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December 4th, 2015
It seems togetherness no longer involves a shared bank account.
Not so long ago nothing said ‘we’re an item’ more than opening a joint bank account with your significant other. After all, what better way to demonstrate trust than by allowing your other half access to your money?
But times have changed.
According to industry super fund-owned bank ME, almost one in five (16%) Australians maintain complete financial independence from their partner – preferring to have entirely separate bank accounts. Around one in four couples (22%) dip their toe in the world of money matrimony, using a combination of both joint and individual bank accounts.
We’re wary of the fallout
Our desire to remain financially independent varies across generations. As a guide, only 17% of long term couples aged 18-29 use joint bank accounts exclusively, compared to 46% of couples aged 50-plus.
One possible explanation for our reluctance to share bank accounts is the growing awareness of the potential financial fallout that can follow a relationship breakdown. The same ME study found almost one in two Australians believe they would face serious financial consequences if their relationship turned sour. Indeed, 19% of 30 and 40 somethings say a relationship breakdown could be financially ‘crippling’.
For an alarmingly high number of couples, the possibility of their relationship ending abruptly is very real. Government figures show almost 119,000 couples tied the knot in 2013, yet in the same year around 48,000 other couples were finalising their divorce – numbers that suggest two out of five marriages in Australia will hit the rocks*.
Joint accounts can work
The thing is, while it can pay to maintain some level of financial independence, sharing a bank account can offer valuable benefits for couples.
A joint account can be a convenient way to manage shared costs and regular bills like home loan repayments or weekly groceries. It can provide a means to reach shared goals like saving for a holiday. It’s a step that can also provide savings on multiple sets of bank fees that may apply to separately held accounts.
A tool to work together
Holding a joint account could even enrich your relationship.
ME’s research found lack of commitment to a joint financial future is among the leading causes of relationship conflict. Using a joint bank account in tandem with clear ground rules could be a positive step towards demonstrating long term togetherness.
To make a joint bank account work, try developing a savings plan you can both work towards. Establish what you believe are fair budgets for spending on non-essential items. And try setting spending limits, such as ‘neither of us can spend over $100 from the joint account without consulting the other’ to eliminate financial tension.
Importantly, allow room for each of you to enjoy your own hobbies or interests by establishing a weekly ‘me-time allowance’ − money you’re each free to blow on whatever you want, no questions asked. Members Equity Bank Limited ABN 56 070 887 679.
*Australian Bureau of Statistics Cat 3310.0 – Marriages and Divorces, Australia, 2013. Issued 26 November 2014 https://www.abs.gov.au/statistics/people/people-and-communities/marriages-and-divorces-australia/latest-release
This content was provided by Members Equity Bank. The views expressed are not necessarily those of First Super. First Super has shares in Members Equity Bank.
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