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Scottish Sun
a day ago
- Business
- Scottish Sun
The death of the joint bank account – how under 35s are ditching them and how to manage money with your loved one
Scroll to see how you manage your finances in a coulple SHARING IS CARING The death of the joint bank account – how under 35s are ditching them and how to manage money with your loved one Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) 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. Sign up for Scottish Sun newsletter Sign up 1 Sharing finances comes with moving in with a partner Credit: Getty 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.
Metro
31-05-2025
- Business
- Metro
Make money from your living room with these 7 investing tips for novices
Money is a major part of human life. We literally need it to survive, from paying bills to buying food, not to mention simple pleasures like holidays. Yet basic financial understanding is something a lot of people struggle with. A 2024 study by Freetrade, which quizzed 2,000 people, found 81% weren't confident in their financial literacy and 91% lacked confidence specifically around investing. Meanwhile the gender investment gap is growing, particually among Gen Z and millennials. The latest data suggests 41% of men aged 18-34 invest, compared to just 20% of women. Investing can increase individual net worth – it gives your money the chance to grow, and if done successfully, can generate passive income. Ladies, we're missing out on money! So, Metro spoke to Nisha Prakash, lecturer in Financial Management at the University of East London, to get some beginner insight. Specifically, simple hacks you need to master before taking the leap. First things first, Prakash says that before you start investing, you need to have a general idea of why you're doing it with clear financial goals. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video This could include buying an asset, for example a house or car, paying for wedding expenses, funding children's education, or, if you're thinking more long-term, retiring. 'This will set the timeline and target, which could help you choose the financial instruments based on the required risk-return,' explains Prakash. Investing – in it's most basic form – means buying something in the hope it will increase in value. So once you know what you're aiming for, you can start looking at options such as ISAs, or stocks and shares, with more clarity. On that note, don't dive headfirst into something you know little about, nor can afford. Prakash asks: 'How much volatility can you handle?' Meaning, can you afford to put all your eggs in one basket? Or, are you better off playing the long game? Aka, taking baby steps with your cash to lower the risk. Prakash notes that many don't realise that investing is a spectrum, and there a various ways you can grow your money. It's not just like what you see in the movies: men in suits shouting and screaming at stock market monitors. If you want it to be, investing can be stress-free. The expert says: 'There are many online questionnaires available to measure risk tolerance. Just because stocks give you a high return, it might not be ideal for everyone.' For some of us, Prakash states that fixed-rate ISAs work the best. These are low-risk savings accounts where you agree to lock your money away for a certain period. In exchange, you're guaranteed a tax-free interest rate. There are different lengths of fixed rates, typically ranging from one to five years. However, they often come with a clause: you cannot withdraw money or close the account during the fixed rate period without a penalty. But, because you're agreeing to leave your money for a set amount of time, you're usually rewarded with a higher interest rate. If you know you'll need to dip in and out of your savings pot during the fixed time, you're better off looking into an easy access ISA. Fixed-rate ISAs are commonly suited to people who have lump sums they want to invest and know they won't need to access them, which leads us to our next point. In contrast, what's important with these kinds of accounts, is that you can access them as soon as you need the money, explains Metro's Andy Webb. Here are four top-paying accounts that anyone can open. Bank: Cahoot Account Rate: Sunny Day Saver Rate: 5.00% AER variable for 1 year on balances up to £3,000 Account Rate: Sunny Day Saver Bank: Charter Savings Bank Account Rate: Easy Access Rate: 4.46% with unlimited penalty-free withdrawals with a minimum deposit of £1 Account Rate: Easy Access Bank: Skipton Building Society Account Rate: Quadruple Access Cash ISA Saver Rate: 4.00% tax-free/AER variable Account Rate: Quadruple Access Cash ISA Saver Bank: Yorkshire Building SocietyAccount Rate: Easy Access Saver Issue 3 Rate: 4.10% and allows unlimited penalty-free withdrawals This is so important, Prakash emphasises. While some experts say you need at least three months' worth of living expenses, Prakash says it's better to be on the safe side and go for six months. An emergency liquid fund is simple, she says. It protects you from having to sell assets if unexpected expenses arise. Or, if you lose your job or income. Ultimately, having a financial buffer takes the pressure off, as it means you don't have to dip into your savings you've worked so hard to invest. Prakash says it's vital people learn about the basics of investing. This includes financial instruments, risk vs. return, diversification, interest rates, and insurance, to name a few. The expert explains: 'Complicated products don't necessarily translate to better returns in the long term. The trick is to understand the business well before investing.' As Warren Buffett popularly said, 'Never invest in a business you cannot understand.' There are so many resources online to give you a better insight into investing. Platforms like Money Saving Expert have various beginner's guides, from educating on stocks and shares, pensions and investing, and investment funds. 'Having a budget and tracking your cash flow allows you to understand how much you can realistically invest each month,' says Prakash. While Prakash says there are apps that can help track budget and expenses, the 50/30/20 rule is also a great tried-and-tested method. This hack can help build your emergency fund, too. Essentially, the rule involves dividing your spending into three categories: needs, wants and savings. Then, with each paycheck, allocate 50% to needs, 30% for wants and 20% for savings or debt repayments. Knowing this exact amount each month allows you to invest that 20% without fear of not being able to afford it. Needs – 50% of total salary Needs include essential living costs such as rent or mortgage payments, bills, food and transport to and from work or the school run. Wants are non-essential costs, such as shopping, eating out, gym memberships, subscriptions, trips away and nights out. The final 20% of your savings should then go towards paying off debt beyond minimum payments or putting money into a savings account, investment, or pension fund. Source: HSBC Prakash recommends checking your credit report to 'understand the factors impacting your credit score,' if there are any. Should you have any errors on your report, for example, it shows an already closed loan, get it corrected. More Trending There are plenty of easy ways to check your credit report online. Experian allows you to check as many times as you want for free, without it affecting your score. Not only does this give you peace of mind, in terms of knowing whether or not lenders may reject you, but as you improve your score, you'll have access to better deals, including getting credit at lower rates. There's no shame in needing a bit of hand-holding at the start, says Prakash. If you'd rather have a little guidance before investing and making financial decisions in general, consulting a certified financial planner might be the way forward. 'They'll help you build a personalised plan' in terms of investing, and be able to explain any queries or worries you may have. View More » MORE: I'm a 40-year-old divorcee — this is exactly what I spend in a month MORE: Phone thieves stole £10,000 from my savings but the bank says it's my fault MORE: The £1 pension trick that could save you losing thousands
