Author Topic: Examples of split finances  (Read 1362 times)

Millennialworkerbee

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Examples of split finances
« on: December 03, 2018, 09:53:41 AM »
For couples who have (partially) separate finances from your spouse, what does this look like?

We’ve been married for 3 years and tried to do joint finances. The common theme for those 3 years is that my husband wants to spend money on something that I don’t put as much value in, so I pick a fight. He isn’t a super ridiculous spender but like to have a nice(ish) car, eat out more than I want to, golf a little more than I think our budget should be, etc. I don’t have a problem with the spending categories, I just think the amount is more than it should be. But I’m frugal, that’s why I like reading this blog ;).

We’re currently talking about splitting up some finances. Right now the current list is car (including maintenance & gas), eating out, clothes, “fun money” for going out with friends, etc. Something like we each get $1000 a month to spend how we want, but no money is coming out of the family pot for the expenses mentioned above. The thing I like about this is that this “big allowance” system is the method we want to use for our kids as they start getting into activities, caring about what they wear, etc.

Has anyone else done something similar? What about retirement savings, we still want to be able to retire together?

spacklebum

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Re: Examples of split finances
« Reply #1 on: December 03, 2018, 10:46:18 AM »
One crucial aspect of this is are you a dual income couple?

For us (DINKs at the moment), we just kept our accounts separate and defined who pays for what. In our case I pay for most of the household bills, SO pays for food/groceries and gas. Discretionary stuff beyond that is up to us individually, although we have a similar mindset around savings / frugality.

For shared accounts / single income, the budgeting approach you suggest seems appropriate.

Millennialworkerbee

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Re: Examples of split finances
« Reply #2 on: December 03, 2018, 11:00:44 AM »
One crucial aspect of this is are you a dual income couple?

For us (DINKs at the moment), we just kept our accounts separate and defined who pays for what. In our case I pay for most of the household bills, SO pays for food/groceries and gas. Discretionary stuff beyond that is up to us individually, although we have a similar mindset around savings / frugality.

For shared accounts / single income, the budgeting approach you suggest seems appropriate.

I forgot to mention that we are dual income. I make about 2 times what my husband makes, although he is in sales so it is unpredictable and may rise over time. A big goal is to be fair in whatever we decide to do regardless of how much money we make. So I wouldn’t want an allowance 2 times bigger just because I make more. Plus let’s be honest, mine will mostly go to savings ;)

eav

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Re: Examples of split finances
« Reply #3 on: December 03, 2018, 12:08:56 PM »
For when the time comes to split finances with my SO, I see it going like the below:

Joint Checking – Household Expenses: rent/mortgage, utilities, phone, car, groceries, insurance
*Will take a monthly average and add a cushion to get a safe monthly amount to be transferred here

Joint Savings #1 – Car fund, Set agreed amount auto-transferred from each person’s account
Joint Savings #2 – Home savings (down payment and/or maintenance) Set agreed amount auto-transferred from each person’s account
Joint Savings #3 – Gifts/Holidays FOR OTHERS :), Set agreed amount auto-transferred from each person’s account
Joint Savings #4 – Vacation – For vacations taken together, Set agreed amount auto-transferred from each person’s account

Separate checking accounts – Whatever is left. I see all eating out and joint entertainment coming out of our separate accounts. We don’t eat out often, and don’t mind switching on and off covering the bill. I feel the same in that seeing all spending my SO does would make me crazy and cause silly fights, so I feel separate accounts are necessary.

This way you have your savings goals covered. The only way I see your "fun money" being closer to your SO's is if you contribute much more to joint savings, fund individual savings on the side, and/or cover much more of the retirement funding. This may be difficult unless you truly adopt the view that in marriage all money made is OUR money. Hope all goes well!

SunshineAZ

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Re: Examples of split finances
« Reply #4 on: December 03, 2018, 12:39:35 PM »
One crucial aspect of this is are you a dual income couple?

For us (DINKs at the moment), we just kept our accounts separate and defined who pays for what. In our case I pay for most of the household bills, SO pays for food/groceries and gas. Discretionary stuff beyond that is up to us individually, although we have a similar mindset around savings / frugality.

