Author Topic: Couple Money Sharing Strategy?  (Read 26362 times)

DSKla

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Couple Money Sharing Strategy?
« on: January 26, 2015, 11:37:21 AM »
My gf and I got into a lively debate last night about how we think finances should be shared between a married couple with unequal incomes, which we both believe is in our future. Now seems like a good time to hash it out since we make exactly the same yearly salary.

I am aiming to FIRE, she is not. While she isn't super extravagant, she does enjoy buying lots of clothing and shoes on sale and at thrift stores, and generally does more optional spending than I do.

My thought was: split all expenses 50/50 regardless of incomes, then each of us keeps our own money in separate accounts after that. She feels that expenses should be split proportional to income, e.g. if someone brings home 2/3 of the money, they pay 2/3 of the expenses. And though it wasn't clear, it sounded as if she wanted just small personal accounts, and that a lot of the money gets pooled together.

We won't be sharing incomes for a few years at least, but what's a fair strategy? Getting her 100% on board with my spending habits is incredibly unlikely, but she isn't outrageous or super high maintenance either, so I don't see her impeding my goals or vice versa if we can come to an agreement.

Couples: what's your expense split? Do you keep personal accounts?

I'm trying to find a compromise. Perhaps pooling a certain percentage into a joint account that requires agreement for any purchases, and the rest into personal accounts that are for whatever the individual wants?

Note: this will only be an issue if I end up being the higher earner. If it's her, I will happily pay my 50% of expenses and never ask her for a dime of her money to use on my hobbies and optional spending.
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J'onn J'onzz

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Re: Couple Money Sharing Strategy?
« Reply #1 on: January 26, 2015, 12:13:35 PM »
My opinion is that once you are married all money earned is household money regardless of which person is earning it.

When budgeting then you decide how much money per month each person gets as personal spending money.

Psychstache

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Re: Couple Money Sharing Strategy?
« Reply #2 on: January 26, 2015, 12:18:13 PM »
My gf and I got into a lively debate last night about how we think finances should be shared between a married couple with unequal incomes, which we both believe is in our future. Now seems like a good time to hash it out since we make exactly the same yearly salary.

I am aiming to FIRE, she is not. While she isn't super extravagant, she does enjoy buying lots of clothing and shoes on sale and at thrift stores, and generally does more optional spending than I do.

My thought was: split all expenses 50/50 regardless of incomes, then each of us keeps our own money in separate accounts after that. She feels that expenses should be split proportional to income, e.g. if someone brings home 2/3 of the money, they pay 2/3 of the expenses. And though it wasn't clear, it sounded as if she wanted just small personal accounts, and that a lot of the money gets pooled together.

We won't be sharing incomes for a few years at least, but what's a fair strategy? Getting her 100% on board with my spending habits is incredibly unlikely, but she isn't outrageous or super high maintenance either, so I don't see her impeding my goals or vice versa if we can come to an agreement.

Couples: what's your expense split? Do you keep personal accounts?

I'm trying to find a compromise. Perhaps pooling a certain percentage into a joint account that requires agreement for any purchases, and the rest into personal accounts that are for whatever the individual wants?

Note: this will only be an issue if I end up being the higher earner. If it's her, I will happily pay my 50% of expenses and never ask her for a dime of her money to use on my hobbies and optional spending.

Honestly, I you have to phase things as "we won't interfere with each others life goals" instead of "we will work together on our life goals", you should really think long and hard about whether or not this is a relationship you want to make permanent.

Not that you can't have a relationships with someone with disparate life goals, but in my experience, it seems to open the door to all sorts of problems (frequent fights, resentment, etc).

Capsu78

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Re: Couple Money Sharing Strategy?
« Reply #3 on: January 26, 2015, 12:21:44 PM »
+1- shared pot, doesn't matter who puts what up on the scoreboard. Over 30 years we have flip flopped a couple of times.  I think it is great to be having this conversation during "courtship" as they used to say, but don't let it be the only.  Things like views on children, parenting also very important and sometimes neglected.

pminkler

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Re: Couple Money Sharing Strategy?
« Reply #4 on: January 26, 2015, 12:22:43 PM »
Right now, my SO and I have wound up on an "income based" sharing plan.  He makes 34% of our total household income,  I make 66%.  If it's shared, (groceries, rent, utilities, alcohol) he pays 34% of the bill and I pay 64% of it.  We mostly eat the same things.  If I get tea that he doesn't use, and he gets tiny oranges I don't like...then it mostly evens out over time to an amount that doesn't really matter.

We keep a Google Drive spreadsheet that has a form attached to keep track.  Buy groceries?  Fill out the form.  At the end of the month, the spreadsheet does the work to see who owes the other person what.

Anything after what we need to survive and live, is the other person's option.  We both have separate accounts.  We only argue if he's coming home with optional stuff and wonders why he can't pay his 34%. 

This also helps in conversations about FI, in the blue moon he brings it up, to demonstrate how somebody can save 60-75% of their income...since the percentages are all the same regardless of income.

DSKla

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Re: Couple Money Sharing Strategy?
« Reply #5 on: January 26, 2015, 12:23:05 PM »
My gf and I got into a lively debate last night about how we think finances should be shared between a married couple with unequal incomes, which we both believe is in our future. Now seems like a good time to hash it out since we make exactly the same yearly salary.

I am aiming to FIRE, she is not. While she isn't super extravagant, she does enjoy buying lots of clothing and shoes on sale and at thrift stores, and generally does more optional spending than I do.

My thought was: split all expenses 50/50 regardless of incomes, then each of us keeps our own money in separate accounts after that. She feels that expenses should be split proportional to income, e.g. if someone brings home 2/3 of the money, they pay 2/3 of the expenses. And though it wasn't clear, it sounded as if she wanted just small personal accounts, and that a lot of the money gets pooled together.

We won't be sharing incomes for a few years at least, but what's a fair strategy? Getting her 100% on board with my spending habits is incredibly unlikely, but she isn't outrageous or super high maintenance either, so I don't see her impeding my goals or vice versa if we can come to an agreement.

