The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: mh1361 on March 20, 2014, 09:10:37 AM
-
I googled this, but basic wedding vows are as follows: "I, (name), take you (name), to be my (wife/husband), to have and to hold from this day forward, for better or for worse, for richer, for poorer, in sickness and in health, to love and to cherish; from this day forward until death do us part."
For everyone who is married but keeps their finances separate, how does it work as part of a committed relationship, that is supposed to last until someone dies? I just don't get it, but I'd like to understand the thinking better. How can you be so committed to each other to get married, professing vows (if you did), and seemingly lead separate lives by keeping your finances separated? To me (I'm getting married in a few months), if either myself or my fiancee wanted to keep finances separate, I would be thinking that one of us is thinking that the marriage might not work out. And if that's the case, I wouldn't be getting married. I'm sure I'll get blasted for this, but hopefully I can learn something from it.
-
I think that for many couples keeping finances separate actually helps the marriage work out. If you combine all of your finances then essentially every purchase is a joint purchase and therefore should be a joint decision, or at least open to veto by both parties. If, on the other hand, you both earn your money separately and have different ideas of what you would like to spend it on then you are free to do so as long as you are still upholding your end of paying for shared expenses.
That being said, I think it would be very difficult to keep all finances *completely* separate. After all, if you live together you obviously have some shared expenses such as housing. One way to deal with this is to have both parties contribute to a joint account or pool for those shared expenses, and keep the rest of their income for themselves.
One thing that's always seemed bizarre to me is couples who completely combine their finances and then buy gifts for each other. What's the point, when you're using their own money to buy them a gift?
-
Broadly, I think keeping finances separate forces each person to be economically self-sufficient and keep tabs on their own income, spending, and saving. It can almost be seen as a form of budgeting. It reduces the chance of "tragedies of the commons" where perhaps each party feels like they can meaningful boost their spending because of their partner's salary. When each person is economically self-sufficient, the chance that resentment builds over money issues diminishes considerably. You won't get worked up over her $100 salon bill and she won't get worked up over your $300 gadget because each of you is in charge of your own financial sphere. This is probably an especially useful approach when your partner has different attitudes about money. It may be better to ring-fence this aspect of your relationship in order to minimize conflict.
It's obviously not for everyone, and probably works best in a dual income household, but I don't see it as inherently pessimistic. It also doesn't mean you can't set savings targets and work toward common economic goals.
-
We keep accounts separate but have a combined budget and treat all spending as shared. I'm guessing that's not what you mean by separate finances? Either way, we didn't use those vows, which are ridiculous in my opinion.
-
One thing that's always seemed bizarre to me is couples who completely combine their finances and then buy gifts for each other. What's the point, when you're using their own money to buy them a gift?
Gifts are really more about the thought than about how much value was extracted from the exchange. I mean, if I buy my sister a $20 Christmas gift, and she buys me a $20 Christmas gift, by your logic what was the point?
-
One thing that's always seemed bizarre to me is couples who completely combine their finances and then buy gifts for each other. What's the point, when you're using their own money to buy them a gift?
Gifts are really more about the thought than about how much value was extracted from the exchange. I mean, if I buy my sister a $20 Christmas gift, and she buys me a $20 Christmas gift, by your logic what was the point?
That's actually exactly what I think, especially when it comes of gift exchange circles (office gift exchange, etc.).
Regarding the separate finances, it's much like anything else in a relationship. As long as the arrangement has been discussed, mutually agreed upon, and both parties are on board for long term goals I don't think there's any "wrong" way for two people to join finances or not as the case may be.
-
I think that for many couples keeping finances separate actually helps the marriage work out. If you combine all of your finances then essentially every purchase is a joint purchase and therefore should be a joint decision, or at least open to veto by both parties. If, on the other hand, you both earn your money separately and have different ideas of what you would like to spend it on then you are free to do so as long as you are still upholding your end of paying for shared expenses.
But if you're able to commit to something like marriage, then you should be emotionally connected enough to be able to discuss spending priorities without causing a fight, right? I guess it seems like avoiding a conflict vs. dealing with one. And avoiding always seems to end poorly.
One thing that's always seemed bizarre to me is couples who completely combine their finances and then buy gifts for each other. What's the point, when you're using their own money to buy them a gift?
Totally agree about this. Especially if I tell her exactly what to get. I'm trying to mold Birthdays/Christmas into something a little different for us. Like I cook dinner for her for a week, or she reads a book that I've wanted her to read. Or something like that. And probably something service orientated for Christmas.
-
Broadly, I think keeping finances separate forces each person to be economically self-sufficient and keep tabs on their own income, spending, and saving. It can almost be seen as a form of budgeting. It reduces the chance of "tragedies of the commons" where perhaps each party feels like they can meaningful boost their spending because of their partner's salary. When each person is economically self-sufficient, the chance that resentment builds over money issues diminishes considerably. You won't get worked up over her $100 salon bill and she won't get worked up over your $300 gadget because each of you is in charge of your own financial sphere. This is probably an especially useful approach when your partner has different attitudes about money. It may be better to ring-fence this aspect of your relationship in order to minimize conflict.
It's obviously not for everyone, and probably works best in a dual income household, but I don't see it as inherently pessimistic. It also doesn't mean you can't set savings targets and work toward common economic goals.
I think I would respond the same as I did for the first half of Posthumane's post.
-
We keep accounts separate but have a combined budget and treat all spending as shared. I'm guessing that's not what you mean by separate finances? Either way, we didn't use those vows, which are ridiculous in my opinion.
Why are they ridiculous? And in your mind, is part of the reason to keep accounts separate so that if you were to ever split, it would be easier?
-
No married but together for over 10yrs.
Finances combined since 2nd year together (moved in). No issues at all.
-
No married but together for over 10yrs.
Finances combined since 2nd year together (moved in). No issues at all.
What made you want to combine finances?
-
Our ceremony went something like: These two have been committed to each other- this ceremony doesn't change their relationship, just publicizes it. For the crowd: You two like each other, right?
Totally paraphrased, but pretty much it.
We have separate accounts, but are pretty lax about who pays for what. Also, completely transparent, and we discuss expenditures over a certain threshold. No veto power, but we're pretty good at taking each other's opinions into account.
We're choosing to spend our (separate) lives together, not having one unified life. Very important to me is the lack of an assumption that the other person will be around, no matter what. No taking each other for granted- every day, we choose to be together. We choose that each day through the tough times, and the good times, but it's never taken for granted.
-
For myself, combined finances would cause me a lot of stress. Sure, we could probably find a way to make it work, but why compromise if you don't have to and invite extra stress into your life? We have a good system now that we're both happy with. We have joint credit cards and separate bank account/investment accounts. Once a month he e-transfers me his half of the rent, and twice a month we pay off our portions of the credit cards, which have all our expenses on them.
I don't see why a couple who has a functioning system should feel obligated to change it on account of getting married. If it works, and you're both happy, great!
I do think it's important to be fully aware of each other's financial situation, and have regular discussions to make sure you're on the same page. In our case, we share Mint data and discuss spending daily, and discuss investments and net worth increases about once a month when we do our month-end accounting/retirement journals. Definitely you don't want to have secrets here.
-
How can you be so committed to each other to get married, professing vows (if you did), and seemingly lead separate lives by keeping your finances separated? To me (I'm getting married in a few months), if either myself or my fiancee wanted to keep finances separate, I would be thinking that one of us is thinking that the marriage might not work out.
Separate bank accounts means separate lives? That's quite the leap. I could just as easily turn it around. Why do you feel the need to combine finances? Don't you trust your spouse? You need to constantly monitor his/her spending in order to have a successful relationship? Sounds pretty controlling to me.
-
I don't see why a couple who has a functioning system should feel obligated to change it on account of getting married. If it works, and you're both happy, great!
I do think it's important to be fully aware of each other's financial situation, and have regular discussions to make sure you're on the same page. In our case, we share Mint data and discuss spending daily, and discuss investments and net worth increases about once a month when we do our month-end accounting/retirement journals. Definitely you don't want to have secrets here.
I completely agree with that. I too will be getting married in the not too distant future and it looks to me that our financial situation will remain largely unchanged. Right now they are mostly separate, though we do share housing expenses in proportion to our salaries (i.e. I make X times what she makes, so I pay X times as much as her for mortgage, etc.).
Just because we are getting married does not mean, to us, that we become one big person. We still have may different interests and different things that we value and choose to spend money on. I do not understand why the OP thinks this makes us less committed to the relationship than we would be if we combined everything - the reason I have my stuff and she has hers is not so we can separate it in case of divorce but because I have no interest in her stuff and she has no interest in mine. When there is something that we both want to buy, we buy it together. We also don't share clothing or hygiene products...
-
For us (no pre-nup) it doesn't make sense to have separate finances, since if we got divorced, it would all be split evenly, and when we reach retirement age, its all going to be used jointly.