For shared accounts / single income, the budgeting approach you suggest seems appropriate.

This is very close to what we do.  He has always made more money and we keep separate accounts and pay different bills.  He covers the house (which is in his name only), and I pay some of the other utilities, groceries, vet bills, etc.  When his kids were younger, he also paid for their expenses, child support, etc.  He is spendypants and we would never have lasted if we tried to do joint finances.  Ironically, despite him being the higher earner, my retirement savings are slightly larger than his, but I do put in a much higher percentage in than he does. 

We actually set up a joint account a few years back during a period where I was unemployed with the intention of him adding money when needed for groceries or other bills and I have never taken a dime out of it.  LOL 

Millennialworkerbee

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Re: Examples of split finances
« Reply #5 on: December 03, 2018, 12:49:05 PM »
For when the time comes to split finances with my SO, I see it going like the below:

Joint Checking – Household Expenses: rent/mortgage, utilities, phone, car, groceries, insurance
*Will take a monthly average and add a cushion to get a safe monthly amount to be transferred here

Joint Savings #1 – Car fund, Set agreed amount auto-transferred from each person’s account
Joint Savings #2 – Home savings (down payment and/or maintenance) Set agreed amount auto-transferred from each person’s account
Joint Savings #3 – Gifts/Holidays FOR OTHERS :), Set agreed amount auto-transferred from each person’s account
Joint Savings #4 – Vacation – For vacations taken together, Set agreed amount auto-transferred from each person’s account

Separate checking accounts – Whatever is left. I see all eating out and joint entertainment coming out of our separate accounts. We don’t eat out often, and don’t mind switching on and off covering the bill. I feel the same in that seeing all spending my SO does would make me crazy and cause silly fights, so I feel separate accounts are necessary.

This way you have your savings goals covered. The only way I see your "fun money" being closer to your SO's is if you contribute much more to joint savings, fund individual savings on the side, and/or cover much more of the retirement funding. This may be difficult unless you truly adopt the view that in marriage all money made is OUR money. Hope all goes well!

Thanks! I forgot to think about vacation, home repairs, and other big joint expenses. Those need to be factored in my numbers.

I really 100% believe that all money earned is OUR money and am happy to have a smaller % of personal allowance compared to my take home pay than my husbands would be. Life is a long time and I’ll probably be the lower earner at some point.

spuggy

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Re: Examples of split finances
« Reply #6 on: December 03, 2018, 12:51:56 PM »
Me and my SO have been married for five years, together for 11. We have one joint account, from which we pay all the bills, the food budget, and save £100 extra a month each for a holiday. If we do anything impromptu, like go out for a meal, we might pay from this account and then pay our share back from our own separate accounts. We have another account with £2k emergency money in it for house repairs, unexpected broken appliances, etc, which we replace as needed.
I earn about double what my SO earns, so I pay proportionally more of the mortgage (including most of the overpayment) and the bills. We both have separate accounts to cover our own expenses (car, clothes, etc). But I still see my money as his, even though he struggles with that - it does help that he's naturally frugal, it doesn't help that he struggles to see why I would be happy to give him £4k towards a newer car (because on Friday his broke down on the motorway and if I never have to spend another freezing cold minute waiting for a tow truck in the rain it will be too soon!)
Hope that helps.

Zikoris

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Re: Examples of split finances
« Reply #7 on: December 03, 2018, 10:16:00 PM »
We each have our own bank accounts and investment accounts, and have joint credit cards - but even with the joint cards, we each only pay off our own things (and only split things that we both use), so I'm not stuck paying for his video games, and he's not stuck paying for my soda. It works really well, and we've been doing it this way since we moved in together.

We've always split joint costs exactly 50/50, regardless of income mix. Our income split has swung both ways over the years, though I've generally earned more. We figure out amounts we're both okay with for the joint expenses like rent and food, so neither of us is strapped for cash.

We don't have any large joint expenses, or large expenses period. We've basically just designed our lives in such a way that they don't exist.

Regarding retirement savings, we each have our own separate accounts, but I manage that aspect for both of us. We have our investment accounts linked to our online bill pay, so we just do deposits at the same time we're paying off the credit cards (twice a month). We're not overly concerned about being ready to retire at exactly the same time - he's a 100% remote freelancer, and intends to continue post-retirement in some capacity, so we don't have to be exactly marching in lock-step for that to work out.