Couples: what's your expense split? Do you keep personal accounts?

I'm trying to find a compromise. Perhaps pooling a certain percentage into a joint account that requires agreement for any purchases, and the rest into personal accounts that are for whatever the individual wants?

Note: this will only be an issue if I end up being the higher earner. If it's her, I will happily pay my 50% of expenses and never ask her for a dime of her money to use on my hobbies and optional spending.

Honestly, I you have to phase things as "we won't interfere with each others life goals" instead of "we will work together on our life goals", you should really think long and hard about whether or not this is a relationship you want to make permanent.

Not that you can't have a relationships with someone with disparate life goals, but in my experience, it seems to open the door to all sorts of problems (frequent fights, resentment, etc).

Very true. Although the only difference I meant to imply is that I would like to FIRE and she is very happy doing what she does, and likely has no desire to retire early. Which I completely understand. Otherwise our values are very similar.
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Peacefulwarrior

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Re: Couple Money Sharing Strategy?
« Reply #6 on: January 26, 2015, 12:24:55 PM »
"And they that were two shall be made one flesh, so then they are no longer two, but one flesh."

If you are not ready to share everything you are marrying the wrong person. Fighting over money is one of the top reasons people get divorced, so don't take this lightly. You need to be 100% on the same page before tying the knot.

Future Lazy

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Re: Couple Money Sharing Strategy?
« Reply #7 on: January 26, 2015, 12:28:27 PM »
DH and I are both 22. Last year, he brought home about $15,000, where I brought home around $25,000. We split our necessary expenses ~50/50. That's housing, utilities, food, internet & phone bill. We keep separate bank accounts, and all personal spending (or savings) comes out of there.

Monthly, I have a surplus of 40-50% of my income, but currently DH is working part time and sometimes doesn't quite make ends meet. Even though it would be helpful to his pocketbook to split expenses 40/60 (or whatever), I don't want to be helpful to his pocket book. I want DH to be motivated to get a better job that he doesn't hate, and financial pressure is what I can provide. I don't want 15k/yr to be his acceptable income baseline.

I honestly think this depends on what the earnings are. "Fair" division of expenses, or the decision to combine incomes, is an incredibly personal decision. If you're talking about a situation where someone makes 50k/yr and someone else makes 75k/yr, it shouldn't even matter if the expenses are under control. In other words, if individual incomes are well over 25k-30k/yr, that should leave room for tons of savings (or spending) for both parties.

And though it wasn't clear, it sounded as if she wanted just small personal accounts, and that a lot of the money gets pooled together.

This is where DH and I will eventually end up (I think): Where the majority of income is pooled and saved or used to pay bills as needed, and a fixed allowance is moved to a personal account once a month ($50/mo per person?). Personal accounts are personal, and if she spends it all on clothes each month and you save yours up to buy a big ticket item next year, whatever. It's your personal money. 

I'm just not willing to combine finances with a low wage earner. :) I'm afraid that it'll allow DH to relax and feel like things are ok, and not achieve more with his life. I don't want to be mooched off of. The downside to this is that I've got a fair amount of money saved, but my DH feels broke as balls all the time - because he is. It also means I have to foot big ticket items (such as car repairs) and ask DH to pay me back.

That being said, what I hear you saying is... "I'm not ready to/don't want to combine incomes, but she is/does." That's understandable, since that's basically marriage. Do you guys plan to get married? If not, then you probably shouldn't have a joint bank account. If so, then everything is a shared pot. 

Sorry if that was a bit rambling, I tried to bold the part that really matters! This has been on my might a lot lately too. Hopefully you guys can come to a good equilibrium/agreement for yourselves.

DSKla

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Re: Couple Money Sharing Strategy?
« Reply #8 on: January 26, 2015, 12:28:41 PM »
"And they that were two shall be made one flesh, so then they are no longer two, but one flesh."

If you are not ready to share everything you are marrying the wrong person. Fighting over money is one of the top reasons people get divorced, so don't take this lightly. You need to be 100% on the same page before tying the knot.

I agree. That's why we are trying to reach an accord now, before we're permanent and while we are making the same amount of money. Because fighting over it once we're married is not something I ever want to do. And if we can't agree, obviously that would make us reconsider quite a bit, but easier to agree/divorce now than after a marriage.
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Peacefulwarrior

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Re: Couple Money Sharing Strategy?
« Reply #9 on: January 26, 2015, 12:42:09 PM »
"And they that were two shall be made one flesh, so then they are no longer two, but one flesh."

If you are not ready to share everything you are marrying the wrong person. Fighting over money is one of the top reasons people get divorced, so don't take this lightly. You need to be 100% on the same page before tying the knot.

I agree. That's why we are trying to reach an accord now, before we're permanent and while we are making the same amount of money. Because fighting over it once we're married is not something I ever want to do. And if we can't agree, obviously that would make us reconsider quite a bit, but easier to agree/divorce now than after a marriage.

Whoever brought up not sharing everything regarding income is completely disillusioned regarding the commitment it will take to create a lasting and happy marriage. Hell, the primary legal implication of getting married is that you own everything together (unless you go for a pre-nup). In no way am I a big fan of marriage, and I think if you really want to do it at least it needs to be done 100% or it's really meaningless. Sounds like someone is more into the romantic thought of having a wedding than to really make two become one.

Timmmy

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Re: Couple Money Sharing Strategy?
« Reply #10 on: January 26, 2015, 12:48:45 PM »
DW and I share everything.  All money goes in to a joint account and all bills come out of a joint account.  We give ourselves some pocket money each month and big purchases are discussed.  I can't even grasp how annoying it would be to be married to someone with different financial goals than me. 

We have been married for 6 years and we have flip-flopped the bigger income several times and neither one of us cares who earns more.

