28 responses so far ↓

• 1 Lynn // May 27, 2009 at 11:31 am

  I am in the same camp you are. We each get our monthly amount and everything else goes into our joint account. I know that separate finances work for some but it definitely wouldn’t work for me. Luckily my husband has no objections. He makes a little less than 2x what I make so he could really object but his allowance is just about 2x what mine is so he doesn’t mind. Both my parents and his parents do the complete joint thing so I don’t think it was so foreign to both of us. My newly divorced sister in law had separate finances with her ex and after hearing how they were handling their bills its really not a surprise things didn’t work out. He made 1/2 of what she made and never paid his bills (the electric and water bills – she had her electric and water turned off numerous times in the last year she was married) but went golfing at every opportunity.

• 2 Stacey // May 27, 2009 at 11:58 am

  Our parents have separate finances – dad pays all the bills, mom pays for her own medication, gas, clothing, ect. from her paycheck. It’s creating a lot of resentment as they approach retirement. My mom confessed that she can’t “afford” to buy health insurance on her SS – and Dad won’t help her pay for it. She’s got to make it on her own, and make her money stretch, even though they’ve been married for more than 30 years. It’s a bit confusing to me.

  My husband and I do the same as you – one joint checking account, and we budget a set amount for expenses and fun each month. Although I will admit that when I have a larger expense (contact lenses, for example) I feel guilty spending “his” money, because he earns twice what I do!

• 3 amy // May 27, 2009 at 1:38 pm

  LAL, I wonder too how couples can make separate finances work and not feel resentful—Stacey’s example above just boggles me. DH and I have both been married before and we do have separate checking accounts, but that’s because we’re too lazy to combine them—we don’t write checks and all bills are paid electronically. Despite the separate accounts, all our money is for the common good, including how we’re investing our individual retirement accounts.

  We have an agreement that any purchase over $100 is brought up with the other, as a courtesy. Not that we ever say “no” to each other, but it has made me rethink buying another nice purse when I already have six. One thing I don’t fool myself about, though, is that living way below our means allows us the luxury of not worrying much about money, and not marrying quickly let us see how the other handled money. Also, we are very comfortable talking about money. These are three luxuries not everyone has.

  I make a very comfortable living, have my own constitutionally-guaranteed health insurance and pension, and several retirement accounts. I am happy to share my good fortune with my spouse and expect no less from him. For me, marriage is combining your lives for the betterment of both of you, and that means combining everything. Prenups, splitting expenses, your money, my money, bean counting—those are deal-breakers for me. I’m nice about it, certainly everyone is entitled to their preferences, but if you’re not on the same page as me you need to move along now.

  So, in answer to your question “how do couples who keep separate finances reconcile their bottom line?” I have to say I have no idea. It sounds like a lot of my money/your money interactions, and well, ya’ll know how I feel about that now.

• 4 JoeP // May 27, 2009 at 2:43 pm

  As a married couple, you’re on the same team, so why in the world would you choose to have separate finances? I understand the part of allowances, discretionary spending, and budgeting for big ticket items. But as others have said, I can see a future of resentment, and the word “my” being thrown around a lot.

• 5 Meg from FruWiki // May 27, 2009 at 8:14 pm

  I don’t understand couples that do that — and often it seems like there is a lot of resentment. And yet, it seems common enough, that and people writing about how “unfair” it is for the Mrs. to spend the Mr.’s money when he “earned it”. That drives me crazy when I think about how much spouses can do other than bring in a paycheck! No one should be defined by their salary!

  My husband’s name is on the paycheck, but we both agree that it is our money. I work for and with him in our company, I help him out with his full time job, and I help around the house.

  I’s taken me a long time to really figure out my role in everything and its value because its not traditional. I’m not a mom. I’m not a “housewife”. But my husband is good enough to point out all that I do — and when a recent surgery left me in recovery for a week, we both realized that I do even more than we thought. Call me household VP of Ops

• 6 bogart // May 27, 2009 at 9:25 pm

  Interesting question. DH and I never fully “combined” our finances (in an administrative sense), but we are “combined” in an actual sense (what’s his is ours, what’s mine is ours).

