Author Topic: Family finances pre and post children  (Read 2434 times)

Off the Wheel

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Family finances pre and post children
« on: March 16, 2019, 09:58:59 AM »
Looking for input and advice from those who've come before.

My husband and I have been married for three years, together for five. In that time, we moved in together, bought a place, got a dog, and now we're pregnant.

For the most part, our incomes have been relatively equal, so we put X amount into a joint account to cover our primary shared expenses (mortgage, internet, Netflix, etc.) We rotate the other shared expenses (utilities vs property tax, groceries, etc.) We're not super diligent about who has paid for what, but it feels fairly equal. For one year, he went back to school, and during that time I paid for the mortgage and all our shared expenses.

Cueing up to now, assuming the baby is okay (a previous loss has made me temper any planning), I'll go on mat leave in September. That means my income will be reduced by 66%. I'm Canadian, so I'll be off for 12-18 months likely.

What would you recommend we do?

Option A - we go to the model we used when my husband was in school, and he pays for all our shared expenses, and I pay for my daily life.

Option B - we pool our income.

Option A is easy, and would probably work out fine. My concerns are that because I'll be home, I might be more likely to take on daily shared expenses like groceries, etc, and I don't want to spend more than I should out of the minimal amount I'll be bringing in. Ideally I'd like to keep saving some of that. I'm also not sure the impact a child will have on our finances, or the best way to plan/pay for that.

What did you do, and how did it work out?

seattlecyclone

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Re: Family finances pre and post children
« Reply #1 on: March 16, 2019, 12:11:17 PM »
My wife and I started pooling our incomes right after we got married, but this seems like an increasingly easy choice once a kid is in the mix. You will be deliberately reducing your cash income to take on more of the responsibility for your shared child. How much is that worth? What if you decided it would be best for the family if you left your career entirely? Would you need to pick up some part time work in order to feel empowered to spend any money on yourself at all?

I'm a red panda

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Re: Family finances pre and post children
« Reply #2 on: March 16, 2019, 12:18:06 PM »
Our income is pooled. We both work for the good of the family.

I actually make more than him, but maternity leave is mostly unpaid for me.

GizmoTX

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Re: Family finances pre and post children
« Reply #3 on: March 16, 2019, 12:59:45 PM »
You're married. There is no 'his' money and 'her' money, just 'our' money, especially with dependents on board. You're making this needlessly complicated & stressful. Mutually decide how much your joint savings and expenses will be. Allocate a modest personal no-strings amount for each of you if this will help; otherwise, decide what minimum amount/expenditure will require joint approval. You will be exhausted for at least the first year with a baby; consider hiring housekeeping help.

Maya

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Re: Family finances pre and post children
« Reply #4 on: March 16, 2019, 01:50:35 PM »
Our money is pooled and I find it the easiest, especially as things may change post mat leave. You or your husband might want to drop work schedules

As for maternity leave I'd suggest only taking 12 months of benefits ileven if you take more time off from work. That give you the flexibility of working part time without your benefits being flawed. Ack.

https://www.ourfinest.ca/2019/03/should-i-take-12-or-18-months-maternity.html?m=1


Abe

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Re: Family finances pre and post children
« Reply #5 on: March 17, 2019, 08:48:25 PM »
Looking for input and advice from those who've come before.

My husband and I have been married for three years, together for five. In that time, we moved in together, bought a place, got a dog, and now we're pregnant.

For the most part, our incomes have been relatively equal, so we put X amount into a joint account to cover our primary shared expenses (mortgage, internet, Netflix, etc.) We rotate the other shared expenses (utilities vs property tax, groceries, etc.) We're not super diligent about who has paid for what, but it feels fairly equal. For one year, he went back to school, and during that time I paid for the mortgage and all our shared expenses.

Cueing up to now, assuming the baby is okay (a previous loss has made me temper any planning), I'll go on mat leave in September. That means my income will be reduced by 66%. I'm Canadian, so I'll be off for 12-18 months likely.

What would you recommend we do?

Option A - we go to the model we used when my husband was in school, and he pays for all our shared expenses, and I pay for my daily life.

Option B - we pool our income.

Option A is easy, and would probably work out fine. My concerns are that because I'll be home, I might be more likely to take on daily shared expenses like groceries, etc, and I don't want to spend more than I should out of the minimal amount I'll be bringing in. Ideally I'd like to keep saving some of that. I'm also not sure the impact a child will have on our finances, or the best way to plan/pay for that.

What did you do, and how did it work out?

Option A seems somewhat complicated. We have had joint accounts on everything since we married despite significant differences in income currently. I don't exactly understand the point of keeping separate accounts. It's a lot of hassle keeping two separate books for exactly the reasons you point out.

red_pill

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Re: Family finances pre and post children
« Reply #6 on: March 17, 2019, 09:03:28 PM »
We have a joint account.  Every payday we take out the same amount of cash as our “allowance” that is used for clothing, eating out and whatever other discretionary spending we want.  We both get the same amount even tho we don’t make the same income.   We started that because I got sick of tracking my wife’s spending and stressing about it.  With the allowance system I know it’s capped at a certain amount. But unexpectedly, since  we went to cash, though, our spending went WAY down.  There’s just something different about taking cash out of a wallet compared to tapping a card. I sometimes go months with the same cash in my wallet.

