Marriage - how to do you manage finances?

[pumpkinlantern]

My partner and I are in our early 30s planning on getting married soon and I am thinking about what is the best ways to manage money.  We are both working professionals and will make good money (both comfortable 6 figures), so there's a little bit of slack.  He brings more assets to the table (a partly paid off home and some savings) whereas I currently have more student debt.  Our salaries will be within the same range.  I will likely take some time off for maternity leave if/when we have kids, which will be unpaid.  We both like our jobs, but do want to be FI, not so much to retire, but so that we can have more freedom to pursue our work interests without worrying about how much we make.

My plan is to pool our income with shared savings goals, and a joint household budget (eg. housing costs, food, etc.), but also each having a separate personal spending budget of $X each (clothing, personal care, etc.). 

My rationale is that
- Pooling our income allows us to think like a team (eg. I might make some income sacrifices for maternity leave or to support our future family, but I shouldn't be penalized for that)
- Having a joint household budget improves efficiency
- Having a personal spending budget reduces friction.  There is no need to argue over a few dollars here and there that won't make much difference to the overall picture as long as its within a reasonable pre-determined budget (ie. no big deal if you spent $5 more on a haircut and I spent $5 more on a new shirt).  I feel like if both partners have the same spending budget, it reduces resentment on who's values are more important.  And after all, staying married will affect our finances more than anything else...

How do you share your finances with your partner?  And potential pitfalls people see here?

[Imma]

Well, one potential pitfall is you talk about what you want - have you discussed with him what he wants already? That's the starting point.

Personally, if I were the one bringing assets to the marriage and my future spouse would bring debts, I would at the very least push for a prenup that protected my premarital assets (of course the options you have depend on your jurisdiction). Sorry, I don't mean to sound rude but I'm just surprised you don't mention discussing anything with him yet if you're getting married soon. Does he support your plan for unpaid maternity leave - I assume you mean extended unpaid maternity leave and not just the period you need to physically recover from pregnancy?

[Bloop Bloop]

I think it's very personal to each couple. What works for one won't work for another.

I make 4x what my partner makes. But I see us both as contributing the same to the household finances. We have a joint savings target - I contribute 80%, she contributes 20% - and we contribute jointly to expenses in roughly the same proportion although no one is keeping score. If anything she pitches in a bit more than her ratio would indicate.

There was some friction in the early stages when my partner wanted to help her parents (who make do, but are not particularly well off) and I was worried that this would result in spiralling level of "help" especially since technically I am already well-off and we could live comfortably on half my income, or on my partner's income for that matter. We had a good discussion on this. I trust my partner that she will contribute to her parents only in a reasonable amount which still lets her meet our joint savings goals. Her parents understand that we owe them nothing and her parents seem to have no expectation of increasing ongoing support. So it was all good.

The other point of friction is that I have a lot more expensive taste in cars, so we agreed that my car purchase would be taken out of a special over-and-above savings target that I need to hit in addition to my usual one.

I also have accepted that FIRE is my goal and mine alone (my partner enjoys her work) so I won't quit my job till our passive income (not including my partner's active income) hits our desired figure. I think this is fair. Otherwise I could quit now. I wouldn't want to do that. I'm still too young.

The main thing is that I trust my partner and I think she trusts me and we talk about these things openly, though it took a lot of time because finances are such emotionally complicated things.

Anyway, obviously none of those things is going to be relevant to you, but the point is that you need to communicate and make sure everyone's happy with the arrangements, and you can end up doing it however works for you.

[SwordGuy]

There are quite a few threads discussing this very topic already on this forum.

[lizzzi]

Throw it into the pot and share and share alike.

[julia]

My bf and I are not married but we’ve been together for over 3 years. When we moved in together, we pooled all of our money together (he transferred all his money to me and I allocate it to our investment portfolio, etc) so we have one joined bank account. We consult each other on every purchase but we’re on the same page so money is never something we argue about.
Depends on how similar your partner is to you. If we ever broke up, we know that we are mature enough to divide the money properly.

[Villanelle]

We throw it in one pot and share with no limits.  That has worked exceptionally well, though that is in part because we have very similar financial styles and philosophies. 

