Marriage - Combining Finances Mechanics

[Bumbles8]

Hello all Mustachians - long time since I posted.

My partner and I recently got hitched - and now we would like to combine finances more thoroughly and effectively.

Some Background:  We have been living together for two years and have many of our finances interlaced, but have never opened a shared bank account.  We split rent, share health insurance through my job, and are aligned on our frugal nature.   I make ~2x her income and I try to carry more of the weight when it comes to expenses.

I would like for her to continue to have her own savings and checking account.  I want her to feel like she always has 'her own money' that I can't touch. 

Now we would like to open a shared account but I am looking for any ideas and details on the mechanics of combining finances.   What has worked for you?  How do you make sure each person feels like they have their own money to spend?  Do we each send x% to the shared account?   Or do we just jump in and send all money there?  Any bank recommendations?

This seems like it should be simple, but I can't come up with a simple system that makes sense.

Also, what other things should I be thinking about now that we are married?   We are going to combine our car insurance, she already is by beneficiary on my accounts.

TLDR:
1.  Just married, how do we combine our finances for paying shared bills?  bank account, credit card, etc recommendations
2.  What are other financial things I need to change or check?

Thank you!

[Sibley]

Both paychecks go into one account, each spouse has a separate checking account and each gets a set amount transferred monthly for fun money, all bills are paid out of the main account, budgeting and goal setting happens jointly. Both should have access to all online accounts. Both should be able to pay the bills, update the budget, etc, though for practical purposes it'll probably be one or the other on a day to day basis.

That's one way of handling it. Do whatever works for you, so it'll take some trial and error and lots of communication.

[newco]

If you have a system that works for both of you, why reinvent the wheel?  I'm all for separate finances with a joint bank account that each party throws X amount into each month based on their budget/earnings.  If you make 2x her, you contribute 66% to the shared account and she contributes 33%.  Everything leftover is yours and hers.  No arguing about spending money on a purchase that might only benefit one party.    What you use your shared account for can be up to you, e.g. mortgage, utilities, groceries, vacations, etc. 

[lucenzo11]

There are many ways you could set up finances and there are probably a bunch of posts on here with people talking through various ways in which they do things. I'll offer up two options for consideration.

Option 1: Open shared checking/savings. You talk it through and agree on an amount that each of you will contribute to the shared accounts each month. It could be a percentage of income, 50/50, or just a predetermine split. Seems like you want to take on a little more so maybe you agree to put in more than her. All standard bills get paid out from the shared account. Savings isn't totally necessary here, but you could use it as your emergency fund or use the savings for a near term goal like a vacation or semi-big purchase in the next year or so. Whatever is leftover in your separate accounts in yours to spend or save or whatever. But even if those are separate, you probably want to talk about those too just to make sure those are aligned with any long term goals. The pros of this is that they aren't too different form what you have now and it still maintains your separate income streams, allows her to feel like it's her money as you stated that is one your goals here. The cons are that for some people this still feels like separate finances that just combine money to pay bills and the bulk of the finances are still separate. This really then just comes down to the mentality behind it. You can have separate accounts but financially view your money as being pooled together still.

Option 2: Open shared checking/savings. Redirect all income to go into shared accounts. Pay all bills out of here and then setup auto transfers of set amount to your individual accounts each month. This set amount is for each of you to spend on whatever you want. I like this method because then you actually see how much you are bringing in combined as one unit. It can be very powerful and for some couples it makes it easier to budget and set goals of what they want to do. The con of this method is that some people can feel like their auto transfer to their account is an allowance like they are a child when that's not really the point of it.

Credit cards kind of just build on top of these. You can add a shared credit card that gets paid from the shared checking or you can have separate credit cards that get paid from the separate checking. The main issue with both the options above is that it's a lot of accounts and can feel complicated. If you get to this point, try to consolidate as much as you can which is why some couples just go fully to having completely shared finances.

As for bank account recommendations, if you are just paying bills, it doesn't matter too much. If you will do actual savings, may sure it's high yield savings. I use Ally as they have been pretty good at adjusting savings interest rates but they aren't the highest out there right now. https://www.doctorofcredit.com/high-interest-savings-to-get/ This site has a list of the highest interest rates out there. Just be careful for intro rates and other limitations that banks like to use.

[patchyfacialhair]

My wife and I got married in 2015. Other than workplace retirement accounts, we combine everything and don't have his or her stuff. We both direct deposit into checking at the local credit union, and we have a joint savings account there too. My wife and I do a quick verbal check in on any purchases that are out of the ordinary (clothes, recreation, unnecessary items, etc.

At the end of the day, you got married for a reason, and maybe I'm too shaped by my religious upbringing but we truly don't think about "her stuff" or "my stuff." It's "our" stuff and that includes money.

[Laura33]

Both paychecks go into one account, each spouse has a separate checking account and each gets a set amount transferred monthly for fun money, all bills are paid out of the main account, budgeting and goal setting happens jointly. Both should have access to all online accounts. Both should be able to pay the bills, update the budget, etc, though for practical purposes it'll probably be one or the other on a day to day basis.

That's one way of handling it. Do whatever works for you, so it'll take some trial and error and lots of communication.

+1. 

