Author Topic: spouses and income  (Read 14693 times)

unix_kung_fu

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spouses and income
« on: June 16, 2014, 12:21:58 PM »
I likely will be getting married in the next year or two. We've talked about it already.

We make about $145k combined, she makes a little more than I do, like $15k. How do you married couples treat the finances? We've been living together for a while and previously were putting in $500/each into a bank, we travel a bit so we're not saving anything. That money does not include rent - just all utilities, food, dry cleaning, etc.

She isn't entirely frugal but doesn't like to spend money where possible, just not as much as I. I was thinking we'd direct deposit all but some spending money into the joint account (after tax advantaged retirement stuff maxed), equally fund an emergency fund for the both of us and get a joint brokerage account.

She has about 60k in her own BofA account drawing jack sh*t in interest, I have very little savings but am turning that around. I don't want to leach onto her savings and saying we should combine them though.

Is it normal for married couples to set aside their own savings/investments pre-marriage, then maintain a joint one post-marriage? I just don't know what the norm is, if there is one.

hexdexorex

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Re: spouses and income
« Reply #1 on: June 16, 2014, 12:26:22 PM »
Not married but been with gf for 6 years. All our finances are separate and split the big things (rent) based on income...so I pay 60% she pays 40%.

MooseOutFront

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Re: spouses and income
« Reply #2 on: June 16, 2014, 12:32:53 PM »
I believe in fully joined finances (been married 12 years fwiw), but lots on people on this site don't.  We share all of our accounts except one; we each have our own blow money accounts that get funded monthly with an allowance and can be used on anything without the other caring.  Everything else gets spent more or less within pre-planned budgeted categories.

In your situation (we make similar income as you, my wife a little more than me), I would maybe start off by keeping her $60k savings separate almost like it doesn't exist until you're both comfortable with how everything is working together.  Then in a few years that account being viewed differently may look silly to both of you and you roll in in to the rest of the plan.

It helped that we were both young and broke when we got married so we never did anything other than combined finances from day one.
« Last Edit: June 16, 2014, 12:34:24 PM by MooseOutFront »

CommonCents

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Re: spouses and income
« Reply #3 on: June 16, 2014, 12:39:49 PM »
Is it normal for married couples to set aside their own savings/investments pre-marriage, then maintain a joint one post-marriage? I just don't know what the norm is, if there is one.

There is no "normal" - there is only what works for you and her.  Many people do as you propose.  You will likely get almost as many variations of responses as people that respond to your question here.  That said, there are few more common approaches I've seen:
  • One Pot: "Your" money and "her" money goes into one pot.  You budget together.  Generally a necessity for those with a stay at home spouse, this is still often used by many couples, particularly in older generations, or those who got married younger with fewer (or zero) assets.  My parents did this - a necessity for them, as mom couldn't have a career when she kept getting moved due to my dad's career, she eventually became a SAHM, and he could be gone for months at a time.
  • Separate pots: You keep your money entirely separate.  You agree together on how to split bills.  I've known a friend that did this where the agreement was that he cover all of the shared bills except one (which she'd frequently ask for help on anyways, and no, it wasn't the mortgage).  I've known another set of friends that split the bill (pre-marriage) based on their percent of money earned.  So if one person earned $40k, and another $60k, they split bills 40/60.  This is more frequently used by those in second marriages I've observed, where couples are older and may have differing expenses such as kids.
  • A mix: Some money is shared.  Maybe people have a budget for their spending money that is all theirs that they don't need to explain to the other.  Maybe they agree anything under a set amount can be freely spent but over it must be jointly agreed (the above couple that split bills based on income moved this after marriage).  Maybe they nominally have shared account names, but practically speaking don't actually have a pot of shared money. 

In all scenarios though consider will things change if you have kids?  get sick and can't work?  Get divorced?  (A number of people on here are unhappy about "bargains" about money and who would work/stay home made years ago.)  If you already have separate kids, how will you handle a house/inheritance etc. when one of you dies?

tl;dr:  There's no right way to do things.  Do what works for you.

boarder42

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Re: spouses and income
« Reply #4 on: June 16, 2014, 12:56:26 PM »
i dont think there is a normal.. My wife and i keep seperate finances for the most part.  i make about 50% more than she does.  we max out our 401k's and Roth IRAs and i fund most vacations and pay a majority of the house payment.  other than that we split most expenses down the middle.

boarder42

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Re: spouses and income
« Reply #5 on: June 16, 2014, 01:02:22 PM »
we have joint CCs for gas and grocery.  and then use the gas card for other joint agreed upon expenses.  i split the utility bills in half... she wants cable so she pays the full price for it.  before finding this site she paid half the house payment.  and then i wanted to max out her 401k so i lowered her house payment so she wouldnt see a hit each month.  you just have to find what works for you.  combining finances would probably lead to more fights than its worth for us. 

Mrs. Frugalwoods

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Re: spouses and income
« Reply #6 on: June 16, 2014, 01:27:13 PM »
I don't think there's a "standard practice"--everyone should do what works best for their household. Our accounts are fully combined. When we got married we had basically no assets and no debt. We didn't have any qualms about combining because we're on the same page about spending, saving, and investing. Neither of us worries that the other will abscond with our money and buy something frivolous.

