Author Topic: Why do married couples have separate bank accounts and/or "split" costs?  (Read 62132 times)

Giro

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We keep separate checking accounts but we both spend so little that it doesn't even matter.  I don't care about the very little household expenses and who is paying for what.  I care about the investment accounts and that we are getting closer and closer to FI every day. The most important thing is maxing the ROTHs, maxing 401's, and sending thousands to Vanguard each month.  Who buys the milk is irrelevant. 

If you have a spouse who isn't as frugal or doesn't earn as much income, it may be different.

goober

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I find it surprising that so many keep separate accounts. When you get married, unless there is a prenuptial agreement, legally all assets are shared 50-50. It doesn't matter who makes more, or who has more debt, if a divorce happened, it's going 50-50. Most expenses are shared, why complicate things by having separate accounts? I could see each person having a main account where everything is deposited, and then having a small amount withdrawn into two separate accounts for free spending if that is a concern, but other than that it seems to make everything more complicated.

And to the presents comment, if each person is working, each are contributing money, so I don't see how it becomes less special if it's from a shared account, the spouse is still using hard earned money to give something thoughtful. 

morning owl

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I find it surprising that so many keep separate accounts. When you get married, unless there is a prenuptial agreement, legally all assets are shared 50-50. It doesn't matter who makes more, or who has more debt, if a divorce happened, it's going 50-50. Most expenses are shared, why complicate things by having separate accounts? I could see each person having a main account where everything is deposited, and then having a small amount withdrawn into two separate accounts for free spending if that is a concern, but other than that it seems to make everything more complicated.

And to the presents comment, if each person is working, each are contributing money, so I don't see how it becomes less special if it's from a shared account, the spouse is still using hard earned money to give something thoughtful.

Exactly! Thank you for saying this. This is my feeling for having separate accounts -- no matter who pays the bills, everything would be split 50/50 in a divorce, anyways.

We each have our own investment accounts, because they are registered. DH pays into my TFSA and he pays most of the bills so that I can invest my income in a taxable account. It's a form of income splitting, as a workaround. If he were to give me money to invest in my name, in a taxable account, then he would be taxed himself at his higher tax rate, as per attribution rules in Canada. If he pays all the bills and allows me to invest my own income, then I pay taxes at my lower rater. For us, it works. As you say, the money is shared, anyway. But since we are not legally allowed to do income splitting as a married couple with no kids and very different incomes, this is what works best for us financially.

Whatever works, people! Different strokes.
« Last Edit: March 16, 2015, 08:09:20 AM by morning owl »

MoneyCat

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In the past, I had a bad situation with a live-in girlfriend stealing all my money from a joint bank account so I decided I would never risk that again -- no matter the circumstances.  My wife and I have separate accounts at the same bank and a joint account into which we transfer our share of expenses and from which we pay our bills. It is much easier that way and we have never argued about money.

morning owl

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After doing some research (thanks, Wikipedia) I see that in the US you are allowed to split incomes if one spouse earns significantly more. This may be where some of the confusion here is coming from! I'm not sure if the people here in the separate income camp tend to be non-Americans, but this could be part of the issue. In Canada we all file taxes separately, and until very recently the government did not allow income splitting at all. We still don't, technically, although Harper has passed some bill recently that allows couples with kids to do some sort of income splitting. I haven't looked into it because it does not apply to us. But now it makes sense why people don't get the purpose of separate accounts! It really makes no difference in Canada. There's no financial reason to have a joint bank account, since even when married, we pay income taxes based on our individual incomes. And in marriage all assets are 50/50.

stripey

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My parents have separate accounts, and mostly shared finances. They have a rough idea what the other has in their accounts of course, and divide up the financial responsibilities between the two of them.

They recently celebrated their 35th wedding anniversary and appear quite happy with each other so something must be going right:)

They have always counselled me to keep separate accounts. Not to keep secrets, nor as 'insurance' against a divorce (doesn't work anyway) but because it's easier to delegate responsibility that way. They argue that it means you don't need to feel like every detail of something that's your responsibility is examined by the SO. That sort of energy, they argue, is better invested eslewhere in teh relationship.

When (if? ) I marry, it will likely be separate accounts, separate responsibilities. And with the transparency thing? The most likely groom-to-be and I know what each other's financial situations and bank accounts look like anyway.

Giro

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Please confirm with your own state law regarding divorce and assets.  NOT all assets are 50/50 when you get married.  Many states allow you to maintain the assets that you "brought into the marriage" upon divorce.

It doesn't matter what other people do.  I think you find a system that works for you and your spouse and you use that system.  Don't compare yourself to others ever! 




charis

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My parents have separate accounts, and mostly shared finances. They have a rough idea what the other has in their accounts of course, and divide up the financial responsibilities between the two of them. . .