Also, I know the way my brain works and if we did some sort of splitting, I would hyper analyze it and that would cause problems.  Once expenses need to be in one category or another, I'd get obnoxious about it.  (Hey, I know my weaknesses!).  Is clothing in my personal budget, or not?  Does that matter if it's replacing my one pair of ratty old slipper, which are part of what allows us to keep the thermostat low in winter?  I bridmesmaid's dress?  What if that dress is for his sister's wedding?

For groceries, What about some super fancy, expensive cheese I (or my spouse) wants to try?  Regular grocery bill (joint) or personal fun money?

If you are your partner are anything at all like me, think I think if you are going to have anything split, you need to be very, very clear up front about what exactly defines joint versus personal. 

Also, as others have mentioned, the phrase "my plan" stands out a bit.  I would go into this is a conversation.  Of course having an idea how that seems ideal to you is fine, but it should just be something that's a starting point as the two of you figure out all this together.  And discuss what happens if there are huge changes in income, whether he supports that maternity leave plan and what that will mean for both finances and expectations about household management and chores, and things like that. 

[Imma]

We throw it in one pot and share with no limits.  That has worked exceptionally well, though that is in part because we have very similar financial styles and philosophies. 

Also, I know the way my brain works and if we did some sort of splitting, I would hyper analyze it and that would cause problems.  Once expenses need to be in one category or another, I'd get obnoxious about it.  (Hey, I know my weaknesses!).  Is clothing in my personal budget, or not?  Does that matter if it's replacing my one pair of ratty old slipper, which are part of what allows us to keep the thermostat low in winter?  I bridmesmaid's dress?  What if that dress is for his sister's wedding?

For groceries, What about some super fancy, expensive cheese I (or my spouse) wants to try?  Regular grocery bill (joint) or personal fun money?

If you are your partner are anything at all like me, think I think if you are going to have anything split, you need to be very, very clear up front about what exactly defines joint versus personal. 

Funny, it works the other way round for us. We have a joint account for joint costs and separate accounts for our own costs. As for groceries if it's actual real food like bread and veg it's from the joint account. I wouldn't mind if my s/o bought a few craft beers from the joint account and I know he wouldn't mind if I bought some fancy chocolate, but we both tend to pay that from our own accounts. When it's part of a big load of groceries we just look at what category the majority belongs to. He takes longer showers and I don't charge him extra for the water :)

I can totally understand pooling money when you live together even though we choose not to, but think long and hard about stuff like premarital assets and inheritances. Find out what the rules are where you live. Discuss this openly. Pooling everything sounds really romantic but it's not so romantic when he runs off with the secretary and half of your inheritance (or, from his perspective, you could run off with half of his assets and alimony)

[RWD]

All our bank accounts are shared. I manage our finances and move money around so that it gets invested and bills get paid. I track all our spending but we have no budget. We have no spending limits. We don't keep track of who has spent more. Both of us are naturally frugal so there is no need to set artificial limits. If anything if we had set personal allowances it would probably encourage us to spend more than we already are.

We do talk to each other about almost all our purchases. Not for permission but so that we're both on the same page.

[Michael in ABQ]

All our bank accounts are shared. I manage our finances and move money around so that it gets invested and bills get paid. I track all our spending but we have no budget. We have no spending limits. We don't keep track of who has spent more. Both of us are naturally frugal so there is no need to set artificial limits. If anything if we had set personal allowances it would probably encourage us to spend more than we already are.

We do talk to each other about almost all our purchases. Not for permission but so that we're both on the same page.

Pretty much exactly the same.

We did have a monthly budget but haven't really kept up on it for the last year or so. Basically since the last baby came along. I've been the sole breadwinner nearly the entire time we've been married (ever since our first child was born) but we like at it as our money, not my money. I contribute money to the household and some additional time when I'm not working. But my wife contributes almost every waking hour caring for us.

[AMandM]

Everything is shared. All our accounts are joint accounts. All income is considered joint regardless of who earned it. All expenses are joint expenses, with jointly-agreed-on amounts for each category.

When we got married I had more assets than DH, and we expected me to earn more than he would, but as things have turned out I became a homeschooling SAHM and earned close to nothing. Part of what makes this work for us is that we don't really think of money as the principal way of contributing to the family well-being, and partly we're just way too lazy to keep track of separate budgets and amounts.

[Buffaloski Boris]

I think every couple is different. Been married many years now and we have always pooled most but not all resources. And our each having one separate bank account as well as separate credit has always been at my insistence. Why: what happens if one of us dies or is incapacitated? The last thing the other person would need is to try to figure out how to pay the light bill because bank accounts were tied up. Having some money stashed is an insurance policy.