We like having everything combined because:
-it's easier to calculate our total net worth at any given time
-it's easier to track our save/spend rate every month
-it's easier to pay our shared living expenses (mortgage, groceries, utility bills, etc)
-we're stronger together (our combined incomes earn more interest and are more diversely invested than if we were investing/saving independently)
-we reap greater dividends on our rewards credit card

However, I would caution that if you're not 100% comfortable with how your partner approaches money, don't combine.

PDX Citizen

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Re: spouses and income
« Reply #7 on: June 16, 2014, 01:37:57 PM »
I agree that it depends on the partnership, but have found that with my wife, a hybrid method works well. We both have our own bank accounts and retirement accounts (which precede marriage), but just before we married, we opened one joint account.  We contribute 50/50 to that every month (she makes a little more than I do) and then pay all joint expenses out of it (mortgage, utilities, food, travel, home repair, etc.)  One nice aspect of it, is I think it encourages us both to save a bit more - if either of us wants to buy something for ourselves, it isn't coming from some big joint pot of money, but instead our personal savings, so it seems more direct.  On the other hand, we aren't bothered by it as much if the other person decides they want to spend their own money on something for themselves.  It's also nice in that we can both occasionally buy each other gifts or dinner out of our own accounts, and it's not just coming out of the joint account.  But, I've only been married a couple years, so others probably have much more experience!

hermoninny

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Re: spouses and income
« Reply #8 on: June 16, 2014, 01:39:12 PM »
I'm not sure there is a "normal" these days!  Between my friends and I, we all do things differently from each other.  We have combined everything.  It makes things SO easy for us. I can't imagine how much more complicated our budgeting would be if we had separate and joint accounts and splitting bills and this and that.  But, that's just me.  Find what works for you and do it. 

ETA: we both have "fun money" that we're not allowed to question each other on.  Mine usually goes for books, clothes, and pedicures, and his goes toward building his classic car.  It works for us.

JoyBlogette

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Re: spouses and income
« Reply #9 on: June 16, 2014, 01:41:01 PM »
We each contribute 95% of our salary to "joint" finances and keep 5% for personal spending/savings (no questions asked).  All of our bills are paid out of the joint account.

lsaurus

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Re: spouses and income
« Reply #10 on: June 16, 2014, 01:56:02 PM »
There is no "normal' :).  I'm getting married in August (wahoo!) we have been together for 4 years, lived together for 2 years. Our household income is basically the same as yours.  He makes more but my benefits (401k, health insurance) are better than his which essentially makes our incomes the same. Last year we decided to budget together but keep all our accounts separate.  We use YNAB and all of our paychecks go into the "available to budget" category.  Once a month we decide where all the money is going to go and we do a mid-month reconciliation meeting.  It feels really fantastic to be on the same page when it comes to our household finances.  Our current savings rate is 55% but after wedding/kitchen remodel this year we should start to approach 65-70%. 

We keep our 401k's, HSA's and vanguards account as "off-budget" so we can see our net-worth but it doesn't change our day to day budgeting. It keeps his vanguard/401k separate from mine.  We have equal amounts going into them so it doesn't really matter but we didn't officially combine anything.

We are each responsible for paying certain bills and making sure our individual CC are paid in full each month.  If any account runs to low we just transfer money to cover the necessary bills. We each have our own "fun money" category.  With YNAB it doesn't really matter what account the fun money comes out of as long as it is allocated in the budget.  Neither of us care if the other sees what we spend our fun money on.

I think the most important thing is to not assume anything when it comes to relationships and money.  It doesn't really matter what method (combined, separate, hybrid) as long as it works for both of you. I thought I would get more resistance from him on certain category amounts but I've been pleasantly surprised at his enthusiasm and even his suggestions to lower our monthly budget! 

Numbers Man

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Re: spouses and income
« Reply #11 on: June 16, 2014, 01:59:51 PM »
Maybe I've been married too long but we combined our assets once we were married. Why don't you put the pedal to the metal and save as close to that $60k that you can in the next 2 years so that the difference in your savings accounts won't be as issue.

Timmmy

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Re: spouses and income
« Reply #12 on: June 16, 2014, 02:08:12 PM »
I'm stunned at the number of people that are married without 100% combined finances.  My wife and I are completely combined same checking account, same investment account bills are all paid from the one account.  Been that way since when we got married.  We both naturally save at about the same rate so I think that helps.  My spending is in larger chunks less frequently and hers is more day to day on small purchases.

nawhite

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Re: spouses and income
« Reply #13 on: June 16, 2014, 02:09:48 PM »
Even though I am happily married and my wife and I have joint finances which works perfectly for us, the most important thing I can say is "Get a Pre-Nup." If your future spouse says "it's so unromantic, how do I know you're really committed to our marriage?" turn it around and say "and how do I know you're not going to divorce me and take my money? That fear is just as hurtful to me."

I've never been divorced, I have no fears of divorce (knock on wood), and our finances are happily combined, but I wish I had a pre-nup so I had the peace of mind that my DW didn't marry me for my earning potential.

As for whether or not to combine finances, it sounds like you're both on similar pages with your financial plans. In those cases, combining finances is easy. When one is a spender and one is a saver, combined finances can be a recipe for disaster.

DMoney

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Re: spouses and income
« Reply #14 on: June 16, 2014, 02:13:48 PM »
Congrats on your upcoming nuptials!

I've been married twice.  Here's how we did it:

1.  Too young, short marriage: We kept everything separated and split paying the bills (rent, utilities).  We both maxed out our Roths and 401ks. Didn't really worry much about who paid for groceries and fun, etc.  When that marriage ended, parting ways was EASY, thank goodness (at least financially). 