They have always counselled me to keep separate accounts. Not to keep secrets, nor as 'insurance' against a divorce (doesn't work anyway) but because it's easier to delegate responsibility that way. They argue that it means you don't need to feel like every detail of something that's your responsibility is examined by the SO. That sort of energy, they argue, is better invested eslewhere in the relationship.

I don't understand this.  If you are married, you both have financial responsibility for everything and all financial decisions should be joint decisions. 

And several people have said they maintain separate accounts because they don't have the same financial philosophy, investment risk tolerance, retirement goals, or spending habits.  That's illogical - when you get married, you have to agree on spending, investments and retirement goals.  You can't just do your own thing because you have different habits, or whatnot.   You both should be intimately aware of each other's spending, etc. 

If you feel like you would be scrutinized or uncomfortable by having joint accounts, that is a whole other issue that needs to be addressed.  In marriage, you always need to be on the same page financially.  That's your future and the future of your children, if you have them. 


TrulyStashin

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I don't know why anyone would insist on separate accounts for any other reason.  I'm open to suggestions, though.  Haven't seen any good ones here thus far.

I think it depends on what you mean by "separate." DH and I pay our bills from a joint account, but we each have our own bank account where we keep an agreed-upon portion of our paycheck to spend on what we like. The "separate" part means that we can't see what the other person is spending mad money on and can't pass judgment. I don't think this means we're headed for divorce.

+1.  I'm 46.  My SO is 51.  We don't live together but if we did, we'd have one joint account from which all household bills and joint expenses (eating out) are paid and to which we each contribute equally (yes, we have discussed this).  But we would also each maintain the bank accounts we currently have and our paycheck would be deposited there.  Our financial goals are aligned and we cheer each other on "Look at my 401k balance!!  Good job, honey!"

That said, we each have fairly entrenched habits around managing money flow.  I use Mint and Quicken.  I download transactions and reconcile nearly every day.  I input all my anticipated payments for the coming month at the end of the current month. 

He likes YNAB. He doesn't use Quicken because he has a program that his bank offers (which mine doesn't).

I have a spreadsheet that I love.  He has one that he loves, with a different format that drives me nuts.

How and why would we try to scrap what works for each of us as individuals just because we're together? [rhetorical]  We wouldn't argue over financial goals, but I could sure see arguing over Mint v. YNAB and I don't see any upside to changing habits that I've had since I got divorced 12 years ago.



Cromacster

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I feel the way and my wife handle our finances would be considered separate my many.  It's what we have always done and it is what works for us.  We split all bills 50/50, discuss large purchases, and have to cover our own discretionary spending.  I've attached a flow chart to help visualize how our separate accounts are handled.  Overall, we have 2 joint accounts and a couple joint credit cards.  Other than the joint accounts we do not have access to each others accounts.  We do have a system in place in case one of us is incapacitated in some form where the other would need access to the accounts.

In the grand scheme of things I feel this helps us to discuss and be more open about our finances.  We periodically sit down and discuss where we are at, how much we spent, how much we saved, how much cash we have..etc etc.  We don't really care what the money was spent on as long we are hitting our targets (within reason of course, hookers may be frowned upon).  This has more to do with our relationship than the system of how we handle our money.

I agree that there is a difference between having separate accounts as I detailed above vs keeping financials secret/hidden from each other.
« Last Edit: March 16, 2015, 09:21:56 AM by Cromacster »

goober

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My parents have separate accounts, and mostly shared finances. They have a rough idea what the other has in their accounts of course, and divide up the financial responsibilities between the two of them. . .

They have always counselled me to keep separate accounts. Not to keep secrets, nor as 'insurance' against a divorce (doesn't work anyway) but because it's easier to delegate responsibility that way. They argue that it means you don't need to feel like every detail of something that's your responsibility is examined by the SO. That sort of energy, they argue, is better invested eslewhere in the relationship.

I don't understand this.  If you are married, you both have financial responsibility for everything and all financial decisions should be joint decisions. 

And several people have said they maintain separate accounts because they don't have the same financial philosophy, investment risk tolerance, retirement goals, or spending habits.  That's illogical - when you get married, you have to agree on spending, investments and retirement goals.  You can't just do your own thing because you have different habits, or whatnot.   You both should be intimately aware of each other's spending, etc. 

If you feel like you would be scrutinized or uncomfortable by having joint accounts, that is a whole other issue that needs to be addressed.  In marriage, you always need to be on the same page financially.  That's your future and the future of your children, if you have them.