I can understand the theory of having separate finances, but in practice it would make me batty, because when you are legally married, the law considers it all a joint pot of money (barring pre-nups, etc). That said, we do have our own "fun money" each month for personal purchases. Its not completely black and white. I guess for me it comes down to: if I didn't trust my spouse with money, they wouldn't be my spouse, and if i do trust them, why do we need separate money?
I think we did the traditional vows out of habit/convenience but we didn't exactly mean them literally.
-
We keep accounts separate but have a combined budget and treat all spending as shared. I'm guessing that's not what you mean by separate finances? Either way, we didn't use those vows, which are ridiculous in my opinion.
Why are they ridiculous? And in your mind, is part of the reason to keep accounts separate so that if you were to ever split, it would be easier?
I think they are ridiculous because I believe they contain unreasonable promises. I took my vows very seriously and was not willing to say something that I knew was untrue (i.e., to promise to stay with someone no matter what, until either they die or I die). I'm not anticipating divorce and will work my ass off to keep my marriage strong (and expect my partner to do the same), but it could happen that one or both of us changes so significantly that divorce becomes a good option. We haven't combined our accounts because it doesn't seem necessary. What's the advantage?
-
As far as we're concerned, when we got married we became one big person, so that's the way we behave. All income is joint. All expenses are shared. Furthermore, since we anticipate having children and me staying home, I'm not going to provide the same fiscal contribution, and my husband would be a jerk to expect that.
In practice, my husband hands me every cent we make and I pay all the bills, decide spending priorities, and handle our investments.
That's how we're looking at it.
-
I can understand the theory of having separate finances, but in practice it would make me batty, because when you are legally married, the law considers it all a joint pot of money (barring pre-nups, etc). That said, we do have our own "fun money" each month for personal purchases. Its not completely black and white.
I just wanted to bold the above because every time a forum has this discussion there are assumptions about what "separate" and "joint" mean. I imagine that few people have a 100% joint (one account) or 100% separate (completely separate accounts and payments) approach. Most use a "yours-mine-ours", whether that is a cash allowance from a joint account or a % into joint and the rest is "mine". If you have a joint account but keep a separate account each for personal spending, is that "joint" or "separate"? That line varies person to person and can muddy the waters because someone will write apples and another will read oranges.
-
How can you be so committed to each other to get married, professing vows (if you did), and seemingly lead separate lives by keeping your finances separated? To me (I'm getting married in a few months), if either myself or my fiancee wanted to keep finances separate, I would be thinking that one of us is thinking that the marriage might not work out.
Separate bank accounts means separate lives? That's quite the leap. I could just as easily turn it around. Why do you feel the need to combine finances? Don't you trust your spouse? You need to constantly monitor his/her spending in order to have a successful relationship? Sounds pretty controlling to me.
It was supposed to sound drastic for discussions sake. I think confessing those vows invalidates your points as far as monitoring and trust. If I truly felt the need to do that, why would I be marrying that person? As to why do I feel the need to, it's the sense of oneness as serpentstooth described. I would feel like I'm hiding something. And this is more practical and less ideological, but the idea of paying the other person every month for rent, grocers, utilities, and everything else seems like a chore.
-
No one likes to view it this way... we tend to be hopeless romantics.... but in reality marriage is a business partnership. And like a business partnership, there are a zillion ways to structure it. Most of them are potentially workable.
"Separate finances" is not for me. But that's me. I just don't see it as a big deal in and of itself. Now: the reasons you want to keep it separate may potentially be hiding a big deal. (He's going to spend all my money... or She is controlling me via our checkbook or any number of other things.)
-
We keep accounts separate but have a combined budget and treat all spending as shared. I'm guessing that's not what you mean by separate finances? Either way, we didn't use those vows, which are ridiculous in my opinion.
Why are they ridiculous? And in your mind, is part of the reason to keep accounts separate so that if you were to ever split, it would be easier?
I think they are ridiculous because I believe they contain unreasonable promises. I took my vows very seriously and was not willing to say something that I knew was untrue (i.e., to promise to stay with someone no matter what, until either they die or I die). I'm not anticipating divorce and will work my ass off to keep my marriage strong (and expect my partner to do the same), but it could happen that one or both of us changes so significantly that divorce becomes a good option. We haven't combined our accounts because it doesn't seem necessary. What's the advantage?
It seems like you are extremely committed to your relationship, so I don't really understand why you think they are unreasonable. I'm not sure what a significant enough change looks like that would make divorce an option.
-
For myself, combined finances would cause me a lot of stress. Sure, we could probably find a way to make it work, but why compromise if you don't have to and invite extra stress into your life? We have a good system now that we're both happy with. We have joint credit cards and separate bank account/investment accounts. Once a month he e-transfers me his half of the rent, and twice a month we pay off our portions of the credit cards, which have all our expenses on them.
I don't see why a couple who has a functioning system should feel obligated to change it on account of getting married. If it works, and you're both happy, great!
I do think it's important to be fully aware of each other's financial situation, and have regular discussions to make sure you're on the same page. In our case, we share Mint data and discuss spending daily, and discuss investments and net worth increases about once a month when we do our month-end accounting/retirement journals. Definitely you don't want to have secrets here.
How do you handle groceries?
-
One reason we keep finances separate in our daily lives is it makes it much easier for my taxes: I'm a US citizen, he's not, and he believes his income is his own business, not that of the US gov't. That said, he and I sometimes have have different spending styles, rates, and priorities. Keeping most of our accounts separate really makes things more straightforward.
For retirement however we currently combine finances nearly 100%. If I start investing in US index funds however I'll have to keep those separate - again because of the US government.
-
And this is more practical and less ideological, but the idea of paying the other person every month for rent, grocers, utilities, and everything else seems like a chore.
That would seem like a chore to me too. We skip that part. I have my bills, she has hers, and we alternate paying rent. Is it 100% "fair"? No. Do we care? No. We don't keep score.
-
We keep accounts separate but have a combined budget and treat all spending as shared. I'm guessing that's not what you mean by separate finances? Either way, we didn't use those vows, which are ridiculous in my opinion.
Why are they ridiculous? And in your mind, is part of the reason to keep accounts separate so that if you were to ever split, it would be easier?
I think they are ridiculous because I believe they contain unreasonable promises. I took my vows very seriously and was not willing to say something that I knew was untrue (i.e., to promise to stay with someone no matter what, until either they die or I die). I'm not anticipating divorce and will work my ass off to keep my marriage strong (and expect my partner to do the same), but it could happen that one or both of us changes so significantly that divorce becomes a good option. We haven't combined our accounts because it doesn't seem necessary. What's the advantage?
I'm not sure what a significant enough change looks like that would make divorce an option.
Not being able to think of a reason for divorce does not suggest, to me, that a reason does not exist. Maybe you have better self-knowledge than I do. That said, I can think of a number of things that could motivate me to leave my partner (murder, rape, infidelity, abuse, etc). I would like to think that my spouse and I did a pretty good job vetting each other, but you never really know. Knowing that, and also knowing that I'm not willing to break my vows, my spouse and I worked together to create something mutually agreeable.
Even if you do believe in those particular vows, you might think about rewording them to something a little less trodden. Kind of like the "Love is patient" reading, those vows seem impersonal and border on the meaningless, in my opinion.
-
Obviously stuff like Roths and 401ks goes into our separate accounts, but if there was a way to combine them into one "Mr. and Mrs. Serpentstooth" account with double the contribution limits, I'd do it in a heartbeat.
Totally agree! Our 100% combined setup sounds virtually identical to the serpentstooth's.
-
How do you handle groceries?
They all go on the joint credit cards, which are tracked in Mint. Twice a month when we do payouts, Mint adds up the total grocery cost for that period and we each pay half of that.
-
So before joint accounts existed people didn't actually mean their vows...
Snark aside whatever works for the relationship regardless of vows is probably what's best. Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
Why are you assuming that separating finances is the results of an attempted (and failed) open dialogue? Do you agree that separate finances can be the result of an open (and continuing) dialogue? I see combined finances where only one partner has interest/active participation other than spending in much the same way - avoiding conflict. The difference is that I accept that can be a valid and agreed upon situation and I don't judge their relationship as any less meaningful or fulfilling.
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
Why are you assuming that arguments and disagreements are the reason for separate finances. What if you agreed with happy rational discussion that separate finances work best for you?
-
This thread is relevant to my interests. We are planning for separate finances primarily because I can probably only take a few more years, at most, of the daily grind. She is just starting her career and has very few assets. So separate finances allows us to keep things fair at a high level (if "my" investments aren't performing well enough to cover "my" half of the expenses, then I'd have to go back to work. Similarly, she can quit once "she" has saved enough for retirement). At the same time, she may never want to quit (since she hasn't started her job yet, who knows how much she will like it?).
I also agree that you never know what might cause a divorce. People often change, and not on purpose. It has nothing to do with trust to recognize that sometimes things just don't work out. Some day, when we are both retired, I don't see a problem with combining accounts for estate purposes (avoiding probate is good).
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
Why are you assuming that arguments and disagreements are the reason for separate finances. What if you agreed with happy rational discussion that separate finances work best for you?