  Month to month, we each contribute 50% of the amount of our mortgage to a joint account and then it is deducted out of there. Other than that, honestly, we’re pretty casual. He pays certain bills and I pay others; some of who pays what is discussed and some is pretty random (but everything that repeats is one person’s responsibility forever unless discussed. I always pay the phone bill. He always pays the water bill. Nothing slips between the cracks. Er, touch wood.). Any and all major debt/commitments/decisions are discussed first no matter “who” pays for them. We’re both equally responsible for everything even if one of us takes on paying it. We stash some savings, but not a ton outside of paying down debt and retirement accounts.

  This works for us. I’ll add that we’re at quite different stages in our lives in many ways, so even if we set up a firm division of expenses (whether 50/50 or whatever we agreed was fair / made sense), there’d still be a lot of “weirdness.” When we married he had 2 teenage kids and 2 decades in a 3-decade-and-out pension system. I was just starting my first job (there’s 16 years age difference between us and I got more education than he did…) and have always had a 403B rather than a pension. We’ve always had to negotiate / decide stuff that had nothing to do with splitting things 50/50. We paid for the kids to go to college. We paid COBRA health insurance for the one with a pre-existing condition until she finished grad school and got a job with benefits (i.e. a long time). We paid for his vasectomy reversal (failed) and a bunch of fertility treatment to conceive our son though DH would have been perfectly happy not having any more kids. I’ll get survivorship benefits on his pension … meaning from age 41 on I’ll have a guaranteed monthly income of $2500 for life. He contributes little to his 403B but I mostly max mine out (a few tough times are exceptions) because I want to be able to retire early and enjoy his retirement with him. In other words, there’s just a lot of stuff in there that cannot be mathematically “divided out.”

  I can’t imagine being married to someone in Stacey’s mom’s situation; to me that’s not what marriage is about.

• 7 LAL // May 28, 2009 at 10:07 am

  Lynn, that’s it. What happened if your BIL did pay all the bills but just didn’t save a dime? In the sense that he just went golfing? What happens in 20 years? Does he say, I paid my share, so I didn’t save? Now what?

  Stacey, that’s the exact scenario I’m wondering how couples who keep money separate deal with?

  Amy, I wonder if there is a problem if one person earns significantly less?

  JoeP, there are many couples happily married who keep money separate. But I wonder how it works specifically? Not enough nerve to ask them directly.

  Meg, I’ve seen that too. That it’s unfair to spend your “spouses” income if you earn less.

  Bogart, what happens if you didn’t save for your own retirement? And spent everything?

• 8 amy // May 28, 2009 at 2:57 pm

  Hi LAL, in response to your point on one spouse earning significantly less—I earn about half of what my husband earns, but in my previous relationship I had the larger salary, and we still combined all finances. So, for me, I can say with certainty that my feelings about combining assets 100% for the common good holds regardless of who earns what. For me, that is a true partnership. Again, for this to work, both people have to be on the same page regarding financial priorities, and money-based communication needs to be good.

  I also share your curiosity on how couples with separate finances work together, but yes, it’s an intrusive question to ask people. It’s interesting too that the respondents to this question themselves do not have separate finances in their relationships.

• 9 bogart // May 28, 2009 at 3:30 pm

  LAL, well, we’re a team, and what we do, we do together. So if I don’t save for my retirement (a) he’ll know about it and (b) we’ll lack financial security relative to how things are if I do. Lots of different ways this could play out … I could have to work longer. He could have to work longer. We could both have to work longer. We could have to live a more frugal life together.