I'm in the same camp as you! It is so often discussed in case studies that one should be aware of where each dollar is going each month, but so many seem to be using separate accounts, separate spreadsheets, etc. Sounds like some are sharing information, but at that point what is the real purpose behind having separate accounts? If you plan to spend your life with someone, you should have an mutual understanding and agreement of where you both want to be, and each person should be 100% committed to those goals and objectives.

hdatontodo

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A former CW told me this story. He was away on a business trip and tried to take money out of an ATM. The request was declined. He found there was no money in any account at that bank. He wife took $30K out and then left him. It never got counted against her.

People may think things are split 50/50 in divorce, but this isn't necessarily the case. If DH is working and his 401K has grown a lot during marriage. A QDRO will give 1/2 of the increase to the DW possibly. In some states if someone takes a lot of money before they leave, that could be counted against them once finally in court. However, the amount divided up in divorce here is what is available once finally in court. So if someone sells the house and uses the money to pay attorneys fees or to bury their brother, the other person might not get half.

I didn't get a credit report from my ex before marriage and found out later that she had been siphoning off family money to pay pre-marriage debt she hadn't told me about.

It is too late in life for "a friend" to risk that his current DW who is menopausal, on oxicontin after surgery, and acting hateful as can be could be trusted.

(edit) Here's a URL about a spouse using a home equity line of credit before divorce: 
http://articles.chicagotribune.com/1990-01-29/business/9001080686_1_home-equity-credit-line-director-of-consumer-lending

Kudos to you in wonderful marriages. A word to the wise to the rest of us.



« Last Edit: March 16, 2015, 10:44:12 AM by hdatontodo »

2Birds1Stone

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I feel the way and my wife handle our finances would be considered separate my many.  It's what we have always done and it is what works for us.  We split all bills 50/50, discuss large purchases, and have to cover our own discretionary spending.  I've attached a flow chart to help visualize how our separate accounts are handled.  Overall, we have 2 joint accounts and a couple joint credit cards.  Other than the joint accounts we do not have access to each others accounts.  Though this is taken care of in a will if one of us were to die.

In the grand scheme of things I feel this helps us to discuss and be more open about our finances.  We periodically sit down and discuss where we are at, how much we spent, how much we saved, how much cash we have..etc etc.  We don't really care what the money was spent on as long we are hitting our targets (within reason of course, hookers may be frowned upon).  This has more to do with our relationship than the system of how we handle our money.

I agree that there is a difference between having separate accounts as I detailed above vs keeping financials secret/hidden from each other.

I dig it!

I am sure many here know who the MadFIentist is. I listened to a very good podcast episode where he talked about why him and his wife have separate finances. He wants to pursue FI, she wants to continue practicing optometry. They have a system that works, sure in the eyes of the law its all shared money. But why should anyone conform to what someone else thinks is normal in terms of anything, let alone finances and marriage. 

eyePod

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We do this but not for any other reason than laziness. We both know eachother's account names/passwords. But we set up online bill pay through one or the other account and don't want to have to copy over the information to another one!

It's not really splitting the cost either, it's just picking which account to pull from. We use YNAB so it's all one big fund anyways. If we're making a big purchase, we just take from whichever account has more money in it. We don't care about where it's coming from for any other reason than convenience.

Cromacster

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You both should be intimately aware of each other's spending, etc.

While I agree with your statement that couples need to be on the same page financially, this statement bugs me quite a bit.  Do you suggest I comb over everything my wife spends to see what she is spending money on...and her mine?

Zikoris

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Why should "separate finances" = "I have no clue what my partner is doing"?

Because that's what "separate" means?

I have no problem with maintaining multiple accounts.  But if you're using multiple accounts to conceal your financial life, then I think your relationship has a problem. 

I also have no qualms with having multiple bedrooms, unless you're using your private bedroom to do something your partner wouldn't approve of, then I think that's a problem.  Same deal.

Quote
You can have separate finances but still discuss things, show each other your balances, etc. You can have separate accounts but not keep secrets from each other.

Sure.  In that case, I wouldn't consider your finances separate.  Maybe just inadequately unified.  It just facilitates problems, though I concede it doesn't necessarily create them.

The problem arises when you each consider some funds as belonging to you, because that opens up the possibility of resentment or power struggles over who pays for what, or a sense of entitlement that one person should be able to spend "their" money however they want to.  I don't think that's healthy in a marriage.

Ok, well, this is getting a little ridiculous. If you're not keeping secrets from each other you don't actually have separate finances, despite the fact that you don't have a single account with more than one name on it?

I disagree that it facilitates problems. For me, joint finances would facilitate a whole heap of stress and problems that I see no reason to have, particularly when we have a functional, transparent system now, are both happy, and on the same page with long term goals and spending.