NoraLenderbee

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Re: Couple Money Sharing Strategy?
« Reply #11 on: January 26, 2015, 01:00:50 PM »
There's no one right way. I know of successful marriages where they do a proportional split, and ones where they pool money only to pay common household expenses (mortgage, etc.) and keep the rest separate. Just keep talking with her until you find the plan that you're both most comfortable with. If children are a possibility, consider that a 50-50 split (or any split) doesn't work well if one partner stops working or cuts back to do parenting.

starguru

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Re: Couple Money Sharing Strategy?
« Reply #12 on: January 26, 2015, 01:13:45 PM »
DW and I have separate accounts.  We just never combined them.   We talk about money frequently and never really argue about anything financial.  Our accounts are open books to one another.
I make ~2.5x what she does so I pay more (mortgage, 3/4 childcare, she covers health insurance since her work plan is better), which I am happy to do.  It works really well for us.  We both have the same long term financial goals.

I can't stress that communication is the key for us.  Every major purchase is discussed and analyzed.  She convinced me to buy less car when our old one broke down.  I didn't need permission to make a very unmustachian purchase (but it was still discussed) that she didn't agree with.  If she wants to do a home improvement project, we discuss it and figure out who pays for what.  We make sure that we both increase our savings every year.   

Keeping separate accounts does have 1 key advantage -- both partners have their own money and hence power in the relationship.  There is no asking permission for things.  She doesn't need my permission to buy something and I don't need hers.  Of course we live well below our means so it never becomes a problem; while we might occasionally make purchases the other doesn't agree with we save a shit-ton of money so its not an issue; we are on the trajectory we want to be on. 

In the end, if both partners have the same or similar long term goals I don't really think it matters if the accounts are combined or not.

RunHappy

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Re: Couple Money Sharing Strategy?
« Reply #13 on: January 26, 2015, 01:33:51 PM »
Right now my SO and I are living together and we share the communal expenses 50/50 (even though he makes more than me).  The reason is we share space in the house 50/50 and not any other type of fraction.

When we get married we plan to create a his/hers/theirs situation and I will most likely be in charge of the household budget, because I'm better at it.  Edit:  We already treat each others bills a household responsibility to a certain extent.  Example: individual car maintenance, pet care, etc.  What we leave separate is clothing, other individual entertainment, and debt we had before we got together (he has student loans and a previous mortgage). We factor those into our overall household responsibilities, however payment for those come from his salary, not mine.

When it comes down to it I know many couples who have split their finances a variety of different ways.  One couple, he pays for EVERYTHING and she is in charge of savings.  5 years after they bought the house, she told him she saved enough to pay off their mortgage + 5 years living expenses (quiet a team!).

Another couple I know have everything joint and are constantly overdrawing everything because no one person is in charge of all the bills.

Another does the percentage split and they never fight about money.
« Last Edit: January 26, 2015, 01:40:34 PM by RunHappy »

Future Lazy

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Re: Couple Money Sharing Strategy?
« Reply #14 on: January 26, 2015, 01:38:07 PM »
"And they that were two shall be made one flesh, so then they are no longer two, but one flesh."

If you are not ready to share everything you are marrying the wrong person. Fighting over money is one of the top reasons people get divorced, so don't take this lightly. You need to be 100% on the same page before tying the knot.

I agree. That's why we are trying to reach an accord now, before we're permanent and while we are making the same amount of money. Because fighting over it once we're married is not something I ever want to do. And if we can't agree, obviously that would make us reconsider quite a bit, but easier to agree/divorce now than after a marriage.

Whoever brought up not sharing everything regarding income is completely disillusioned regarding the commitment it will take to create a lasting and happy marriage. Hell, the primary legal implication of getting married is that you own everything together (unless you go for a pre-nup). In no way am I a big fan of marriage, and I think if you really want to do it at least it needs to be done 100% or it's really meaningless. Sounds like someone is more into the romantic thought of having a wedding than to really make two become one.

We had a courthouse wedding in front of no one we knew. Afterwards, we went for a hike, and to my late BIL's memorial service. I didn't share the news with my parents for many months afterward. Marriage is for ourselves to be strengthened as a unit, an expression of commitment to the struggles ahead, not a show put on for others. A relationship is a puzzle, where marriage is a single piece, and wealth is a single piece, and there are many more pieces. The idea that marriage is final, a finishing seal on a 100% complete finished relationship, I think, is a fundamentally flawed outlook.

Whether or not incomes and financial resources are pooled or kept separate is a personal decision. Both systems work.

pagoconcheques

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Re: Couple Money Sharing Strategy?
« Reply #15 on: January 26, 2015, 01:48:43 PM »
The trick to a long relationship is recognizing that there are three parties involved: you, your SO, and the couple you comprise.  The system you use has to work for all three parties. 

We've always just had one checking account into which all of our earnings go.  This works for us.  We know happy couples who handle it many different ways, so pick what you want just keep all three parties happy. 

Additionally, we take turns doing the accounting (we use Quicken) and paying bills.  Each takes a turn for three months, and we have a hand-over session each time we switch.  This forces transparency and accountability for actually doing it properly.  At tax time, we do it together using TurboTax. 

Once the taxes are done we treat ourselves to a nice restaurant and make two plans.  One is for the coming year and includes professional and personal goals as well as financial and spending.  The other is a five-year plan that covers the same stuff.  We typically fit each of these plans on one side of a 3x5 index card, but we've used paper napkins or the back of a receipt if we forget the cards. 

It's not just HOW you do it, it's making time to REFLECT on how you do it. 


CommonCents

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Re: Couple Money Sharing Strategy?
« Reply #16 on: January 26, 2015, 02:05:48 PM »
What happens in your plans if you have kids?  How do you allocate those expenses?  Particularly if one of you takes time off to be with them?  What happens if one of you gets sick and can't work anymore?  That's the issue with the pots of money situation I feel, that it only really works when both parties are earning equally.  When you're earning unequally, it really breaks down a lot (particularly if the partner earning less is contributing a lot more than 50% to the household in other ways, such as grocery shopping, cooking, cleaning, kids, etc.) 