2. Second marriage, father of my children, hereto referred to as "the keeper":  The first year or so, things were still separated.  I think I paid some utilities, he paid some others.  We split the rent.  After about a year of happy married life, I said, "You seem like a keeper.  And we got you that fancy MBA.  So I don't want to think about bills or taxes or money or investing or anything anymore. I just want my credit card and ATM card to work when I need them."

Sounds crazy and irresponsible, right?  This has worked out pretty well for us because of a few important reasons:

A.  We are both of a similar mind when it comes to spending habits.  Not big spenders, in general, but not draconian about indulgences.  (This is shifting a bit as I follow MMM more, but the keeper is onboard.)  We discuss big purchases but never had a "rule".  (I know one couple who can't make a $50 purchase without asking permission/discussing.)

B. We both are earners.  Seems like in families where one parent stays home there is the potential for more disagreements since one is "contributing" more in a financial sense.  (Hogwash)

C.  We make plenty of money, as we're both professionals.   If one person splurges we're not underwater unable to pay the electric bill, etc. 

Good luck!  Looks like you'll have lots of different models to consider!
« Last Edit: June 16, 2014, 02:17:24 PM by DMoney »

Philociraptor

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Re: spouses and income
« Reply #15 on: June 16, 2014, 02:20:02 PM »
Girlfriend and I combined finances when we moved in together 2 years ago (she started depositing her checks into my account, I added her name to my bank account and all credit cards).  I manage everything, including budgeting, paying bills, and funding our IRA's.  I tell her what credit card to use where so that we maximize cash back.  Worked well so far.  Nothing's changed since then, we got married 3 weeks ago.

CarDude

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Re: spouses and income
« Reply #16 on: June 16, 2014, 02:21:36 PM »
One more vote for the one pot system; it's always worked well for us.

exceljunkie

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Re: spouses and income
« Reply #17 on: June 16, 2014, 02:22:08 PM »
I believe in fully joined finances (been married 12 years fwiw), but lots on people on this site don't.  We share all of our accounts except one; we each have our own blow money accounts that get funded monthly with an allowance and can be used on anything without the other caring.  Everything else gets spent more or less within pre-planned budgeted categories.

In your situation (we make similar income as you, my wife a little more than me), I would maybe start off by keeping her $60k savings separate almost like it doesn't exist until you're both comfortable with how everything is working together.  Then in a few years that account being viewed differently may look silly to both of you and you roll in in to the rest of the plan.

It helped that we were both young and broke when we got married so we never did anything other than combined finances from day one.
+1

theglobetrotter

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Re: spouses and income
« Reply #18 on: June 16, 2014, 04:19:28 PM »
Before moving to England, joint account to pay bills. We put 50-50 into it. I made more. Maybe about $10k more.

We had our own IRAs/investments, checking and savings. We always invest first aka direct deposit from paycheck, so once we get our money in our personal checking accounts, it is ours to do whatever. No asking if I can buy this fabric to make the kids' skirts (not a need, just hobby/excuse for me to make something) or if he wants to buy a car part (for the vintage car he owns).

In England, we decided to give the girls the full English experience and to travel as much as we can. So I stay home with occasional income. The first year I taught online. After both girls started full time school, I started charging for my photography work and the occasional web developing/IT consulting. His money pays for everything, including my ROTH. My money is used to pay for my business insurance, taxes and equipment upgrade and professional development. My field changes quickly and I need to keep up if I want to be employable in the near future.

After England, back to the first method. We're actually making the same amount with me not working but I hate not making my own money!

plantingourpennies

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Re: spouses and income
« Reply #19 on: June 16, 2014, 04:36:26 PM »
We're totally joint, the only exception being accounts that legally can't be joint (IRAs and 401Ks), though we think of those as joint anyhow.  For us it just makes it easier to be a team when we're using the same playbook. 

Emilyngh

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Re: spouses and income
« Reply #20 on: June 16, 2014, 05:25:43 PM »
I make all of the income, as my spouse SAH, but we have completely joint finances, and also did when we were both working FT.

We each have a personal checking account, which an allowance is deposited into once a month.   Our allowances are only $75/mo each, but we're not big spenders and this enables us to have an occasional lunch out or coffee without feeling guilty and like we have to report these things to each other.   We discuss and agree on any spending outside of this.   Everything else beyond bills goes to savings/investments.

As far as whose name the savings/investments are in, does it really matter in your state?   I'm pretty sure that in my state, earnings put into savings/investments during the marriage are co-owned and would be equally split if divorce occurred.   We have each other as beneficiaries of everything, so if a death happened it would all go to the other person.

erae

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Re: spouses and income
« Reply #21 on: June 16, 2014, 05:44:03 PM »
We use a modified one pot/two pot similar to others.  It works because neither one is a big spender.