I see it sort of like hobbies. Some couples do the joined-at-the-hip thing and do everything together. Some couples have totally separate hobbies. Most couples are probably somewhere in the middle. In our case, we have a handful of joint activities like hiking and travel, but do the majority separate since, for example, I can't wrap my head around D&D and he has no interest in becoming a ballerina. I don't think any system is superior to another - it totally depends on the couple involved and what they prefer.

Cromacster

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Ok, well, this is getting a little ridiculous. If you're not keeping secrets from each other you don't actually have separate finances, despite the fact that you don't have a single account with more than one name on it?

Much of the argument discussion in this thread revolves around the definition of separate finances.  From what I have read on this thread, no one has claimed that they are totally oblivious to what their SO's financial state is.  Again, semantics.

Zikoris

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Ok, well, this is getting a little ridiculous. If you're not keeping secrets from each other you don't actually have separate finances, despite the fact that you don't have a single account with more than one name on it?

Much of the argument discussion in this thread revolves around the definition of separate finances.  From what I have read on this thread, no one has claimed that they are totally oblivious to what their SO's financial state is.  Again, semantics.

I absolutely agree.

Sol, it seems like what you're saying is that being oblivious about your partner's money is a problem. Everyone agrees with that! That is unrelated to how many names are on your accounts however, and is quite common even among (non-mustachian) couples with joint finances.

goober

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For me, joint finances would facilitate a whole heap of stress and problems that I see no reason to have, particularly when we have a functional, transparent system now, are both happy, and on the same page with long term goals and spending.

What problems do combining finances create? I got married last year, and all it took was opening a joint account, and changing the routing number on direct deposit. I can understand continuing what works if both spouses have access to see spending (not necessarily individual expenses, but I'd certainly want to know an amount), but I honestly do not see how combining accounts really leads to stress and problems, if anything it makes things easier as it is one account you can put automatic billing on and not having to worry about going into 2 accounts, dividing costs, making sure two payments go through, etc.

Zikoris

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For me, joint finances would facilitate a whole heap of stress and problems that I see no reason to have, particularly when we have a functional, transparent system now, are both happy, and on the same page with long term goals and spending.

What problems do combining finances create? I got married last year, and all it took was opening a joint account, and changing the routing number on direct deposit. I can understand continuing what works if both spouses have access to see spending (not necessarily individual expenses, but I'd certainly want to know an amount), but I honestly do not see how combining accounts really leads to stress and problems, if anything it makes things easier as it is one account you can put automatic billing on and not having to worry about going into 2 accounts, dividing costs, making sure two payments go through, etc.

We have different comfort levels for things like minimum chequing account balances, and would judge the hell out of each other's spending (neither of us is extravagant, but we spend on different things).

We both believe in living as close to a stress-free life as possible. Having done so for many years, I think it's one of the best things you can do for your mental health.

Kris

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We do this but not for any other reason than laziness. We both know eachother's account names/passwords. But we set up online bill pay through one or the other account and don't want to have to copy over the information to another one!

It's not really splitting the cost either, it's just picking which account to pull from. We use YNAB so it's all one big fund anyways. If we're making a big purchase, we just take from whichever account has more money in it. We don't care about where it's coming from for any other reason than convenience.

We're like this, too.  At this point, it's way more work to merge everything than to just keep it the way it was when we met.  But I'll pay bills that are in my name from "his" bank account, and vice versa.  It's all our money, in the end.

mskyle

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Sounds like some are sharing information, but at that point what is the real purpose behind having separate accounts? If you plan to spend your life with someone, you should have an mutual understanding and agreement of where you both want to be, and each person should be 100% committed to those goals and objectives.

I guess what a lot of people feel is that if you know you're both committed to those goals and objectives, you don't need to actually see how they're spending every cent? You can just trust that they're making decisions that will help both of you achieve those goals and objectives?

Le0

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Reading through some of the replies here, I find this discussion very interesting.

My wife and I are recently married ~ 2 years. When we got married she was at school, so I made her joint on my account and gave her my bank card, because there wasn't any money in her account.

Since then we have canceled her accounts because they were charging us fees.

I completely agree with the commenters that are saying that in a marriage your finances along with your lives and future goals need to be on the same page. You can have different goals but you need support from your husband/wife to make it happen.

But you don't need a joint account.

If paying one bill from His account and paying another bill from Her account makes sense, go for it. Strive to eliminate any His money Her money ideas from the relationship, we should always give ourselves (money, goals, life etc) as a gift to our spouses.

Eric

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I don't understand this.  If you are married, you both have financial responsibility for everything and all financial decisions should be joint decisions. 

If you plan to spend your life with someone, you should have an mutual understanding and agreement of where you both want to be, and each person should be 100% committed to those goals and objectives.