  Actuarily, I’m likely to outlive him by a bunch and he does pretty much see that as my problem/responsibility (as do I). I mean, I get a say in our joint decisions (like what sort of pension he takes) that affect my prospects once he’s gone (the same is true for him, of course … probabilities and reality don’t always end up on the same side), but I don’t (e.g.) get to live a miserably spartan life now in order to be able to live it up once he’s gone. But we’re in this together…

• 10 LAL // May 28, 2009 at 7:30 pm

  Bogart, how would you handle if your spouse wanted to spend all their cash on fun and no savings? With separate accounts what can you do?

• 11 bogart // May 28, 2009 at 10:45 pm

  LAL … oh, but he does ! No, seriously, what would it matter if we had joint accounts or separate accounts? Either way I couldn’t stop him unless the accounts were set up so that only both of us could withdraw from them (i.e. 2 signatures, PINs, etc., were required). And even then, he could always quit depositing his paycheck.

  I think the question here is really one about how much monitoring one wants to do of finances month-to-month. Because (most of) it’s not coming out of our joint account, I don’t see a lot of what he spends. But I also don’t really care (actually I just did the math and worked out that after covering everything that’s pretty fixed in our budget (which is not to say it’s all “needs,” just current commitments) we have about 4% of gross left … and really, I just don’t care to monitor how either of us spends our 2%. On one level that’s oversimplifying, because the 4% is just our current situation. But if we had a lot more left after covering commitments, we’d probably visit that together, decide how much extra to sock away (or put toward debt, whichever), and stick with the system we’ve got.

• 12 Kristy @ Master Your Card // May 29, 2009 at 12:23 am

  My feeling is that there should be a joint account for bills, but that couples should have separate accounts. How they choose to work it is entirely up to them. The reason I believe so is because I’ve been in banking long enough to see what happens to joint accounts when a marriage deteriorates. No one ever thinks it will happen to them, but the reality is that we just never know what the future holds.

  I’m not married, but when I do get married, I’ll present it like this. One joint account for bills, two separate individual accounts for savings, and then two other separate individual accounts for funds to do with as we please. I would recommend that we save at least 10% of our paychecks – anymore is to the discretion of the individual – and that we will discuss any issues or concerns surrounding that every month, as well as share statements to show for the 10%. As long as my future spouse was saving for retirement via 401(k) and/or any other investments, and had his 10% set aside, then I don’t care what he does with his money.

  I’ve been told when I find the person I want to spend the rest of my life with, I will likely change my mind about this arrangement, but I doubt it. Like I said, I’ve seen enough to make me very cautious.

• 13 Kristy @ Master Your Card // May 29, 2009 at 12:26 am

  Oh, I forgot to mention the joint emergency fund! I would also suggest a joint savings acct for the emergency fund whereby each couple contributes a % to that account to cover emergencies. Once it is fully funded, then contributions may cease until such time as it needs to be replenished.

• 14 Double Journey // May 29, 2009 at 2:20 am

  I have written about this before on my website.

  http://www.doublejourney.com/2009/01/11/how-to-split-the-finances/

  We have a shared pot and a separate pot. We put in the shared pot according to how much each of us makes. It works great and prevents a lot of headaches in terms of what each person can spend their own money on since the other person really doesn’t care.

  Not that it matters for us. We have the exact same ideas about spending and saving.

• 15 JoeP // May 29, 2009 at 1:23 pm

  If you’re working toward common goals, then having a joint account shows equal commitment and buy-in. If a couple wants to have a joint account for these goals and keep separate accounts on the side for play money, I don’t see this as a problem at all. It just might take a little longer to reach those common goals, which might be perfectly fine for them.

  I trust my wife completely, but I feel like having separate accounts would be kind of like saying, “It’s none of your business how much I have in it and what I spend it on, it’s MY MONEY.”

• 16 Slinky // Jun 15, 2009 at 11:31 am

  I have separate accounts with my fiance and no plans to change that. It works extremely well for us. I can easily go on for hours with this subject, so I’ll just point out a few things about my relationship and then people can ask questions if they want specifics.