All in all though, I think a lot of it boils down to trust. Do you trust this person to be there when you’re sick or hurt or dying? Finances aren’t as important as that.

[firestarter2018]

If you want to really share everything and keep things as simple as possible:

- All paychecks go into one checking acct
- From that account, all bills are paid and automatic savings/investment transfers happen
- Budget is agreed upon and some method of tracking that budget is implemented (we use YNAB)
- Each person gets a monthly, agreed-upon amount of fun money, to be used for whatever the person wants to use it for -- with no commentary from the other person! For some couples this will be $25, for others $500 -- the point is that everyone needs some money that is "just for me"
- Talk about big purchases
- Separate credit cards are fine for churning purposes and/or so one person can buy gifts for the other without ruining the surprise
- Set goals together and check-in periodically

The framework above generally requires that one person take the lead on tracking the money and paying the bills, but in my experience there is usually someone who wants to take on that role (good with numbers, organized, etc.)  But both partners need to have full transparency on any and all accounts, know the passwords and log-in's, etc.

I can imagine circumstances where two people get married and want to maintain a somewhat separate financial framework and do things like pay bills based on the percentage of total income they bring in, but to be honest, when kids come into the picture, that should all go out the window. You're one family, with one pot of combined money, and the money supports everyone in the family.  Haggling about who pays groceries this week or who pays the doctor's visit co-pays just seems absurd to me. But again- do what works and will be sustainable for *you two*.

[Villanelle]

If you want to really share everything and keep things as simple as possible:

- All paychecks go into one checking out
- From that account, all bills are paid and automatic savings/investment transfers happen
- Budget is agreed upon and some method of tracking that budget is implemented (we use YNAB)
- Each person gets a monthly, agreed-upon amount of fun money, to be used for whatever the person wants to use it for -- with no commentary from the other person! For some couples this will be $25, for others $500 -- the point is that everyone needs some money that is "just for me"
- Talk about big purchases
- Separate credit cards are fine for churning purposes and/or so one person can buy gifts for the other without ruining the surprise
- Set goals together and check-in periodically

The framework above generally requires that one person take the lead on tracking the money and paying the bills, but in my experience there is usually someone who wants to take on that role (good with numbers, organized, etc.)  But both partners need to have full transparency on any and all accounts, know the passwords and log-in's, etc.

I can imagine circumstances where two people get married and want to maintain a somewhat separate financial framework and do things like pay bills based on the percentage of total income they bring in, but to be honest, when kids come into the picture, that should all go out the window. You're one family, with one pot of combined money, and the money supports everyone in the family.  Haggling about who pays groceries this week or who pays the doctor's visit co-pays just seems absurd to me. But again- do what works and will be sustainable for *you two*.

Actually, not everyone needs that.  If that's what works for the OP or for others, that's wonderful and I am thrilled that those people have found a set up that makes all partners happy.  But DH and I have never had that, and in 19 years, we've never had one single argument about money. 

I'm adding this because I think every couple has to find what works for them, and generalizations aren't especially helpful because the right answer is different for everyone (and can even evolve over time within the same relationship).

[HBFIRE]

We keep it very simple.  Combine everything and no budgets.  Haven't had any issues.  The key is to be on the same page. We did a lot of introspection together several years ago on what we value and optimized our spending accordingly.  I've also set in place several optimized systems so that we don't have to worry about our spending for the most part.  We do review our spending once a quarter to make sure nothing is slipping through the cracks.  Big purchases are always discussed.  I'm of the 80/20 mindset.  Get the big stuff right and don't sweat the small stuff.

[moof]

If you want to really share everything and keep things as simple as possible:

- All paychecks go into one checking out
- From that account, all bills are paid and automatic savings/investment transfers happen
- Budget is agreed upon and some method of tracking that budget is implemented (we use YNAB)
- Each person gets a monthly, agreed-upon amount of fun money, to be used for whatever the person wants to use it for -- with no commentary from the other person! For some couples this will be $25, for others $500 -- the point is that everyone needs some money that is "just for me"
- Talk about big purchases
- Separate credit cards are fine for churning purposes and/or so one person can buy gifts for the other without ruining the surprise
- Set goals together and check-in periodically

The framework above generally requires that one person take the lead on tracking the money and paying the bills, but in my experience there is usually someone who wants to take on that role (good with numbers, organized, etc.)  But both partners need to have full transparency on any and all accounts, know the passwords and log-in's, etc.