We got married and share equally - but kept our separate bank accounts.  We added each other to the bank accounts, and feel no hesitation on asking/answering questions, but they are still thought of as "mine" and "his" (that's just because we both liked our own for different reasons and neither wanted to give theirs up).  We don't *have to* ask permission for purchases, but in practice, we talk through most big purchases.  It doesn't really matter who makes the big purchase (or pays the mortgage that month) in the end as we feel it's one pot. 

But maybe it helps in that at one time or the other in the relationship, we've each been the one earning double that the other one earns.

wtjbatman

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Re: Couple Money Sharing Strategy?
« Reply #17 on: January 26, 2015, 02:12:10 PM »
We are getting married in three weeks. Several months ago we combined our finances. We opened joint checking and savings accounts, and deposit all of our income into those accounts. We compiled a list of our debts, sorted by interest rate. At the end of the month after all of the bills are paid, we put whatever money is left over towards our debt with the highest interest rate. We don't look at it like my money is paying her debt, or her money is paying my debt. It's our money and our debt.

Let me tell you, it's one of the best things we've ever done. Since combining our finances we basically never argue about money. We both know what's coming in and what's going out, and there's question we are both contributing as much as we can to our life together. I can't imagine not combining finances and having a loving, successful relationship. Considering when you become married your assets start becoming combined legally, it only makes even more sense to combine finances when getting married.

Of course we also kept our separate bank accounts. Personal allowance money (an idea we tried for a month then gave up on), gift money, small side hustle earnings, etc can be deposited in those accounts if either of us really want to. So far we don't really do that, as we agree on 99% of purchases from the joint account, but it's always an option.

frugalconfederate

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Re: Couple Money Sharing Strategy?
« Reply #18 on: January 26, 2015, 02:18:36 PM »
In our 39 year marriage there were times when he made a lot more than me, there were years when I made a lot more than him...  but it never mattered.  All of our money is our money.  Neither of us made large purchases without running it past the other one. Our accounts are all joint accounts.  It works for us.  I know another couple married almost as long, but they have always kept their finances separate because one of them likes to spend too much.  That works for them.  You just have to figure out what works for you.

nobody123

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Re: Couple Money Sharing Strategy?
« Reply #19 on: January 26, 2015, 02:21:14 PM »
My opinion is that once you are married all money earned is household money regardless of which person is earning it.

When budgeting then you decide how much money per month each person gets as personal spending money.

+1.  My wife is a SAHM, but an equal amount for "fun money" is allocated for each of us. 

I can't imagine keeping separate finances once you are married, unless someone has child support / alimony to pay from a previous marriage and you want to isolate that from the rest of your finances.

Other things to discuss before getting married:
1. Kids?  Yes / no, number, when.
2. Will one of you stay home if you have kids?
3. Job offer requiring a move - what is the criteria for uprooting the family.
4. Financial assistance for relatives, yes / no

iowajes

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Re: Couple Money Sharing Strategy?
« Reply #20 on: January 26, 2015, 02:23:08 PM »
My husband and I share our money - there is no his money and my money.

I had friends who did the "my income is mine and yours is yours" thing. I don't know exactly how they split household bills, but man was it uncomfortable when someone would invite them to some sort of event and wife would say "YES! Sounds great" and husband would say "I'm sorry, I'm out of money this month."  Then wife either felt like husband was holding her back (because she'd be pissed she had to stay home with him) or husband would be upset he went out without her.

It also seemed like there was occasional power struggle "Okay, I'll treat this time..." because one of the spouse's income was lower than the other.

I know some people do the "fun money" allotment, where each spouse can spend it or save it as they please, we don't do that because my husband and I have similar views on frivolous spending so no one is going to drain the accounts we keep together.



seattlecyclone

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Re: Couple Money Sharing Strategy?
« Reply #21 on: January 26, 2015, 02:25:02 PM »
My wife and I share accounts. It works well for us. Having separate accounts for some things and sharing other expenses would be pretty hard to keep track of, and I think it would lead to more arguments about things, about whether an expense is worthy of paying out of the shared account or whether one partner has to use "their" money to pay for it. As is, anything either of us buys is spending "our" money and we have to be able to justify the spending on that basis. That doesn't mean we don't allow each other to spend money on something for just one of us, but it means that we're one unit and all purchases (personal or joint) add into the overall financial picture and we need to be mindful of that.
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Re: Couple Money Sharing Strategy?
« Reply #22 on: January 26, 2015, 02:28:33 PM »
We pay for joint things 50/50 (rent, internet, groceries), our own things individually (cell phones, haircuts, personal things) , and sort-of-joint things typically around a 1/3, 2/3 split. Neither of us has a desire for a relationship that involves subsidizing the other's lifestyle choices.

We make decisions about how much to spend on joint expenses based on what we're both comfortable paying. Neither of us has expensive tastes.
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boarder42

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Re: Couple Money Sharing Strategy?
« Reply #23 on: January 26, 2015, 02:34:10 PM »
My wife and i have joint CC's for what i consider normal expenses.  we have a gas card and a grocery card.
up until  i found MMM i was splitting the mortgage with her 50/50 now after finding this and her not wanting to FIRE i pay a larger portion of the mortgage so i can have her max out her 401k account.  i'm the larger earner of the 2 of us but most things are split equally ... all things considered.  at the end of the day i think she will come around to FIRE but she may not. 

i feel your pain on the "if i become the larger earner side" ... this should not contribute to some slush fund so she can spend more on useless stuff. 

this gets much more complicated when kids come into the picture ... my wife and i will have to talk our finances then and probably end up with a card thats for kid stuff. 
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gecko10x

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Re: Couple Money Sharing Strategy?
« Reply #24 on: January 26, 2015, 02:34:20 PM »
My opinion is that once you are married all money earned is household money regardless of which person is earning it.

When budgeting then you decide how much money per month each person gets as personal spending money.

Exactly this.

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Re: Couple Money Sharing Strategy?
« Reply #25 on: January 26, 2015, 02:43:14 PM »
But there is not right or wrong answer if it works for you... i see it much more common in my generation to keep separate accounts.  it leads to no real bickering over money.  if i wnat to save 60% i save it if i want to buy a boat i buy it.  as long as we are paying for the household needs who really cares what the other does with their money. 