Prior to getting married, we both had checking and savings accounts in our respective banks.  Each payday, our paychecks go into our checking accounts and I pull out money for investing, bills, and savings according to our budget.  We don't pay attention to whose money is going where - I just put the money wherever it's needed and I leave about $200 for expenses in the checking account.  Next payday, the left-over money from the previous check gets swept into savings.  Every few months, when the savings accounts starts getting too big, I clean those out and roll them into our investments.  So far, it's worked great, though we're largely on the same page about spending.  We rarely use all of our $200 between checks, and when we need more than thn that, we dip into our savings, though I think that's only happened a few times.  It gives us both flexibility, but let's us know when we're burning through cash by making us transfer money out of savings and into checking if we go over the 200.

chasesfish

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Re: spouses and income
« Reply #22 on: June 16, 2014, 07:47:05 PM »
Fully joint here.  Joint budget, joint accounts except for those that can't be (iras 401ks)


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sobezen

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Re: spouses and income
« Reply #23 on: June 17, 2014, 01:09:01 AM »
Good points everyone thanks for sharing.

OP you may want to also read the topic "Weapons of Mass Destruction" it addresses various perspectives from couples who chosed to combine, separate, and/or partially merge their finances.  I find it helps to consider as many perspectives as possible to help see complex topics differently.

Since many have shared the benefits of merging finances, I will share a few slightly different ideas.  I am a firm believer in keeping some assets created prior to a serious partnership or marriage, separate.  Although I am young, unmarried and single, I have dependents namely my aging parents to care for so I feel it is necessary to consider their needs in addition to my own.  Others may not share my situation but if things potentially go South in a marriage, ask yourself the following question.  Am I willing to place the well-being of my loved ones at risk if my partner one day decides to separate and no longer supports my decision to help my family?  Can my loving partner remain amicable if we unexpectedly separate?  These considerations are particularly important for anyone who has a child or even children from previous relationships. 

I feel in situations where you are the financial provider and people may depend on you, it helps to factor in their needs as well.  Another consideration why it may help to keep some of your finances separate involves keeping your own financial identity so you are not always checking with your partner on purchases.  This may seem like a small and insignificant issue but you would be amazed how much friction and hidden resentment is caused by the "perception" of spending.  By keeping some of your accounts separate, each individual is still able to maintain some financial freedom and choice, while still contributing to the shared expenses and goals.  :)

Ultimately the choice to merge your finances, use a hybrid blending approach, or keep things completely separate can only be answered by you.  Keep asking questions and I encourage you to dedicate tons of time to research this topic because it will help you to clearly understand your values/needs before you discuss this delicate topic with your partner.  Good luck and keep us posted!  Cheers!
« Last Edit: June 17, 2014, 03:58:23 PM by sobezen »

soccerluvof4

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Re: spouses and income
« Reply #24 on: June 17, 2014, 07:04:53 AM »
Like people said this is no normal for this , whatever works as long as you have the same goals.

we have been married for 18 years and everything has always been joint. Our income is irrelevant in that we own our own business so were all in together and our goals our becoming more and more the same as well. I got on the MMM bandwagon a bit a head of her but shes come around with little or no resistance. Mint doesnt lie!

ambimammular

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Re: spouses and income
« Reply #25 on: June 17, 2014, 09:51:35 AM »

B. We both are earners.  Seems like in families where one parent stays home there is the potential for more disagreements since one is "contributing" more in a financial sense.  (Hogwash)

There is greater potential for abuse when finances are kept separate and one of the people is an at-home-parent.  If it goes bad, it will go really bad.

That said, I know people who combine, and then hide stashes from each other (the intentions are that husband can't spend what he doesn't know about, as she pushes him toward mustachianism.)






snshijuptr

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Re: spouses and income
« Reply #26 on: June 17, 2014, 10:00:20 AM »
We are fully combined, much like many others above.

Something not mentioned is that we are also fully combined on our GOALS! We sit down together and decide as a family what our financial goals are. We talk about it consistently. We keep our eyes on the ball. When we make a purchase, it is usually a benefit for both of us. We each get $10 a month in individual spending money (as does our daughter) for going out to lunch at work or other random stuff (we usually save up and go out once a season). We also don't do presents for each other on a regular basis. We would rather all go out to dinner or buy a family gift.

Fully combining finances works when you fully combine your financial lives.

Villanelle

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Re: spouses and income
« Reply #27 on: June 17, 2014, 10:09:28 AM »
We too are fully combined. All money is our money.  There are no separate accounts or "pots" or allowances or anything else.

In a dozen years of being married, we haven't have a single argument about money.  That might have to do with the fact that we both married someone with very similar financial philosophy to our own.

Due to moving overseas for his career, I no longer have an income.  But everything is treated the same as it was when we were both getting a paycheck.  Money is deposited, money is spent.  For large purchases, we talk it over, though we don't have a specified limit like some do. (e.g. "If you are going to spend more than $250, if needs to be discussed.") We don't run purchase by one another and don't have allowances or any set amount of blow money. If I want new shoes and decide that is a worthwhile use of $50 of our dollars, I buy them. I don't hide the shoes or receipt from him, but nor do I need to announce/confess that I bought shoes.  The same is true for him.  If he wants to go to lunch with coworkers or purchase a gadget, I don't need to be informed.   I trust him to spend within our values and he trusts the same of me.  And that has never once led us astray.  YMMV.

MountainFlower

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Re: spouses and income
« Reply #28 on: June 17, 2014, 11:45:25 AM »
We are totally combined.  We didn't combine until a year or so after marriage.  Once we did, our finances really took off.  It was like the accountability of one account made a difference. 

We've been married 18 years.

unix_kung_fu

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Re: spouses and income
« Reply #29 on: June 17, 2014, 03:14:31 PM »
thanks for the responses everyone, a lot of interesting ways to do it. we'll be discussing these and looking at works best.