I can imagine circumstances where two people get married and want to maintain a somewhat separate financial framework and do things like pay bills based on the percentage of total income they bring in, but to be honest, when kids come into the picture, that should all go out the window. You're one family, with one pot of combined money, and the money supports everyone in the family.  Haggling about who pays groceries this week or who pays the doctor's visit co-pays just seems absurd to me. But again- do what works and will be sustainable for *you two*.

This is very close to what we do, and it has worked well for the last 13 years.  We each have our own personal accounts that get regular deposits every 2 weeks.  This personal money is for personal lunches, clothes, and personal hobbies.

Everything that comes in goes to joint first.  Savings is all automated out of joint on the same day paychecks are deposited (you never want to see this money sitting around begging to get spent before you invest/save it).

We've never had serious arguments over money, even as we've cycles from dual earner, back to school for her, then stay at home for a few years before back to dual earner.

What will work best for each couple varies, but I never want to be in the position of granting permission or judgement over my wife's personal spending choices inside of a reasonable range (i.e. the allowance we each get bi-weekly).

[Metalcat]

We have 100% pooled resources, but almost all of our accounts are separate and our paycheques are kept separate.

We live on DH's stable and predictable income, and my higher, but variable and unpredictable income has always gone to debt, savings, downpayment, expensive courses, etc.

So DH manages all of the day to day life expenses with his income, and I handle all of the bigger financial planning on my side. This works with our personalities.

We have no separate "hers and his" money, all spending is collectively discussed and agreed upon. It's not like we ask permission for every little thing, but we do mention it as part of our daily conversation.

That's the key for us. We literally talk about money every day. It's just a casual, normal component of our daily discourse. It's not some heady subject wrought with potential conflict, it's as normal and pedestrian as talking about clipping cat nails.

I personally have far more difficult and awkward conversations about money at work than at home. Talking to my husband about whether or not we should buy a new cast iron pot is nothing compared to telling staff they're not getting raises.

[zinnie]

Are you both at the same level of frugality right now? We just dump everything into one pot and deal with it together. There has not been a need to call out personal spending budgets separately. But if you have different values or need budgets to stay on track I think what you're pitching makes sense. It's always a good idea to set up a system that will help you succeed at your goals.

[Omy]

DH and I had a number of individual accounts when we combined households. He made me the beneficiary on his accounts and I made him the beneficiary on my accounts. We created joint saving, checking, and investment accounts which we put everything else in. We own our principle residence and two rental properties jointly. We never had a budget because we are both naturally frugal and generally on the same page about money (and had plenty of money coming in). We discuss our individual expenditures openly and regularly.

This has changed slightly since we FIREd in August. I was concerned that the first year or so of withdrawing (rather than accumulating) would create anxiety for me - and that I would be overly scrutinous of his and my discretionary spending. Rather than add friction to a good marriage, I suggested individual "slush" funds. We seeded both accounts with $1000 and add $100 to both accounts every month (through trickery on a spread sheet - we don't have actual separate accounts).

This has worked well so far because we each feel free to "live a little". Whenever I go out with friends, take art classes, buy myself a trinket or an overpriced haircut, I do it without guilt or scrutiny...I just "take it out of slush".

[partgypsy]

The most important thing is to discuss with your intended how you to want to manage finances, and that both feels comfortable with it.

I was previously married. We pooled all the money because we both started out with little/no money and that was the only way we could pay the bills. At some point when I had a regular job and was reading a lot of personal finance stuff we tried "allowances" but it didn't work. We couldn't agree what was personal I felt the amount of booze we were buying, since he was drinking 90% should be person, but as it was purchased at the grocery store or gas station he felt it should be household. OTOH if I bought a doormat for the front door he thought that should come out of my money, since he didn't care if we had a doormat. So we dropped that but did have informal rule if spending more than 100 on something we would talk to the other about it first.

