This week’s topic is on “Couple’s Finances.” Whenever this topic is presented, the discussion usually drifts to the pros and cons of Joint Finances vs. Separate Finances. There are some pretty intense feelings on both sides, which almost always leads into interesting articles and ensuing comments. For me…
I just can’t wrap my head around ’separate finances’!
Neither my wife, nor I can imagine having separate accounts. In fact, I would go as far as claiming that I lose a piece of respect for some people when I hear that they have separate finances. I’m not proud of this. On an intellectual level, I believe people should do whatever system works for them. But on a practical level, my stomach turns when I hear or read people talking about this issue. I’m often annoyed at several of the comments on sites who’ve tackled this subject in the past. I just don’t get it…
My biggest beefs with separate finances in marriage:
- It seems like many couples settle for separate finances because they desire avoiding “tough” conversations up front. In my life, ignoring or avoiding any issue has very rarely led to a positive resolution. In fact, the majority of times I’ve neglected an issue it has become far worse, before finally coming back to bite me in the butt. On the surface it can seem like separating accounts is a way to avoid money fights, however I believe many people use this as an excuse to delay working through the real issues behind the fighting.
- His and Hers, rather than Ours. How in the world can people have separate finances and still avoid slipping into his bills, her bills, his debt, her debt, his spending, her retirement? I find it hard to find how this system promotes unity and communication. I entered the marriage with more credit card debt and my wife entered it with much more student loan debt. Once we were married though it was our debt. Our income is our income. Our bills are our bills. Our financial goals are our financial goals. I love the fact that we have one shared plan and are constantly working together to implement it.
- There are many ways to budget “his/her” money, without separating finances. Whether you call it “blow money,” “personal spending,” or “his and her cash,” it is an essential part of budgeting. There’s nothing wrong with having money that each spouse can spend on whatever they fancy, but it seems akward to separate your finances just to accomplish this. I mean, is budgeting this category really that much harder than working out the details of splitting household bills and percentages of income?
- I feel like one spouse “paying” another by writing a check or transferring money is degrading. Every time I read someone talk about how they “pay” money to their stay at home spouse every two weeks, I actually want to scream. When my wife was pregnant she worked part-time in our business and had very little side income for a short amount of time. After my daughter was born, we sold our business so that I could stay home with her for the first 8-9 months, while my wife went back to work as a teacher. In either case, I would have felt horrible receiving/giving “pay” to/from my wife. Our money is our money, period.
- I don’t want a roommate, I want a spouse. During and directly after college, I lived with multiple roommates. In each situation we all had separate accounts. We all talked about how to split each bill and about whom would be responsible. Once a month, I would pay my portion of the joint bills and spend the rest of my money on whatever I wanted. Marriage is suppose to be the most intense form of intimacy and trust. I can’t imagine using the same system with my wife as I did with my roommates (as fun as they were).
- Separate accounts encourages secret accounts. Obviously, simply having separate finances doesn’t mean either party is being dishonest or untrustworthy. However, it is much easier to hide finances or get into “trouble” with separate finances. Everyone has their own weaknesses and temptation is always present in one form or another. Having struggled with addiction before, I’ve had the best success with systems which help me avoid temptation rather than encourage it.
- Both have access in case of an emergency. In the event something were to happen to me, even for a short amount of time, my wife would never have to worry about lack of access to any or all of our resources. Sure, either one of us could go to the bank tomorrow and withdraw all the money and put it on 18 red. If you can’t trust your spouse enough to have them on all of your accounts, should you really be getting married?
I guess I just can’t think of any negatives of joint finances!
There are only two cases where I would even find it convenient to have separate finances:
- I wanted to make a major purchase not in our budget, selfishly, without my wife knowing. Any purchase that would fall into this category is one that I would regret 24 hours later. Those of you who are regular readers know I’m a huge fan of putting as many obstacles as you can between yourself and habits that can destroy your financial goals. Having joint accounts is yet another layer of protection to help fight our impulses.
- I got divorced. Why anyone would use this as justification for separate finances I’m not sure. My wife and I do our very best to eliminate the possibility of divorce completely. Our theory is that if we never allow it to be an option, even for a second, than no matter how intense our problems become we will have no choice but to overcome them together.
Don’t get me wrong, we’ve had the same struggles in our young marriage that everyone works through. Our first couple years have been full of up and downs. Luckily, our handling of finances has been a constant source of strength. We feel as though having every account joint (even business) has brought us closer, increased our communication, and solidified our long-term goals.
I have an immense amount of respect for people who are able to achieve lasting, long-term relationships. I know for a fact that fantastic, mutually-beneficial marriages built on love, respect, and trust can include separate finances. I would never argue the opposite. I simply wonder if these relationship might even be further improved with increased financial unity. Maybe… maybe not.
Either way, I’m always interested in hearing from people who’ve been successful with separate finances. I really enjoy intelligent discussions that challenge my current belief systems. It is for this reason that I’m super excited for this week’s Personal Finance Hour (come join me in the chat room). And as always, I would love to hear your perspective on this issue.
Am I being narrow-minded? Do you have any information that can help open up my perspective? What do you choose in your marriage… joint or separate finances? Let me know below!
Subscribe via RSS
Follow @ManVsDebt on Twitter
Become a fan of MvD on Facebook!
{ 3 trackbacks }
{ 64 comments… read them below or add one }
On the whole I do agree with you and 6 months ago I would have been right there with you. However I have recently learned about some very happily married couples that have always had sep accounts. I also have several examples of joint account holders in very bad shape. I still think all the income should go into one big pot first, but I am doing a lot of research to discover if there are any benefits to sep accounts. We shall see.
The Weskonomist’s last blog post..Ten Things I Hate About Economists
I’m with you on joint finances for married couples. I am paid through direct deposit from my employer, and have the capability to have different amounts deposited to multiple accounts. My wife and I decided to keep individual daily expense accounts, into which $100 per paycheck (a total of $200 per month) is deposited from my pay. The remainder of my check goes into our joint account, and all of my wife’s pay goes into our joint account since she is paid by paper check. All of our bills are paid out of the joint account. We set up the separate accounts for daily individual use, like gas and food, as safeguard against overdrawing our joint account at any point.
Adam @ Checkbook Diaries’s last blog post..Why I Skipped the Ski Trip This Year, and Putting a Plan in Place for Next Year
@ Weakonomist – I am also intrigued at the potential benefits of separate accounts. I’ve yet to bump into any information that helped persuade me (as you have in the last 6 months), but am interested to hear people’s take tonight. Let me know if your research turns up any insights!
@ Adam – I can definitely understand people having separate accounts for their “blow” money. For us, though, we find no reason to do it. It just complicates our overall financial picture and we have no problems just budgeting the amount and each spending it out of the joint account.