This is relevant to Smalllifes question as well. I was saying IF arguments and disagreements were the reason for separate finances. I never said "the only reason people ever have separate finances is because they fight and bicker over money all the time."
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
Why are you assuming that separating finances is the results of an attempted (and failed) open dialogue? Do you agree that separate finances can be the result of an open (and continuing) dialogue? I see combined finances where only one partner has interest/active participation other than spending in much the same way - avoiding conflict. The difference is that I accept that can be a valid and agreed upon situation and I don't judge their relationship as any less meaningful or fulfilling.
Yes, I agree that separate finances can be the result of an open (and continuing) dialogue. Obviously there are plenty of examples where that is the case. And, I think I agree with the bolded sentence. An open dialogue about finances, joint or separate, is probably the healthiest for a relationship.
-
I think each couple should do what works for them. I have been married 3x's and have not done it the same in each marriage. It also depends on what stage of life you are at and how much $ each person has entering the relationship for some people. Couples should do whatever works best for them-no right or wrong way to do it!
-
Every person will have a different point of view. Do what works for you. That's all that counts. We have a combination. We are very happy. It's important that we both take some financial responsibility. If something ever happens to me, my spouse needs to be comfortable handling finances. Also, we like having some of our own money. We are not "one big person" nor do we want to be. Not knocking those that do, it's just not how we roll. It's not a trust issue - we are very open about everything (have each others' account info and all of that). Money is just a tool for us and we use it as we see fit. It does helps that we are both frugal and communicate a lot about our finances and goals.
There are small things my spouse would never buy for herself or with joint money. She does, however, enjoy these things (i.e. flowers). I enjoy bringing her flowers randomly - she really likes them. She knows that I think before I buy anything, so if I am getting her a gift, it's because I want to get her something she can just enjoy - guilt free. She does the same for me.
-
For everyone who is married but keeps their finances separate, how does it work as part of a committed relationship, that is supposed to last until someone dies? I just don't get it, but I'd like to understand the thinking better. How can you be so committed to each other to get married, professing vows (if you did), and seemingly lead separate lives by keeping your finances separated? To me (I'm getting married in a few months), if either myself or my fiancee wanted to keep finances separate, I would be thinking that one of us is thinking that the marriage might not work out. And if that's the case, I wouldn't be getting married. I'm sure I'll get blasted for this, but hopefully I can learn something from it.
Been married for almost 30 years. DH and I have always had a joint account to run our home and provide for our kids. We also each maintain separate accounts for our discretionary spending.
It works for us.
Explain to me the logic behind this phrase: "seemingly lead separate lives by keeping your finances separated". How does the use of separate personal accounts yield two lives led separately or that the number of checking accounts one has determines how "committed" you are to your spouse? When one "knows thyself" you take that and hopefully act in accordance with what has the best chance of creating a system that will work comfortably for both spouses. I have to show your post to my husband.......it'll give him a chuckle.
You're in a for a very, very rough ride if you decide up front(and this goes for any matter not just finances) that this is how something has to be and not recognize that reality often has a way of changing certain decisions that you made early in the process. I suspect that you might have other doubts regarding marriage and what it will mean for you.
The all or nothing approach when dealing with marriage for many aspect doesn't always work out.
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
I think what troubles you is that you ignored my bolded part above. Whatever that may be, joint accounts, separate finances... whatever.
And isn't just as easy to say what you said but replace separating with combining? Why is combining finances a special flower that prevents conflict?
-
I think that for many couples keeping finances separate actually helps the marriage work out. If you combine all of your finances then essentially every purchase is a joint purchase and therefore should be a joint decision, or at least open to veto by both parties. If, on the other hand, you both earn your money separately and have different ideas of what you would like to spend it on then you are free to do so as long as you are still upholding your end of paying for shared expenses.
And this is usually how problems start....should? Based on what rule book? You're not the arbitor of my marriage....I can assure you of that. In addition, DH and I are the experts on what should and should not happen for us in our organziation which by the way I have over 29 years more experience in running that you do
-
I also agree that you never know what might cause a divorce. People often change, and not on purpose. It has nothing to do with trust to recognize that sometimes things just don't work out.
I agree. This is also my perspective, if that was not clear in my other postings.
OP says s/he wouldn't be getting married if s/he thought the marriage might not work. If I interpret this literally (which I doubt the OP meant it to be), s/he is 100% certain that the marriage will last until one or other dies. To me, this position (again, not claiming OP meant it this way) is dishonest and likely counterproductive to a long-lasting marriage. Isn't it easier to be proactive about your relationship if you acknowledge that longevity isn't certain, that you are likely not perfectly matched across every aspect of life?
-
She's alway been the breadwinner so it was a no-brainer for me :) At that start she made about 3x what i did... now it's about 1.5-2x :)
Haha, but really as corny as it's gonna sound, we both knew we were going to stay and grow old together. We wanted to simplify our arrangements so we just combined everything (of course our employer RRSP "401k equiv in Canada" are separate as that is with our companies).
Currently we're just living off my income and putting hers away.
No married but together for over 10yrs.
Finances combined since 2nd year together (moved in). No issues at all.
What made you want to combine finances?
-
I can understand the theory of having separate finances, but in practice it would make me batty, because when you are legally married, the law considers it all a joint pot of money (barring pre-nups, etc). That said, we do have our own "fun money" each month for personal purchases. Its not completely black and white.
I just wanted to bold the above because every time a forum has this discussion there are assumptions about what "separate" and "joint" mean. I imagine that few people have a 100% joint (one account) or 100% separate (completely separate accounts and payments) approach. Most use a "yours-mine-ours", whether that is a cash allowance from a joint account or a % into joint and the rest is "mine". If you have a joint account but keep a separate account each for personal spending, is that "joint" or "separate"? That line varies person to person and can muddy the waters because someone will write apples and another will read oranges.
We have 100% joint. The only thing separate is our credit cards, and that's because we both kept what we had prior to marriage. Technically, we have more than one account, but that's to take advantage of various benefits we can get from different banks. They are all joint, however. It never occurred to me that we were odd or one of a rare "few" in that situation. Is that really uncommon?
Everything is joint and we spend whatever we please. It is all "ours", without exception or sectioning or anything else. If there will be a super large purchase not on a credit card (which happens almost never), DH tells me since I am the one who manages the accounts and makes transfers as necessary. Again, it never occurred to me that our set up is rare. Is it really?
-
Again, it never occurred to me that our set up is rare. Is it really?
I don't think it is. This is the setup we have as well. If I had to guess, I would say that most people who say they have joint accounts really do have 100% joint accounts. Not all, of course, but in general.
-
Again, it never occurred to me that our set up is rare. Is it really?
I don't think it is. This is the setup we have as well. If I had to guess, I would say that most people who say they have joint accounts really do have 100% joint accounts. Not all, of course, but in general.
This might be a generational thing - most of my exposure to married finances are mid 20s/early 30s. Even my parents have separate credit cards in addition to the joint account. So it's rare for my circle of friends but might not be in others (the only ones I know of got married right out of school and an armed forces couple). Learned something new!
-
For everyone who is married but keeps their finances separate, how does it work as part of a committed relationship, that is supposed to last until someone dies? I just don't get it, but I'd like to understand the thinking better. How can you be so committed to each other to get married, professing vows (if you did), and seemingly lead separate lives by keeping your finances separated? To me (I'm getting married in a few months), if either myself or my fiancee wanted to keep finances separate, I would be thinking that one of us is thinking that the marriage might not work out. And if that's the case, I wouldn't be getting married. I'm sure I'll get blasted for this, but hopefully I can learn something from it.
Explain to me the logic behind this phrase: "seemingly lead separate lives by keeping your finances separated". How does the use of separate personal accounts yield two lives led separately or that the number of checking accounts one has determines how "committed" you are to your spouse? When one "knows thyself" you take that and hopefully act in accordance with what has the best chance of creating a system that will work comfortably for both spouses. I have to show your post to my husband.......it'll give him a chuckle.
You're in a for a very, very rough ride if you decide up front(and this goes for any matter not just finances) that this is how something has to be and not recognize that reality often has a way of changing certain decisions that you made early in the process. I suspect that you might have other doubts regarding marriage and what it will mean for you.
The all or nothing approach when dealing with marriage for many aspect doesn't always work out.
As I mentioned before, I said it that way to spark more discussion. Thanks for posting, clearly with your lengthy marriage you bring a lot of experience to the topic. To me, if you're married you'll have similar life goals, and so you're spending would probably reflect that. IF people have separate accounts because they want to fund their lifestyle and their spouse doesn't agree with it, then that doesn't make a ton of sense to me. If people have separate accounts just because it's more practical in some way, then great. mbl, do you see the money as yours, mine, and ours?
-
Keeping an open dialogue on finances and striking a balance that works for that particular relationship is the important part.
I guess what troubles me about that is if some people try for an open dialogue, end up arguing and separating finances, then they're just avoiding conflict. I imagine it would come up again and again.
I think what troubles you is that you ignored my bolded part above. Whatever that may be, joint accounts, separate finances... whatever.