[svosavvy]

This is a biggie obviously and there is a million ways to slice it.  I would say whatever you do check in with each other often.  These issues left unattended turn into landmines.  If a plan isn't working get together talk it out and do something else.  My wife and I did have good luck with the "allowance" thing although we call ours a "distribution" b/c allowances are for 5 year olds haha.  We agreed on what the "distribution" would be and it was equal for each of us.  Best part of that was the other has no say in how that money is spent.  That was earlier during our hardcore path now we are dealing with more assets.  We're both so cheap that it's like "I want this" and the other is like whatev's b/c we are in a different place financially than we were 10 years ago.

[partgypsy]

For example if I ended up staying with the guy I'm currently seeing, we would not do "one pot" because while we both have similar values in day to day spending and budgets (we like to be frugal, get deals), we spend and save/invest very differently. I like to get my hair cut and highlighted twice a year. I like to go out to eat with friends, buy things for my kids. He is more frugal on a day to day basis, but is more likely to suddenly spend thousands in cash such as on a new vehicle. Big picture, he has all his money in real estate, and is more comfortable taking risks. I am risk averse. I like having an emergency fund and having a retirement fund. So we would most likely just have 1 joint account for paying basic bills and the rest would be separate because that would keep the peace.

So, I guess I'm saying it just depends on the couple what is the best way to split bills.

[Villanelle]

The most important thing is to discuss with your intended how you to want to manage finances, and that both feels comfortable with it.

I was previously married. We pooled all the money because we both started out with little/no money and that was the only way we could pay the bills. At some point when I had a regular job and was reading a lot of personal finance stuff we tried "allowances" but it didn't work. We couldn't agree what was personal I felt the amount of booze we were buying, since he was drinking 90% should be person, but as it was purchased at the grocery store or gas station he felt it should be household. OTOH if I bought a doormat for the front door he thought that should come out of my money, since he didn't care if we had a doormat. So we dropped that but did have informal rule if spending more than 100 on something we would talk to the other about it first.

This is exactly the kind of think I was referring to and illustrates it better than I did.  For me, if I/we decided to draw lines, then I'd need them to be clear, correct, precise lines.  DH doesn't care if we have Christmas decorations.  He'd be fine showing up places without a host gift. 

My family does larger, nicer holiday gifts.  Would that come out of my personal budget?  Okay then, but when they give is a check for 4 of five figures, does that go back into my personal budget as the flip side of that coin?  If DH wants Netflix and I don't, does that come out of his money?  But what if we watch a show together on it then? 

I'm not trying to talk anyone out of the allowance/stipend/fun money approach.  Clearly, it works for plenty of people.  People less neurotic than me.  This just shows why it is important to have a detailed conversation when hashing this stuff out, and to really think through examples of things that might occur.  And to be flexible so that if what you choose isn't working, you can adjust. 

[mspym]

We have separate finances and are happy with this. Both of us have been burnt by joint finances before and prefer it this way. Eventually we might get a joint acct but that is probably when we FIRE and move countries. If you talk about things, this isn't a problem.

[Trifle]

We have always kept things very simple, in joint accounts.  We've never had to draw any lines or have any individual allowances; we both have the same money values and no dangerous temptations.  We have an agreement that before we buy anything worth more than $100 or so we will talk about it, but that's it.  We've been together 27 years and haven't yet had an argument about money.

As others have said, each couple just needs to figure out what works for them. 

[Fire2025]

We keep our money totally separate.  We've been together 22 years and have never fought about money.  He FIRE'd last year.  I hope to FIRE in 2025.  No issues with that either. 

Separate works for us, but as many people have said, you have to find what works for you and your partner. 

Good luck!!!

[Nangirl17]

We also have seperate accounts (though his name is on 'mine' and my name is on 'his' in case of disaster but we don't operate them jointly).

When we married, we had two residences (his and mine), and had to keep them both for a few years (long story). So we just kept paying our "own" bills. When we were finally able to go down to one residence, he just kept paying the bills on his place (I did offer to split) and so I have put more money into investments. We consider the investments 'ours' even though they have different names on them, and are jointly working towards our FIRE number.

We have considered pooling our accounts and operating them jointly (especially when someone suggested that combining bank accounts is essential if you're married because it is a rite of passage/you aren't really working together blah blah), but it seems like a lot of work to do for what benefit? The system we have works for us. When we retire we'll likely have to change things up a bit, but why mess with it if it's working right now?!

[mspym]

We have considered pooling our accounts and operating them jointly (especially when someone suggested that combining bank accounts is essential if you're married because it is a rite of passage/you aren't really working together blah blah), but it seems like a lot of work to do for what benefit?

