Managing Joint Accounts: A Five-Point Peace Plan
It's unlikely that you and your significant other agree on everything. If you share one or more bank accounts, however, you're going to have to agree on some things if you ever hope to have your finances in order.
Perhaps you have different views on money. Maybe one of you is a saver (also known as penny-pincher, cheapskate, tightwad) and the other is a spender (also known as irresponsible, impulsive, materialistic). (If you're calling each other these parenthetical names, consider it a red flag.) Perhaps one is better at the day-to-day details of managing the account. Maybe neither of you is especially great at recording every transaction and a search would reveal ATM slips under the seats of both of your cars.
No matter how you feel about the big issues like saving for the future, investing, or how much your home or vehicles should cost, if you want to commingle your finances, you're going to have to agree on these points:
- One of you is the account manager, and the other is not It is nearly impossible for two people to take equal responsibility for managing the family finances. Decide which of you will be the account manager for your family. Who should it be? Some couples believe it should be the person who has more time, and some believe it should be the husband because handling the money is "the man's job." Neither of these criteria is valid. People who are detail-oriented, able to remain emotionally uninvolved, and fairly tolerant of repetitive tasks tend to be better suited to money management and those qualities are found in both men and women, and in both really busy and less-busy folks. Set aside your pride, society's gender norms, and all your other time commitments and decide which of you should be the account manager based on one criterion: Which of you is better at this?
After you've decided whose responsibility this will be, give that person room to work. The account manager needs his or her partner to step back, have faith, and not second-guess the system.
- Being the account manager does not make you the boss of the other Don't gloat. Yes, you're the account manager because you're better at this stuff than your partner. When you start to feel smug, remind yourself of three things you're hopeless at that your partner can do with ease. Remind yourself, because if you don't, your partner will. Don't "parent." Handling the family finances is your job, but it doesn't make you superior to your partner. When you inform your partner of where you stand financially each time you balance your accounts, don't make it a lecture. When you tell your partner how much money is available for discretionary spending, don't call it an allowance. If your partner made errors forgot to tell you about a purchase or ATM withdrawal or spent more than the budgeted amount relate the errors in a neutral tone and be sure to relate any errors you made as well. You're summarizing account activity, not laying blame.
Don't joke with friends about which of you controls the purse strings. You're both in charge of the money; you share the big decisions. As a team, one of you tracks the details and keeps the other informed. You're equals. Resist becoming drunk on your imagined power.
- The account manager communicates fully with the other financial partner Aside from the responsibility to manage the accounts accurately, you are also responsible for keeping your partner fully informed. It's not fair to use your partner's distance from the details against him. Don't hide transactions. Don't use your role as an opportunity to make financial decisions that you know he would not agree to.
- You both adhere to your established system Points 1-3 address the behavior and attitude of the account manager, but this point applies more to the other partner.
For any system to work, it must be followed completely and consistently. For the account manager to do a good job, both of you must follow the system. Don't make the account manager track you down for receipts or extra information on deposits or expenditures. Don't withdraw more cash than you've agreed to. Don't pretend that you don't understand the system if you don't, then you both need to sit down and clarify it. Don't keep saying "I forgot" or "But I needed it." If you don't give the account manager the necessary information and cooperation, you'll make it impossible for your partner to continue treating you like a responsible adult.
- If the system needs refinement, work together to make changes Every organizing system will need to evolve to accommodate the changes life brings. If you find that a component of your financial system is causing problems for one of you, you must both be willing to find a resolution, even if it means one of you gives something up or accepts a new inconvenience. If one of you is unable to remember every expenditure, find a way to minimize the damage for example, by limiting which accounts you spend from or giving up your ATM card. If you've agreed that you will both empty your wallets, pockets, and car consoles of receipts every day and deposit them in a designated spot, but one of you sometimes forgets, consider other options: Could you do it once a week instead? You must find the balance between the efficiency of your system and the adequacy of your effort.
More on: Family Finances
Reproduced from Organize Your Personal Finances in No Time, by Debbie Stanley, by permission of Pearson Education. Copyright © 2005 by Que Publishing. Please visit Amazon to order your own copy.