WHY YOU SHOULD ALWAYS HAVE A SECRET SAVINGS ACCOUNT
When you’re in love you tend to want to share everything, and once you’re living together that often includes pooling your money into joint accounts.
And while that can make sense, especially when it comes to contributing to bills, holidays and other shared expenses – it’s rarely a good idea to do this with all your cash.
Having some money which is clearly your own that’s held in your own account means you’ll retain some financial independence.
In short, it’s your money to spend as you wish and when you wish without having to ask permission to buy something or justify purchases at a later date.
Some would say it usually helps to discuss how you plan to do this with your partner upfront, so you’re on the same page when it comes to joint savings goals – especially if you have different approaches to money.
Yet, there’s also a strong argument that keeping some of your savings secret could be a good thing – even though it might go against the foundations of trust most believe are vital in a relationship.
Sound like a strange thing to have? Well, research from financial reviews site Smart Money People found one in ten people in a serious relationship haven’t told their partner about a stash of cash.
For most it’s there to maintain that independence, but for a significant one in five who have one, this money is a ‘get-out’ fund, increasing to one in three for those in their 30s.
Get out of what? Well, it’s ultimately your own insurance policy if things aren’t going well. It’s money that would allow you to ditch your partner without worrying in the short-term about things like how you’ll afford somewhere to live in the immediate time after leaving. Or let you buy a new car or other things that were previously shared.
Yes it all sounds like a downer, and hopefully you’d never need to use it. But having one could give you the breathing space you need if you really want or need to end things. It means you don’t have to stick somewhere that’s making you unhappy, or worse, because you can’t afford to leave.
And the money can also apply to other situations you want to leave – perhaps a bullying boss or toxic work environment.
This doesn’t mean you shouldn’t trust your partner with money.
If anything, it’s vital that you actively and regularly talk about (the rest of your) finances with them.
Doing so isn’t just going to strengthen your ability to spend and save together, but pulling together for the same money goals could help keep your relationship powering along for years to come.
Andy's Best Buys: Easy Access Savings Accounts
What’s really important with these kinds of account, and any kind of emergency fund, is that you can access them as soon as you need the money, which means they need to be in easy access accounts.
Though interest rates on these have avoided the huge cuts in recent months that have been seen on other account types, that’s likely to change if the base rate is cut multiple times this year as predicted. Even so, it makes sense to get the best rate you can on your stash now, and consider moving it later if you find there are higher paying alternatives.
A handful of current accounts offer higher paying rates than those below, but you’ll need to open a current account first if you don’t already have it. So I’ve gone for the top paying accounts that anyone can open.
Bank: Cahoot
Account Rate: Sunny Day Saver
Rate: 5.2% AER variable on up to £3,000
Bank: Coventry
Account: Triple Access Saver
Rate: 5.15% AER variable (only three Building Societywithdrawals a year)
Bank: Leeds Building
Account: Limited Issue Online
Rate: 5.1% AER variable SocietyOnline Access
Bank: Zopa
Account: Smart ISA
Rate: 5.08% AER variable
You’ll find more on these and other savings options here.
Follow Andy, award-winning blogger and podcaster from Be Clever With Your Cash, on Instagram and YouTube, or visit becleverwithyourcash.com.
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2024-02-13T10:05:25Z dg43tfdfdgfd