And isn't just as easy to say what you said but replace separating with combining? Why is combining finances a special flower that prevents conflict?
Scroll up to see my response to a post by smalllife. You'll see that I don't think it's a special flower.
-
I don't know about other jurisdictions, but in my part of Canada, separate accounts have absolutely no effect in case of divorce. The legal process is simple: the Court takes everything that has been accumulated during the marriage and splits in two.
Of course, there are prenups to arrange for different ways, but they have to be negotiated and signed by both spouses. And even then, some things cannot be signed away in prenups.
In my couple, I consider everything that my wife earns over what is needed for necessary expenses "mad money" since she has a DB pension plan and a guaranteed job.
-
This thread is relevant to my interests. We are planning for separate finances primarily because I can probably only take a few more years, at most, of the daily grind. She is just starting her career and has very few assets. So separate finances allows us to keep things fair at a high level (if "my" investments aren't performing well enough to cover "my" half of the expenses, then I'd have to go back to work. Similarly, she can quit once "she" has saved enough for retirement). At the same time, she may never want to quit (since she hasn't started her job yet, who knows how much she will like it?).
I also agree that you never know what might cause a divorce. People often change, and not on purpose. It has nothing to do with trust to recognize that sometimes things just don't work out. Some day, when we are both retired, I don't see a problem with combining accounts for estate purposes (avoiding probate is good).
I'm in a similar position (she's just starting her career and I want to get out of the grind ASAP), which is why we have separate finances and are investigating a pre-nup for our wedding.
-
First Marriage: Joint, except for named accounts like 401k's. That marriage did not end because of finances.
2nd Marriage: Joint for shared expenses, separate for everything else. With two established adults already with their own children, assets, and accounts, combining everything seems contrived/artificial. It would be more work to artificially combine everything than to just let things remain as they are. Also drew up a prenup for this 2nd marriage, to protect my own interests and my kids'.
Obviously I agree with all the others who have said that maintaining some separate finances/accounts or having a prenup is not "planning for failure," any more than having a smoke alarm is planning for a fire or having insurance is planning for an accident. It's a prudent hedge against catastrophe, no matter how likely or unlikely.
Also, if I substituted the word "activities" for "finances", I think it would seem ridiculous to say "we have to do all activities jointly, otherwise we're just maintaining separate lives and planning to divorce one day." Maintaining separate finances is really no different, for all the very good reasons others have pointed out.
@KingCoin, I think you laid it out very well
-
I think that for many couples keeping finances separate actually helps the marriage work out. If you combine all of your finances then essentially every purchase is a joint purchase and therefore should be a joint decision, or at least open to veto by both parties. If, on the other hand, you both earn your money separately and have different ideas of what you would like to spend it on then you are free to do so as long as you are still upholding your end of paying for shared expenses.
And this is usually how problems start....should? Based on what rule book? You're not the arbitor of my marriage....I can assure you of that. In addition, DH and I are the experts on what should and should not happen for us in our organziation which by the way I have over 29 years more experience in running that you do
I obviously did not word my original statement very well since what you understood it to mean is not really what I had meant by it. I was not talking about your marriage or what you or other couples should be doing, my statement was in reference to my relationship and so I will try to reword it:
If we had all of our finances combined then I would feel that each time I made a significant purchase outside of what I consider joint expenses (such as if I wanted to say buy a new tool or a part for the airplane) I would feel that such purchases would need to be a joint decision which for me would add a layer of hassle. Same thing the other way for her purchases. As it stands now, while we do discuss the merits of major (or sometimes even very minor) purchases, if we do not agree on something it usually comes down to "well, I don't agree, but it is your money that you earned so do what you like."
While you may have a longer running relationship than mine, our setup has been working for us for a number of years (btw, just because we are not married does not mean that we have not been together any length of time and have no experience). I would suggest you try to be a little less sensitive to random posts on the internet which were intended at no one person in particular.
As to how we handle groceries and such: she works very close to a safeway and often stops there to buy things like fresh fruits and veggies that she thinks we need, several times a week in small quantities, which she pays for from her account. I go to the costco and make a big run for staples which I think we need every few weeks, which I pay for from my account. On average we end up spending similar amounts over a year.
-
Obviously I agree with all the others who have said that maintaining some separate finances/accounts or having a prenup is not "planning for failure," any more than having a smoke alarm is planning for a fire or having insurance is planning for an accident. It's a prudent hedge against catastrophe, no matter how likely or unlikely.
Also, if I substituted the word "activities" for "finances", I think it would seem ridiculous to say "we have to do all activities jointly, otherwise we're just maintaining separate lives and planning to divorce one day." Maintaining separate finances is really no different, for all the very good reasons others have pointed out.
@KingCoin, I think you laid it out very well
+1. Your insurance analogy is one I've used before for getting a pre-nup. My friend and his wife tried to say that it was because we don't trust each other. I said that it's like having catastrophic health insurance. I don't think I'll get in a car wreck or get cancer anytime soon, but that doesn't mean I don't prepare for it in case it comes up. Others see it differently; no big deal.
Is it that I don't trust her, deep down? Perhaps. I trust the girl I know now, but things change, and I've seen too many people get burned. I actually told my fiancee (before we got engaged, of course) that I never wanted to get married because I like to save/invest (more than almost everyone I've met in real life, although par for the course on these forums) and don't want to lose a substantial portion of that money if I get divorced. She then asked about a pre-nup.
Ironically, my friend was close to divorce at one point, and I could see it happening in the future. His wife strikes me as the type who would be ruthless too (he's even hinted at this trait and other red flags when it's just me and him). My fiancee would probably want everything to be fair, so I probably don't need it.
I will say that neither of us plans to be a stay-at-home parent (if we have kids) unless one of us is financially independent on his/her own (I would reach that stage first, most likely). If we have kids, we would probably combine finances at that time.
-
Again, it never occurred to me that our set up is rare. Is it really?
I don't think it is. This is the setup we have as well. If I had to guess, I would say that most people who say they have joint accounts really do have 100% joint accounts. Not all, of course, but in general.
I am the one who said we have individual "fun money". But it isn't separate accounts- it is just 50$ budgeted to each of us to spend on whatever we please. It comes out of the joint account. So things can definitely be very grey. Does that count as separate finances.? I don't think so but maybe some do.
-
Again, it never occurred to me that our set up is rare. Is it really?
I don't think it is. This is the setup we have as well. If I had to guess, I would say that most people who say they have joint accounts really do have 100% joint accounts. Not all, of course, but in general.
Us too. 100% joint. When we were younger we used to withdraw $20 each week each for 'pocket money', but more as a self-limiting and budgeting exercise - so I could buy a coffee and he could buy Magic cards and we wouldn't resent each other for it, or need to track those little expenses.
We're over it now, and we're comfortable with what the other person spends. We have a courtesy arrangement that if there is a $250 plus amount to be spent, we consult each other on whether or not it is really necessary, but in 13 years we've never had a money argument.
-
As far as the insurance policy goes, it seems a little like apples and oranges to me. If you take it even further, could you apply it to kids? You think you'll enjoy having kids and that you'll be a good parent, but if not, they can always go to an orphanage. I'd be interested to hear what some of the other posters that have joint finances think of the insurance analogy.
-
I agree with the poster who noted that a marriage is similar to a business arrangement and there are different ways to manage that. In our case everything is joint but I am in charge of the finances. I'm strong there and the missus isn't, so someone has to take the reins. When it comes to big purchases, we (almost) always discuss that jointly. Frankly speaking, I rarely spend more than $100 on anything without letting the missus know about it first. It's not asking permission per se, but I am spending money from our joint pool and I feel obligated to discuss that with my "business partner" first. Our system has its difficulties, most obviously what to do when we're not on the same page.
I knew a couple that had separate finances and there were flaws in their arrangement as well. He was a very traditional guy who measured himself in part by how much money he made, which was considerably more than his schoolteacher wife. So he was quite (read - too) proud of the fact that he took care of all the major bills while she took care of all the day-to-day spending. She wasn't strong with finances either so again, someone had to steer the ship, but it was far from a perfect system. He became the stereotypical patriarch and she became the deferring wife. That led to some less than great financial decisions that I think two people working as equals from a joint account could have avoided. Since he makes a very nice income I doubt he ever spotted the flaws I did, their spending was always obscenely wasteful yet their bottom line was always just fine. They were the classic examples of big incomes papering over poor spending habits.
For us it is just much simpler to have everything lumped into joint accounts. Why have two AMEX accounts when one will do nicely?
-
Frankly speaking, I rarely spend more than $100 on anything without letting the missus know about it first. It's not asking permission per se, but I am spending money from our joint pool and I feel obligated to discuss that with my "business partner" first.
$100 sort of became our "unspoken agreement" as well. In fact, we've gotten to the point that we've spoken about our unspoken agreement. (Does that nullify an unspoken contract?) Like you: Not because it really matters or because it's permission. It's just a heads up. "I'm buying a nail gun. It's $150."