If person A make 100k and person b makes 50k ... and person B wants to buy something and its split 50/50 then maybe person B should re-evaluate how much they make.

NOTE: we're both engineers... we both have the options to make more or less money if we want to ... and we both could be very similarly paid if we chose to.  so i'm not being cold and heartless when i say this.  Now say you married someone with much less earning potential ... i would probably re-evaluate this strategy.  but our earning potential is eqaul... what we get paid is a personal choice about where we work and what we are striving to be / become / our effort at work.
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looking for FI

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Re: Couple Money Sharing Strategy?
« Reply #26 on: January 26, 2015, 02:53:01 PM »
Honestly it doesn't matter because if you were to get divorced and she had 50k in credit card debt and you have 50k in a brokerage account both of you walk away with nothing. She has no debt and you have no investments. However you choose to view it is irrelevant all income is joint and all assets and liabilities are joint whether the account is titled that way or not.

caliq

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Re: Couple Money Sharing Strategy?
« Reply #27 on: January 26, 2015, 02:55:33 PM »
I just got married last June, and we immediately added each others' names to our bank accounts, which were already at the same bank.  We consider all money "ours," and all bills/debts/savings "ours."  We know (and knew before marriage) that there will be large income gaps for basically our entire lives.  I'm currently in school, so our monthly budget is based entirely off his income.  Anything I earn is extra and goes straight to savings/debts.  That way we're not in a position of relying on my income, so I can cut my hours to study for finals or whatever.  When I'm done with school, I'll jump to a starting salary around 100k, which is significantly higher than what he brings in.  The disparity will likely continue for the rest of my career, unless he goes back to school or starts his own company or something. 

I think the flip flopping is pretty standard -- you never know who might get an amazing job offer or laid off, etc etc.  Keeping everything in one pot is the simplest way to do it, imo.  I really wouldn't want to calculate changes in the portion of monthly bills I owe every time I got a raise :/ That just sounds annoying!

nobody123

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Re: Couple Money Sharing Strategy?
« Reply #28 on: January 26, 2015, 02:57:42 PM »
But there is not right or wrong answer if it works for you... i see it much more common in my generation to keep separate accounts.  it leads to no real bickering over money.  if i wnat to save 60% i save it if i want to buy a boat i buy it.  as long as we are paying for the household needs who really cares what the other does with their money. 

If person A make 100k and person b makes 50k ... and person B wants to buy something and its split 50/50 then maybe person B should re-evaluate how much they make.

NOTE: we're both engineers... we both have the options to make more or less money if we want to ... and we both could be very similarly paid if we chose to.  so i'm not being cold and heartless when i say this.  Now say you married someone with much less earning potential ... i would probably re-evaluate this strategy.  but our earning potential is eqaul... what we get paid is a personal choice about where we work and what we are striving to be / become / our effort at work.

So what happens when person A wants to take their boat and move to the Bahamas when they FIRE at 35?  You are going to leave your spouse behind because they aren't in the financial position to do so?  Geez...

whiskeyjack

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Re: Couple Money Sharing Strategy?
« Reply #29 on: January 26, 2015, 03:00:19 PM »
There are some questions you and your gf need to discuss before coming to a decision.   

Do you intend to have children?

If you have children, will one of you be giving up some/all of their working income to stay home and care for those children?   Is one of you more likely to take on the responsibility of taking a day off because your child is sick and you couldn't find a sitter at the last minute?  How you make these decisions is going to influence your career path and total earning potential.

What if one of your children has a disability, would one of you become a SAHP then?

Keeping completely separate finances works best when both partners are contributing equally in terms of paid vs unpaid labor.  I feel the same way about a percent-income split.   It works fine unless there is an imbalance somewhere else.   If one of you has to give up some earning potential to take on more unpaid at-home responsibilities, it's important that both members recognize that effort as valid and important.

We have disparate incomes and completely pooled finances.  In our younger days we each had a 'fun money' account that each could use without having to track or justify that spending to each other.   Over time the separate accounts went away because we are better aligned in our thinking and spending.

In your particular case where no children have been mentioned, but there is a likely disparity in income, I would suggest doing something similar.   Pool all resources, pay all necessary combined household expenses out of that (and I'd work in a minimum required savings contribution).  This includes "John invited us to XX and I really want us both to go".   If you both go, it comes out of the pooled funds. The remainder can be split into your individual discretionary spending.  Yours can go to more aggressive RE savings and hers can go to whatever she values more.

Have some conversations to make sure she won't be burning with resentment if you are able to RE and she cannot (but if you set a good example of how you are living a happy and fulfilled life WITHOUT all the spending, she might come around on her own.)

I am assuming that you are both fully committed to each other, and both believe the other is contributing equally to the relationship even if the financial numbers are different.

Neither of us really enjoys having the minutae of our spending analyzed and so even before we had kids, a by-income-split would have caused more stress for us than this.

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Re: Couple Money Sharing Strategy?
« Reply #30 on: January 26, 2015, 03:05:32 PM »
We did a proportional split. My partner made more, so he put in 2/3 of shared expenses and I put in 1/3. It worked well for us when we were just living together. Then, after official commitment, we prepared to have a baby by living on just his salary and paying off debt with mine. When debt was all paid off, we used all of mine for emergency fund and investment. Now that I'm home with the baby, we live on his salary alone, and can live comfortably within our means.

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Re: Couple Money Sharing Strategy?
« Reply #31 on: January 26, 2015, 03:08:35 PM »
But there is not right or wrong answer if it works for you... i see it much more common in my generation to keep separate accounts.  it leads to no real bickering over money.  if i wnat to save 60% i save it if i want to buy a boat i buy it.  as long as we are paying for the household needs who really cares what the other does with their money. 

If person A make 100k and person b makes 50k ... and person B wants to buy something and its split 50/50 then maybe person B should re-evaluate how much they make.