And what if the agreement was mutual to have separate accounts?  Is that allowed?  Because you guys seem to think that everything needs to be agreed upon, but somehow fail to realize that having separate accounts was decided jointly as well.

charis

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You both should be intimately aware of each other's spending, etc.
While I agree with your statement that couples need to be on the same page financially, this statement bugs me quite a bit.  Do you suggest I comb over everything my wife spends to see what she is spending money on...and her mine?

A) Why would you be "combing" through each other's spending?  My husband and I have joint accounts and credit cards, and we track everything on Mint.  So it's all out there, in black and white. And why shouldn't it be?  There is no combing involved.  We know what we are spending money on, simple as that. 
B) I can't understand why spending would be a private matter in a marriage.  Keeping things separate to avoid disagreements is just putting it off, possibly creating a greater fallout later.

Do I like that my husband buys expensive energy drinks from the gas station?  No. Do I judge him for it? No, he is an adult and I trust that he spends money as he sees fit, and vice versa.  But I might discuss him buying his drinks in bulk to save money. 

Listen, marital money is marital money (however your state handles assets brought in/gifts).  And your SO can rob you blind even if you have separate finances. 

HazelStone

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1) We have very different ways of managing our bank accounts and credit cards. DH is set up for an email notice on Every Damn Transaction. That would drive me NUTS. I just check my accounts every few days. His salary is more than half again what mine is, and so a couple Big Bills going to him and many Smaller Bills going to me ended up proportional. I also did not marry until my late twenties, so giving up full autonomy was not easy.

2) One of my relatives was in an abusive relationship- her husband kept sole access on "their" bank account, but nothing stayed in it long. I won't go into the gory details, but not having money/an account of her own and all paychecks monitored made it more difficult for her to leave the relationship. Obviously I don't think DH would be the type, but I still wanted my own account, subject only to me. It's a security blanket. DH had a small inheritance, and meant to keep that in an account with his name only, so he couldn't complain if I wanted my own. IIRC, he told me to on his own initiative, from the experiences of his own family.

charis

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I don't understand this.  If you are married, you both have financial responsibility for everything and all financial decisions should be joint decisions. 

If you plan to spend your life with someone, you should have an mutual understanding and agreement of where you both want to be, and each person should be 100% committed to those goals and objectives.

And what if the agreement was mutual to have separate accounts?  Is that allowed?  Because you guys seem to think that everything needs to be agreed upon, but somehow fail to realize that having separate accounts was decided jointly as well.

Obviously, people agree to have separate accounts.  That's how they have separate accounts (I would hope).  The question was, why do they decide to do that?


morning owl

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Obviously, people agree to have separate accounts.  ... The question was, why do they decide to do that?

Jezebel, this question has been answered a dozen or more times already in this thread. Give it a rest. Clearly separate accounts is just not for you, and thankfully nobody is forcing you to have them, since you clearly don't understand how a marriage can work with this system. So just leave it alone as one of the mysteries of your known universe. We can all continue to enjoy our own methods of organizing our own households. Amen.

Cromacster

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A) Why would you be "combing" through each other's spending?  My husband and I have joint accounts and credit cards, and we track everything on Mint.  So it's all out there, in black and white. And why shouldn't it be?  There is no combing involved.  We know what we are spending money on, simple as that. 

B) I can't understand why spending would be a private matter in a marriage.  Keeping things separate to avoid disagreements is just putting it off, possibly creating a greater fallout later.

Do I like that my husband buys expensive energy drinks from the gas station?  No. Do I judge him for it? No, he is an adult and I trust that he spends money as he sees fit, and vice versa.  But I might discuss him buying his drinks in bulk to save money. 

To me intimately aware means you know everything your SO spends money on.  Which I would assume means you look over your statements or mint outputs and are asking him what that expense was.  Sounds like combing if you want to define it.  Personally, I don't care what my wife is spending money, nor do I really have a need or desire to know.  I ultimately only care about the amount.  If we are hitting our savings goals, that's all that matters.

Listen, marital money is marital money (however your state handles assets brought in/gifts).  And your SO can rob you blind even if you have separate finances.

I don't think anyone has argued that keeping finances separate is a way to protect yourself in a divorce.  It might simplify things ones a couple decides to separate. (I guess one person claimed being wiped out by a SO with a joint account).

In the end it is about what works for the couple.  The key is communication and trust (as any part of a relationship).  The means to this end really doesn't matter.  People are always going to have different systems and methods.  There are no absolutes here. 
« Last Edit: March 16, 2015, 11:06:57 AM by Cromacster »

Eric

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The question was, why do they decide to do that?