And in our "totally joint monies" we do have small amounts of "separate monies" that are only delineated by how it is categorized in gnucash. If, for example, someone is given $40 for a birthday gift -- it goes into the big pile and gets tagged with "wife's money" or "Spork's money".
-
Technically we're joint accounts, but we have two joint checking accounts with one as my primary and one his. We each control our own money (direct deposits) and have a single shared savings account. All bills are paid out of my account since we're saving the husband's full paycheck minus his monthly fun money. Works great for us.
And my wedding vows were nothing like that stuff at the beginning. We actually wrote our own and included a line from "Who Framed Roger Rabbit?" (the apple of my eye, the cream in my coffee...) among other things.
-
As far as the insurance policy goes, it seems a little like apples and oranges to me. If you take it even further, could you apply it to kids? You think you'll enjoy having kids and that you'll be a good parent, but if not, they can always go to an orphanage. I'd be interested to hear what some of the other posters that have joint finances think of the insurance analogy.
I think you're missing the point of the analogy.
Having insurance does not make it more likely an accident will happen. Having separate finances does not make it more likely a separation will occur. Having the ability to put your child up for adoption does not make it more likely that you will. That's the point of the analogy.
-
As far as the insurance policy goes, it seems a little like apples and oranges to me. If you take it even further, could you apply it to kids? You think you'll enjoy having kids and that you'll be a good parent, but if not, they can always go to an orphanage. I'd be interested to hear what some of the other posters that have joint finances think of the insurance analogy.
A joint contract between two consenting adults is different than having a child who depends on you. The child didn't come into this world as an informed adult but (likely) rather because you wanted him/her to and obviously without his/her consent. A child doesn't have the maturity or skills (yet) to succeed in the world and it's the parents' responsibility to make sure that happens. Apples and oranges.
I think the insurance analogy holds; perhaps others would see it as an analogy to insurance that they would never buy, such as a premium health care plan that covers everything and has a low deductible or a $5M term life insurance policy (although a pre-nup only costs a few hundred dollars up-front). However, you didn't give a compelling reason why the insurance analogy doesn't apply. Even your orphanage analogy is an insurance policy in a way, although I saw it as a bit of a strawman, as explained above.
Facts are facts: a high percentage of marriages end in divorce and I'm willing to bet that almost none of them think the marriage will end in divorce. I think my fiancee and I have a great thing going; I'd be so bold to say that we are less likely to divorce than 95% of couples out there (we have similar goals, very similar interests, get along very well, etc). However, I also know that my perception is biased and probably no different than anyone who gets married and ends up getting slaughtered in a divorce. If that makes me overly cynical, so be it I guess.
As I said in previous posts, having kids and having a stay-at-home parent changes things, at least it would for my fiancee and me (you can cancel/change pre-nups any time you want). If two working parents with decent careers have kids and still split finances/keep a pre-nup, that is their prerogative. It would be a little tougher but with modern banking it probably isn't that hard.
-
As far as the insurance policy goes, it seems a little like apples and oranges to me. If you take it even further, could you apply it to kids? You think you'll enjoy having kids and that you'll be a good parent, but if not, they can always go to an orphanage. I'd be interested to hear what some of the other posters that have joint finances think of the insurance analogy.
I think you're missing the point of the analogy.
Having insurance does not make it more likely an accident will happen. Having separate finances does not make it more likely a separation will occur. Having the ability to put your child up for adoption does not make it more likely that you will. That's the point of the analogy.
I understand that's the point of the analogy. The point I was making is that if that's part of the decision process, then maybe it's not the time to make that decision. For example, "Let's have kids, worst comes to worst they can go up for adoption." That doesn't sound like people who are ready to have kids. Similarly for marriage, "Let's get married, but since the divorce rate is around 50% we should make plans in case that happens." If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner. Again I'm NOT saying that separate finances means that you are preparing for divorce. Several people have already explained why it's just the practical way to do it. What I am saying is that if you are thinking about getting married, and when it comes to finances, your motivation between having joint or separate finances is down the right what would make a divorce easier, then maybe you should spend a little more time thinking about that. And no, I'm NOT saying that everyone who decides to have separate finances through that motivation will end up getting divorced. Obviously, and thankfully, it works out well for some people.
-
As far as the insurance policy goes, it seems a little like apples and oranges to me. If you take it even further, could you apply it to kids? You think you'll enjoy having kids and that you'll be a good parent, but if not, they can always go to an orphanage. I'd be interested to hear what some of the other posters that have joint finances think of the insurance analogy.
I think you're missing the point of the analogy.
Having insurance does not make it more likely an accident will happen. Having separate finances does not make it more likely a separation will occur. Having the ability to put your child up for adoption does not make it more likely that you will. That's the point of the analogy.
I understand that's the point of the analogy. The point I was making is that if that's part of the decision process, then maybe it's not the time to make that decision. For example, "Let's have kids, worst comes to worst they can go up for adoption." That doesn't sound like people who are ready to have kids. Similarly for marriage, "Let's get married, but since the divorce rate is around 50% we should make plans in case that happens." If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner. Again I'm NOT saying that separate finances means that you are preparing for divorce. Several people have already explained why it's just the practical way to do it. What I am saying is that if you are thinking about getting married, and when it comes to finances, your motivation between having joint or separate finances is down the right what would make a divorce easier, then maybe you should spend a little more time thinking about that. And no, I'm NOT saying that everyone who decides to have separate finances through that motivation will end up getting divorced. Obviously, and thankfully, it works out well for some people.
I think you may be oversimplifying the process of deciding whether to keep finances separate or joint. Unless it is a marriage of convenience I'm pretty sure most people don't walk into the decision process saying "so let's keep our finances separate for when we divorce." They're going to take a broader approach that will take into account their feelings of divorce and the likelihood of it; as well as many other factors such as income disparity, debts, credit worthiness, and financial/life goals. Or at least they should take that broader approach. :)
Narrowing it down to a "So do you think we'll divorce?" or a "Because divorce is prevalent we should have separate finances." as the sole reason why people would maintain separate finances is narrowing it down too much for this sort of topic. There should never be one sole motivator for anything. People should look at their decision making from many angles.
If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner.
If I admit that there are chances I could be hit by a car then I have higher chances of being hit by a car?
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
-
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
You know that affair with Anna is likely going to end in a divorce, right? :)
-
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
You know that affair with Anna is likely going to end in a divorce, right? :)
Not if I don't admit there's a chance. ;)
The GF would be pretty pissed though.
-
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
You know that affair with Anna is likely going to end in a divorce, right? :)
Not if I don't admit there's a chance. ;)
The GF would be pretty pissed though.
Just make sure to put her on your list before it gets laminated.
-
If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner.
If I admit that there are chances I could be hit by a car then I have higher chances of being hit by a car?
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
But whether you divorce or not is not random chance. The divorce rate for the population as a whole may be 50%, but that doesn't mean that you personally have a 50/50 shot of making it. The rate of obesity in the general population is 67%. That doesn't mean that I, personally, have a 67% chance of being overweight. If I went through life making decisions as if I might one day be overweight, yeah I think that could potentially increase the "odds" of my becoming so:
"Hmm, I wear a size 4 now, but most people gain weight as they age so I'll buy a size 6 just in case."
"Hmm, I don't feel like eating cookies right now, but most people stress eat, so I'll buy them just in case."
"Hmm, I fit pretty well in a compact car, but I might gain weight - most people do - so I'll buy a full size car just in case."
You don't think that this way of thinking could have any impact, however small, on whether or not I actually gain weight? Both weight gain and divorce have an element of control to them - there is psychology at play. Obviously, that doesn't mean ignoring the possibility of either - but I would contend that one's resources are better spent in preventative measures (exercise, learning about nutrition) than in preparing for failure (buying larger clothes, just in case).
-
If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner.
If I admit that there are chances I could be hit by a car then I have higher chances of being hit by a car?
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
But whether you divorce or not is not random chance. The divorce rate for the population as a whole may be 50%, but that doesn't mean that you personally have a 50/50 shot of making it. The rate of obesity in the general population is 67%. That doesn't mean that I, personally, have a 67% chance of being overweight. If I went through life making decisions as if I might one day be overweight, yeah I think that could potentially increase the "odds" of my becoming so:
"Hmm, I wear a size 4 now, but most people gain weight as they age so I'll buy a size 6 just in case."
"Hmm, I don't feel like eating cookies right now, but most people stress eat, so I'll buy them just in case."
"Hmm, I fit pretty well in a compact car, but I might gain weight - most people do - so I'll buy a full size car just in case."
You don't think that this way of thinking could have any impact, however small, on whether or not I actually gain weight? Both weight gain and divorce have an element of control to them - there is psychology at play. Obviously, that doesn't mean ignoring the possibility of either - but I would contend that one's resources are better spent in preventative measures (exercise, learning about nutrition) than in preparing for failure (buying larger clothes, just in case).
Hah, love your examples.