NOTE: we're both engineers... we both have the options to make more or less money if we want to ... and we both could be very similarly paid if we chose to.  so i'm not being cold and heartless when i say this.  Now say you married someone with much less earning potential ... i would probably re-evaluate this strategy.  but our earning potential is eqaul... what we get paid is a personal choice about where we work and what we are striving to be / become / our effort at work.

So what happens when person A wants to take their boat and move to the Bahamas when they FIRE at 35?  You are going to leave your spouse behind because they aren't in the financial position to do so?  Geez...

my FIRE plans put it so we can both FIRE at that age if she wants to keep working thats her prerogative but we will have kids and i'm not just gonna take the boat and head to the bahamas... that would likely end in divorce papers being sent my way... i'm not saying its black and white ... but you can make separate finances work.
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wtjbatman

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Re: Couple Money Sharing Strategy?
« Reply #32 on: January 26, 2015, 03:16:47 PM »
Neither of us really enjoys having the minutae of our spending analyzed and so even before we had kids, a by-income-split would have caused more stress for us than this.

We are like you. My fiance earns salary but monthly income fluctuates thanks to commissions and bonuses, my income is hourly and fluctuates because of OT some weeks and working less than 40 hours other weeks.

Are we going to sit down every month and use some formula based on our income and bills to determine who pays what down to the dollar? I know we have some real math nerds around here who eat this shit up, but me and the fiance aren't those people. It would cause more stress than anything gained by being "fair" with our money. Which, as I said before anyway, we consider to be both of ours now.

I think the most important thing is that we talked about it and figured out a plan that we believe will work... all before getting married. If you talk and come up with a income/bill % plan that you both feel will work, then go for it. You are already better off than all of those people who barely discuss their finances and wing it month to month.

studentdoc2

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Re: Couple Money Sharing Strategy?
« Reply #33 on: January 26, 2015, 03:36:01 PM »
My spouse and I place a big emphasis on partnership in our relationship, but we have very different careers and very different skill sets. We each use those to the best of our advantage for our common goals and the future we want. For us, it would never work to split things 50/50 or in proportion to our income; first, our incomes are likely to be very different (possibly by 10-fold), and second, we both contribute to the household in different ways (e.g., he hasn't had to deal with figuring out a budget or paying a bill in two years (although we routinely check in so he know's where money is going and why and has full access to those accounts), and I've cooked less than 10 meals for the two of us in the same time)). I'm more FIRE-oriented than he is, so we've had some long conversations and compromises about the end goals and the rate at which we are approaching them. Sharing finances (with separate accounts for a monthly discretionary stipend, gifts, etc.) has helped us really focus on the type of life we want together and ultimately has led to fewer resentments. I think I would feel very lonely if I were working away for FIRE on my own totally unsupported by my spouse. Plus, I've never understood how the split/proportioned finances work in the event of big purchases like a house.... But I know there are couples that make this work!

ShortInSeattle

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Re: Couple Money Sharing Strategy?
« Reply #34 on: January 26, 2015, 03:39:12 PM »
I agree that there is more than one way it can work. So as long as you are both happy, it's fine.

We went the "pooled income" route and it is what I would recommend in most cases. If you were already FI and marrying late in life, or if your spouse had a spending addiction that was going to harm the family, separate finances make a lot of sense. But for most couples, shared accounts offer advantages:

1. It reinforces that you are a team. - no resentment or stinginess from a "mine" vs "yours" attitude.
2. It simplifies accounting. - no need to calculate percentages.
3. It encourages shared decision-making. - big expenses can be discussed, budgets can be agreed upon.
4. It equalizes power. - All "contributions" to the household are equally valued. Money isn't a measure of who gets more say.

Early on in my marriage I earned more, now my SO does.  It's never mattered all that much. We're married - entangling our lives under one banner was kind of the point for us.

Let us know what you guys decide, OP.

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Re: Couple Money Sharing Strategy?
« Reply #35 on: January 26, 2015, 03:40:55 PM »
Our incomes are similar so we split 50/50 and keep most things separate.  We'd  fight all the time with joint money so that seemed silly to combine when We are both happy with separate and never fight.

ShortInSeattle

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Re: Couple Money Sharing Strategy?
« Reply #36 on: January 26, 2015, 03:43:12 PM »
The trick to a long relationship is recognizing that there are three parties involved: you, your SO, and the couple you comprise.  The system you use has to work for all three parties.   

Wise words!

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Re: Couple Money Sharing Strategy?
« Reply #37 on: January 26, 2015, 04:06:22 PM »
I'll add another "100% joint account" to the mix.

I recognize marriage as the epitome of a "joint/team effort" in all manners of the term. We've been married for 6 months, but together for the past 7 years. We essentially joined forces financially when she graduated college in June 2012.

My income has consistently been 2-4 times greater than hers and will likely remain at least 50% greater even after her education is completed. She comes from a slightly different family financial background of semi-split finances, and so initially had a hard time  relying on my income as the financial support when we first joined accounts.

Since then however, it's all been a wash. We earn money, it goes into the account. It's spent on necessary things. We're on nearly exactly the same page financially and so no outrageous spending even comes to mind. 

 My wife will soon be unemployed this coming fall when she begins a 9 month internship. It doesn't even matter because it's all part of the plan. Tuition will be paid for by "the money", food, rent, gas, cellphone, etc will all be paid. It's an investment, as when she completes her education she'll be much more able to contribute significantly to our FI plans.
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PEIslander

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Re: Couple Money Sharing Strategy?
« Reply #38 on: January 26, 2015, 04:13:37 PM »
My bride & I were married 27-1/2 years ago. We started our marriage without jobs & two hundred dollars in the bank! We had no doubt that somehow we'd make it together. All our income has always been our income. All our expenses have always been our expenses. All our savings have always been our savings (although in separate accounts 'cause that's what the taxman makes us do). Neither of us gets an allowance. We are free to spend money however we see fit. The thing is with sharing equally comes some responsibility. Neither of us is likely to spend extravagantly (or selfishly) without considering the other - it hasn't happened yet. It just seems to come with the role of being an equal partner. If anything, through most of our marriage we both would have been okay if the other would actually spend more on themselves.