Linea_Norway

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Re: Examples of split finances
« Reply #8 on: December 04, 2018, 07:47:34 AM »
When DH and I started to live together, he got 50% higher salary than I did. We both put a monthly sum on a shared bank account, 40/60 division, and used that account for paying the house-related bills, the food and going out for dinner together.
Whenever one of us paid for a dinner together from our own account, we transferred the amount back from the shared account. We spent the rest of the sum after our own needs. This was a bit of fuss, but that was before electronic banking and smartphones with bank apps. We had to write checks for each transaction of money.

Later we found out that we both weren't big spenders and we quite splitting finances.

2Birds1Stone

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Re: Examples of split finances
« Reply #9 on: December 04, 2018, 08:19:15 AM »
This is always a fun topic that tends to go off the rails.

We've been together 8 years, and not married yet.

We split our rent/utilities 50/50, and live in a place that we moved into when making 1/3rd-1/2 of our current income. We don't keep score but we alternate who buys groceries, our individual vehicles, cell phones, gym, eating out (alone), etc are covered by our own separate accounts, retirement accounts are also completely separate.

I tend to pay for more of our leisure or entertainment spending category. Happy hours, meals out, booze, road trip expenses, etc. Which I'm completely happy to do.

We have varying urgency to get to FIRE, and I've put a lot more time and energy into my career/income, while SO is very frugal, she's been underemployed most of our relationship, which is totally fine with me :)



PoutineLover

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Re: Examples of split finances
« Reply #10 on: December 04, 2018, 08:29:13 AM »
My partner and I live together, but we aren't married. We split household bills (rent, internet, hydro) 50/50, and we take turns paying for things like groceries, date nights, household items. If it's a big cost, we'll split it formally, but alternating seems to come out pretty even. We have our own savings, but if we ever get married, have kids, or buy property together, there will likely be more mingling of finances. I don't think there's anything wrong with each person having their own account and contributing to household expenses together. I would hate to micromanage my partner's spending or have him micromanage mine, so I don't think we'd ever go 100% joint, but we are both pretty laid back and not big spenders anyway, so it probably won't be an issue.

Imma

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Re: Examples of split finances
« Reply #11 on: December 04, 2018, 08:38:23 AM »
We're together 5 years, DINKs, over time we've both been the highest earner and these days I make a bit more than he does, but work less hours. We are unmarried but legally / tax-wise we are partners (in our country the government can't discriminate between married and unmarried couples).

We each have our own personal accounts that our income is paid into. We have a joint account for the joint bills (mortgage, taxes, utilities, internet, groceries) and we each pay a set amount into this account every month. We always pay the bills 50/50 regardless of current income as we also own the house 50/50. Our bills are low enough that we'd be able to pay them even if we earned minimum wage.

All other expenses come from our personal accounts. If we go out for dinner or an ice cream or something, we usually take turns to pay. When we go on holiday we both withdraw the same amount of cash and that's our spending money for the holiday.

Ironically, we do have similar spending habits and we're both naturally frugal. We know how much the other has saved/invested and we talk about money a lot more than our parents (with shared accounts) did and unlike them we never argue. Even though we're happy together I'm just really happy to have my own personal emergency fund that no one can touch.

Milizard

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Re: Examples of split finances
« Reply #12 on: December 04, 2018, 08:49:32 AM »
One crucial aspect of this is are you a dual income couple?

For us (DINKs at the moment), we just kept our accounts separate and defined who pays for what. In our case I pay for most of the household bills, SO pays for food/groceries and gas. Discretionary stuff beyond that is up to us individually, although we have a similar mindset around savings / frugality.

For shared accounts / single income, the budgeting approach you suggest seems appropriate.

I forgot to mention that we are dual income. I make about 2 times what my husband makes, although he is in sales so it is unpredictable and may rise over time. A big goal is to be fair in whatever we decide to do regardless of how much money we make. So I wouldn’t want an allowance 2 times bigger just because I make more. Plus let’s be honest, mine will mostly go to savings ;)

For your situation, it strikes me that you should do a his/hers/ours set up for the allowances such as this for example:

$1000/month his money
$1000/month her money (to your individual savings, if you wish)
$1000/month joint savings

If his income spikes, it would be only fair to divide the excess among the 3 funds as well.  It's not very different than what your original idea was, except you have an individual savings account that you both agree is for you and you alone.

