down the aisle to joint account bliss.