The most significant financial thing in our marriage was the early decision to build up a nest egg. Having savings has always been liberating. We always knew that if life was getting too tough we could afford to take a vacation. We always knew if our jobs became unbearable we could afford to quit and then take some time to find a better one. We always knew if some unexpected cost came up we'd be able to deal with it. That freedom allowed us to not be ruled by money. (In contrast, friends always seemed to live paycheck-to-paycheck and sadly a lack of money has ruled their existence). In recent years as our attention is getting more focused on retirement we have more explicit financial goals. The only difference is this makes us a little more focused on saving.

Future Lazy

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Re: Couple Money Sharing Strategy?
« Reply #39 on: January 26, 2015, 04:25:07 PM »
DH and I are both 22. Last year, he brought home about $15,000, where I brought home around $25,000. We split our necessary expenses ~50/50. That's housing, utilities, food, internet & phone bill. We keep separate bank accounts, and all personal spending (or savings) comes out of there.

Monthly, I have a surplus of 40-50% of my income, but currently DH is working part time and sometimes doesn't quite make ends meet. Even though it would be helpful to his pocketbook to split expenses 40/60 (or whatever), I don't want to be helpful to his pocket book. I want DH to be motivated to get a better job that he doesn't hate, and financial pressure is what I can provide. I don't want 15k/yr to be his acceptable income baseline.

I'm just not willing to combine finances with a low wage earner. :) I'm afraid that it'll allow DH to relax and feel like things are ok, and not achieve more with his life. I don't want to be mooched off of. The downside to this is that I've got a fair amount of money saved, but my DH feels broke as balls all the time - because he is. It also means I have to foot big ticket items (such as car repairs) and ask DH to pay me back.

That being said, what I hear you saying is... "I'm not ready to/don't want to combine incomes, but she is/does." That's understandable, since that's basically marriage. Do you guys plan to get married? If not, then you probably shouldn't have a joint bank account. If so, then everything is a shared pot. 

Sorry if that was a bit rambling, I tried to bold the part that really matters! This has been on my might a lot lately too. Hopefully you guys can come to a good equilibrium/agreement for yourselves.

I don't want to start an argument and if it works for you that's great, but it comes off as trying to parent your spouse (at least to me).  If my spouse was making $15k per year (and it was out of laziness and not because she was....saving baby african black rhinos or something I don't know) then I'd think we could have a discussion about it.  Does your SO know that you using this as motivation?

Yes, I am doing some parenting. When you marry someone who didn't have emotionally/physically present parents, that's to be expected. Surprise: Kids don't raise themselves very well. My parents were equally absent, so we both have exaggerated handicaps. For example, he's teaching me how to drive, and is 100% more consistent about chores than I am. I still have to tell him to rinse his dish before he puts it in the sink, and to pick up food dropped on the floor. I'm fairly good with money, but he's better at adulting (being responsible and on time) in general. There is definitely parenting from both sides. We're still kids.

Also yes, he explicitly knows that I don't think his current trajectory is going to meet our goals, and that hating your life while working part time for Orange Hardware Box Store is not an acceptable career path. Back this up with information about the cost of having and raising up to 4 kids(! DH's ideal number!), as well as the cost of a house large enough to put them in. And not B.S. ".5mil to raise one child" costs that the mainstream thinks is normal - but it's still far more than what is affordable on our current financial trajectory. DH would like to be the SAHP, and we've discussed how that's not going to happen without gaining the financial momentum now.

It's not about DH making as much as I make - that's not important - but what is important is having the prerogative to earn enough to cover at least 50% of the bare necessities ($800/mo) and also project yourself into the future toward a financial goal, such as SAHParenthood.

If DH made $0 saving baby rhinos full time.. Or working at a Dumb Friends League, or traveling to obscure places and living with the native tribes of wherever, or playing his bass guitar in YouTube videos - whatever he was passionate about, I would be absolutely fucking thrilled. If he was passionate about working for Giant Orange Homeowners Mart, then 15k/yr would be just fine; I maintain the belief that if he was passionate about it, his bosses would notice, and he wouldn't be making 15k/yr for long.

DSKla

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Re: Couple Money Sharing Strategy?
« Reply #40 on: January 26, 2015, 04:50:45 PM »
Wow, lot's of good responses here, and it seems like a wide variety of workable plans. Thanks for all the suggestions.

I can see how kids throws a wrench into the mix as well if one parent stops working to care for them. Guess it's just going to be a big discussion that potentially evolves over time. The bottomline for me is I am trying to achieve a certain savings rate to FIRE, so at the end of the day it shouldn't matter to me whether the accounts are separate as long as I can achieve my desired savings rate, and she can achieve hers, which is going to be a much lower rate since she is happy working and will want to continue for quite a while.
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nobody123

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Re: Couple Money Sharing Strategy?
« Reply #41 on: January 26, 2015, 11:58:07 PM »
my FIRE plans put it so we can both FIRE at that age if she wants to keep working thats her prerogative but we will have kids and i'm not just gonna take the boat and head to the bahamas... that would likely end in divorce papers being sent my way... i'm not saying its black and white ... but you can make separate finances work.

Obviously the way you're doing things works for you, and that's great.  Since I like to argue about hypotheticals on the interweb, what happens in your earlier scenario if:

The $50K income listens to higher earner with equal qualifications, decides that they aren't earning up to their potential, and finds a job for $75K.  But, that job would require the couple to move to an area where $100K earner can only find a $90K job.  Overall, they would be ahead if they moved, but the separate finances / separate goals scenario would lead the higher earner to have to adjust their plans to account for the drop in income.  I guess you could negotiate a $10K payment from the $75K earner to make you financially whole, if you don't mind sleeping on the couch for the rest of your natural life.  Any other outcome would result in a joint financial decision.