For a long time, joint accounts were how women got access to credit. We don't have to do that anymore and, much like changing your name, is a vestige of the old system which tends to have more significance assigned than warranted. A joint acct didn't keep Oypym's first marriage together, his ex built her professional career with his surname so keeps it despite divorce / remarriage, and it is a comfort to both of us that we will both be OK if we separate and doubly-OK if we stay together.

[Annie101]

We did what you are planning for the first 8 years or so.  The personal accounts were pretty small, for work lunches, clothes, socializing without the other, haircuts, and similar.  The monthly amounts to us each were slightly different since my clothes and haircuts cost more.  Worked fine.  We eventually let them go because it was no longer worth the extra effort.

[dogboyslim]

I make about 3x my wife, and she was SAHM for many years.  We have shared accounts.  We use YNAB and allocate the money to our budgets and have shared investment goals.  We don't have separate accounts (other than IRAs), but we each have "fun money" for things like shoes/bike parts that the other party really doesn't get.  We both started out with pretty much nothing (at least we weren't in debt) and a similar income, so we just grew with it.  If I had met someone later in life, with significantly different assets/income, I'd probably have looked at things differently.  This approach works well for us though.

[OtherJen]

We have always kept things very simple, in joint accounts.  We've never had to draw any lines or have any individual allowances; we both have the same money values and no dangerous temptations.  We have an agreement that before we buy anything worth more than $100 or so we will talk about it, but that's it.  We've been together 27 years and haven't yet had an argument about money.

As others have said, each couple just needs to figure out what works for them.

This is similar to how the finances work in my marriage (16 years). We’ve always had only joint bank accounts. For accounts with only one name on them (e.g, retirement accounts), we both have password access. I think there’s only one credit card account that we don’t share, and that’s because the credit union wouldn’t let me add him as a card user (I only use it to autopay an insurance premium). I don’t think we’ve ever fought about money.

Finances are like choosing to rent or buy or to have kids or not. Each couple has to figure out what works for them.

[Greystache]

If you live in a community property state, marital assets are split down the middle in the event of a divorce. Keeping your accounts separate is an illusion. You might want to have a prenup since you are bringing different levels of wealth/debt into the marriage, but everything you earn after the wedding is community property.  For us, it was never a question, we did everything jointly. We were both equally broke when we got married, so no need for a prenup. We made vastly different incomes throughout our marriage. Always had one bank account where we pooled everything.

[shawndoggy]

Every couple IS different, but as I approach 50, my anecdotal experience with friends is that the “our money” pooled model folks have stayed together and of those who have split up, they’ve all been of the “my money / your money” model.

For what that’s worth.


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[partgypsy]

Every couple IS different, but as I approach 50, my anecdotal experience with friends is that the “our money” pooled model folks have stayed together and of those who have split up, they’ve all been of the “my money / your money” model.

For what that’s worth.


Sent from my iPhone using Tapatalk

Not necessarily. That wasn't the problem in our marriage, all we had were joint accounts but got divorced after 25 years of being together and 20 years of marriage. That said, putting the "me" before the "we" all the time in a marriage can spell doom for the relationship, and that can display in a number of ways, including the joint versus separate accounts question.   

[OtherJen]

Every couple IS different, but as I approach 50, my anecdotal experience with friends is that the “our money” pooled model folks have stayed together and of those who have split up, they’ve all been of the “my money / your money” model.

For what that’s worth.


Sent from my iPhone using Tapatalk

Not necessarily. That wasn't the problem in our marriage, all we had were joint accounts but got divorced after 25 years of being together and 20 years of marriage. That said, putting the "me" before the "we" all the time in a marriage can spell doom for the relationship, and that can display in a number of ways, including the joint versus separate accounts question.   

Yeah, I think a shared perspective on money and finances and a sense of being on the same team are the important parts. Whether or not to combine the household accounts is secondary to those aspects.

[Raenia]

From a practical standpoint, we each have our paycheck deposited into a personal account, then set a monthly transfer into our joint account, from which we pay all joint household expenses.  We also fund our IRAs from our personal accounts, as well as any brokerage account contributions.  We each have a certain amount of free spend, which we use our own accounts for (prevents the need to justify small purchases to each other, ability to buy gifts without spoiling it, etc.)