JustTrying

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Re: spouses and income
« Reply #30 on: June 17, 2014, 11:57:04 PM »
We have a somewhat bizarre system, but it works for us: We both have individual checking accounts. We have joint savings. We have an agreed amount that we put into our joint savings every month. There are certain bills that I pay every month and certain bills that he pays every month, and we take turns with the mortgage. Some people think it's odd that we don't combine our finances more, but hubs is self-employed, and it would make me super anxious if I had to share an account with him and see those numbers bouncing around all the time. The way we do it works really well for us, and we rarely argue about finances. (And to me, not arguing about finances is very important, as it is a topic that many couples argue about constantly).

GGNoob

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Re: spouses and income
« Reply #31 on: June 20, 2014, 10:11:32 PM »
My wife and I share everything, even though I've always made more money (she may actually beat me next year at the rate she's going). All of our money goes into one account. Mint is our budget tool of choice and we each have a spending budget of $200. This $200 can be spent on anything without the other person caring and it rolls over from month to month if you want to save up for something big. We did have to set up some ground rules about what had to come out of our own spending budget and what could fall into another category. For example, all clothes, even for work, come out of this budget. For my wife, our combined spending budget can pay for basic make-up, but things like lip stick have to come out of her spending.

As a married couple, I don't think it should matter who makes more and the income should always be shared. That's also why our spending budgets have always been the same instead of having mine bigger because I make more. But that's just my opinion.

CestMoi

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Re: spouses and income
« Reply #32 on: June 21, 2014, 03:32:16 PM »
Not married, but my live-in bf and I maintain separate accounts, and would if we were ever to marry.

I think your fiancee ought to invest some of that 60k she has in the BofA account. And I'm also a believer in pre-nups.

netskyblue

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Re: spouses and income
« Reply #33 on: June 21, 2014, 03:42:08 PM »
100% separate, here.  I pay most of the "bills": rent, energy, internet, he does most of the housework and buys most of the groceries.  I earn more.  Our savings are separate, our bank accounts are separate (with a "pay on death" to the spouse).

Jennifer in Ottawa

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Re: spouses and income
« Reply #34 on: June 21, 2014, 03:48:32 PM »
We've been married 16 years and have had joint accounts since the day after our honeymoon.

In a previous relationship I found it extremely tiresome to be calculating who owes what and what amount who had to transfer to the other to pay bills.  Keeping things together is far easier, and when one of us dies, the other doesn't have to worry about anything to do with banking.

Even though I manage our finances, we both know all the details (bank balances, bill amounts etc).  If one of needs/wants to spend money on something, we do.  Purchases over $50 generally get discussed, and we don't 'keep score'.  If he spends $100, I don't feel I am 'owed' $100 in spending.  It generally all evens out in the wash.


Chrissy

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Re: spouses and income
« Reply #35 on: June 21, 2014, 04:57:06 PM »
I read that the new "conventional" wisdom is to keep things separate for 2 years, because of the high failure rate of marriages.  I followed that advice when I got married, thank god, because he spent every dime in every account to which he had access.

We meant to have a prenuptial agreement, but my lawyer got overwhelmed, so it changed to an antenuptial (post wedding) agreement.  It specifically said no support for either party.  If we hadn't had that, he would've pursued me for support.

It was easy to convince him to do one... neither one of us had much, and it was really about protecting our parents' legacies.  You see, if something drastic happened to our parents, we would've both stood to inherit tidy sums.  So I just said, "We should do this.  What if, 10 years from now, your folks have passed, I go completely crazy, leave you for some cabana boy, and spend half your mom's money on him?  'Cause I don't want you to do that to me, either."

And he was all like, "Where do I sign?"
« Last Edit: June 21, 2014, 06:50:29 PM by Chrissy »

daymare

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Re: spouses and income
« Reply #36 on: June 21, 2014, 05:59:28 PM »
So my situation is that my fiancÚ and I will have been together for ~5.5 years when we get married in a few months, when we'll both be 25.  Met & started dating sophomore year in college, then dated long distance for 1.5 years (for a few months before that, he lived with me, then a few months after that, I lived with him before moving to a third city for grad school).  Now, with the first year of my PhD over, he's moved to be with me and we just moved into our new rented apartment together.

We are coming in with similar assets - I have about 47K in a Roth IRA, he has about 40K.  I completely believe in total melding of finances, I needed to feel comfortable doing that to feel comfortable getting married (and I am wicked protective of my assets, so it means a lot to me to have found someone I will be sharing all finances with). The plan is to use one of my CCs with him added to the account as our joint account, as well as my bank savings/checking account (as only I currently have direct deposit set up, he *just* got a job in the new city, yay).  Then all our individual cards we'll probably keep, setting up auto bill pay and some. Low recurring expense like netflix or whatnot.  So everything will be joint, maxing out his 401K, both Roths, saving tons.  The goal is to mostly get by on my 31K stipend, and save his ~55K salary.

It's been a bit hard emotionally on me to have effectively joint finances while he was unemployed and I was hardcore working/struggling in school, which I didn't expect.  But there's no competition, no score-keeping in the long run.  If I become a tenure-track professor, I would be making 150K reasonably, so then I'd be the higher earner, but then again, it's also really impossible to predict the future, we're so young.  Academia could not work out, or I could pursue something different, plus he has a lot of potential earnings as a chemical engineer.  And I view us as a team - if I make the money but he moves for me/my career, his lower earnings don't make him any less of an equal in our relationship/finances.

