Opinion: You Should Have Joint Goals And Joint Bank Accounts

You may want to serve yourself a glass of wine for this one…Lately, I’ve been speaking to many of my millennial friends who are engaged, married, or see themselves marrying their boyfriend/girlfriend and we have talked about their personal financial goals and their joint financial goals.

To no surprise, they have all reacted the same exact way when I’ve asked about their joint finances…they could not imagine joining their finances and sharing one bank account. There were always moments of silence. I find out that the main reasons were insecurity, lack of confidence in their partner’s ability to manage money, complacency, pride and defensiveness in their own earnings, and the fear of change.Let’s have a real talk for a minute…

Why would you have so much doubt, fear and hesitancy about joining your finances with your significant other? If you plan to marry or have already married, you’re no longer individuals but you are one, united in harmony. You are a team, you share a household, your share a lifestyle, you share life together, and you should be unified with your finances and set a vision and financial goals for your household. It may be hard to swallow this idea of joining your finances and your bank accounts, but don’t let yourself become one of the 7.2 million Americans who hide money from your spouses or destroy your marriage because you fight about whats yours or theirs, about debt, or any other financial issue.

I’d like to share with you my personal experience why it was the best decision I personally made as a husband and in a financial perspective. The ultimate best decision I made in my life was to marry my wife, Vania. The second best decision I made in my life was to join my finances with Vania. Yes, you heard me right.

Truth be told, after we got engaged, one of the first questions we asked ourselves were “how are we going to pay for a wedding?” We discussed with our parents about the financial costs of a wedding and the type of wedding we wanted. Neither of our parents were in the financial position to pay for 100% of the wedding. Within 30 days, after our engagement (literally), I proposed to Vania that we needed to join our finances if we were going to make this work and to have financial success in our future.

We closed our existing individual bank accounts and opened a new joint checking and savings accounts. I then created a budget and set a 15 month goal to save $20,000 so that we can contribute to our wedding costs. To make this all possible we made huge sacrifices as 22 year olds. At the time I was living on my own. So, I moved in with her and her family so that we can reduce my rent costs and we were extremely frugal with our overall expenses. We did not go shopping, we bought groceries instead of eating out, and we barely went out to bars and partied with friends. We found joy in picnics on the beach, riding our bicycles in cool trails, going on cheap dates, building our Christian faith together, spending time with our families, and watched a lot of movies at home. There were many days when we felt like we were loosing out on so much. However, looking at it in retrospect those were the best days of my life.

The sacrifice and commitment we made together was beautiful and it is so gratifying to know that my fiance, at the time, was willing to do everything possible with me because we found value and common ground in the vision that we shared. Now that I think about this, the choice to join our finances has made our relationship stronger, has made us grow greater respect for each other and has given us so much confidence in our financial lives. In those days, we laid an unbreakable foundation.

4 years later, we feel empowered and we have so much belief in our financial capabilities! We have made strides together with our professional careers and financial decisions. Together our income has increased, together we purchased a home, together we have made investment decisions, together we are building our retirement funds and together we have fully funded our emergency fund. Together, with a joint bank account and with joint financial goals we made it possible.

If you find yourself holding back from making this leap of faith with your significant other, I’d encourage you and I’d like to challenge you to have this conversation with them. The same way you may dream together about building your home, having a family, and traveling the world, you most definitely need to have a vision for your financial lives. It is inevitable and it is a necessary conversation to have. Find a common ground, set expectations, and create realistic goals for yourselves. Consider the possibilities of growth and success for your relationship and financial well-being.

HERE ARE STEPS TO TAKE: 

  • Talk about a financial vision

Talk to your loved one about the visions you have. Let them share their visions. Come together with a joint vision. Share different ideas and feed off of each other. Let this be an enjoyable conversation and not a competition of who’s got the best ideas.

  • Set realistic financial goals

Set goals to accomplish that vision. Make bite sized goals on a month to month basis. Then year by year and then think 5-10 years down the line. Also, don’t forget to think about how you both would like to retire. Retirement needs to be part of your financial discussions!

  • Set financial expectations 

It is extremely important to set expectations. What roles are each of you going to play with paying the bills? How about the actual management of the cash? Think about the day to day process of managing the money and set roles and expectations.

  • Create a Budget

Create a joint budget. This should be your household budget that will support your vision and goals. Make sure to consider all streams of income and expenses. Remember, it is no longer what you want or what he/she wants, it’s about what YOU BOTH need and how you can compromise to have a great lifestyle and standard of living.

  • Open a Joint Checking and Savings Account

Go to the bank together and open a joint account. Both of you will be responsible and be beneficiaries of the funds in the accounts. Make sure to open a high-yield savings account for your emergency fund. Yes, this does mean both direct deposits will go into one account. Trying to have your own separate accounts won’t create a condusive environment for trust and financial accountability.

  • Communication

Communication is going to be key to your success. I dedicate every Sunday to let my wife know how we did financially for the week and to discuss the important decisions we have to make in the upcoming days or months. Also, I always give her an update on all of our accounts (retirement, investments, mortgage, student loans, etc.). More importantly, I ask her for her perspective and opinion for every single decision. Even for the most common sense decisions. We are a team and every decision is a bilateral decision.

  • Transparency

Both of you need to have FULL TRANSPARENCY of all of the accounts. Both should have full access and be able to check on the accounts whenever you feel like it.

At the end, many of you may object to the suggestions I have given and will have different perspectives about joining your finances. I get it, it’s a tough pill to swallow for some. This is a challenging discussion to have. It’s also important to note that not one glove fits all. Take what you can from this and create a similar strategy that works best for your household.

My hope is that my personal experience serves as a testimony and demonstrates that it is possible to join your finances with your loved one and that you are able to succeed financially, together. I’ve gained so much more than financial stability with my wife. This decision 4 years ago has strengthened our bond, our trust, and it provides stability in our household and has given us the foundation to build our future family.

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