Hello Adam,
I have never livd in a situation where the seperate account method is used. I do have a few friends who have always done things in this way. Admittedly, I haven’t thought about this issue a lot but now you have me thinking! I can see some pros and cons to each approach. I need to think on it more and perhaps quiz some of my friends as to why they do things the way they do and what is working and what isn’t.
Thanks for the thought provoking article..Keep’em coming!
Keith’s last blog post..Do You Believe?
I don’t see anything wrong with both joint and separate accounts. Both will have their pros and cons. There’s no right or wrong. There’s no one is better than the other. It’s just individual preference. Why bother yourself with or get upset over how other couples manage their finances?
Personally, if I were married, I’d prefer a combination of joint and separate accounts. This is just my preference.
Cheers~
Mark
Hi Adam,
That’s an awesome photo–crazy!
My husband and I have tried every combination of sep and combined and both when it comes to finances. The worst was when they were completely seperate. We treat money differently and I think it’s working best now that the stronger financier (me) takes control, but not too tightly.
Celeste’s last blog post..Procrastinators are in luck.
@ Keith – You make a good point about not living in a situation with separate finances. I didn’t grow up with influences whom used separate accounts, so maybe that’s one of the reasons I struggle to grasp any benefits from it.
@ Mark – I hope I didn’t come across as upset! I was more trying to outline my struggles with understanding a system that has clearly worked for some people. I do think the discussion is an important one though. Both sides of the coin can learn from the other, which is why I’m trying to open up my perspective on the issue. Thanks for taking the time to comment!
@ Celeste – I’m glad you enjoyed the photo. I couldn’t believe it when I found it… it just seemed so awesome! Thanks for sharing your personal experience. I think it’s important to make sure you don’t take control too tightly (as you pointed out), but rather be a great example for your spouse!
My wife and I have separate accounts and a joint account. We don’t really have separate finances though. Our separate checking accounts are for our personal spending like gas for our cars, blow money, and eating out for lunch. It is essentially just a budget item which gets moved into two separate accounts. All bills and household expenses are OUR expenses and are handled through the main account. The separate accounts makes it easier for us to keep up with our blow money and keep play separate from the business end of our joint finances.
Kyle’s last blog post..Suburban Garden Expirement – April Update
Glad you found me through Twitter! I enjoy discussions about personal finances, and find those related to how couples handle their finances to be especially interesting. First of all, I can appreciate and applaud your “no exits” approach to staying married, however, I would like to point out that this can only work when both parties have the same belief system. My husband and I had a separate plus joint account system when we were first married (second marriage for us both), having had joint finances with our previous spouses. I think the reason for that was the lack of trust that had developed as a result of having been severely hurt financially by our ex-spouses and our not wanting to give up control of what “belonged” to us. Since my husband made more money than I did, I had difficulties with this system and after trying to explain to him to no avail, I ended up with a secret credit card. Eventually, I was found out, which led to a real “heart to heart” (I recommend the beach for this type of talk, it’s a calming environment) where we hammered out a new joint plan that worked for both of us. Several years later, all of our finances are now entwined and I actually manage the finances for both of us. I think that an inability or unwillingness to merge finances for common purposes and goals has probably deeper meaning for both parties and should be explored, but as long as these goals are being accomplished to the satisfaction of both, they should do what works for them.
Never quite understood it myself. Life is two busy to have to track everything twice. That being said, I do think it is important for everyone to have a “slush fund” so they feel free and flexible to have some fun spending when the time arrives!
Great post Baker!
The Almost Millionaire’s last blog post..My Best Investment – 1st Quarter 2009
I think the issue starts when its too late. What I mean is couples get married and only find out that they are not compatible with each other because they either don’t have the same money habits, financial goals, hidden financial history and now its a disaster.
They did not take the time to discuss money prior to getting married for whatever reason and now they can’t trust one another. Or one can’t trust the other and the rope gets pulled both ways.
tom’s last blog post..Why are you really moving out?
@ Kyle – I like that even though you technically have accounts that aren’t joint, that you still handle all the bills like “OUR”-bills. It seems like you are able to play the middle ground pretty well.
@ Karen – Thanks so much for sharing your personal experience. You definitely have insightboth sides of this equation and your comment helps reinforce some of my existing beliefs. I’m glad to see you and your spouse have found a working solution. I really appreciate you stopping by and sharing so openly!
@ Brandon – Yeah, it’s always been much simpler for us just to do it once!
@ tom – You bring up an excellent point about the importance of discussing these matter before marriage. I read and hear about way too many people that get into the exact cycle of problems you outlined.
I’m going to go ahead and agree with you. I also don’t “get” why a married couple would keep separate finances. Then again, I’ve never been divorced, had money troubles when I was younger, or as a kid, been burned before, etc. It probably, as a number of comments have already alluded to, has something to do with a deeper sense of fear or mistrust.
For my fiance and I, we have already talked a lot about our finances, and how we are going to go about combining them. We’re not married yet, but we’re already starting the shift towards talking about “our” money and “our” expenses, even though we have separate accounts and separate incomes. Its a very interesting process, and a very emotional one, but one that definitely needed to be dealt with BEFORE the wedding.
Alan Schram’s last blog post..Small Choices, Big Difference: Part I
Completely, 100% agree with you.
Last time I checked marriage was supposed to be about unity and joint-ness rather than just living together. Just goes to show how far our society has gotten from God’s design of life. “Yea, I just live with my wife. I don’t know what she does with her money.” (palm-face-smack image here)
@ Alan – Thank for dropping by! I think you are way ahead of the game in dealing with your financial issues up front. My wife and I were on the ball about discussing pre-martial finances, as well, however it’s hard to cover everything that will come up in the first few years. I think think sort of discussion is absolutely essential in the society we live in!
@ No Debt Plan – Kevin, thanks for getting my back
!
Yes, discussing finances before marriage is always a good idea, but I’d like to point out that the true test of financial harmony comes during the marriage when major decisions need to be made. Then how couples communicate about their finances becomes the determining factor. The ability to be able to respect each other’s position and communicate to a compromise or mutually beneficial outcome becomes the goal.
My boyfriend and I have separate and joint accounts. We have a joint account that we put a proportion of our checks into. We pay rent, food, gas, dining out, and fun from the joint account. Our personal accounts are ours. Even after we are married, I’m sure we will keep this arrangement to some degree, though our joint pool will probably be bigger. At that time, I will add him as a beneficiary on my retirement, and vice versa.
We’re both very independent people, and really cringe at the idea of having to ask ‘permission’ to buy something. Of course, if we’re buying something like furniture or a washer and dryer, that’s a joint decision and joint money. But if I want to buy shoes, I’m going to buy shoes. It also helps we’re on the same page financially. We both frugal savers, and there’s no risk of one of us raiding the joint fund because we overdrew our personal accounts.
