This is an excerpt from Dollar Scholar, the Money newsletter where editor Julia Glum teaches you the modern money lessons you NEED to know. Don’t miss the next issue! Sign up to money.com/subscribe and join our community of over 160,000 scholars.
My friends and I share everything: appetizers, clothes, opinions on what Taylor Swift’s next album will be (it has to be reputation). So why not share our bank accounts?
This question is brought to you by a video I recently saw on TikTok with the on-screen title “All my money is shared with my best friend 💸”. The user, Caitlin Emiko, goes on to explain that for the past year she has been splitting her salary with her (platonic) friend: “Everything I do, she gets, and everything she does, I get too “, she adds. . Great if true.
Honestly, when I first saw the clip, I recoiled. I’ve known this for a long time married couples who don’t yet have joint bank accounts, so taking that step with just a friend seemed scandalous to me. But then I started thinking about how annoying it is to Venmo, my roommate, every time we pay rent, order DoorDash, or go for a midday Starbucks run.
Wait, does this idea have legs?
Is it a good idea to share a bank account with your best friend?
According to Jordan Gilberti, senior lead planner at financial planning firm Facet, there are definitely some pros and cons.
On the one hand, it’s convenient and can start to prepare me for the future, assuming I eventually merge my finances with a romantic partner. If my friend is trustworthy, she says, it’s probably not that different from having a joint account with a parent or sibling (which is relatively common). It can be a good practice, allowing me to share the money before push comes to shove.
It might even help me spend smarter. Having someone else on my bank account, Gilberti says, can give me a built-in accountability partner, who can keep my spending sprees in check.
“Every purchase you make will be seen by another pair of eyes and you might think twice before going on that big shopping spree,” he says.
Alas, that’s… more or less all for the “pro” column. And there are a LOT of potential downsides that come with opening a joint account with a friend.
The first is that there’s no guarantee that my best friend will behave once she has full access to my money, according to Michelle Winterfield, co-founder of the expense-splitting app Tandem. Friend breakups happen all the time, and if things go wrong he might just drain the account and walk away.
Even if I trust my friend not to bankrupt me after an argument, there’s a good chance we’re not 100% aligned on our financial habits.
Let’s say my friend spends more than I do: If she buys a designer bag and uses more of what I consider “our money” than she thinks is fair, that could lead to problems. Or say her salary exceeds mine: I might start to secretly think that she doesn’t “deserve” to spend as much as her because I’m not able to contribute at her level.
See how it gets really complicated, really fast?
“We all have our own financial styles, and aligning with another individual on how to spend their money can be extremely difficult,” says Gilberti.
If I’m going to try it, though, there are responsible ways I can dip my toes in the water. Gilberti suggests doing an experiment where we create an account specifically for a common goal, like a trip we’ve decided to take together next year. Hopefully, we can expand the use of the account for daily activities.
He says I will have to set hard boundaries with my friend. How much will we each contribute and how often? What can we use the money for? Can we set budgets for how much we can spend in each category?
Winterfield says I could open a joint account but only deposit a portion of my paycheck. That way, if something goes wrong, I still control most of my money.
“You should have some sense of independence, always,” he says.
The bottom line
The cons of opening a joint bank account with my best friend probably outweigh the pros because we have different financial educations, goals, and habits.
“The safest bet is to keep most of your money, including your emergency fund, in a separate bucket just for you,” Gilberti says.
More from Money:
Where should I keep my emergency fund?
Will I spend less if I force myself to use cash?
Is it ever okay to be emotional with money?