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Five things to consider before opening a joint bank account

Opening a joint bank account is an exciting milestone for any relationship, but here are some important details that you might like to consider before merging your finances.

5 minute read

On the topics of joint bank accounts and shared finances, advice is decidedly mixed. Some say that couples who pool all their resources together are the happiest. Others say that maintaining a level of financial independence is the secret to a long and happy relationship. Either way, it’s a good idea to be aware of the pros and cons before joining finances with your partner. Here are five things to consider…

1. Combining debt

First and foremost, before combining finances, it’s always important to have a clear view and understanding of the financial responsibility you might be taking on. Do you have significant debt? Does your partner?

If you pool all your finances together, their debt may become your debt, and vice versa. So, to avoid any nasty surprises later on, you should have an open and honest conversation with your partner sooner rather than later. For instance, if they have a large overdraft, you’re going to want to know about it before you move all your life savings into the same account.

We realise that few things are less romantic than a conversation about debt, but it could actually save your relationship – as well as your credit score – in the long run.

2. Your assets

At the other end of the spectrum, you should also consider any assets that you and your partner already own as individuals – especially property and business assets. That’s because, typically, in the event of a break-up, your combined assets may be split up between you.

Complicating matters further is the Property (Relationships) Act 1976, which says that even de-facto couples that have been together for three years or more have the same status as couples who are married or in a civil union.

So, in other words, even if you haven’t joined your finances with your partner just yet, your assets could already be split in the event of a break-up or divorce – especially if you already live together in a property that either you or your partner owns.

3. What happens if you break up?

If you’re looking at merging your finances together, then chances are you’re not thinking about breaking up any time soon, but it’s still worth considering what would happen in the unlikely event that your relationship breaks down.

Any decisions you make about money right now, such as buying a new car together on finance, or guaranteeing someone’s loan, could have massive repercussions if your relationship should ever end.

If your name is on the bills, credit card, any loans, or finance agreements, then you'll also be liable to pay them – whether you and your partner are still together or have broken up. Failure to pay that outstanding debt could also affect your credit score and make it difficult to borrow money in the future.

4. Your partner’s attitude towards money

There are lots of different approaches to money. Money personalities can range from people who are controlled and practical with their money, to those who are more entrepreneurial and wishful, and sometimes are mix of all of them. There are at least five different money personalities – which one are you?

Contrasting approaches to money management can become an extremely contentious issue in any relationship, so it’s always worth considering your partner’s spending style before combining your finances.

5. Get the right advice

If you have questions, you can always speak to a relationship property lawyer for advice. The more you know, the more confidence you can have that  joining finances with your partner is the right move for you.

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This article is solely for information purposes and is not intended to be advice with respect to any matter discussed in it. If you need help, please contact BNZ or your professional adviser. Neither BNZ nor any person involved in the material accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content.