Cathy’s last blog post..Spotting a Phishing Scam
@ Karen – You bring up another excellent point. I feel like our ability to discuss a major decision and come to a mutual resolution (in regards to finances) has been a major strength in our young marriage. We definitely try to leverage it in the other areas of our life, as well.
@ Cathy – Thanks for taking the time to add your perspective. I can understand where you are coming from. My wife and I have overcome the “permission” obstacles by sitting down and doing a joint budget. In your example, we would budget at least some money for shoes (or that would be spent out of the “blow” money) and then when the purchase was made there wouldn’t be any need for permission. The only time “permission” becomes and issue is when we want to make a purchase not in the budget and that’s more money than we each have to “blow.” In those cases, I’m extremely glad I feel negative pressure, because that is often times a purchase I would regret shortly after.
That’s great that you’ve found a way to keep each other on track, Baker.
Thanks for the response. I’m glad you found something that works for you!
I hear you Baker, on the topic of separate finances. There is one thing you fail to consider . . . the notion that some people need separate checkbooks to keep from killing each other. To wit; I am a law student who will be facing the board of bar examiners in roughly 9 months. The one thing we have been told, literally since the day we began law school, was keep our noses clean and do nothing you would have to report as a negative to the board. Fair enough. I have been fairly successful staying out of jail and not running afoul of the folks in charge. My wife, however, can not keep a checkbook out of the red. God knows, I love her dearly, and would never consider leaving her or kicking her out. She cannot, however, avoid an old habit she picked up in college years ago and never quite shook … She will write a check today knowing that money will come in in time to beat the check to the bank.
I have begged, pleaded, even given her a bumper fund to put at the bottom of her checking account balance to keep her from approaching negative numbers. Nothing helps. Eventually, she is in the red, often really in the red. It is an expensive habit, and these days you run the risk of dinging your credit report when you do it repeatedly.
I can’t share her bank account, because I do not want to have to be an apologist for her in front of the board of bar examiners. After I get my license to practice, maybe. Now? No.
Mort, being a student of psychology (not law), I would have to say that there is something at the bottom of why your wife will not play by the rules. She knows where the bottom is, but steadfastly refuses to honor it. It reminds me of an old friend of mine who was married to a man who neglected to take the videos back in a timely manner incurring all sorts of late fees, yet she refused to do it because “it was his job.” Meanwhile, their little power play cost them plenty in money that could have gone to a much better cause. This is a great argument for separate accounts, but still the bad money habits end up affecting both.
I think that having separate finances is great. It works very well for my wife and I, as linked above.
We discuss our finances openly, but never fight about money because we are individually responsible for our own money. If she wants to splurge on shoes, its no skin off my back and vice versus if I want to buy power tools. It ultimately allows us to become closer.
-Dan Malone-
Live for Improvement’s last blog post..Getting Out of a Traffic Ticket
The way we do it is a slight variation. We both have separate checking accounts which accept our direct deposit pay. On payday, we both send most of our check to the Joint account.
Both of our sets of parents worked from one check book and we observed that they were frustrated and bouncing checks as they’d forget to tell the other they wrote one or not know the amount they wrote earlier.
I’m sure this isn’t the “separate finances” you mean. Ours has worked well for us, and avoided that bounced check issue our parents enjoyed.
Joe
JoeTaxpayer’s last blog post..Inflation falling
It sounds like you have a great financial partnership and you should be thankful.
However, not everyone is so fortunate. You should keep in mind all of the challenges of having an irresponsible spouse. When this happens, all of the talking in the world doesn’t work, because they really don’t care about the finances. They just want to buy whatever they want, even of it hurts the rest of the family. They consider excessive spending to be a right, not a problem.
I personally know many couples who have gone through financial nightmares because of irresponsible spending by one of the spouses. For the responsible spouse it’s the most helpless feeling in the world. Separating finances is one of the few things that may work in this situation. It can be the single thing that saves a marriage.
The reason you can’t list any negatives of joint finances is because you probably haven’t experienced any of them. It’s like saying you don’t understand alcoholism, when you don’t have a drinking problem. When joint finances go wrong, bankruptcy and divorce are the two biggest negatives. They are also very common right now.
Try talking to someone who has been there and then you will know what it’s like. It’s an awful feeling when you go to pay the bills one day and find out all of the money is gone. Imagine you have a single income for a family of four, the bills are due, the refrigerator is empty, it’s two weeks until payday and all the money has been squandered on junk.
Having said all of that, I can now say something a little more positive. We are still married after 18 years, our finances are in pretty good shape and Yes, we still have separate bank accounts. We have both become more responsible and we rarely fight about money any more. Many other couples I know aren’t nearly as fortunate.
This picture brings back some old memories.
Bret’s last blog post..The Effect of Luck on Finances
I’m not married yet, but we’ve been together 6 years and have gotten to the point where we stop correcting people when they call the other person our husband or wife. We also have no intention of changing from our separate finances after we do get married.
First of all, I’m glad you admit that you CAN have a healthy relationship while maintaining separate finances, many people don’t. The attitude that there’s something wrong with people who have separate finances is ridiculous. I also have to point out that joint finances can be just as unhealthy when people try to control or ignore money, or just don’t talk about it.
RE: Your biggest beefs.
- Very true, but not always.
- People get very hung up on a couple sharing everything, but everyone has things that are strictly their own, unless you like cross dressing anyway. Just like I have MY socks, and MY cell phone, I have MY money. At the same time, we have OUR apartment, and OUR bills and OUR long term plan. Separate finances doesn’t have to mean you’re working alone, sometimes you divide and conquer instead.
- No argument there.
- In the case of a single income household, yes. In the case of dual incomes, no. For two people with separate finances and two incomes, it’s nothing more than balancing the checkbook. Or like an investment portfolio where one stock or fund is overbalanced. It just evens things out again. In my case, it’s generally a very small amount once a month that is transferred for the sake of keeping the bookkeeping neat.
- This is nothing more than a personal view and hangup.
- Nope. Growing up, my parent’s had joint finances. My dad maintained at least one secret account pretty much throughout. He simply didn’t deposit his entire paycheck into their main account, a small part went into his private account. It’s just as easy to have a secret account either way. In a way, having separate finances is trusting the other person not to do that.
- Although I have not yet, when we marry, I will likely add my fiance to all my accounts for just this reason. They’ll still be “mine”, but he’ll have access in case something happens to me, just like he’s already my primary beneficiary and I his.
3 big Negatives of joint finances off the top of my head
- Overdrafting
- Coming in over budget
- Gifting and taking the other out ends up pretty meaningless. “Well dear, you have $100 to spend on my birthday gift, don’t go over budget!”
