A-Z of personal finance: F is for family finances
Separate, joint or a combination
You may prefer to maintain a certain degree of independence by keeping separate accounts for personal spending. If your partner is a spendthrift whilst you are a saver or you just prefer to spend your money without your partner scrutinizing the minutest detail, separate accounts may be more appropriate. Parties to a joint account have a right to withdraw all the money in the account. It is for this reason that the use of joint accounts is usually limited to people who have built a solid level of trust; generally close family members, partners, parents and children.
Having a joint account combined with individual accounts for personal expenses is a good compromise as each partner takes some responsibility for the household budget, yet is still able to retain some autonomy.
Joint account holders and authorized signatories
There is sometimes confusion about the difference between a joint account holder and an authorized signatory. Creditors view a joint account as they would an individual account, this means that each account holder is financially liable, and of course either party can withdraw at will.
Update your beneficiaries
It may seem absurd to be discussing your estate plan at this stage of your life, but you need to update the beneficiary designations on your employers “next of kin” form, bank accounts, retirement savings account, insurance policies and your will. This is doubly important where this is not your first marriage.
There is no one size fits all when it comes to finances in relationships but with careful planning and clear communication you can avoid many frustrating conversations.
The full text appears in “A-Z of Personal Finance” by Nimi Akinkugbe. Available in leading bookstores including Glendora Books, Laterna Books, Patabah, Terra Kulture, Quintessence, Jazzhole …and online from Jumia, Amazon, Barnes & Noble, Manna Books and AMV Publishing
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