Good luck! (I guess I should add that this works because we are both reasonable, responsible, not crazy consumer people.  We have different spending proclivities (he's much better at cooking/eating at home, but has the car/gas/insurance costs, whereas I care more about traveling a lot, yet spend more on clothes (since he spends nothing)).  But it's all wonderful, I trust him, I want to be accountable to him.

NewStachian

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Re: spouses and income
« Reply #37 on: June 21, 2014, 06:42:35 PM »
I've been married for just over a year and we went full joint accounts. My wife's about 90% of where I'm at in terms of frugality. It was stressful at first, but I calmed down a bit about it even though she's not as efficient as I would like. Our savings rate was 47% at my last monthly snapshot, so I'm not complaining anymore.

I think combining finances is less about how much you make and more about your views on money. You can make the exact same and have wildly different spending habits, which will lead to problems, or you can make different amounts, have the same view on spending, and be just fine.

CommonCents

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Re: spouses and income
« Reply #38 on: June 21, 2014, 08:41:12 PM »
My wife and I share everything, even though I've always made more money (she may actually beat me next year at the rate she's going). All of our money goes into one account. Mint is our budget tool of choice and we each have a spending budget of $200. This $200 can be spent on anything without the other person caring and it rolls over from month to month if you want to save up for something big. We did have to set up some ground rules about what had to come out of our own spending budget and what could fall into another category. For example, all clothes, even for work, come out of this budget. For my wife, our combined spending budget can pay for basic make-up, but things like lip stick have to come out of her spending.

Digression, but...  I totally get makeup coming out of her budget, but I find it odd that lipstick wouldn't be considered "basic makeup" - and this coming from a person who doesn't wear makeup 95% of the time.  When I do, it's 1) lipstick, 2) foundation, 3) lip liner (and in about that order of what I would make the effort to put on - rarely going to eye makeup).

MrsPete

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Re: spouses and income
« Reply #39 on: June 21, 2014, 09:42:58 PM »
I believe in fully joined finances (been married 12 years fwiw), but lots on people on this site don't.  We share all of our accounts except one; we each have our own blow money accounts that get funded monthly with an allowance and can be used on anything without the other caring.  Everything else gets spent more or less within pre-planned budgeted categories.

In your situation (we make similar income as you, my wife a little more than me), I would maybe start off by keeping her $60k savings separate almost like it doesn't exist until you're both comfortable with how everything is working together.  Then in a few years that account being viewed differently may look silly to both of you and you roll in in to the rest of the plan.

It helped that we were both young and broke when we got married so we never did anything other than combined finances from day one.
I've been married 23 years, but this is essentially what we've done -- and it works. 

Separating finances makes no sense to me for two reasons:  1) If you're marrying this person, you're vowing to stay together, combining everything -- why then would it make any sense to try to keep your finances separate?  It's almost like saying that you aren't certain that you'll stay together and want to have an escape route.  2)  Would there ever come a time when you'd say, "I'm going out to dinner, but you're not because you have no money?"  Ridiculous, isn't it? 

What does matter tremendously is that you and your future spouse are in agreement on how you intend to spend.  If you agree on that, the exact location of the money (this account vs. that account) doesn't matter.

Primm

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Re: spouses and income
« Reply #40 on: June 22, 2014, 12:37:07 AM »
I've done both. My first marriage we were totally combined with finances and totally miserable. Having a joint bank account didn't stop him from spending $2k on a ring for his bit on the side. Now, I'm in a marriage where we have totally separate finances except for our mortgage and I couldn't be happier. We don't act like flatmates, it's more a case of whoever gets the bill pays for it, and if the money is a bit one sided then the person with more will transfer some across.

Honestly, I think the argument about trust (as in, "if you truly trust him/her why would you not combine finances?") is a bit of a red herring. My belief is, if you truly trust your spouse, why WOULD you combine finances? Do you really need to watch every cent that they spend? That's not really trust then, is it?

I find talking about separate / combined finances is a bit like religion. Atheists generally say "I don't believe in God, but if you do that's fine", where religious types truly believe that their way is the only way and everyone else will burn in hell.

Same for separate finances. People who travel this way usually say "this is what works for me". People who have combined finances generally think that we separate money people are all heading for hell the divorce court, and that combining finances is the ONLY WAY to do it.

What does matter tremendously is that you and your future spouse are in agreement on how you intend to spend.  If you agree on that, the exact location of the money (this account vs. that account) doesn't matter.

'Zactly.
« Last Edit: June 22, 2014, 12:38:43 AM by Primm »

Villanelle

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Re: spouses and income
« Reply #41 on: June 22, 2014, 07:06:50 AM »
I've done both. My first marriage we were totally combined with finances and totally miserable. Having a joint bank account didn't stop him from spending $2k on a ring for his bit on the side. Now, I'm in a marriage where we have totally separate finances except for our mortgage and I couldn't be happier. We don't act like flatmates, it's more a case of whoever gets the bill pays for it, and if the money is a bit one sided then the person with more will transfer some across.

Honestly, I think the argument about trust (as in, "if you truly trust him/her why would you not combine finances?") is a bit of a red herring. My belief is, if you truly trust your spouse, why WOULD you combine finances? Do you really need to watch every cent that they spend? That's not really trust then, is it?

I find talking about separate / combined finances is a bit like religion. Atheists generally say "I don't believe in God, but if you do that's fine", where religious types truly believe that their way is the only way and everyone else will burn in hell.