Most people have a common view about separate finances. They think it means we are acting alone. Where separate finances works, that’s very far from the case. We’re still working together in every way. My fiance and I probably talk more about our finances than joint couples. Even though we have separate finances, there’s an implicit understanding that if help is needed, it’s there. We’ve discussed where we want to go in life and how we’re going to get there. It’s not me working towards my goals, and him towards his. We’re both working according to an agreed on long term plan, just like most joint couples. Our plan is probably less detailed since we delegate things between us, but it’s just as valid a way of doing things.
It also doesn’t mean that you’re working with a black box where the other person is concerned. I know how much debt, savings, investments, etc. my fiance has. In fact, I track his investments and helped him set his asset allocation and everything. We’ve contemplated pooling resources to help pay off debt sooner, but in our case it never made a lot of sense. Our budgets are also collaborative, since we discuss and agree on mutual expenses like groceries and eating out. So we both know where each other stands, and what we’re working on besides our mutual goals.
We also really like the divide and conquer method of our system. Most of the work in managing money is in the day to day transactions and keeping track of a budget. In our case, I only have to worry about what I spent. I never have to track him down and wait while he digs in his wallet to figure out what that $14.77 charge from walmart was for. We also never have to worry about how much of the food budget the other has spent, since we both maintain our own budget.
That’s part of why we have separate finances. We’re both budget nerds of the every cent needs to match kind. The problem is that we’ve both developed our own methods of budgeting and it would be tough to merge. Unlike most couples, we’d be arguing over whether to budget monthly or biweekly instead of how much the food budget should be (since those things have already been agreed on.) Our budgeting methods are pretty diametrically opposed, and sure, we could compromise and come up with a joint method…but it wouldn’t be fun anymore! (I know, we’re weird.)
A big key towards making separate finances work, is to not keep score. Sure, you split everything 50/50 or whatever, but don’t be anal retentive about it. For us, some of the enjoyment is the ability to give gifts and treat each other. Sometimes we’ll go out to eat at a little nicer restaurant than usual, and he’ll tell me, “My treat. I’m taking you out tonight,” and that makes it extra special for us both.
Personally, I’m of the opinion that a couple with a good relationship should be able to use either joint or separate finances or even switch between the two without it making any difference. These are just two methods of keeping the books. The rest of it comes down to your relationship and talking about things. Most money issues aren’t money issues – they’re relationship or personal issues. Finances is just where you see that issue come into play whether it’s irresponsible spending or arguing over priorities.
I’d be glad to discuss more about how we handle things separately if you like. Just shoot me an email.
Slinky’s last blog post..Wedding Guilt
You state: “In fact, I would go as far as claiming that I lose a piece of respect for some people when I hear that they have separate finances. ”
Well, I would say that I lose respect for people who judge other folks by how they do their financial accounting. As long as the couple is happy, how is it anybody else’s business? You can’t use that as a yardstick for how the couple gets along or feels about each other. That’s like saying you don’t respect couples who don’t want to have kids- it’s really none of your business.
“I’m not proud of this. On an intellectual level, I believe people should do whatever system works for them. ”
“I know for a fact that fantastic, mutually-beneficial marriages built on love, respect, and trust can include separate finances. I would never argue the opposite.”
That last one was in bold. I’m not sure if you didn’t read the article or you just missed the point. The title is “I just don’t get it,” not “people who do this are idiots.” I was being open an honest about my struggles accepting a way of handling financial aspects of married life. I and other readers enjoy opening our minds to other methods, so that we can learn and grow. Several people with separate finances have commented and contributed real substance and value to the post. If you need inspiration on how to do this, read some of the longer comments above.
I completely agree with you on this one. I do a fair bit of financial counseling and the couples that are most willing to implement my advice are those with a single account. The idea of my money and your money or my bill and your bill seems to lend itself to problems. Not saying that split finances can’t work, but when my wife and I got married we agreed to become ‘one’.
Greg @ Managing Money God’s Way’s last blog post..Saving money just by asking
My wife and I treat this the same way. We agreed to become “one,” as well.
Some reasons you missed in the reasons to keep finances separate:
1. Finances are already separate. You don’t enter a marriage with combined finances… The process of combining them can be extensive. You say “it seems akward to separate your finances just to accomplish [personal spending]“, but it’s the default state. It’s awkward for me to think about switching to shared finances to fix a problem that doesn’t exist. Easier solution… one joint account for “our” expenses. Both spouses contribute an agreed amount to the joint account. You don’t have the issue of one spouse writing the other checks, you don’t have one roommate being responsible for one bill.
2. Getting divorced. Though you mention it, you brush it aside, saying “My wife and I do our very best to eliminate the possibility of divorce completely.” Every other happily married couple felt the same way at some point. Yet a large percentage of them get divorced.
3. Spending. It would be psychologically damaging to know how much my wife spends on her hair. She mentioned it in passing once, and I’m still trying to forget it. On the flip side, I upgrade my new cell phone every now and again, even though my old cell phone works perfectly fine. She understandably can’t understand that. However, each of us are still frugal and save thousands of dollars each month. It’s better for both parties to simply keep things separate and have a once a month money meeting to make sure we are still on track to reach our goals.
We still talk about things as “our” money. We don’t avoid any “tough” conversations (though having good personal finance instincts helps that.)
I wrote about this once myself and found that I got a lot of comments as well. It’s a tough topic, and I’m not sure there are any right or wrong answers. It’s one that depends on probably dozens of personal details between the couple and their financial situation.
Thanks for the awesome comment.
1) I can see your point here. I think it’s just a different way of thinking than mine, which is interesting to be exposed to. When my wife and I combined finances, we didn’t view it as fixing a problem. We just both had the expectation that we’d do it and it was easy for us.
2) I know the statistics well. We just choose to try to put everything we can between us and that as a possibility.
3) Again, this comes down to just a difference in comfort levels. I would be uncomfortable the other way. I would make me feel uneasy to spend a bunch of money if it hadn’t been agreed on before hand. Just like I would feel uneasy if my wife spent a large quantity of money that we hadn’t talked about either. Obviously there isn’t a right or a wrong, it’s a matter of comfort level.
I really appreciate you adding some constructive feedback from a different perspective. It’s neat to see how other people feel about the issue.
Just a different perspective regarding number 3 – For us, I honestly can’t remember any significant purchases that weren’t discussed beforehand or at least mentioned, with the exception of gifts for each other and a vacuum cleaner…and the vacuum was extenuating circumstances relating to asthma. Even the gifts usually get talked about one way or another. That’s the thing with all this. It works the way you want it to work.
And I’m going to stop while I can still restrain myself from going off on tangents.
Slinky’s last blog post..Status Report #3
This is a great post and never out of date. I am all for joint finances, but there was a time when I was a bit unsure. My previous message was messy and my ex did go to the bank and clean out OUR money. It made me very uneasy once I got a new little nest egg going to go ahead and share that with my new husband. We talked it over, he understood my feelings and we got through it together. In hindsight, I didn’t have anything to fear and almost feel a bit silly for my initial concern (note to self: revisit this with husband).