That's only if you take the view that keeping separate finances is a preparatory action which is what I'm refuting. I believe having separate finances has a pro of being easier to manage in the event of a divorce but I disagree that people are approaching their finances in such a way when deciding to get married. See the first part of what I wrote -
I think you may be oversimplifying the process of deciding whether to keep finances separate or joint. Unless it is a marriage of convenience I'm pretty sure most people don't walk into the decision process saying "so let's keep our finances separate for when we divorce." They're going to take a broader approach that will take into account their feelings of divorce and the likelihood of it; as well as many other factors such as income disparity, debts, credit worthiness, and financial/life goals. Or at least they should take that broader approach. :)
Narrowing it down to a "So do you think we'll divorce?" or a "Because divorce is prevalent we should have separate finances." as the sole reason why people would maintain separate finances is narrowing it down too much for this sort of topic. There should never be one sole motivator for anything. People should look at their decision making from many angles.
Note that I specifically state that people should not be walking around making decisions based solely on what they should do in the event of one thing.
-
Hah, love your examples.
That's only if you take the view that keeping separate finances is a preparatory action which is what I'm refuting. I believe having separate finances has a pro of being easier to manage in the event of a divorce but I disagree that people are approaching their finances in such a way when deciding to get married. See the first part of what I wrote -
Oh, I agree with you on that one. I don't think most people here are separating finances to make divorce less painful. It sounds like the most common reason is accounting simplicity.
-
If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner.
If I admit that there are chances I could be hit by a car then I have higher chances of being hit by a car?
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
But whether you divorce or not is not random chance. The divorce rate for the population as a whole may be 50%, but that doesn't mean that you personally have a 50/50 shot of making it. The rate of obesity in the general population is 67%. That doesn't mean that I, personally, have a 67% chance of being overweight. If I went through life making decisions as if I might one day be overweight, yeah I think that could potentially increase the "odds" of my becoming so:
"Hmm, I wear a size 4 now, but most people gain weight as they age so I'll buy a size 6 just in case."
"Hmm, I don't feel like eating cookies right now, but most people stress eat, so I'll buy them just in case."
"Hmm, I fit pretty well in a compact car, but I might gain weight - most people do - so I'll buy a full size car just in case."
You don't think that this way of thinking could have any impact, however small, on whether or not I actually gain weight? Both weight gain and divorce have an element of control to them - there is psychology at play. Obviously, that doesn't mean ignoring the possibility of either - but I would contend that one's resources are better spent in preventative measures (exercise, learning about nutrition) than in preparing for failure (buying larger clothes, just in case).
If running out of cookies was potentially financially catastrophic, then yeah I probably would stock up.
-
If you are already admitting that the chances are there, then chances are it will be considered as an option much sooner.
If I admit that there are chances I could be hit by a car then I have higher chances of being hit by a car?
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
But whether you divorce or not is not random chance. The divorce rate for the population as a whole may be 50%, but that doesn't mean that you personally have a 50/50 shot of making it. The rate of obesity in the general population is 67%. That doesn't mean that I, personally, have a 67% chance of being overweight. If I went through life making decisions as if I might one day be overweight, yeah I think that could potentially increase the "odds" of my becoming so:
"Hmm, I wear a size 4 now, but most people gain weight as they age so I'll buy a size 6 just in case."
"Hmm, I don't feel like eating cookies right now, but most people stress eat, so I'll buy them just in case."
"Hmm, I fit pretty well in a compact car, but I might gain weight - most people do - so I'll buy a full size car just in case."
You don't think that this way of thinking could have any impact, however small, on whether or not I actually gain weight? Both weight gain and divorce have an element of control to them - there is psychology at play. Obviously, that doesn't mean ignoring the possibility of either - but I would contend that one's resources are better spent in preventative measures (exercise, learning about nutrition) than in preparing for failure (buying larger clothes, just in case).
If running out of cookies was potentially financially catastrophic, then yeah I probably would stock up.
Those Girl Scout cookies only come by once a year. Nothing wrong with grabbing a couple dozen dozen boxes.
-
If running out of cookies was potentially financially catastrophic, then yeah I probably would stock up.
Er...the analogy was divorce=overweight, not divorce=no more cookies.
Mmm....girl scout cookies.......
-
Great points matchewed.
Really a lot of this discussion about "combined" or "separate" finances is silly in relation to marriage and divorce. How the accounts are held or managed is, for the most part, meaningless (there CAN be a few distinctions with completely separate property that was held separately prior to marriage and never commingled, but even that's open to legal challenge). That's why all the answers saying "do whatever works best for you" are good and accurate.
Your property, pensions, retirement accounts, custody of children -- it's all going to be split equitably (supposedly) in the event of a divorce, unless there's a legal contract between the parties specifying another method of splitting it (i.e., a prenup or postnup). How the parties held or managed the assets makes Zero difference. Husband's 401k will be split in half with wife, wife's 401k will be split in half with husband. It makes no difference that the husband is not a named owner on the wife's account and vice-versa.
For your day-to-day finances, assuming both parties have the same standard of living, it doesn't matter which accounts it comes from. If there's inequity in how the parties are living (one's spending freely while the other is being frugal for example), then there are other issues that need to be addressed as already pointed out in the discussion.
And News Flash: If you are living with a spender while you scrimp and save, it will not matter to the courts in the event of a divorce! The spender will still get half of what's left, so be prepared for that.
-
I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me. I admit there is a chance there is a chance Anna Kendrick will fall madly in love with me....
:)
You know that affair with Anna is likely going to end in a divorce, right? :)
Not if I don't admit there's a chance. ;)
The GF would be pretty pissed though.
Just make sure to put her on your list before it gets laminated.
LOL. Ever since that episode, my wifey and I have kept "a list". It was really done in fun and truly means nothing.
-
One of the secrets to our long happy marriage is we don't argue about money. The price we pay is some waste and a less frugal life than ideal, but the benefits are worth it. My money is her money and her money is our money. Everything we own jointly (except my classic car, and she questioned that.... I didn't have a good answer). We don't discuss most small purchases but try to use good judgement and not spend frivolously. We discuss all medium and larger purchases and both have veto power. It's a big tradeoff, but it works for us.
-
My two cents is this. Unless you have children from prior relationships you are trying to protect financially, a prenup is just another way of saying I don't trust you. Using divorce statistics to plan your future doesn't say much for your view of yourself or your future spouse. People used to aspire to be better than the rest. Now it seems expectations have become much lower and we know people tend to live up or down to their expectations. Don't get married and keep your finances separated. That way when the inevitable happens as you expect it to, you can make a "clean break" financially as it were.
-
Hah, love your examples.
That's only if you take the view that keeping separate finances is a preparatory action which is what I'm refuting. I believe having separate finances has a pro of being easier to manage in the event of a divorce but I disagree that people are approaching their finances in such a way when deciding to get married. See the first part of what I wrote -
Oh, I agree with you on that one. I don't think most people here are separating finances to make divorce less painful. It sounds like the most common reason is accounting simplicity.
Some could keep them separate to keep each other more accountable or avoid fights about purchases. One partner may be more frugal if he/she can only spend "his"/"her" money. I suppose it would be like if you had a teenage kid and made him buy his own clothes or vehicle. Sure, you could just buy it for him, but making him use his own money may force him to be more frugal about his choices. The expectation would probably be that one spouse won't want a divorce every time s/he doesn't have access to the other's money, just as the teenager will take responsibility and not threaten to run away if he doesn't get clothes money.
-
My two cents is this. Unless you have children from prior relationships you are trying to protect financially, a prenup is just another way of saying I don't trust you. Using divorce statistics to plan your future doesn't say much for your view of yourself or your future spouse. People used to aspire to be better than the rest. Now it seems expectations have become much lower and we know people tend to live up or down to their expectations. Don't get married and keep your finances separated. That way when the inevitable happens as you expect it to, you can make a "clean break" financially as it were.
Some people are more risk-averse than others. Honestly I could go into the history of why we are considering a pre-nup but 1) it's long and more complicated than "I don't trust you" and 2) you obviously have pre-conceived notions so it would be a waste of my time.
-
Wow now. Help me understand. Don't assume preconceived notions about what you think are my preconceived notions. What are the advantages of marriage with a prenup for you?
-
Wow now. Help me understand. Don't assume preconceived notions about what you think are my preconceived notions. What are the advantages of marriage with a prenup for you?
My apologies; I was tired and didn't feel like explaining it but certainly can. Fair warning: I'm long winded and want to give a full picture.
I'm almost 30 and my fiancee is almost 27. I have a STEM degree because I am good at math and science; I had to finance it myself and came out of college with a lot of debt (over $40K), but paid it off in a couple of years by saving about 70% of my pay. She got a degree in a liberal arts field (paid for by her parents) because she enjoyed the subject but then had very few job prospects coming out of school.
She recently got a Master's degree and got a little bit in loans for it (I paid most of the other bills); she still will be making about half of what I make with her new job. I've recently started socking away about $4K/month and she will soon be saving about 1/3 of that (prior to this I was putting away about $2,500-$3K/month and she was putting away about $500/mo).
