Looking to invest more in their friendships, some are opening shared bank accounts
A new way of maintaining strong friendships? Creation of a joint bank account.
This is the advice that Madison Machen received last year by chatting with his headquarters on a flight to New York. The woman was on his way to meet her best friend during one of their periodic trips. The trip, she said, was funded by her joint account with the friend.
“I liked the concept so much, I went home and called my best friend and I said to myself, I think we have to do it,” said Machen.
Six months later, the resident of Austin, Texas, and her friend Kim had saved more than $ 1,000 in their joint cash account. Then: a trip celebrating their 20th anniversary of friendship next May, said Machen, let’s hope it in the south of France.
“It’s fun for us, because we can make small bets, almost like a juras pot,” said Machen. “I train for a marathon right now, and one of my goals was that if I jump my long race, or if I jump one of my shopping, I have to put $ 5.”
Machen is part of the handful of people on Tiktok who became viral after having published videos on how this money economy strategy was also a friendship.
The trend is a lively contrast to the popularity of incentives “buy now, pay later”, which allow consumers to delay payment of their purchases. But BNPL loans can lead people to delay in their reimbursements, reported the Associated Press last month.
In a world where most people tend to make financial decisions in isolation, the practice of “financial intimacy” with friends can also help strengthen these relationships, according to Alyssa Davies, author of the book “Financial First Aid: Essential Tools for Confidential, Secure Money Management”.
“When we start to approach money in a creative and fun way like this, it makes money less intimidating, crushing, and there is much more transparency,” said Davies, who approaches the mixed username on Instagram. “It becomes much easier to spend intentionally when you have this responsibility with the people you trust and you like.”
Tori Dunlap, a content creator known as the Herfirst100K user name, which offers tools to help Gén Z and Millennial women with financial decisions, stressed that the increase in the popularity of joint accounts is due to consumers looking for flexibility in expenditure.
“They don’t want to feel the pain of a big purchase at a time,” she said.
But some of the trend videos, which quickly picked up hundreds of thousands of views, also sparked meticulous examination of people who wonder if the creation of an account could really put friendships in danger.
Dunlap said she believed that the greatest risk in the conclusion of this type of arrangement with friends was confidence.
“Everyone on account has generally has equal access, which means that a person could withdraw funds without authorization,” she said. “If someone loses their job, goes through a break or simply changes your mind, it can disorder quickly.”
In order to avoid a potentially disorderly situation, Dunlap said it was better to define clear expectations for all those involved, whether by having a conversation or by having a written agreement sign.
“Okay in advance how many people put, how it will be used and what happens if someone is backing down,” she said.
The creator of financial content Taylor Price, known as the pricratestay online, also warned that in addition to the friendship drama, the creation of a joint savings account with friends may include a financial risk.
“Joint account holders are also responsible for overdraft and costs,” she said. “If a person has credit problems, it could have an impact on everyone’s banking relationship.”
Although the price warns against the creation of shared accounts, in particular with friends, it recommends using individual shipwreck funds. This budgeting strategy consists in regularly reserving a small amount of money to save for future expense.
“When it’s time to book, everyone pays their share on their own funds,” said Price. “You get the same result without risking your friendships or money.”
However, Kim Brindell said that having a common account helped his group of friends in Australia pay for everything, from flights to hotels and meals during their trips. This also allowed them to avoid conflicts on division costs, she said.
“Even with applications that follow the expenses these days, it’s another layer of ease, not having to think about grasping your phone to note things by buying a game of drinks,” said Brinsell, who also published on the trend on Tiktok.
Their group began by setting up automatic transfers of only $ 10 per week on their shared account.
“We now have a girl trip every year for three years, which is a first in our group, and most of us have been friends for over 20 years,” she said. “It has certainly had an impact on how we prioritize quality time together as an older.”
