The death of the joint bank account – how under 35s are ditching them and how to manage money with your loved one

The Sun

a day ago

SETTING up home with a loved one is exciting but as well as picking out a new sofa, you'll need to manage bills and a household budget together.
Young couples are turning their back on shared bank accounts and instead finding new ways to divvy up joint costs.
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In the past, couples often set up a shared bank account which can then be used to pay for any joint expenses from food shopping to council tax.
Both will have a debit card for the account and can pay in as well as withdraw cash.
But over the last six years, the proportion of joint current accounts held by under-35s has steadily dropped from 18% to 14%, while the number of joint accounts grew overall from 12.4million to 13.9million, according to exclusive figures from credit agency Experian for The Sun.
Joint bank accounts can be a convenient way to pay household bills, but they also financially link both partners in the eyes of lenders – meaning one person's bad money habits can damage the other's chances of getting credit.
The other downside are potential issues over control.
Dr Nisha Prakash, a lecturer in financial management from the University of East London, says: 'The younger generation values financial independence and autonomy.
'Typically, a joint account holder can withdraw the entire amount from a joint account without the other person's consent."
Here's how you can fairly share household finances without a shared bank account.
Make a budget
Communication is key - talk about how much each person has to contribute towards bills and other expenses.
Draw up a rough budget of how much total costs are expected to come in at each month.
You will need to think about whether to include food shopping and other items in the costs.
Consider if you are going to split bills equally or whether one person earning more is going to pay a higher proportion of costs.
For example, if one person is earning 70% of the combined household income, decide whether they also cover 70% of costs.
It's a good idea to agree these things at the outset to avoid disagreements.
Divvy up bills
One way of managing budgets is to share out the responsibility of bills between you.
Vicky Reynal, author of Money on Your Mind: the Psychology behind your Financial Habits, says: 'With more dual-income households, couples are finding ways to coordinate finances as equals in ways that do not necessarily require a joint account.
"For example, one pays the internet and the other the electricity.'
This way you could take ownership of the service.
For example, making sure you're on the best tariff as well as being the one to sort out any provider issues that may arise.
You can try to split so that you'd both pay a similar amount each month in respective bills or have one transfer cash where there is a shortfall.
Split fairly
Apps such as Splitwise allow you to keep track of shared expenses.
Each person can add an expense. For example a food shop or a bill they have paid.
The app then keeps a running total and works out who owes what.
You could do that at the start or end of each month, week or even daily depending on what suits your circumstances.
Decide on savings goals
Consider whether you want to set up a pot for savings for joint events such as holidays or Christmas.
You should also consider getting an emergency fund together to cover joint and unexpected costs such as a broken boiler.
This should be three to six months of your total outgoings, then it can act as a financial buffer in case either of you are suddenly out of a job.
You can create 'jars' to save and spend from together through app-based savings provider HyperJar.
It's easier to set up and not as formal as a joint bank account.
You can also set up a joint savings account through most financial providers, and means you don't have to link all your income and outgoings to the account.
Just look for the best interest rate so that your money works as hard as possible.
If you have a one year savings goal, Cahoot Simple Saver pays 4.55% for a year and can be opened as a joint account.
And remember to do with someone you trust, as one person can usually withdraw the entire amount.
Joint account
If you do decide to get a joint account together, make sure you pick the right bank and account type.
Look for low fees, a high interest rate on cash kept in the account and easy access via an app and online.
Remember to find out if both account holders are equally responsible for any overdraft.
A three-account system can work well for couples.
This is a joint account for shared expenses while each person keeps their own personal account.
It's a good idea to review account statements together and use alerts so both parties know when the money leaves the account or when it gets credited.
Remember that either party can withdraw the amount without consent, unless you specifically request dual approval.
How to effectively manage your money
Kara Gammell, finance expert at MoneySuperMarket, gives tips on how to get a handle on your finances so you have more left for saving,
Analyse your spending
If you're struggling to get a grip on your finances, the way to start is to do a proper inventory.
Try Emma, the money management app, which uses open banking to combine information from all your bank accounts, savings accounts and credit cards, plus investments. The app then highlights any wasteful subscriptions and costly debt and helps streamline your savings.
What's more, it analyses your personal finances and recommends ways to conserve money so that you can get on track financially more easily than ever.
If you want to have a deep dive into your spending habits, go through your bank statement at the end of each month and give every purchase a rating of one, two or three.
Mark with a 'one' any purchases that didn't make you feel good; give a 'two' rating to things that felt 'sort of good but indifferent'; and mark with 'three' any purchases that you would make all over again in a heartbeat.
You'll be surprised by what you learn.
Monitor your credit report
From overdrafts to loans, credit cards, mobile phones and mortgages, it can be hard to keep track of your finances, and it can be all too simple to find yourself in the dark about how much debt you have in total.
But this information forms your credit score, which is used by lenders to determine whether you'll be offered competitive rates and offers for financial products, or even whether you will even be accepted when you make an application.
I use MoneySuperMarket's Credit Score tool, which is a free credit report tool that lets me see all my account balances in one place.
I'm automatically notified when my credit report is updated monthly, which can be a huge help in avoiding any financial problems from spiralling and means I always know what my overall financial situation is.
The tool also suggests ways to improve your credit score, so you're more likely to be offered competitive interest rates, which helps you save money in the long run.