And think that was answered too.  Mostly for convenience.  Sometimes for laziness.  And the remainder because of complicated financial situations that can occur in a 2nd marriage. 

Trying to make this subject seem like it's some reflection of the strength of the partnership is silly.  Lots of people do things lots of different ways.  There's no one right answer.  Joint accounts seem like a lot of extra work to me/us, so we just never got around to it.  And yet we have a wonderful marriage.  It's a miracle!

Zikoris

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You both should be intimately aware of each other's spending, etc.
While I agree with your statement that couples need to be on the same page financially, this statement bugs me quite a bit.  Do you suggest I comb over everything my wife spends to see what she is spending money on...and her mine?

A) Why would you be "combing" through each other's spending?  My husband and I have joint accounts and credit cards, and we track everything on Mint.  So it's all out there, in black and white. And why shouldn't it be?  There is no combing involved.  We know what we are spending money on, simple as that. 
B) I can't understand why spending would be a private matter in a marriage.  Keeping things separate to avoid disagreements is just putting it off, possibly creating a greater fallout later.

Do I like that my husband buys expensive energy drinks from the gas station?  No. Do I judge him for it? No, he is an adult and I trust that he spends money as he sees fit, and vice versa.  But I might discuss him buying his drinks in bulk to save money.

We also track everything on Mint, despite having separate accounts. We have complete transparency.

B) makes no sense. Why would there be fallout? Why couldn't I continue to buy the occasional soda or my boyfriend the occasional video game out of our own money indefinitely, without judging each other? It's worked excellently for 5+ years so far, why would it suddenly implode?

Compromising for the sake of compromise is not some sort of accomplishment. Analogy time: Me and him prefer different types of peanut butter (crunchy and smooth), and both love peanut butter and eat it every day. We choose to stock both types, so we both get exactly what we want all the time. Could we compromise, and for example alternate between the two, or find some type that's that's in the middle (mildly crunchy?)? Sure. Would there be any advantage to that over our current system? No. Are there any consequences to keeping our own separate jars? No. Does it indicate anything else about our relationship, besides that we prefer to eat different types of peanut butter? No. Will there be any long term fallout from not compromising on this? Oh HELL no.

RunHappy

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For me, joint finances would facilitate a whole heap of stress and problems that I see no reason to have, particularly when we have a functional, transparent system now, are both happy, and on the same page with long term goals and spending.

What problems do combining finances create? I got married last year, and all it took was opening a joint account, and changing the routing number on direct deposit. I can understand continuing what works if both spouses have access to see spending (not necessarily individual expenses, but I'd certainly want to know an amount), but I honestly do not see how combining accounts really leads to stress and problems, if anything it makes things easier as it is one account you can put automatic billing on and not having to worry about going into 2 accounts, dividing costs, making sure two payments go through, etc.

We have different comfort levels for things like minimum chequing account balances, and would judge the hell out of each other's spending (neither of us is extravagant, but we spend on different things).

We both believe in living as close to a stress-free life as possible. Having done so for many years, I think it's one of the best things you can do for your mental health.

This.  I have several friends who have joint accounts. One or the other is constantly making comments about how the other spends.  She thinks its wasteful for him to spend money on unnecessary car modifications, he thinks its unnecessary for her to spend money on yoga classes.  Both equal the same amount of money, but since it comes out of the joint account there is a lot of judging. 


Cromacster

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Are there any consequences to keeping our own separate jars?

What if you finish your jar first, and have to fill that craving by dipping into his jar.  What would happen then? WHAT? Lord, think of the children!

charis

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A) Why would you be "combing" through each other's spending?  My husband and I have joint accounts and credit cards, and we track everything on Mint.  So it's all out there, in black and white. And why shouldn't it be?  There is no combing involved.  We know what we are spending money on, simple as that. 

B) I can't understand why spending would be a private matter in a marriage.  Keeping things separate to avoid disagreements is just putting it off, possibly creating a greater fallout later.

Do I like that my husband buys expensive energy drinks from the gas station?  No. Do I judge him for it? No, he is an adult and I trust that he spends money as he sees fit, and vice versa.  But I might discuss him buying his drinks in bulk to save money. 

To me intimately aware means you know everything your SO spends money on.  Which I would assume means you look over your statements or mint outputs and are asking him what that expense was.  Sounds like combing if you want to define it.  Personally, I don't care what my wife is spending money, nor do I really have a need or desire to know.  I ultimately only care about the amount.  If we are hitting our savings goals, that's all that matters.