Same for separate finances. People who travel this way usually say "this is what works for me". People who have combined finances generally think that we separate money people are all heading for hell the divorce court, and that combining finances is the ONLY WAY to do it.

What does matter tremendously is that you and your future spouse are in agreement on how you intend to spend.  If you agree on that, the exact location of the money (this account vs. that account) doesn't matter.

'Zactly.

I don't understand this.  Combined finances has nothing to do with watching every penny my spouse spends.  I don't look at his credit card at all.  No idea how much is spent on it, and certainly not what each expense is.  When checking our checking account, I technically see the total that autopays, but I pay no attention to it.  And I never look at his cc account statement unless he's deployed and asks me to because he can't check it for accuracy.

Similarly, I have no idea how he spends any cash he pulls out.

Really, I have no idea what he buys.  He could be getting hotel rooms for a liaisons with a mistress and I wouldn't know, despite our joint accounts.  And that's precisely because I do trust him and have no need or desire to look at his cc statement, or to ask him how he spent the $300 he withdrew last week, or anything else. 

I'm sure joint finances could be a way to monitor every expense, but they certainly don't have to be. 

Daleth

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Re: spouses and income
« Reply #42 on: June 22, 2014, 07:59:57 AM »
Is it normal for married couples to set aside their own savings/investments pre-marriage, then maintain a joint one post-marriage? I just don't know what the norm is, if there is one.

There is no "normal" - there is only what works for you and her.  Many people do as you propose.  You will likely get almost as many variations of responses as people that respond to your question here.  That said, there are few more common approaches I've seen:
  • One Pot: "Your" money and "her" money goes into one pot.  You budget together.  Generally a necessity for those with a stay at home spouse, this is still often used by many couples, particularly in older generations, or those who got married younger with fewer (or zero) assets.  My parents did this - a necessity for them, as mom couldn't have a career when she kept getting moved due to my dad's career, she eventually became a SAHM, and he could be gone for months at a time.
  • Separate pots: You keep your money entirely separate.  You agree together on how to split bills.  I've known a friend that did this where the agreement was that he cover all of the shared bills except one (which she'd frequently ask for help on anyways, and no, it wasn't the mortgage).  I've known another set of friends that split the bill (pre-marriage) based on their percent of money earned.  So if one person earned $40k, and another $60k, they split bills 40/60.  This is more frequently used by those in second marriages I've observed, where couples are older and may have differing expenses such as kids.
  • A mix: Some money is shared.  Maybe people have a budget for their spending money that is all theirs that they don't need to explain to the other.  Maybe they agree anything under a set amount can be freely spent but over it must be jointly agreed (the above couple that split bills based on income moved this after marriage).  Maybe they nominally have shared account names, but practically speaking don't actually have a pot of shared money. 

In all scenarios though consider will things change if you have kids?  get sick and can't work?  Get divorced?  (A number of people on here are unhappy about "bargains" about money and who would work/stay home made years ago.)  If you already have separate kids, how will you handle a house/inheritance etc. when one of you dies?

tl;dr:  There's no right way to do things.  Do what works for you.

In addition to the question about how many "pots" to use, there's also the question of how to fund the joint expenses. When spouses are earning almost the same amount it's not a big issue, but it sounds like you guys are off by about 20% (since you earn $145k together and she earns $15k more). I earn a lot more than my husband due to being a fatcat lawyer, and here's the basic outline of how we do it:

- Add up our monthly joint bills (mortgage, household expenses, groceries, car insurance/gas/maintenance... childcare will come into it when children come along).

- Do the math to figure out what proportion of our total income each of us brings in. So if you're earning $100k together and one earns $65k while the other earns $35k, there are your percentages.

- Apply those percentages to the household bills. In other words, say your monthly bills are $3000. The spouse earning 65% of the income would pay 65% of those bills, or $1950. The one earning 35% would pay the remaining 35%/$1050. You can also apply those percentages to any other joint money projects, such as savings, emergency funds, etc.

We do it that way because when spouses earn different salaries, there are only two ways you can split the expenses:
(1) split the money 50-50 or
(2) split your time 50-50.
I find it highly unfair to split the money 50-50 when one person is earning distinctly less than the other. In contrast, nothing could be more fair than splitting your time 50-50 (in other words, with the 65%/35% above or any other arrangement made along these lines, although each person is contributing different amounts of money, they are contributing the same amount of time: it takes both of them, say, 5 days of work to pay their share of the mortgage, 1 day to pay their share of the groceries, etc.).

NorCal

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Re: spouses and income
« Reply #43 on: June 22, 2014, 08:13:24 AM »
The right answer is to find out what works best for your personal situation and personalities.

My wife and I have individual checking accounts for personal spending, and one joint account for household spending.  We both contribute to the joint account as needed.

Our-non retirement savings have been merged into joint accounts, while our retirement savings remain in the same separate accounts from before we were married. 

We do have the same bank (makes logistics easier) and track all individual and joint accounts in Quicken.

This works well for us, and has worked well for other dual-income couples.

Hedge_87

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Re: spouses and income
« Reply #44 on: June 22, 2014, 08:29:30 AM »
Well. ... her money is her money and my money is her money lol.

