Should we start a joint savings account

Setting up a joint account is a big milestone in any relationship. But it is one well worth reaching if you’re planning to buy a home and build a life together, says Irish relationship expert Ray O’Neill.*

“You’re literally investing in your relationship,” Ray confirms, adding that a joint savings account is “a great first step,” for couples who ultimately wish to combine their finances.

“It’ll also look good on the mortgage application!” he adds.

And while a joint savings account isn’t the same as sharing all financial responsibilities, it is a good taster of what that will be like. Read on for top tips on making joint finances work for you.

According to Ray, one of the many benefits of having a joint account is that it can flag problem areas.

“If your partner misses a couple of payments, is he or she going to do the same with the mortgage?” Ray asks. “The important thing is to get the conversation about money started. Too often people are afraid to talk about it and things then flare up later.”

With a joint account, either of you can lodge money in – or take money out. You really have to trust your partner not to go on a mad spending spree, he says. You’ll be glad to hear that doesn’t happen too often, and if it does, at least you’ll know there might be a problem before getting a mortgage.

In fact, there can be trouble when you don’t have a joint account, Ray reveals. One couple had agreed a different approach; they’d live on her money and he would save his for their mortgage deposit.

A year later, she asked how much had he saved and was appalled to find his ‘savings account’ was practically empty. The couple did end up happily married, which goes to show you can work through anything.

After you’ve saved your deposit together, you don’t have to keep a joint savings account, Ray reveals.

But it is a good idea to pool finances as one, he advises, even if you also keep separate personal accounts.

One couple he knows were still adding up each bill and splitting it 50/50, even after years of marriage. “That must have been exhausting,” he says.

It can be particularly hard to let go of complete financial independence, Ray admits. But he describes it as a process that couples must address, particularly if they want to start a family: “They have to stop thinking as ‘I’ and start thinking as ‘we’.”

He recommends adopting a basic tenet of socialism – from each according to their means; to each according to their needs. This basically means pooling resources and splitting responsibilities according to the means of each person.

For example, if one person in the couple earns twice as much as the other, he or she pays €300 into the savings fund, while the other contributes €150. That provides a sense of fairness and ‘building something together.’

That makes sense to us at EBS too, as there are other advantages to having a joint account:

1.      You’re less likely to go into unauthorised overdraft.

2.      With a collectively higher balance, you may be able to more easily save on bank charges with some accounts such as EBS’ MoneyManager.

3.      A joint account gives you an insight into your partner and their finances. He or she won’t be able to conceal any issues with money that could impact negatively on your joint finances later.

1.    You can’t control the amount of money your partner decides to withdraw. So if you're not updating each other on every transaction, your account could go into overdraft without your knowledge.

2.    Your partner could have the power to withdraw all the funds from the account (we’re not saying this is likely to happen – we know you trust each other. But it is a risk, and worth being aware of).

3.    If either of you get into any financial trouble (for example, if you are sued) the money in the joint account will be considered one of your assets, and can be seized.

Whether you are a new or existing EBS customer, to open a new account you will both be asked by EBS to provide:

•    Personal identification documentation – such as a passport or driver’s licence.

•    Proof of your permanent address such as a current utility bill (gas, ESB, landline phone), bank statement, motor or home insurance renewal document. Again, documents must be originals.

•    Proof of your PPS number.

By bringing the documents you’ll need with you, you’ll save time and have your new account opened ASAP. (There will be a few short cuts for those with EBS accounts already).

If you are saving for a deposit, it makes sense to combine your nest-egg in a Regular Savings Account.

If have any queries about opening an EBS savings account? Call us on 0818 654 322 or email info@ebs.ie.

Why not arrange a 30 Minute Mortgage Meeting today with your local EBS Mortgage Advisor?

Get the ball rolling with our First Time Buyer guide. You can also use our mortgage calculator to find out how much you may be able to borrow.