Now, when it comes to birthday gifts etc, we simply say to one another, “Don’t look at the on-line banking this month”. You know they’ve got something going on, but hey, it’s your birthday, so it’s to be expected!
As mentioned in the post – we’re in this for the long haul and although we don’t share EVERYTHING (don’t touch my toothbrush!) it would seem odd to me to not have joint finances.
We always discuss big purchases and neither of us has any secret fetishes that cost money
To each their own, but for me, I’m glad we talked it over back in the beginning and haven’t looked back since.
Oh, I couldn’t agree more. One time I was at a friend’s house when her husband came in, said something like “I bought the concert tickets, you owe me $56 bucks.” He was making easily 5 times as much as his wife, maybe 10 times. I thought to myself, “She’s a lot nicer than me.”
I’d probably have responded “Go find someone else who wants to pay to go out with you!”
PS – They are divorced now – FWIW
I once knew a couple where the man made 5 times as much as the wife also. They had joint finances and the husband dictated absolutely everything she spent any money on…..down to what kind of tampons she was allowed to buy(store brand only)……they are no longer married either…….Neither one of these marriages ended because of finances………It’s cause dude was a jerk.
I cannot disagree with you in any part. I’ve been married for over a year and every time I bring this subject up it’s an argument. My husband makes more money (+15k) than I do and he feels he is entitle to all his money. He feels I need to live within my limits and not ask him for money, because he doesn’t ask me for money. I had to hear it when I asked him for 20 bucks to help pay for the pet’s vaccination. If one of the pets get sick, he expects me to pay for the bill as I came to this marriage with the pets, so they are mine. We had plans to have children but I got that totally off the book. There is no way we can raise a child under these system. I’m looking for a second job besides my full time job and part time school to help me pay for all my expenses. We have a joint checking that we put a certain amount of money to cover bill and groceries. That was another fight over 4 months to get done. He would go to the store, pick his junk and separate them at the cashier. I ended up paying for all the groceries that I cooked and both of us ate. I had no money for groceries and I had relatives from outside of the country over. I asked him for money and he limited me 50 bucks for grocery. Next day he shows up with an Opus One and I found his bank statement showing 1,600 available for over 3 months in his checking account. I cried so much and I decided it had to end. That’s when I finally won the joint account for bills only. Oh did I mention he wanted to file separate with IRS and I had to speak up? What do I do? I’m starting counseling, will try to bring him to couple’s therapy but I’m seriously giving up and thinking seriously of divorce. I feel he is selfish and maybe he is hiding things from me.
I feel your pain! My new husband and I have seperate accounts. He makes quite a bit more than I do, but fortunately he also pays more of OUR bills than I do. The problems we have are with the personal spending. We share in all the bills so that we are paying proportionately to what we earn and we split major expenses, etc. However, he tries to be in complete control of what I spend personal money on, when he blows his money and can’t even account for it! We have literally only been married for a little over a month, and within that time period my financial trust in him has withered away. How do you get past an issue like this? I know it’s just money, but it’s MY financial security too. Just like you mentioned, I think he is hiding something from me too, I just haven’t found out what it is yet…
@Priscila – your man sounds like a jerk. If he can’t share finances and groceries with you then he definitely can’t share his heart or his entire life. Cut your losses and save some tears: get out!
One divorce will convince you.
Let’s hope not
I was married and we had completely separate finances. Not because my x-husband wanted it that way it was because I had no desire to combine our finances. I was young when I got married and I was in love and I was foolish. I married a man that had lots of fun and had no perceived consequences for anything, spending money was the major one. There was always another credit card to use or money to shift to cover things. I had never had debit before getting married, I had graduated a year before from college and come out with no credit card debit and little student loan debit.
I had major credit card debit (that was all mine) by the time I got divorced four years later. The major take home message. (It took me several years to actually understand my deep sub-conscious survival mode) I married a man I did not trust financially. I was attracted to his liaise faire attitude about everything, the no consequences approach intrigued me I had never let myself go like that before. (but unfortunately I learned too)
Now I know that I was protecting myself, even though I didn’t know it at the time. If I can’t trust someone financially then there are some other major issues I need to account for.
Wow, thanks for the deep and intimate comment. While this situation could happen regardless of the status of financial accounts, it’s a great reflection on the importance of financial trust (whichever method you use). Thanks a ton.
ha!
The title of your post reminds me of how harshly judged we are for keeping finances separate. People think that our marriage must be inferior; that we must be planning to divorce; we must not really love each other or want to share our lives.
Barf.
The only reason to keep joint finances, or separate finances, or mixed finances, is because that’s what works for you. Kindly keep your opinion of my choices to yourself.
If you really want to know you can read a little further, and I will tell you our own reasons for keeping our finances apart.
The #1 biggest reason is his past difficulty with the IRS. If you’ve ever tried to clean up an old tax disaster, you know how ugly and time-consuming that can be; we were not willing to put our lives together on hold for some bureaucratic foot-dragging. We had planned to keep a joint account for shared expenses, such as our home, but were advised that until the taxman is happy any account with his name on it is at risk of seizure.
The other main reason, possibly more important to us, is that we have completely opposite and incompatible views about money. Over the course of our relationship – over 10 years together, almost 1 year married – we have both moved toward center: I have stopped agonizing over every tiny outlay, and he has started paying bills on time and thinking before spending. Neither of us will ever be perfect but we don’t let that stop us from being happy together.
Finally, we may be married but we are not one person. We came to marriage later in life, with established households of our own and no particular need or desire to marry anyone ever. We ultimately married because we felt it was right for us, at this time, to honor our partnership legally and in the eyes of our aging parents. We are not the joined-at-the-hip type; our individuality is important to us. Not more important than our partnership, but not less important either. Can you understand that?
Sharing money as a couple is challenging, whoever you are and however you handle it. Joint or separate, it requires honesty, commitment, and communication. No one method works for everyone, or works for each adherent the same way. Maybe you’re “lucky” and agree on everything; maybe you’re constantly challenging and being challenged by each other’s views. One is not “better” than the other.
Do what works for you, and kindly allow me to do the same. Unjudged.
“I’m not proud of this. On an intellectual level, I believe people should do whatever system works for them… ”
“I know for a fact that fantastic, mutually-beneficial marriages built on love, respect, and trust can include separate finances. I would never argue the opposite.”
This post was both a journey for me to understand separate finances and an invitation to open up the discussion. Let me reflect on a couple of the issues you brought up:
1) Obviously, if you’ve been “advised” to keep accounts separates because of haunting IRS issues, it would be intelligent to do so. This type of situation is not really the focus of the discussion, though.
2) Don’t be so quick to assume that we “agree on everything” or that we aren’t “challenged by each other”. We’ve just decided to tackle this issue together with combined accounts. Overcoming “incompatible” views on money seems to be a necessity for marriage (one you’ve seem to find a great balance with). I’m not sure how separate accounts is better for overcoming this than joint accounts.