We do know what we are spending money on.  Because we have one pot of money and we track all of our accounts in Mint.  I have never asked my husband what an expense was (nor him of me).   If you don't care what she is spending money on, what difference does it make to know?  There's no harm, and tracking spending is incredibly useful in achieving financial goals/independence.

charis

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Did anyone say that there was anything wrong with a marriage that keeps finances separate, much less that it would implode?  There is a distinct level of hyperbole in some of these responses that seems to avoid an actual discussion of the issues.

If people are keeping separate accounts because they don't want to be judged by their partners, that IS an actual problem that goes far beyond the joint v separate debate.   If people are transparent with finances, but simply too lazy to comingle funds, fine, but that doesn't really add anything substantive to the discussion.

Chuck

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My parents have separate accounts, and mostly shared finances. They have a rough idea what the other has in their accounts of course, and divide up the financial responsibilities between the two of them. . .

They have always counselled me to keep separate accounts. Not to keep secrets, nor as 'insurance' against a divorce (doesn't work anyway) but because it's easier to delegate responsibility that way. They argue that it means you don't need to feel like every detail of something that's your responsibility is examined by the SO. That sort of energy, they argue, is better invested eslewhere in the relationship.

I don't understand this.  If you are married, you both have financial responsibility for everything and all financial decisions should be joint decisions. 
Why does having separate accounts and split finances prevent this?

My wife and I discuss all major purchases, despite having accounts and incomes that are completely separate from one another. However, and this is a benefit mentioned earlier in the thread, not having eyes on one another's money prevents us from scrutinizing small purchases. If she wants a manicure, it is none of my business. She pays for it with money she earned from her checking account. My finances aren't impacted.

I should mention that we don't accumulate credit card debt. She doesn't even have one, and the one I have is a low balance daily use card that I pay down each month. If debt was in the picture, I could see having more joint oversight. But cash? We both love our independence and are happier this way.

On the subject of trust, I would turn the issue back on it's head: Having separate accounts isn't a sign that you have something to hide. It's a sign that you don't think that your spouse does. It takes a great amount of trust, and mutual belief in shared values, to be comfortable letting your other half have their own space financially.
« Last Edit: March 16, 2015, 11:36:24 AM by Chuck »

Eric

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Did anyone say that there was anything wrong with a marriage that keeps finances separate, much less that it would implode?  There is a distinct level of hyperbole in some of these responses that seems to avoid an actual discussion of the issues.

If people are keeping separate accounts because they don't want to be judged by their partners, that IS an actual problem that goes far beyond the joint v separate debate.   If people are transparent with finances, but simply too lazy to comingle funds, fine, but that doesn't really add anything substantive to the discussion.

LOL!

Buckeye in TX

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For those with separate accounts, how did you initially divvy up expenses, and do you have plans on how to address future income disparity (e.g. loss of job, big pay cut/increase)? This discussion has been very interesting and I do see benefits of separate accounts, but the potential for future complications would make be nervous if I did not have a set plan in place.

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Did anyone say that there was anything wrong with a marriage that keeps finances separate, much less that it would implode?  There is a distinct level of hyperbole in some of these responses that seems to avoid an actual discussion of the issues.

Yes, a number of people have said that there's something wrong with a marriage that keeps finances separate - that's what this whole discussion is about.

Quote
If people are keeping separate accounts because they don't want to be judged by their partners, that IS an actual problem that goes far beyond the joint v separate debate.   If people are transparent with finances, but simply too lazy to comingle funds, fine, but that doesn't really add anything substantive to the discussion.

Just because you see something as problematic does not mean the people who are actually in that situation do. Maybe it would be a problem for you, in which case don't do it, but try to expand your mind to recognize that many people do this and it is NOT a problem for them, and does not harm their relationship or happiness.

Zikoris

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For those with separate accounts, how did you initially divvy up expenses, and do you have plans on how to address future income disparity (e.g. loss of job, big pay cut/increase)? This discussion has been very interesting and I do see benefits of separate accounts, but the potential for future complications would make be nervous if I did not have a set plan in place.

We split expenses 50/50. We have similar incomes now, but if there was a large disparity we would scale our lifestyle and expenses to the comfort level of the lower earner. In the case of job loss, the person would find a new job.

charis

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You don't see it as problematic that people don't want their partners to see what they are spending money on?  Ok, must be just me who wouldn't want to be financial tied to someone who wants to hid their spending when we are legally/financially considered to be the same person.  Guess I'm nuts. 

I never said there was anything wrong with a marriage that keeps finances separate, only that there could be something wrong with the underlying reason, if it involves secrecy.  That is a pretty obvious distinction to me.
« Last Edit: March 16, 2015, 11:57:00 AM by jezebel »

Chuck

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For those with separate accounts, how did you initially divvy up expenses, and do you have plans on how to address future income disparity (e.g. loss of job, big pay cut/increase)? This discussion has been very interesting and I do see benefits of separate accounts, but the potential for future complications would make be nervous if I did not have a set plan in place.
Great question:

1. Before we were married, my wife lived in my house. She paid for her bills (car, phone...) and personal expenses and I paid for mine. Mine included the house and utilities. We always went dutch when we went out or did any kind of social activity that cost money. After we were married, nothing changed. Well, now she pays for the grocery bill. But that's it.