  We manage our day to day expenses separately, but we still plan and dream and work as a couple. Separate doesn’t mean alone, it just means divide and conquer. He manages his spending and saving, I manage mine, but we reach our goals together.

  You have to not “keep score”. No arguing over who did what last time or who ate more of the french fries. Find a system and stick to it, whether that’s alternating who pays or splitting everything 50/50. If you’re resentful or arguing about this, it’s not working, try something else. We split everything unless we’ve agreed otherwise or it’s a ‘treat’ for the other person.

  A lot of the questions here have the same answer….I’d never be involved with that person to begin with. Our finances work because our relationship works. A lot of the questions asked sound like a dysfunctional relationship to me. Someone who expects the other person to support them in retirement while they have all the fun now? Forget the money, how does that relationship even work? Once you assume a good relationship, a lot of these questions just wouldn’t be an issue.

  Neither one of us will put up with a person who doesn’t care about taking care of their future and each other and making our dreams and goals happen. Either one of us will willingly step in to help the other if they really needed it. Sometimes life happens and you don’t quite make it. The other person should still be there to help.

  Separate, but not alone.

• 17 LAL // Jun 16, 2009 at 11:20 am

  Slinky, it’s easy. The person spending the money is treating life as fun. They are enjoying themselves golfing, traveling, eating out. And maybe the saver is going along maybe not.

  Maybe they have lots of common interests, just not saving and spending. I don’t know.

  But I do know, I would not feel comfortable with my DH and I having different incomes and we each contribute to the joint pot and then are left to our own devices.

  Exactly about stepping up. What happens if one person loses their job? What happens if they get sick and can’t work? How can you still have separate accounts?

• 18 Slinky // Jun 17, 2009 at 11:19 am

  Leaving the relationship issue aside, you could still make things work. They each spend and save, but for the both of them. Whenever they go out to eat or to the movies or whatever, the spender pays. That frees up lots of money for the saver to sock away for retirement and new cars and such. Now they’re managing separately, but playing to their strengths. The saver gets to have the fun too AND plan for the future. The spender gets to have all his fun and not worry about the future.

  In our relationship, it’s completely understood that if the other person needs the help, it’s there. When my fiance lost his job, he looked at his resources and figured out how long he could last without a job. And then I came home and looked at my resources and we tacked that on too. When he was working a job that he absolutely hated, I told him to quit because we could manage to live on my salary alone if we had to. When I was still in school, he payed more of the bills and I paid for my own (school) expenses and then contributed whatever I could afford to, sometimes more, sometimes less. It’s not that we don’t pool our resources or don’t work together, we just each manage our own part of the pie. It’s just like a joint couple with one managing investments and one day to day stuff, except we split things in a different direction.

  There’s nothing different ab0ut the answer to a lot of these questions. If we have financial problems, we apply all our resources just like anyone else. Logistically speaking, yes, we manage things separately, but from any other perspective you should always be working together. That doesn’t mean you might not be working on two different goals, but it does mean that you’re both on the same page working to get to the same place.

• 19 LAL // Jun 17, 2009 at 9:23 pm

  Slinky what happens if one of you become disabled or stays home with kids? How do you manage on one income?

• 20 Slinky // Jun 18, 2009 at 10:24 am

  The same way anyone else does, you work together. Maybe the person at home starts a little at home business and we continue separately, maybe it’s not so successful and they just do it for spending money while the other person pays all the bills or maybe we do things like you do. We’ll do whatever works. Just because we prefer separate finances doesn’t mean we’d stick to it beyond the point where it’s a sane thing to do.

  When the rules change, you reevaluate, make a new plan and go on. We prefer to stick with separate finances, but neither one of us is going to leave the other high and dry like Stacey’s parents (which I think is horrible btw).

• 21 LAL // Jun 18, 2009 at 11:34 am

  How do you have separate accounts if there is no income for one person?