I'm not overly passionate about my job and would like to FIRE ASAP (or at least get a job in something else but I would take a big pay cut); she is about to start working in her field and is very excited about it so likely wouldn't retire for awhile. I've saved a decent nest egg so far (about $150K if you include home equity; about $120K without home equity). Had I been smarter about using pre-tax money, my NW would be $175-$200K without home equity. If I continue with my path, I could feel comfortable leaving my job in the next couple of years, or even FIRE around my 34th birthday (liquid NW would be about $300-350K, enough to pay my part of the bills). Her nest egg is much smaller (NW about $10K) and won't grow nearly as quickly (in 4 years NW would be maybe $75-100K if she buckles down).
If we have kids, we wouldn't for at least the next 5 years. If that were the case, I would be willing to cancel the pre-nup and be a SAHD; she has said that she doesn't want to be a SAHM but is fine with me being a SAHD. If I continued working instead of FIRE and we got to a combined NW of over $600K, I would also be willing to cancel it and then FIRE. Honestly, I could see myself working some other job and helping her reach FIRE more quickly. I just read about the "oxygen mask" approach to raising kids in Jeff Yeager's book "The Cheapskate Next Door". I guess that is my FIRE method.
Now, the state I live in has punitive divorce laws for the breadwinner; I know because I work with other breadwinners who got taken to the cleaners, even when the other person had a career of her own and child support wasn't involved (I work with mostly guys, so every story was a guy breadwinner, but imagine a female breadwinner would have the same issue). I actually told my fiancee this (early in the relationship, way before we got engaged) and that I didn't want to get married, unless I was going to have kids, because of the financial risk and how that would destroy my goals. She still wanted to eventually get married and suggested a pre-nup so that I would still consider it.
She now has been reading the MMM blog for a month or so and is actually getting excited about FI, which is why I have considered canceling a pre-nup. Prior to this, my fear was that there is a possibility to get divorced before I quit my job and I would be stuck handing over a huge percentage of my NW and/or paying alimony. Or, it could be right after I leave my job, and a judge could make me pay alimony based on what I "could" make, not being understanding of the concept of FIRE. Either way, I would be stuck working a job I'm not crazy about for much longer than I originally planned, all because I didn't take precautions. Maybe it'd only be 3 more years, but that's 3 more years I'll never get back.
Is it a lack of trust? Perhaps somewhat. She is actually quite trustworthy (more than almost anyone else I know), but I also know that going through a divorce can bring out the worst in people. She would be the one holding the cards and I would be at her mercy; I don't feel comfortable with that. She can understand the logic of a pre-nup and agrees that, since I have set myself up for FIRE and she hasn't as quickly, it wouldn't be fair for her to take my money. However, since most divorces end with money split 50/50, even if she had a choice, it would be easy for her to self-justify taking her half when it comes down to it. This isn't because she's selfish so much as it's because she's human.
It's obvious that a lot of people in this thread don't see money as "mine" and "yours" but rather "ours". I understand that; it's how most people see it. I don't, at least right now.
The guys I know who got divorced never imagined it would happen and usually get some sort of "well, caveat emptor, buddy" as consolation after huge legal bills and losing the battle anyway; I'm taking that advice to heart. I guess that's why I get a little irritated because a lot of people IRL have been saying, "Why are you even getting married if you want a pre-nup?", then when they hear the story of someone losing A LOT from a divorce, brush it off with, "It is what it is."
She has it pretty good now; we split bills but it's by how much we make, so I pay most of them (we've lived together for 4.5 years and it's always been that way). We are moving into a smaller house soon and she is going to pay half the bills then since she will be making good money. My savings rate may even be higher ($4500/mo or so) when we do that, with hers being $1500/mo. I am helping her with her finances so the FI goal can become "our" goal and I can feel more comfortable without a pre-nup, eventually. I wouldn't mind waiting a few more years before marriage to reach that point, but she doesn't want to wait; I can understand that being officially married is more important to her than it is to me, and she can understand that I am nervous about losing my money, no matter how low I think the odds are. So we compromise.
She actually is relatively frugal and is getting better about it; she also isn't a self-entitled type. Quite honestly I could see myself spending the rest of my life with her, but am aware that probably 100% of men who get divorced likely thought the same thing when they got married. I said in a previous post that I see us as more likely than 90% of couples out there to make it (hell, maybe even more), but that I also know my opinion is biased :).
-
My two cents is this. Unless you have children from prior relationships you are trying to protect financially, a prenup is just another way of saying I don't trust you. Using divorce statistics to plan your future doesn't say much for your view of yourself or your future spouse. People used to aspire to be better than the rest. Now it seems expectations have become much lower and we know people tend to live up or down to their expectations. Don't get married and keep your finances separated. That way when the inevitable happens as you expect it to, you can make a "clean break" financially as it were.
People who view prenups the way you do fail to realize that there will always be division of assets in the case of divorce or death. Marriage without a prenup is saying "I'll let my state legislature decide how assets will be divided in a separation" and with a prenup is saying "I want to decide how assets will be divided in a separation." If you think sticking your head in the sand can prevent a divorce, more power to you. Also, we've pretty thoroughly covered the analogy to liability insurance.
-
Wow now. Help me understand. Don't assume preconceived notions about what you think are my preconceived notions. What are the advantages of marriage with a prenup for you?
My apologies; I was tired and didn't feel like explaining it but certainly can. Fair warning: I'm long winded and want to give a full picture.
I'm almost 30 and my fiancee is almost 27. I have a STEM degree because I am good at math and science; I had to finance it myself and came out of college with a lot of debt (over $40K), but paid it off in a couple of years by saving about 70% of my pay. She got a degree in a liberal arts field (paid for by her parents) because she enjoyed the subject but then had very few job prospects coming out of school.
She recently got a Master's degree and got a little bit in loans for it (I paid most of the other bills); she still will be making about half of what I make with her new job. I've recently started socking away about $4K/month and she will soon be saving about 1/3 of that (prior to this I was putting away about $2,500-$3K/month and she was putting away about $500/mo).
I'm not overly passionate about my job and would like to FIRE ASAP (or at least get a job in something else but I would take a big pay cut); she is about to start working in her field and is very excited about it so likely wouldn't retire for awhile. I've saved a decent nest egg so far (about $150K if you include home equity; about $120K without home equity). Had I been smarter about using pre-tax money, my NW would be $175-$200K without home equity. If I continue with my path, I could feel comfortable leaving my job in the next couple of years, or even FIRE around my 34th birthday (liquid NW would be about $300-350K, enough to pay my part of the bills). Her nest egg is much smaller (NW about $10K) and won't grow nearly as quickly (in 4 years NW would be maybe $75-100K if she buckles down).
If we have kids, we wouldn't for at least the next 5 years. If that were the case, I would be willing to cancel the pre-nup and be a SAHD; she has said that she doesn't want to be a SAHM but is fine with me being a SAHD. If I continued working instead of FIRE and we got to a combined NW of over $600K, I would also be willing to cancel it and then FIRE. Honestly, I could see myself working some other job and helping her reach FIRE more quickly. I just read about the "oxygen mask" approach to raising kids in Jeff Yeager's book "The Cheapskate Next Door". I guess that is my FIRE method.
Now, the state I live in has punitive divorce laws for the breadwinner; I know because I work with other breadwinners who got taken to the cleaners, even when the other person had a career of her own and child support wasn't involved (I work with mostly guys, so every story was a guy breadwinner, but imagine a female breadwinner would have the same issue). I actually told my fiancee this (early in the relationship, way before we got engaged) and that I didn't want to get married, unless I was going to have kids, because of the financial risk and how that would destroy my goals. She still wanted to eventually get married and suggested a pre-nup so that I would still consider it.
She now has been reading the MMM blog for a month or so and is actually getting excited about FI, which is why I have considered canceling a pre-nup. Prior to this, my fear was that there is a possibility to get divorced before I quit my job and I would be stuck handing over a huge percentage of my NW and/or paying alimony. Or, it could be right after I leave my job, and a judge could make me pay alimony based on what I "could" make, not being understanding of the concept of FIRE. Either way, I would be stuck working a job I'm not crazy about for much longer than I originally planned, all because I didn't take precautions. Maybe it'd only be 3 more years, but that's 3 more years I'll never get back.
Is it a lack of trust? Perhaps somewhat. She is actually quite trustworthy (more than almost anyone else I know), but I also know that going through a divorce can bring out the worst in people. She would be the one holding the cards and I would be at her mercy; I don't feel comfortable with that. She can understand the logic of a pre-nup and agrees that, since I have set myself up for FIRE and she hasn't as quickly, it wouldn't be fair for her to take my money. However, since most divorces end with money split 50/50, even if she had a choice, it would be easy for her to self-justify taking her half when it comes down to it. This isn't because she's selfish so much as it's because she's human.
It's obvious that a lot of people in this thread don't see money as "mine" and "yours" but rather "ours". I understand that; it's how most people see it. I don't, at least right now.