SheWhoWalksAtLunch

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Re: Examples of split finances
« Reply #13 on: December 04, 2018, 09:56:24 AM »
The DH and I have one checking and one savings account for shared expenses (housing, groceries, insurance, joint travel, joint memberships, joint gifts, emergencies – basically anything we do together or both benefit from).  We each maintain personal checking, savings, investment and retirement accounts for individual use (vehicles, clothing, personal interests and activities). The system works well for us.

When we first moved in together we both put the same amount of money into the joint account each month. (Effectively splitting our shared expenses equally.)  This meant I didn’t see how much he spent on his kids and he didn’t see what I did with my money (mostly save it – I’m so boring).  If something came up that we agreed should be paid out of joint, but we hadn’t budgeted for, we both transferred equal amounts of cash into the account to pay for it.  This was a good first step toward learning each other’s day to day beliefs and behaviors about money.  (Note: We had many conversations about money and life goals before we moved in together, but still benefited from this controlled cash/personal cash situation as expenses and outlay we didn’t originally include in our discussions popped up in the first few years.)

Once the step-kids were independent and we moved south (a story for another time) we switched it up and now both hold back the same agreed upon amount putting the remainder of both our paychecks into the joint account each month (basically putting our personal expenses on a tighter budget and making surplus funds visible so we can jointly direct them toward our shared FI/RE goal).  We’re viewing this as the next step towards FI/RE when we will eventually have to pull all expenses out of individual savings/investments.

We have both had years when we out earned the other.  It has never been an issue because of the joint accounts.  We set financial goals together.  I am the primary bill payer/financial supervisor on the joint accounts simply because I care more.

TL/DR:
1)   Having a hybrid of joint and separate accounts works well for us. 
2)   Whatever you try first, be sure to revisit your choice as your relationship develops and situations change. 

Annie101

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Re: Examples of split finances
« Reply #14 on: December 05, 2018, 09:27:07 AM »
My husband and I used to have personal and joint accounts. Almost all money would be transferred to the joint account. We each kept a set amount that we used for a few things-clothes, haircuts, gifts for each other, eating out and entertainment with friends (without each other), and work lunches. I think it was about $350 for me and $250 for him (I spent more on clothes and haircuts).

This worked well for us for years, but now we just have joint everything. We are both frugal so not a big issue. I just wanted to point out that the amount for each of your personal money doesn't need to be equal.  You could take a much smaller amount and just increase how much goes directly to savings each month (instead of funneling everything through your personal account).  Also, it's important to define what are the personal expenses.  But it sounds like you have a good plan!

LifePhaseTwo

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Re: Examples of split finances
« Reply #15 on: December 05, 2018, 12:48:10 PM »
My DH and I have kept our finances separate since we got together. He had financial obligations such as child support and university costs for the kids from his first marriage, and it was simpler to keep things straightforward that way. Plus, I had always managed my own finances, and had no desire to meld mine with his.

Once a month we have a “finance date” where we sit down with all the receipts, bill payments, bank transactions etc that each of us incurred over the month, and we go through them, and record the expenses in such a way that we know how much each of us spent and on what. Then we transfer money, usually me to him since he pays upfront for most things, so that there’s a 50-50 split on all expenses that are joint.

It gives us a chance to review our spending regularly, and we treat ourselves to our favorite pizza as part of the date. We’ve been doing this since 2008 and find that it works really well for us.

lil_miss_frugal

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Re: Examples of split finances
« Reply #16 on: December 06, 2018, 09:19:29 AM »
Husband and I are dual income family with separate accounts and 1 joint account.

The joint account is solely for mortgage payments right now.
He pays majority of the bills while I pay a couple and buy groceries.

I prefer separate accounts since there are things I enjoy buying that he'd think twice about and vice versa. I'm also the frugal one and better with finances not to mention very anal about certain things. For us, this is how we avoid A LOT of arguments.