• 22 Slinky // Jun 19, 2009 at 12:23 pm

  You don’t, or at least not more than a checking for spending money. You’d have to operate jointly.

  Separate finances doesn’t work unless each person has at least one income stream. That is a con to the system. If ever there was only one income, you’d have to change how you operate. Each system has its pros and cons. With joint finances, it’s harder to follow a budget. That’s simply because it’s harder to track how much of a budget category has been spent when multiple people are doing the spending. That’s a con for joint systems.

  Other general thoughts:

  The way I see it, joint and separate finances are just a framework. It’s the basics of how the money flows. After that, you still have to figure out all the details. How do you decide how much to save? You can save a set amount, by percentage, or by goal (or anything else). The decision isn’t contingent on joint or separate finances. They all work either way, it just depends on what you choose to do. Agree? Disagree?

  So how do you manage your bottom line? Well, how do you do it jointly and why can’t you do it the same way separately?

  Personally, we worry less about bottom lines, and more about getting to where we want to be. We talk about our goals and dreams and what we want to do in our lives and we fit it all together, forming a general plan. Aside from the constraints of income and living expenses, our individual budgets work around that more important plan. It works for us, because we put us and the important stuff before me and the ‘I want’ stuff. It would also work just as well if we managed jointly.

• 23 JoeP // Jun 19, 2009 at 12:47 pm

  How would this work with kids? Do both parents pitch in to a common fund to support child expenses, or is there some sort of give and take?

• 24 LAL // Jun 19, 2009 at 10:00 pm

  Slinky, so the separate system doesn’t work for people who don’t have an income? I hadn’t considered Joe’s point about children?

  As for budgeting when joint, how many expenses really need to be spent separately?

  Spending money? Shouldn’t everything else be joint? Mortgage, utilities, car loan, student loans, debt in general.

  Then you have eating out, etc. Well if you have say $300 cash you can divvy it up in cash. Or like my DH and I, we get $40/month cash for lunch and everything else is joint.

  Groceries should be joint right? How many people shop more than once a week? Gas for the car? Well can you really fill up more than necessary?

• 25 Slinky // Jun 22, 2009 at 11:43 am

  I can’t think of any way to make separate finances work with only one income that isn’t just a strange (inefficient) version of joint finances. If anyone else can, I’d love to hear it.

  Children would most likely be treated the same as joint expenses. For us, that means splitting expenses evenly, although there are other methods.

  My point was that every time you spend money independently of your spouse (excluding spending money), you have to tell them about it so that everyone is on the same page with the budget. Otherwise, you go buy a new pillow and they go buy a new lamp and you’ve blown your budget. I suppose if you never shopped separately, always used cash, or never made unplanned purchases it wouldn’t be a problem.

  We do make separate purchases, rarely use cash, and sometimes desperately need new socks or a new pillow. If I were to create a joint budget out of my personal budget, off the top of my head, I would have categories for clothing, health care, eating out, gas, personal (hair care, deodorant, etc.), house (light bulbs, pillows, lamps) and then my spending money and groceries. Each of those categories needs to be kept track of. It just seems too easy to forget that the other person already spent that money.

• 26 LAL // Jun 24, 2009 at 11:01 pm

  Same with us. We have one credit card and we charge what we want. When either of us makes a purchase we just inform the other one. That allows us to track the spending. When you are joint, you have to communicate your spending before doing it.

  When it’s not joint, I can see a problem in that you never have to communicate if you wish. It’s yours and mine money.

• 27 Slinky // Jun 25, 2009 at 12:32 pm

  But how do you remember all those purchases for all those categories? Do you budget over a very short term, like a week, or do you check your budget all the time?

  I budget over a month and I can never for the life of me remember that my fiance stopped by the grocery store and spent $23 two weeks ago. We don’t have a problem with the communicating, we actually talk about most things before we buy them, just like you. It’s the remembering I have trouble with.

• 28 LAL // Jun 25, 2009 at 1:11 pm

  Will respond on Monday.

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