3) We are not one person either. But we do have ONE financial life. I think the key difference here is the reasons for marriage. You’ve outlined that it’s more of a legal issue and one influenced by family. That’s cool. I respect that, but it’s very different motivation. Individuality seems like another area that’s important to all marriages. But OUR individuality is not more important than our partnership.
Ultimately, I love the fact that you’ve taken the time to write such a passionate comment. Opening up the discussion was my goal and as you can see above there has been a lot of intelligent and respectful commentary on both sides.
Also, I won’t be keeping my opinions to myself, unfortunately. In fact, I sincerely hope you DON’T keep yours to yourself, either. There’s no fun or growth in that.
Great topic. We are a 1 income household so needless to say we share our finances. That said we both have our own checking accounts/credit cards. It’s more of a holdover from before we got married (3 years ago) but it seems to work well enough.
One point I’d like to make is that just because a couple says they have separate finances doesn’t mean that they are 100% separate. In my mind – “separate finances” would mean that they wouldn’t share how much they are making or how much money they have or anything. They would just agree to get things paid. I don’t see how this would work in a marriage.
It seems like in a lot of cases, spouses with separate finances do know a lot about the spouse’s finances and they manage their money accordingly. It’s not how I would do it but it’s not necessarily that much different than putting the money in a pot at the outset.
.-= Four Pillars´s last blog ..Manulife Dividend Cut and Links =-.
Four pillars is spot on with their being many degrees of separation. I usually apply the term “separate finances” to any system that doesn’t involve joint accounts. I consider our finances separate, but I still know how much he makes, what he’s saving for, how much he has saved, what debts he has and how much, etc. And yes, if you work together, there isn’t that much of a difference from putting it all in one pot. It’s just a different way to balance the books. The important thing is the working together part.
.-= Slinky´s last blog ..It’s My Party, But I Want Everyone to Still Like Me When It’s Over! =-.
wow! you’ve given me that push that i needed!
i’ve always liked the idea of sharing finances with my bf but sometimes i’d get worried cos we both have different ideas about how to spend our money. He chooses to ignore bills while i am obsessive compulsive about money and have to know where every cent is going. I have a mortgage, i bought my first house when i was 22 years old and i guess when you hear stories about people breaking up and taking half of the house when it didn’t really belong to them, you get a bit scared. I’ve gotten over that fear cos even though the mortgage is in my name for our current house, i feel like it is our home. We both chose it and he contributes a great deal to renovations and bills and lets face it, he isn’t going to get himself into the housing market anytime soon with his money habits and if i can’t share this with him and give him a leg up, who will?
Plus we have a child on the way, our first, only five weeks to go. I guess your blog made me realize that if i’m committed to this relationship enough to have a child, then i should be committed enough to work our finances together, particularly since i’ve gotten over my fear of losing the house, i hate the idea of him feeling like he is boarding with me anyway, what kind of relationship would it be if he didn’t feel like our house was his home too?
So we have started the ball rolling by setting up a joint account for income and expenditure and we are planning on opening a joint savings account for us to start contributing to. But we need tips and advice on how you manage things like personal expenditure. We are both happy so far with the joint thing and can see that it has more advantages than disadvantages but we can also see that it has potential to cause conflict because of our different attitudes to money.
My spouse and I both make about the same amount of money so we share the bills equally. The way we handle our finances is this. We both have separate checking accounts where our paychecks get deposited into every two weeks. Immediately after pay day all the money we need to pay our bills, and put into savings for that period is automatically deposited into our joint account. That is the same amount every paycheck.
Whatever is left in our separate accounts is left for us to spend freely on entertainment, eating out, clothing, toys. We sit down every few months and decide how much we want to save and for what purpose: vacation, big purchases, retirement, etc.. That way we can adjust the automatic transfer amount that goes into our joint account.
This allows us to work together easily to pay bills and save towards our joint goals. It also allows us to not feel guilty if we occasionally splurge on something for ourselves. It works for us!
I think everyone is different and you need to work out what will work for your relationship. There is no one best way, although I enjoy reading about different approaches to get ideas. Thanks for this post!
.-= Julie´s last blog ..Fruita Day 3 – Mary’s , Steve’s and Handcuffs =-.
My spouse and I choose to have separate accounts. We’re both fairly high income earners, and we both have different approaches to handling money. I’ve been self-employed for almost my entire career (so, long before I met my hubby) so I’ve been working on a system for managing my money for years. Since my income fluctuates greatly from month to month, it’s taken a lot of work to learn how to manage it properly. I would feel like I was throwing all that down the drain if we suddenly pooled accounts.
Secondly, when we bought our house together, it was under that assumption that all expenses would be split down the middle. This means that if we want to do any work on the house, we discuss what we each can afford. Since he usually earns more than I do, and has a better cash cushion than I, I (usually) can’t afford any spur-of-the-moment renos or major maintenance work. I have to take the time to save, or else he covers my share, and I will eventually pay him back my half of the reno cost. I *prefer* knowing that our house is 50% the results of my own hard work! I wouldn’t want him to pay my share for me.
Lastly, I don’t want to let my career slide. It’s important to me. Because I’m self employed, I could easily slow down, rely on my hubby’s income to support me, if we were to blur the lines between our accounts. We don’t have kids, so I would probably become a housewife, dependent on my husband’s income. Now, I have friends who have fallen into this route, and of course that is their choice (and they’re happy with it!), but I don’t want to go down that road. It’s taken me so long to build my career, and I don’t want to give it up or allow it to taper off. If I’m responsible for 50% of a fairly high cost of living, then I’d better get my butt in gear and keep working! If I lose that responsibility, then I might lose my independence, and my career drive.
Hope that allows for another viewpoint on this issue… I enjoyed reading the debate! I believe for us, if our circumstances were different, we might be more willing to have joint accounts. But for now, having separate finances works really well for us.
Great post. Agree 101% with you.
neat ideas and bullet points.
Mike
I read this post after specifically doing a search on this topic. My new husband and I have seperate finances. I hate it but that is where we are right now. When we moved in together two years ago, we split the bills according to what was most reasonable and convenient based on our paydays and income (just like the roommate situation you mentioned, LOL!). BUT – When we got married we had discussed our finances and decided we would get a joint account and get rid of our seperate ones.
Sadly, issues have arisen that have caused me to re-think this issue. First of all, I have been divorced before and spent several years as a single mother. My ex drained our accounts and then ran off leaving me wih a child to raise and no financial help at all. The past for me, makes it very difficult to trust someone else with my financial well-being, especially when I was left high and dry with my ex. Having said that, I know that has nothing to do with my new husband, and is merely a trust/security issue for me.