The guys I know who got divorced never imagined it would happen and usually get some sort of "well, caveat emptor, buddy" as consolation after huge legal bills and losing the battle anyway; I'm taking that advice to heart. I guess that's why I get a little irritated because a lot of people IRL have been saying, "Why are you even getting married if you want a pre-nup?", then when they hear the story of someone losing A LOT from a divorce, brush it off with, "It is what it is."
She has it pretty good now; we split bills but it's by how much we make, so I pay most of them (we've lived together for 4.5 years and it's always been that way). We are moving into a smaller house soon and she is going to pay half the bills then since she will be making good money. My savings rate may even be higher ($4500/mo or so) when we do that, with hers being $1500/mo. I am helping her with her finances so the FI goal can become "our" goal and I can feel more comfortable without a pre-nup, eventually. I wouldn't mind waiting a few more years before marriage to reach that point, but she doesn't want to wait; I can understand that being officially married is more important to her than it is to me, and she can understand that I am nervous about losing my money, no matter how low I think the odds are. So we compromise.
She actually is relatively frugal and is getting better about it; she also isn't a self-entitled type. Quite honestly I could see myself spending the rest of my life with her, but am aware that probably 100% of men who get divorced likely thought the same thing when they got married. I said in a previous post that I see us as more likely than 90% of couples out there to make it (hell, maybe even more), but that I also know my opinion is biased :).
Thanks for laying that all out gobius, it's helpful to see the thinking behind people's decisions.
-
I'll add that it wasn't until joining the forums that I realized how common split finances are, and how important it is to find out "what works" for a given relationship.
My wife and I have had joint finances since the year before we married, when she moved out here. She's largely happy to be oblivious money-wise. Typically I have to initiate any finance conversations, because I want her to have input. We both earn money but her earnings are about 4x mine, since I'm primarily a SAHD.
We do have small separate accounts for things like gift money and a small "blow" money allowance each month, but nearly all cash is in one checking account and one online savings account.
-
You've decided in your own judgement, that separate finances or a prenup is a standard by which any individual's readiness or suitability for marriage can be gauged. Yet, there are many examples that completely contradict your opinion. Two people, whomever they be are often bound by many more important things than checking accounts or other material structures. You're at the start of your life with someone else. You haven't the long term experience or internalized knowledge to understand that there are an infinite way of doing things in marriage. As every marriage is different based on those who are in it.
You make me laugh at your rigidity and grand pronouncement regarding joint finances. Particularly because you don't have any experience being married yet. And most of all, for those that have been married a long time, you have declined to perhaps learn something. I suspect that it has great potential to cause you difficulties in your marriage. Compromise and consideration go a long way in making any partnership successful. We can plan and decide that we're going to organize things one way and then, as happens quite often, realize that some other way might better suit the reality of our lives and personalities. What works for me might not work for you but for you to judge anyone's union based on how they organize their accounts is preposterous.
Do you feel threatened that 401(k)s and IRAs can only be titled as individual accounts? Do you think that introduces some risk?
-
You've decided in your own judgement, that separate finances or a prenup is a standard by which any individual's readiness or suitability for marriage can be gauged. Yet, there are many examples that completely contradict your opinion. Two people, whomever they be are often bound by many more important things than checking accounts or other material structures. You're at the start of your life with someone else. You haven't the long term experience or internalized knowledge to understand that there are an infinite way of doing things in marriage. As every marriage is different based on those who are in it.
Bolded the part above. I've actually spent more time cohabitating as an unmarried couple with my wife than I have living together while married. That will hopefully change next year. :)
I voted Other. Some things are joint while others are separate. We each have our own credit cards that we use for certain types of purchases with the other person as an authorized user but still only one person pays it off. We each pay a proportion of rent based on our income which comes out of our separate banking accounts. I guess that is partially due to the convenience of not having to change anything from when we were cohabitating. As everyone else says, do whatever works.
-
I'm getting married next month, and nothing will change financially except our taxes, which we'll file jointly. If we get a refund the first year, we'll decide what to do with it, and adjust withholding to avoid getting one the next year.
He has his checking account, I have mine. We each cover different household bills. The actual "savings" is kept in my checking account, because I have 3.25% APY. I don't know why he doesn't want to change banks, but that's his choice. I'm better with accounting, so I keep a spreadsheet of what's in savings.
As long as the bills get paid and our savings goals are met, we don't care what the other does with the rest of their income. It works, and we're happy.
-
The evolution of our Finances from PreMarriage Cohabitate to Marriage to Post MMM(current)
Pre marriage
seperate accounts - we split the mortgage and utilities down the middle
Post Marriage
we realized the 2 biggest things we fought over were keeping groceries even and who drove since her car was more efficient than mine
easy solution. Grocery/Gas credit card we share so everything gets split down the middle with that now.
MMM
to max out her 401k since i make more I decided to pay a larger part of the mortgage so she wouldnt see a hit to her finances when we started maxing out her 401k. Now we probably have equal or close to equal disposable income. I also use my EOY bonus to max out our Roth IRAs.
But in general we keep seperate accounts. It allows us more flexiblity and it really doesnt cause any arguements. anything that comes up as a friction spot we work thru and decide if its something we really need to be buying and if it is ... we decide if its something we should both be responsible for. and then find a credit card that gives big benefits for that item. we get 6% on groceries and 3.3% on gas.
-
You've decided in your own judgement, that separate finances or a prenup is a standard by which any individual's readiness or suitability for marriage can be gauged. Yet, there are many examples that completely contradict your opinion. Two people, whomever they be are often bound by many more important things than checking accounts or other material structures. You're at the start of your life with someone else. You haven't the long term experience or internalized knowledge to understand that there are an infinite way of doing things in marriage. As every marriage is different based on those who are in it.
You make me laugh at your rigidity and grand pronouncement regarding joint finances. Particularly because you don't have any experience being married yet. And most of all, for those that have been married a long time, you have declined to perhaps learn something. I suspect that it has great potential to cause you difficulties in your marriage. Compromise and consideration go a long way in making any partnership successful. We can plan and decide that we're going to organize things one way and then, as happens quite often, realize that some other way might better suit the reality of our lives and personalities. What works for me might not work for you but for you to judge anyone's union based on how they organize their accounts is preposterous.
Do you feel threatened that 401(k)s and IRAs can only be titled as individual accounts? Do you think that introduces some risk?
What is this in response to?
-
Some could keep them separate to keep each other more accountable or avoid fights about purchases. One partner may be more frugal if he/she can only spend "his"/"her" money. I suppose it would be like if you had a teenage kid and made him buy his own clothes or vehicle. Sure, you could just buy it for him, but making him use his own money may force him to be more frugal about his choices. The expectation would probably be that one spouse won't want a divorce every time s/he doesn't have access to the other's money, just as the teenager will take responsibility and not threaten to run away if he doesn't get clothes money.
Maybe I'm misreading this, but it sounds like you're describing a situation where one person is so selfish (or perhaps foolish) that they will spend more out of combined finances than they would out of separate. I agree that does sound like a teenager, but at the risk of flaming up the thread, would such a person really be mature enough to marry? It's hard for me to picture an otherwise happy and healthy couple where one of them would exploit the other like that, regardless of how they structure their finances.
-
26 years married. We keep mostly joint accounts. I'm the sole breadwinner with a partially disabled spouse. He keeps a separate savings account with a small inheritance in it. He is risk averse as can be imagined, and while we fund our retirement accounts about evenly, the returns are vastly different.
We were barely out of our teens when we first married and started with everything jointly held. Even our first car had both our names on it. Overkill. One of the things I find amusing about these discussions is how naive people are about their own futures. Every single marriage ends. Each and every one. Half of them end with both partners still alive and the other half end with one partner alive. Along the way, changes will occur that you did not anticipate. These are just the facts. The guy I married worked 2 full time jobs when we were first together. Now, he is incapable of supporting himself, let alone shouldering 50% of the mortgage or whatever proportion seemed 'fair' in consideration of our incomes when we signed a mortgage. Illness, disability, addiction, job loss, sweeping industry changes, natural disasters, war, and plenty of things I didn't mention can all occur and you have only the illusion of control over any of them. I've got no judgment towards anyone whose marriage ends with both partners still alive. That's another thing over which you have only an illusion of control, because your spouse really can just up and leave you, no matter how good and wonderful you are.
If I were getting married at this stage of my life, I'd absolutely consider a prenup. I think aversion to them is akin to putting off Estate Planning and signing an Advanced Directive or buying disability insurance. We just don't want to think about bad outcomes, so we plunge ahead with blinders on.
-
Most people that I know that have been divorced get a pre-nup the 2nd or 3rd time around. There is nothing wrong with getting it the first time either. Do what your gut tells you too.
-
I think aversion to them is akin to putting off Estate Planning and signing an Advanced Directive or buying disability insurance.
Well, I don't believe in death so estate planning is really just setting your life up for failure.
-
I think aversion to them is akin to putting off Estate Planning and signing an Advanced Directive or buying disability insurance.
Well, I don't believe in death so estate planning is really just setting your life up for failure.
+1