I would argue that once you're married, the finances are not at all separate, even if you have your paychecks deposited into separate accounts.  At some point the goals of the couple (or family, when the kids arrive) will be put ahead of the goals of the individuals, and if they don't, why on earth did they get married to begin with?

Spondulix

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Re: Couple Money Sharing Strategy?
« Reply #42 on: January 27, 2015, 12:41:58 AM »
Sometimes there are practical reasons to keep your finances separate. Do either of you want to go into business on your own (either as a primary job or as side income)? It can be a lot easier to do taxes/figure out business expenses with a separate account. Are you looking to buy a house? It's much easier to have combined finances when you need to prove income or make large payments.

The important part is setting a budget together - where the money lives is just a matter of logistics. DH puts his income in a business account (and mine in a personal) so we sort of have separate finances. We're both on both accounts (for transfers, checks etc), and everything shows up in Mint. So even though our accounts are separated, there's complete trust and transparency. Like others said, I think communication is a huge part - We talk about any purchase out of the ordinary that's above $200 or so (even if it's just, "hey I had to buy this thing, so you'll see it on Mint.")

deborah

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Re: Couple Money Sharing Strategy?
« Reply #43 on: January 27, 2015, 01:49:45 AM »
We have been together for a very long time and have never shared finances. We work out what each of us is going to pay for, and we do it. If one of us doesn't have enough for something, the other is happy to loan that amount, if it is a one off. If one of us just cannot afford what they pay for (say that food goes up 100% or something like that), or thinks the distribution of payments is no longer fair, or has time off work, we re-work who pays for what.

We always had different investment strategies - and didn't like how the other was investing, so investing separately was the best way. Neither of us imposed our values on the other. We both became FI many years ago, and are both now retired, so this strategy does work.

Unique User

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Re: Couple Money Sharing Strategy?
« Reply #44 on: January 27, 2015, 07:43:59 AM »
My opinion is that once you are married all money earned is household money regardless of which person is earning it.

When budgeting then you decide how much money per month each person gets as personal spending money.

Exactly this.

Same here.  But maybe it's because we're older?  I'm 45 and my DH is 50, we've been married 21 years and have always had a joint accounts.  Some years I make more, some years he does.  Since we don't buy things unless we agree or they are absolutely needed, I see no reason for separate accounts. 

caliq

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Re: Couple Money Sharing Strategy?
« Reply #45 on: January 27, 2015, 07:56:39 AM »
My opinion is that once you are married all money earned is household money regardless of which person is earning it.

When budgeting then you decide how much money per month each person gets as personal spending money.

Exactly this.

Same here.  But maybe it's because we're older?  I'm 45 and my DH is 50, we've been married 21 years and have always had a joint accounts.  Some years I make more, some years he does.  Since we don't buy things unless we agree or they are absolutely needed, I see no reason for separate accounts.

I don't think it's age -- I'm 23 and DH is 29 and we have the same philosophy.

However, for at least my generation, I think it might have something to do with how far along (financially, career-wise, etc.) you are when you get married/get serious enough that you start factoring the other person into your financial plans/goals.  It's very easy to say "it's all our money" when you don't have any :D

Terrestrial

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Re: Couple Money Sharing Strategy?
« Reply #46 on: January 27, 2015, 07:59:07 AM »
I agree there are many ways it can be done, I think the most important thing rather than the actual scheme used is COMMUNICATION.  Of the two methods you listed, proportional makes the most sense to me, but to each their own.  50/50 with vastly different incomes would breed resentment, I think.

How my wife and I handle it:
I make ~75% of our household income, my wife 25%, and the split seems to widen further every year due to our career types.  We have always pooled it all into one mutual pot, there is no 'his/her' money besides very minor fun money accounts for hobbies that both get equal funding.  All accts are joint ownership, we talk about and agree on major expenses.  Should we divorce we will add up what we have and split it 50/50.  To me this is fair, I may make more but we are a partnership, she contributes more than her fair share in a variety of other ways.  Marriage can be hard enough even when you have a good one, we always felt that we didn't want money to be a source of friction, and so far it has worked.  Equal partners, no resentment, zero fighting about it in 5+ years now with this system.  Also I feel like now that we have kids this method is beneficial... I would hate to try and figure out how we split expenses for our children, college funding, etc. 

jms493

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Re: Couple Money Sharing Strategy?
« Reply #47 on: January 27, 2015, 08:01:12 AM »
Yes you work as a family together.  There is no more I....it is WE!  Household income,  make a plan,  create a budget that WE agree on and stick to it.  Dont be roommates be a family with goals that move together in agreement on everything.

Since wife and I have been on a budget we dont worry or bicker about money.  It is actually more freedom IMO.

terran

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Re: Couple Money Sharing Strategy?
« Reply #48 on: January 27, 2015, 08:15:31 AM »
I say combine it all, then fight about goals, not money. If she wants to buy clothes/things and you don't, figure out how much you're both comfortable spending and budget for it. If you want to FIRE and she doesn't, figure out how to budget for you to FIRE while she keeps working. If your idea of being FIRE'd requires that she also be FIRE'd talk about that until you come to an agreement.

If you can't come to a mutually satisfactory agreement on all these things (and all the other things you'll come up with) then you're not compatible and you shouldn't be married. This isn't to say that you won't both have to compromise and give up a few outfits or a few extra years of work as compared to your own ideal situation, but if staying together is worth the compromise to you, then make the compromise. If you/she feel it's not worth the compromise then something else is wrong because either your goals are too far apart or you don't want to stay together enough to shift your goals.

 

Zikoris

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Re: Couple Money Sharing Strategy?
« Reply #49 on: January 27, 2015, 08:42:13 AM »
I don't think there would be any agreement or compromise I could come to if we had combined accounts that would leave me not feeling intensely irritated when my boyfriend bought a $500 video game console, and I imagine he would feel similarly about my dance lessons. As it is now, separate accounts means neither of us cares, we both get what we want, and we're both happy. No point introducing pointless stress/discomfort into a relationship if you  already have a system that works.
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