The next issue is that right after my new husband and I got married, I found out about him spending almost $4,000 over the past year that he can’t seem to account for. I was furious! When I asked him about it he said that he had spent it “here and there” or on “this and that”. What does that mean exactly? I could spend $10,000 tomorrow and account for every penny of it! Then he has the nerve to get mad at me when I tell him that I don’t want a joint account with someone who is that careless with money. This issue really added fuel to my trust/security concerns over our finances.
The other thing is that he is constantly asking me about the balances in my accounts. He has always done that and I used to think it was because he was just concerned about us being responsible with our finances, but lately I’m not so sure. He wants me to show him my pay stubs and things like that and gets really mad when I dip into savings for something, yet it’s okay when it’s for something that he wanted… I don’t spend money that he isn’t aware of. He knows when I spend money and what it is spent on, yet he still feels the need to try and control my spending.
I know how much he makes and what bills he pays, and I never made inquiries into his finances in the past, like his paychecks or withdrawls, because I trusted him and didn’t feel the need to check up on him. All of that has changed now. I know something is going on behind the scenes with him, I just haven’t found out what it is yet. I hate that we are going through this, and wish I could trust him and that we could have joint finances. Has anyone dealt with this type of thing before that could shed some light on my situation?
It would be nice if the world was rainbows and sunshine, but sadly it is not and for many legal and tax reasons, joint accounts are not smart.
1) Divorce: Saying its not going happen is an naive answer. You’re better off planning to take away any financial motivations for divorce by smart planning.
- In a divorce joint accounts are split equally no matter who is depositing or who is spending. That amount spent or withdrawn is not credited in alimony or child care requirements.
- It does not matter if one party was spending more during separation, giving gifts to related family members or friends, as the joint account gives them full authority to funds. Often a MAJOR issue in bad divorces. (The burden for proving its not a gift, but actually hiding of funds, is on the accuser, making it EXTREMELY hard to prove.)
- Any trust payments (i.e. investments), either for dependents, elderly parents (with restrictions) and immediate family (nephews/nieces/etc) made from the joint account may be subject to recourse. i.e. the trust fund for your son or nephew set up from your joint account may be pulled into the divorce settlement.
- Similarly, any payments from the joint account towards ownership of property, can make that property a “co-mingled asset” subject to determination of the courts. i.e. payments on your parents home if they are retired and cannot maintain the payments on their income. This is obviously an extreme case, but can be a factor for alimony as it can be determined using value of assets owned, not just income/ability to pay.
2) Taxes, savings, investments: Though there are certain “marriage credits” that may be effective in lower to middle class income brackets, a major downside of joint accounts and married filling jointly is that you lose the benefits a lower earning member may have under tax law.
- Partners earning over $110k ($105k roth) Individually/$190 ($160K roth) combined generally will not qualify for Coverdale ESAs and Roth IRAs. Payments made from joint accounts have been deemed an illegal loophole by IRS. Separate account payments, however, are not illegal.
- Joint accounts in combination with Tenancy-in-Common (instead of Joint Tenancy) can lead to significant tax liability payable in current year dollars should one spouse die or in case of divorce. Often forces sale of the home.
- Credit score: Equal Credit Opportunity Act will shield the impact of one spouses credit score on the other until they open joint accounts.
- Should one spouse incur medical expenses in excess of insurance coverage, joint accounts are available for the payment of those expenses in full, including investments from that joint account, i.e. retirement investments, etc.
I know all of this stuff seems random and “it won’t happen to me”, but when it does you’re screwed, so why bother? There are other ways to handle joint finances that are MUCH simpler. You can open a credit card (say an AmEx with a $25K limit) and add your spouse as a cardholder, and if need by vice versa. You have the same benefits of access to each other funds with no co-mingling of assets, no shared liabilities, only one person has control of the account, so it can be shut off any time. All you need to do is pay off the account monthly. It doesn’t mean you won’t talk about your spending habits or set up goals for your finances, but don’t let the “fuzzy” issues mentioned above overshadow the concrete issues I’ve listed.
If you fail to research and weigh the advantages and disadvantages you are only hurting yourself.
I only felt the need to comment as this page pops up in nearly every search for info on separate finances, and the topic needs to include some factual consideration.
all great comments and good reading….
I am getting married in 3 months and we have decided on separate finances.
This will be her 2nd and my 1st marriage. She has a child from her first marriage, I have a child from a previous relationship. I’m the type that can account for every penny spent (and catogerized on paper) over the last 10 years whereas she is type that can account for maybe the last 30 days. We both are home owners with her house being slightly larger. My income is more than 2x her income. I am the investment type(stock, currencies, futures, IRAs, etc) whereas her investments consist of her job’s 401k.
We have agreed that all existing debt is that person’s responsibility (credit cards, car note, home mortgage, etc). Our short term goals include renting each house out (so they can pay for themselves).
I currently pay 90% food/grocery, 75% family entertaiment, and 100% cable bill across both homes as we mainly spend the most time at her house. While this wasnt anything that was discussed prior, its always been that way.
While I always thought finances would be separate, she suggested we keep finances separate and I agreed so no problem there.
At some point, a 3rd house will come into the picture at which time we will open a joint account to maintain expenses for the new house. We will contribute some percentage of income to that account. We agreed that when unforseen financial circumstances occur that we would be there for each other.
I don’t see separate finances as bad thing or something that means there is no trust or unity. I’m sure most here are excellent drivers like myself but we still buy car insurance.
That $3,000 home entertainment center is a quality product but we still buy the service protection plan just in case.
Plan for the worst and hope for the best.
I think it all boils down to doing what works best for you and your situation.
So i commented on this topic earlier about making a change to sharing finances with my partner. we made the change over a couple of months ago and i think it is brilliant. We share our debts and our income. we don’t have equal amounts of debt and income by any means but it all seems to even out really. you just have to get past the “this is mine and that is yours” mentality. Technically the house is mine but now that i am a stay at home mum only getting baby bonus and a bit of parenting payments, my partner has to pay for the mortgage, he has a home that he can say is his though and he gets equal say in how he wants it decorated/renovated etc, he basically gets to own half a home even though he has a bad credit rating. We are also both contributing to paying off his debts and i have been trying to contribute as much as i can by selling stuff on ebay to pay for our everyday living stuff. I really think it has been brilliant, we have nearly knocked our combined debt on the head, give us four more weeks and we should be completely debt free (touch wood). We could never have achieved this if we kept our finances separate. We both know exactly how much money we have coming and going, we are both accountable for what we spend the money on, we can’t hide any secret spending from each other. I mostly look after everything financial because i’m better with money than my partner is, he wants me to look after the money, he would rather bury his head in the sand when it comes to money and paperwork, but then again, every now and again he has shown some interest and he will help me decide where the money will get spent when pay day comes around. And I always make sure i consult him about what he wants paid off next, i don’t want to be controlling. We are both feeling this wonderful light feeling as all our debt melts away! I highly recommend combining finances.