We opened a joint checking account that was tied to two individual savings accounts (he was moving anyway, so we just used my bank).  Paychecks went into joint account, with predesignated fun money automatically directed into individual accounts (work let us split the direct deposit).  Joint account/joint budget included everything that we agreed on, including vacations, hobbies, etc., even if only one person enjoyed (on the theory that (a) our combined job was to make both of us happy regardless of what did/didn't cost $, and (b) it would probably even itself out somewhat over time anyway).  Fun money went to either gifts for the other person or splurges that the other wouldn't have done (e.g., when he wanted $120 Oakleys instead of $10 Walgreens sunglasses).  Really, though, over time, even those sorts of things started to go into the main account.

We also got one new CC in both of our names; over time, we increased that as we took advantage of CC points, but both of us still have our own individual CCs that predate marriage -- not for any particular reason, just that there was no reason to convert everything to joint since we had a joint card with good rewards, and it's nice to have at least one card where he doesn't see what I billed his Christmas present to.  ;-)  But all the CCs are automatically paid from the main account; when I do something separate from my account, I just transfer the money over from savings.

FWIW, the most important thing is that you guys agree on what the both of you pay for and what is individual.  I mean, if he had thought our joint budget included Oakleys and I thought it meant Walgreens, that would have been a problem.  (Actually, come to think of it, that was a problem -- it was THE problem that led to the individual "fun money" solution).

[lifeandlimb]

Posting to follow. In a similar place to you OP, a few months behind.
Does anyone here use budgeting apps with shared/semi-shared finances? Any opinions or experience to share on that?

[DCW]

We keep it simple.
-Joint checking account that both paychecks go into.
-Joint online savings for extra cash/emergency fund.
-We each have a card for all of the credit cards we have. Paid off every month.
-We manage our finances with excel. We both log income, expenses, investments, savings, etc and use it to track month to month.
-We both have ownership of the process and are free to exercise discretion with whatever we decide to spend money on individually.
-We don't have a set dollar amount for purchases that would require a "check-in". We just tend to "know" when to run it by one another. 

^The only way that this works is if both partners have an equal vote, shared vision, and clear values with regards to how money is utilized, regardless of who makes/spends more/less money. Was there friction at times during the transition from separate to combined? Of course! It required us to come together and make decisions about what was best for the marriage, not necessarily what was best for each other as individuals. I will say that my spouse and I share the same core values around money (and most other things), so the growing pains were just part of the normal process of coming together as one. I'm thankful for that.

Ultimately, the logistics of how you implement whatever system you decide to use doesn't matter. What matters most is that you both are on the same page and to always communicate to one another if you feel things are becoming one sided in any way.

[RWD]

We have a joint account at Ally Bank which handles almost everything. If we purchase something it's always on credit cards so there's no point in his/hers accounts.

Ultimately, the logistics of how you implement whatever system you decide to use doesn't matter. What matters most is that you both are on the same page and to always communicate to one another if you feel things are becoming one sided in any way.

Exactly.

[seattlecyclone]

This is something that can be different for every couple. My spouse and I tend to be pretty well-aligned on spending habits most of the time, so we don't really see much need to set aside separate accounts for "money that you have permission to spend on things your spouse doesn't think are worthwhile expenditures." Our finances are commingled as much as allowed by law. But for couples where you do have bigger differences of opinions on that, a separate "fun money" account can be a reasonable compromise there. To each their own.

[GuitarStv]

We have one shared account, two credit cards, and one brokerage.  It took about a decade to eventually simplify everything down to that though.

[Villanelle]

All money goes into one account.  Everything combined.  (Technically we each still have our own credit cards that we kept from or single days since they were our oldest, but they are all paid from the same account.)  DH has always made way more than I have, and at times I was earning nothing at all.  My current earnings are scant more than a rounding error in our finances.  I've never felt like I couldn't spend money.  I don't tell him that I bought new lounge pants when I was at Target today getting vaccinated, nor does he tell me when he purchases a new guitar book.  For large purchases we mention it, but even then it isn't so much asking permission as it is making sure we don't both make large purchases at the same time and gum up our cash flow. 

This certainly doesn't work for everyone.  We are very fortunate to be on the same page about finances, and to implicitly trust that the other person isn't going to suddenly start blowing thousands of dollars on stuff. 

I think that having a joint account and then transferring a set amount of fun money, or whatever you choose to call it, to individual accounts makes sense.  For me, I don't think it would work.  Once we started trying to split costs or categorize them as  mine/his/ours, the way my brain works, I would get annoying and obsessive over it.  Like, those pants I bought will replace a very worn pair, and I will live in them all winter.  Is that a necessity, or a personal item.  If I need a gown to wear to a work event for DH, is that his, mine, or ours?  Snack foods? Dog toys?  Replacing DH's lounge pants that have huge holes in them, but that he's still happy to wear, including out in public walking the dogs?

Once I got started trying to categorize, I'm certain my over-developed focus on fairness would kick in, and there's just too much gray area.  While I see the logic of that, I don't see how it doesn't devolve into petty squabbling over whether buying a decorative candle to have it when his mom visits is his/hers/ours.  So for us, it's just everything from one big pot and trusting that no one will take advantage.  20+ years in, it's worked so far.