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Thursday, November 6, 2008

The Trouble with Joint Accounts

The trouble with joint checking accounts is that more than one person is taking the money out of it. If more than one person is depositing money - no problem. The more the merrier. It is when two people are deducting from it that problems arise. Take for example the "fun" Mr. Bean and I had this week. We do most of our shopping together, but we have "his" and "hers" wallets, so receipts take residence in one or the other and don't always meet up again until I decide to record the expenses in Microsoft Money.

Now, imagine with me a pay period where both "his" and "hers" collect receipts for 2 1/2 weeks without meeting up again. This is a recipie for disaster and is exactly what happened to us this last pay period. Luckily, our bank was slower in recording the expenses than we were, so we dodged a big bullet.

To keep you from making the same mistake that we *almost* made, here are some tips:
  1. If you are like us and treat your checking account as an in/out account, consider setting up an auto withdrawal from your savings account should your checking account dip below a pre-set amount.
  2. Agree that whomever is the primary financial person in your family holds all the receipts when you go shopping together.
  3. Once a week, put all your accumulated receipts into a envelope for the financial partner in your joint account relationship to enter into the system. Make it a habit by doing it on the same day every week. Pick two days a week to do this if necessary. (You can set a reminder using Outlook or other scheduling software.)
  4. Move to the "envelope system" like my co-blogger Amy and her husband do. When you get paid put all your money in various envelopes for various expenses. For example, have an envelope with a preset amount of money in it for groceries, eating out, debt reduction, entertainment, etc.
Anyone have other tips to share with us to keep from accidentally overdrawing joint accounts?

4 comments:

Christy said...

We have joint accounts, but Dwight gets an "allowance" and carries cash. I've tried to use the envelope system, but I always ended up 'stealing' from an envelope when I ran out of spending money, so that didn't work for me. Maybe I will try it again now that I've done the Fruits of the Spirit Bible study to see if I can demonstrate some self-control.

just ask beth said...

thanks for visiting my blog.. I hate Joint accounts and online checking, my husband cals me and tells me to get the hell out of TARGET!! HAHA!

Anonymous said...

I have "trained" my husband to hand over receipts every evening after work so that I can enter them into the checkbook. This was facilitated by the fact that we were overdrawn one time several years ago because he hadn't entered them. I also have trained myself to not leave a store until the receipt is entered into the checkbook. It seems to work for us.

Allyson Kellner said...

#4 is Key!! Cash only system in envelopes! Extremely HARD to do, but worthwhile! The months we do it are better for us financially than the months we let that little debit card out to zip zip some purchases (such as this past month. . . :-P) I think it's ok to borrow from other envelopes in a pinch, better that than the plastic.