BankerGirl

Posted by Heidi on December 18th, 2007 in banking

Several financial bloggers have published articles on how to manage household finances and how their method of bill paying, checkbook balancing, debt reduction or record keeping is the bees-knees.  Some authors claim that if you follow their plans precisely, you can achieve that elusive state of financial nirvana. 

I encourage you to go with what works best for you.  What I want to address in this post is the importance of “Yours” “Mine” and “Ours” bank accounts.  It doesn’t matter if you’re married or just shaking up, I don’t care of your straight or gay.  If you are in a committed relationship and plan to co-mingle finances (or already do), I’m talking to you. 

This is a scene I saw on a weekly (sometimes daily) basis when I was a retail banker:

Me: I’m so sorry this is happening to you Mr/Mrs X.  It’s tragic that your partner died suddenly/developed a gambling addiction/left you for another man or woman.  Let’s see what I can do to help you today.

Them: You just don’t prepare for this kind of thing, you know.  Mr/Mrs X always took care of the bills, but I got a call today from the bank and they tell me I’m overdrawn.  How could this be?  I get my payroll/pension/social security deposited automatically every month. 

Me: Well, let’s take a look here.  Looks like someone made a $2400 cash withdraw from your joint account on the second of the month.  I take it that you didn’t authorize this transaction?

Them: $2400!?  No, I wouldn’t do something like that - I don’t handle the finances.

Me (pulling up a copy of the image):  Well, it looks like your partner’s signature on the withdrawal slip.  Is there some reason he/she would do this? 

Them: I don’t know - he/she died in a car accident/hasn’t been home in two weeks.  What am I going to do?  I got this letter from the mortgage company saying that I’m past due on my house payments - I figured it was a mistake until I got that phone call today.

Me: Do you have any other accounts here?  Maybe you can make that payment from a different account?

Them: I have a savings account. 

Me (looking in a computer system for the account):  Well, I see that your partner had a savings account here, but you aren’t listed as an authorized signer on the account, so I can’t give you any information on that until this goes through probate/your partner comes in with you.  <Legally, I couldn’t even tell her that a savings account in his name even existed, due to privacy laws - I included it here for illustrative purposes only.>

Them: I know that there’s over $10,000 in that account, are you telling me that I can’t access to it?

Me: Legally, no, you can’t.  My hands are tied.

And so on and so on. 

The point is, if all of your accounts are joint and your S.O. decides to skip town (and I’ve seen this happen many, many times), they can wipe out all of those joint accounts and leave you with nothing.  Typically, the skippee chooses to do so on payday or shortly after, to get away with the most cash - and since it’s their legal right due to joint tenentship, no bank employee can stop them.

And I can’t begin to tell you how many checkbooks I have balanced for widows in my day. So often, one person in the relationship takes care of all of the “financial stuff.”  I’ve seen cases where the surviving spouse didn’t even know what banks to call to report their dear departed’s death. 

This brings me back to the “Yours” “Mine” & “Ours” accounts.  I recommend income streams come into the “Yours” and “Mine” accounts and flow into the “Ours” account for joint expenses.  You may have several “Ours” accounts - but you should have at least one account in your name only (and list your partner as the POD beneficiary).  If you are a SAHS and don’t generate regular “income” have the household breadwinner pay you a “salary” on a monthly basis and sock a little of that away (tell them you want it for surprise gifts for them if they are reluctant). 

Everyone thinks that it couldn’t happen to them - and yet it happens way more often than you could ever imagine.  The point is to at least have something with liquid monetary value that is 100% yours.  Consider it an insurance policy for your financial sanity in case a series of unfortunate events befalls you

Finally, if you feel you must have all joint accounts (and I know that you’re out there), communication and involvement of both partners is of vital importance.  I recommend monthly meetings where you go through statements and balance accounts together.   

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