2. In the event that she loses her job, she will continue to pay her bills from her savings. If those are exhausted, absorbing her expenses temporarily would be trivial to me. If I lose my job, then she would contribute to household expenses like utilities much more aggressively until I find work again. The mortgage can be paid with my pension and savings almost indefinitely.
« Last Edit: March 16, 2015, 11:56:15 AM by Chuck »

Zikoris

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You don't see it as problematic that people don't want their partners to see what they are spending money on?  Ok, must be just me who wouldn't want to be financial tied to someone who wants to hid their spending when we are legally/financially considered to be the same person.  Guess I'm nuts.

Separate finances =/= hiding things, as multiple people have said in this thread.

mskyle

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You don't see it as problematic that people don't want their partners to see what they are spending money on?  Ok, must be just me who wouldn't want to be financial tied to someone who wants to hid their spending when we are legally/financially considered to be the same person.  Guess I'm nuts. 

jezebel, you're kind of trolling at this point. To me, if the trust isn't there, it doesn't matter whether you share accounts or not. If the trust *is* there it also doesn't matter if you share accounts or not. Different strokes. Do what works for you and stop belittling other people's commitments. The thing that's making you sound nuts is your refusal to acknowledge other people's experiences.

morning owl

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What really irks me about this thread and the conversation we're having here is that people who are so against a married couple having separate finances aren't really curious at all to understand why and how this can work for some people. They're not really here to learn or to understand. It seems like these people are here to make themselves feel superior, and to prove that their way is the right way.

Look, if you really want to understand how people can have trusting, communicative relationships, then that's one thing -- and people here are trying to explain it to you. But please don't come in here and pretend to be curious while immediately slamming other people for their decisions. I'm not really fond of answering pretend, judgy questions that are thinly disguised as curiosity. You're ruining it for those who might actually have been interested in how people arrange their lives with separate finances, such as (I assume) the OP. Don't drag the thread through your own need to 'prove' yourself superior. It's a waste of everybody's time and energy.
« Last Edit: March 16, 2015, 11:58:35 AM by morning owl »

eyePod

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You both should be intimately aware of each other's spending, etc.

While I agree with your statement that couples need to be on the same page financially, this statement bugs me quite a bit.  Do you suggest I comb over everything my wife spends to see what she is spending money on...and her mine?

We budget every single dollar we have, so yes, I'd expect that. But that works for us. Anything else would be weird (again, to us). I mean, we combined our genes to make offspring. It's a little bit more intimate than our spending.

Now, we each get fun money. That can be spent however we want. We both laugh about how we can't believe that the other spends it on X (most of the time it's coffee for me).

Vilgan

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Keeping finances separate (including prenup) has helped my wife and I avoid a lot of potential stress and arguments. She really wanted everything separate because she had previously been in a relationship where her ex was very controlling and the "joint" accounts basically became his. I wanted the separate accounts because I think she spends money like crazy, but since it is HER money that SHE earned I don't really care. We can log into each others Mint and talk about money and things regularly and we are gradually growing closer in style but its a lengthy process. Thus far we haven't had a fight about money and haven't had a serious fight about anything in 8 years so I think it is going well.

charis

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Now I'm trolling?  Several posters have commented that they, or people they know, don't have joint accounts because they don't want their spending to be judged by their (financial) partners.  I specifically said that I would have a problem with this in my relationship.  And no, I still don't understand why it isn't a problem. 

In the event that she loses her job, she will continue to pay her bills from her savings.  If those are exhausted, absorbing her expenses temporarily would be trivial to me.

And this is baffling to me.  Your wife loses her job and even though her expenses are trivial to you, she has to continue to pay them out of her (separate) savings?  It appears that I am too dense to continue this conversation and should just bow out of this thread.

Letj

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So how does separate accounts work when one parent is stay at home and not bringing in any income?

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Three things:
  • Funny anecdote, an employee of mine complained to no end when the company decided to stop cutting paychecks.  You had to choose between direct deposit or a pay card.  Seems he liked to keep a few bucks for himself after cashing the check as his wife had pretty tight purse-strings.
  • Try not to conflate separate bank accounts (topic title) and separate finances (no visibility into each other's finances)
  • I think separate accounts would require more trust than a joint account would.  If you can't trust your spouse/SO to have a separate account what can you trust?