From a philosophy standpoint, we do all our planning and budgeting jointly.  We decide together how much to put in my 401k, his 403b, each IRA, and each brokerage account (not joint only because we both already had accounts open at different institutions).  All of these are thought of as joint even if they only have one name on them.  Our transfers to the joint account are not equal, but are based on the overarching plan.  For instance, right now the joint account is funded almost 80% with 'my' money, because 'his' is being diverted to retirement savings, HSA, and health insurance benefits.

So basically, we have a joint-finances mindset, but a separate-finances execution.

[Catbert]

During both my marriages money was basically joint.  All day-to-day bills and pay checking were in a joint account. However...

Major assets per-marriage were kept separate for quite awhile.  When I married DH1 he already had a house which stayed solely in his name ~5 years until it was sold and we bought another one jointly.  When I married again after being widowed I had significantly more assets than DH2.  We each owned a house (my with equity/his under water).  His was rented and sold a few years later.  We still live in mine which was moved from my name to our family trust after ~10 of marriage.  My brokerage account was also solely in my name until we set up the family trust. 

Keeping major pre-marriage assets separate was partly by design (ensuring marriage would stick) but mostly just inertia. 

Whatever works for you.  Don't let anyone bully you into doing it the-only-true-way.

[shawndoggy]

Keeping major pre-marriage assets separate was partly by design (ensuring marriage would stick) but mostly just inertia. 

Whatever works for you.  Don't let anyone bully you into doing it the-only-true-way.

Totally.  My wife and I got married when we were young and poor and learned to be financial grown ups together.  But I can't imagine what it must be like for a couple of folks in their 30s or older to bring "real" finances together in a marriage.  It would be really hard I think!

[happyfeet]

Depends.  First marriage - age 26 - we combined all money.  Never mine and his.  Kids come along - I stay home and take care of life on that end - he works - making executive level.  32 years later - divorced.  So now with my 1/2 of our stash (as we were LBYM -THANK GOD) - no way I am combining money with another.  In a second marriage at my age, 61,  I would only combine for joint household expenses with a shared checking account. 

[Imma]

Every couple IS different, but as I approach 50, my anecdotal experience with friends is that the “our money” pooled model folks have stayed together and of those who have split up, they’ve all been of the “my money / your money” model.

For what that’s worth.


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Not necessarily. That wasn't the problem in our marriage, all we had were joint accounts but got divorced after 25 years of being together and 20 years of marriage. That said, putting the "me" before the "we" all the time in a marriage can spell doom for the relationship, and that can display in a number of ways, including the joint versus separate accounts question.   

My mother left her marriage after 30 years with only her bike and a bag of clothes. They only had joint accounts.

I know I will never put myself in that position. I don't mind sharing household expenses but my stash is mine. And actually I think it's quite romantic that we stay together because we want to, not because we have to.

[Vashy]

We share the equity in the house and the mortgage 50:50 - this has been a bad deal for Mr Vashy because he contributed more (I told him it was a bad deal but he went ahead). When I came over I worked minimum wage and as I rose through the ranks he was always roughly £10k ahead of me. This is now changing - I have caught up and with my side hustle I have theoretically unlimited earnings potential (in reality currently 5-10k extra but friends in the same niche make six figures), so for next year I’m rebalancing his finances - how much money goes into his pension, how much he contributes to the shared account, etc with the goal to get him FIREd at 50 too.

We have a shared account for insurance and the mortgage (which I run - he just pays in). Big financial decisions are made jointly, but I drive the planning. He has his account and his pension, and I have mine. As somebody raised by a financially dependent mother, my primary objective is to keep everybody financially independent, with their own money to spend and shared objectives. I’ll track those and make course corrections if they should go astray. We both have household expenses we cover (he pays utilities and tax, I pay food - it comes out about even).

Many partners can’t leave an abusive relationship because the other person controls all the money so for me that set-up is anathema. I would never merge my finances with anybody else and give up my   independence. I remember the bruises on my mother’s skin too well.

[shawndoggy]

I know I will never put myself in that position. I don't mind sharing household expenses but my stash is mine. And actually I think it's quite romantic that we stay together because we want to, not because we have to.

You have a prenup then?

[lutorm]

How do you who keep finances separate and just share expenses resolve issues like the mother taking time off from work to take care of newborn children while breastfeeding? Keeping finances separate would seem to work only if you don't make family-based decisions where one person sacrifices income (and future income potential) to provide a service for the family. Or does the non-income-generating spouse get paid a "salary" by the other?