I cannot agree with you more! I feel the same about my lowered level of respsect for people in the ’seperate accounts’ marriages. I think they are just leaving room for seperation and making it convenient in the event that it happens, which totally defeats the purpose of being married in the first place. I always feel that those people are making a mockery out of marriage when they don’t have that level of trust. Thank you for being honest about this topic
@Kasy – Trust is an interesting thing. You can easily make the argument that it’s people with joint finances who don’t trust each other. After all….they’re the one’s that have the ability to check up on every cent the other spends. On the other hand, with separate finances, I trust my guy to stay on track to meet our mutual goals, I trust him to manage his resources responsibly, I trust him to be there to back me up or support me if I really need it. Separate or joint finances can be a symptom of a lack of trust, but it’s not at all indicative of it.
If a couples’s purpose to combine their finances is to have the ability to view and track one another’s spending etc, then yes I’d agree that they have trust issues, however, my argument for advocating combined finances isn’t so that you can see what your partner is spending on. The contract of marriage has bounded you together legally so why not financially as well?
Two people meet, each handling their own money, they get married and then combine finances. As this is generally how it goes, I think the more valid question is why combine? For what reason do people abandon their existing system and move to a new one? Why did you? What’s the benefit to doing so? Where is the advantage? It’s not that I think combining finances is horrible or anything like that, I just don’t see why we should go to all the bother when what we do works fine. So, the answer to “why not?” is “why should I?”
We’ve been together for 7 years. We both have our own system for budgeting, expense tracking, etc. We often work on our finances at the same time and discuss our progress and mutual goals while we work. We ask each others advice and make big decisions together. He needs a new car. We discussed whether or not we should go on trying to fix his existing car or get a new one, the impact on our current goals, what sort of car and new vs. used and how to pay for it and how much down payment and what sort of loan term he should get. When his credit card rate was raised, he asked my opinion on what we should do. We agreed to close it and get a new card. We then discussed the different kinds of cards we could get and what we wanted. We made a plan together. That same conversation that you and your spouse would have had….we have that same conversation. We have separate finances, but we still discuss these things together because they affect both of us.
In your initial comment you said, “I feel the same about my lowered level of respsect for people in the ’seperate accounts’ marriages.” Why is that? Is it because you think they have less of a marriage or that’s they haven’t truly committed to each other? It’s not true. Yes, some people with separate finances are like that, just like some people have joint accounts so that they can check up on each other. Your relationship isn’t like that, and mine isn’t either.
I talked about this with my guy over lunch and he had a couple of interesting points. He pointed out that we don’t have “separate finances” so much as “separate accounts”. That’s pretty true. Our accounts are completely separate, but our finances aren’t really separate at all. In support of this, he pointed out the very first thing he said when the car conversation I mentioned came up. He didn’t come home and say, “I’m buying a new car.” He came home and said, “I think we need to reevaluate our priorities.”
To answer you questions:
Why combine? Well my approach to this response would be the same question as why get married? If two people truly believe that their existing system works and there is no need to move into a new one, then why go from being single to being married? I don’t think there is a reason to get so technical about finances in a marraige… I know couples who actually write a check to his/her spouse for half the mortgage, it is absolutely silly to me that this is how a married couple would handle their finances. Why did I do it? Well, when all the money goes into the same pot, in our situation, we are both more reluctant to spend frivolously on meaningless things. Not to say that we should feel guity about splurging once in a while, we do splurge to the level of our financial comfort and trust that neither of us would not exercise indiscretion. I’ve had friends that argued, ‘well, I don’t want to feel guilty about spending $400 on a pair of shoes’, my response is, if you were with the right partner, you wouldn’t, and secondly, for your own purpose; be honest and admit to your financial means and think twice about whether you are spending within those means (most people are in denial about this). So to really answer your question, the advantage is that together you are more inclined to save towards a common goal that will benefit you as a family. We have decided to do this mainly because I knew that I would want to stop working once we start a family. Before I hear any judgement, yes, I realize that we are in the 20th century, but we still feel that the best for our children when we have then would be for their mother to be home. Mind you I have I will be giving up a good paying professional job in southern California, so this is not something that I have thought of lightly. So the bigger question becomes, what if one spouse stays at home, how do you divide up finances then?
You and your partner seem to have a good open communication, however, think about this: regarding your topic on whether he should get a new car or fix the existing one, the discussion should be how can we redirect our finances to spend on what would be a more reliable car. He might have discussed that issue with you but at the end of the day, it’s coming out of his own pocket, and the decision may rest on a more limited financial resource rather than what would make most sense.
You both absolutely have to be in sync when it comes to financial goals and be honest and realistic about them. Our immediate goal right now is to pay down our home loan so that by the time I stop working, we will refinance a smaller balance for a smaller payment, that way we will still be comfortable with one income. So when I decide whether I’ll need those extra pair of Jimmy Choo’s, I’m thinking ahead and seeing the whole picture.
We live a very comfortable life and we worked together to achieve that and it is a lot easier when you have two people working towards the same goals as opposed to you having an agenda individually.
I’d like to chime in on the side of separate and a joint account. My boyfriend and I live together, at one point with a roommate also, and we have a house account set up for bills, date night, and groceries. I’m a banker and very good with finances, he chronicly forgets to pay bills on time. We each contribute the same amount to the house account every month, extra from month to month we allow to build up for a trip or something and pay out shared expenses like food, utilities, and rent.
We also each maintain our own accounts to save and spend from. My debt is my debt and ring or not I would never expect anyone else to pay it. It may be good for some people to sit down and have a conversation about each others spending if it impacts their ability to make the joint expenses but I trust we trust each other to know the best thing to do with our own money. Besides, we work hard for each of our paychecks and as long as the joint account is keeping up with our joint goals there’s nothing wrong with keeping my own money for my own projects and saving for my own independent activities.
The hardest thing for my to get about this debate is why most people see mairrage as a complete loss of self to form this new joint whole. I’m sure as time goes on in a relationship more money will need to be put toward joint expenses/goals but I don’t think that means you need completely joint finances.
Maybe joint finances work when you get married at 20 or 21.
I was 40 and my wife was 32 when we got married. I had debt and she hadn’t had any for the nine years previous to our marriage.
She bought the house and made the payments. She owned the only good working car, too.
Why would any intelligent woman want to join completely her finances with mine, given my history of car repos, debt collectors and apartment evictions?
“Joint/Separate” are simply two states of mind that require each other to co-exist ~ What is joint if there is no separate?
We weren’t two people who fell in love to become one unit. We orbited in love – to paraphrase Buckminster Fuller. Perhaps it’s age or cynicism but joining everything just made no sense for us and where we were at in our life cycles.
I understand that joint finances work best for you, but you cannot know categorically that what is true for you is true for all.