In all seriousness we combined everything. Before we got married I had a very hands off approach to money. I would just take whatever was left at at the end of the month after bills and put it towards whatever my goal was at that time (pay of debt, fund investment accounts,  save for vacations). My wife likes to go through everything line by line and make sure it's OK.  We started out trying to budget and quickly found out we didn't like that. So now we just do a monthly "recap" where she goes through everything and categories everything and then once she is satisfied we send the excess to our next goal. As was stated above though our goals and spending habits are in line.

Rube

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Re: spouses and income
« Reply #45 on: June 22, 2014, 08:49:09 PM »
We have separate savings accounts. I pay most of the bills, she helps as needed. Otherwise she's busy growing the 'stache. Neither of us is worried about the other doing something crazy like running off to Tahiti. We are of similar mindset on spending.

Now the one thing we have together that should be separate is the checking account. We have only one because I am grandfathered into a free checking account. And although I pay everything that comes as a bill, she pays things like daycare, food for the bulk meal-making sessions with her friends and stuff like that. And it drives me fucking crazy to not always know how much is in there when I go to pay bills. Therefore I recommend SEPARATE checking accounts.

Chranstronaut

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Re: spouses and income
« Reply #46 on: June 23, 2014, 12:32:55 PM »
Before moving to England, joint account to pay bills. We put 50-50 into it. I made more. Maybe about $10k more.

We had our own IRAs/investments, checking and savings. We always invest first aka direct deposit from paycheck, so once we get our money in our personal checking accounts, it is ours to do whatever. No asking... if he wants to buy a car part (for the vintage car he owns).

Wow, putri are you future me?  We're currently high-earning DINKs with a nebulous timeline for marriage.  We keep everything separate.  All bills are 50/50, all groceries and expenses are traded back and forth, and the rest is invested separately into our 401ks, Roth IRAs, and Vanguard accounts.  We are equally frugal and have always agreed on most money related things. 

How did moving to the UK impact your 'stache?  My SO is looking for work there and we are excited by the possibility of suddenly uprooting.  However, I don't know how to plan for that, and I like being hands on with my money.

I earn about 10k more and save more because my SO also has a classic car project.  We're still discussing how/if to combine finances at marriage, since I don't have an equivalently expensive hobby and don't really like the idea of "allowances".  I'm interested in pulling the trigger on FI/RE earlier than he is, so maybe that's where my "allowance" will go...

frugalnacho

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Re: spouses and income
« Reply #47 on: June 23, 2014, 01:49:10 PM »
I've been married 23 years, but this is essentially what we've done -- and it works. 

Separating finances makes no sense to me for two reasons:  1) If you're marrying this person, you're vowing to stay together, combining everything -- why then would it make any sense to try to keep your finances separate?  It's almost like saying that you aren't certain that you'll stay together and want to have an escape route. 2)  Would there ever come a time when you'd say, "I'm going out to dinner, but you're not because you have no money?"  Ridiculous, isn't it? 

What does matter tremendously is that you and your future spouse are in agreement on how you intend to spend.  If you agree on that, the exact location of the money (this account vs. that account) doesn't matter.

Aren't your accounts still combined by law anyway?  If you have 100k in your account and your wife has 0k, and you divorce won't the courts just sum that up anyway?  It's not like they are gonna say "this 100k is yours, and too bad your wife let her account go to zero, because now she has nothing!".  They will just sum it up and split it, and then determine child support and alimony payments based on the division of who earns more regardless of past spending.  IE if you earn 100% of the money in the relationship, and keep separate accounts, when you get divorced you will lose 50% of your accounts and a substantial portion of your future income will go to your spouse.

Now before you get married it makes sense, but once you are legally married I don't think keeping separate finances matters.  I could be wrong as i've never been divorced, but from the people i've known that got divorced it doesn't seem like the courts want to deal with a bullshit "separate accounts" strategy and instead use the "fuck it, you're married, you own EVERYTHING jointly regardless of who earned it or who is more frugal" strategy. 

My belief is, if you truly trust your spouse, why WOULD you combine finances? Do you really need to watch every cent that they spend? That's not really trust then, is it?

Yes.  It's not a matter of a trust or judgement, it's a matter of having control over your money.  How can you have control if you don't know where it's all going?

DMoney

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Re: spouses and income
« Reply #48 on: June 25, 2014, 06:02:01 PM »

Aren't your accounts still combined by law anyway?  If you have 100k in your account and your wife has 0k, and you divorce won't the courts just sum that up anyway?  It's not like they are gonna say "this 100k is yours, and too bad your wife let her account go to zero, because now she has nothing!".  They will just sum it up and split it, and then determine child support and alimony payments based on the division of who earns more regardless of past spending.  IE if you earn 100% of the money in the relationship, and keep separate accounts, when you get divorced you will lose 50% of your accounts and a substantial portion of your future income will go to your spouse.

Now before you get married it makes sense, but once you are legally married I don't think keeping separate finances matters.  I could be wrong as i've never been divorced, but from the people i've known that got divorced it doesn't seem like the courts want to deal with a bullshit "separate accounts" strategy and instead use the "fuck it, you're married, you own EVERYTHING jointly regardless of who earned it or who is more frugal" strategy. 


I have been divorced.  We made pretty close to the same income.  Were only married a short time.  No kids.  Wanted the break to be clean when we decided it was over.   Didn't involve a lawyer, and since we had kept our accounts separate it was easy.  No court, no alimony, etc. 

Married a second time now, with kids, long-term - accounts are all together.  He handles everything.  See my note above.