[Vashy]

I sure would find it unfair if the costs of raising kids fall on only one person. It took two to make them so so both should look after them, in whichever capacity.

[Imma]

I know I will never put myself in that position. I don't mind sharing household expenses but my stash is mine. And actually I think it's quite romantic that we stay together because we want to, not because we have to.

You have a prenup then?

Yes. Our personal assets are personal. We will leave this relationship with what we personally brought in + accumulated ourselves + half of the value of our shared assets (the costs of which are split 50/50 too). I own my business fully, he owns his.

The only real joint property we have are the contents of our house. We felt it would be ridiculous to write down who owned the table and who owned the sofa. Anything we buy now we either pay 50/50 or the person who wants it pays. We are not Scrooges, we don't really care about the small things.

[pumpkinlantern]

Thanks to everyone for their input and responses!  It helped to generate some ideas and points of discussion.  Here's a follow-up in case anyone is curious as to what we decided.


Re: prenup

We've discussed prenup and don't think there's much advantage.  Our assets/debt is pretty minimal relative to our projected income, our income is fairly comparable and its difficult to protect future income anyways.  ie. I could technically pay off my student debt with my investments today if I wanted to, but would rather keep the debt which is interest-free or at a very low interest rate.  And the equity of his property is not large relative to our income either.

Re: joint vs. separate accounts

Thanks!  We discussed this as well.  I am okay with having things either joint or separate, but he feels like joint is better.  I actually have a short-term higher income potential than he does and he has a long-term higher income potential than I do (although not guaranteed).  I would be making some sacrifices to take a slightly lower paying but more lifestyle friendly job in order to support his career and also take the brunt of early childcare.  And I think he would prefer that I do this and he share "his" success with the family rather than to risk me being resentful or to give him less support in his career.

Re: fun money

We will have a small amount of agreed upon fun money each per month for small luxuries.  @firestarter2018 - we agree that some money "just for me" would be good for us as long as it is within our budget and doesn't get in the way of our savings goals.

Overall conclusions

We feel fortunate that we are in a position that both of us have good careers that we enjoy (at least for now - things/work environments can change) and either of our salaries alone would be enough to support our fairly modest lifestyle with a bit of room to spare and still save aggressively.  The goal is less to mince on details and more to build good systems so that it is easy and efficient, minimize any resentment/friction that can ruin a relationship, and not inflate our lifestyles.

[use2betrix]

My wife and I have been together 8 years, married for 4. I’ve made 95% of the money during our time together.

We combine and have joint everything. If I didn’t feel comfortable doing that with my spouse, she wouldn’t be my spouse. Some people make separate finances work, however.

[rokel]

We have separate accounts and use a joint credit card for household expenses. I love it. I'm in a slightly better position financially than my husband and plan to FIRE before he does, but I also have worked really hard in my profession and moved my way up whereas he has had a lot of stops and starts. When we're both working we make about the same amount of money. My parents fought about money constantly growing up and my husband had been burned in a previous relationship where they pooled money so this was something that we were both happy to try out. It's worked really well for us. We've been married for ten years with two kids and have never once fought about money.

[ruhig]

We each (DW and I) get equal monthly allowances which include clothing, hobbies, and individual wishes.

IRA's must remain individual by law. I'm older, so we spend as needed from my traditional IRA because that account will require an RMD (Require Minimum Distribution) soonest.  A lower balance at the end of the previous year means a lower RMD. 

We live in a marital property state, so each would inherit everything from the other.

We have a joint after tax portfolio, which holds our emergency fund only, because our investment company money market pays better than our bank. The emergency fund, as well as our bank accounts, are joint.

We deposit our social security checks into a joint bank account, so that money is used jointly. DW has been contributing more SS dollars than I, but I expect to catch up next year when I turn 70 and start collecting SS on my own earnings.

[moof]

Thanks to everyone for their input and responses!  It helped to generate some ideas and points of discussion.  Here's a follow-up in case anyone is curious as to what we decided.
...

Congrats!  Having a good solid money discussion, no matter the course you end up agreeing to, is far ahead of a considerable number of couples who go in with either no plans and lots of assumptions.  Given that money is often the source of marital discord, you are ahead of the pack.