But yeah, one bank account is soooo much easier.  I can’t imagine it any other way.

seemsright

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Re: Family finances pre and post children
« Reply #7 on: March 17, 2019, 09:18:18 PM »
Babies are costly. I am finding the elementary age EXPENSIVE I swear my kid eats more than hubby and I combined. The shoes she goes through...my word.

Hubby and I have had our money together since we were in high school. (My parents kept scalping my account so I put my taco bell paycheck into his account...we ran two registers)

I think there is 1000 different ways to do finances. I think you need to sit down and figure what works best for the two of you.

One account makes life simple. I could not imagine going through the mental energy thinking who was going to pay for the bread or if the kid needed a new pair of shoes.

Kayad

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Re: Family finances pre and post children
« Reply #8 on: March 17, 2019, 10:09:45 PM »

Hubby and I have had our money together since we were in high school. (My parents kept scalping my account so I put my taco bell paycheck into his account...we ran two registers)


This is a great story!

I am another vote for combined accounts.  I grumbled when my DS pushed this (we used your system of a shared account for shared expenses with additional “personal” accounts for many years).  Fully shared is much simpler, and I can’t imagine the old system working now that we have a baby.

The caveat is if husband is a spendthrift or something and is going to blow all your would-be savings if you fully combine. 

Tuskalusa

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Re: Family finances pre and post children
« Reply #9 on: March 17, 2019, 10:44:39 PM »
We pooled our income when we got married and never looked back. Every windfall is shared. Every debt is shared.

englishteacheralex

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Re: Family finances pre and post children
« Reply #10 on: March 18, 2019, 12:39:00 AM »
Another vote for pooling money. We've done it since we got married. We have two toddlers. We're a team. We use Mint to track our spending and to budget. We've switched back and forth as far as who makes more money, but it's been him for quite a while now. There is zero weirdness around that. All the money is ours.

SimpleCycle

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Re: Family finances pre and post children
« Reply #11 on: March 18, 2019, 03:12:33 AM »
We didn't combine finances right away when we got married, but we were fully combined by the time we had kids and it made it a ton easier.  We've had several interruptions in income during that time and so one account gave us a much better picture of where we stood as a couple.

Freedomin5

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Re: Family finances pre and post children
« Reply #12 on: March 18, 2019, 03:21:37 AM »
We have separate accounts because our jobs can only deposit salaries into bank accounts with a single owner, and the owner must be the person who is working (don’t ask; China is weird).

Anyway, long story short, we keep separate accounts. That being said, there is no “his money” and “her money”. It’s all our money. My account is the one from which bills are paid. We have agreed to leave $1000 in DH’s account every month, and everything else gets transferred to my account for savings/investments/large expenses.

We don’t keep track of who pays for what from which account. It’s too much hassle. Besides, we are in this together. We are building a life together. We created our financial plan together and our savings goals together. That means I trust DH to make financial decisions that benefit the family. Just as he trusts me to make spending decisions that benefit our family.

Imma

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Re: Family finances pre and post children
« Reply #13 on: March 18, 2019, 04:28:04 AM »
You're married. There is no 'his' money and 'her' money, just 'our' money, especially with dependents on board.

That very much depends on the situation. Do you have a pre-nup? Just asking because you kept your accounts separate after marriage. If not, what are the legal rules where you live?

Of course, everyone should handle their finances in the way they feel comfortable doing, but I would strongly recommend everyone to act according to agreements that you've put into place and with the law in mind. Everyone gets married thinking they're going to be together forever, but a lot of people end up divorcing. If you want to keep certain pre-marital assets separate, for example, you need to make sure you don't mingle them at some point.

elliha

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Re: Family finances pre and post children
« Reply #14 on: March 18, 2019, 06:46:30 AM »
We have different accounts but not his or her money and this works best for the both of us. I have paid everything for periods when he was unemployed and didn't have any money. I do not see this as a loan or that he owes me anything because of this, it is the way life is basically when you live together with a person. I do want to keep track of the money I have earned myself and he feels the same way. When we both have an income we pay half the bills each and I who make a bit more buy a bit more of the food we eat to even things out but we do not keep track of this so that this is always exactly the same or so, one money he may even buy more food than me but on the whole I buy more of this than him. I buy our kids' clothes and he pays for gas for the car (I don't have a driver's license) but we pay most of the other car costs together. Occasionally like when we are on a longer trip I pay for gas too but I don't tend to pay for the everyday driving. We never felt a need to formalize this but these are the broad strokes. We have discussed having a joint savings account but not come to any conclusion on that.

When I have been on maternity leave we have mostly just used any money we had to survive as we have mostly been in pretty bad positions financially when the kids were young (I on parental leave, he unemployed or in a very badly paid job) so I cannot really give any good advice for this part but I think that if we would have a kid again that we would pay based on income so the one with less income pays a bit less and the other covers the rest.

Off the Wheel

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Re: Family finances pre and post children
« Reply #15 on: March 18, 2019, 08:05:31 PM »
Hi everyone, thanks for the suggestions. We're starting to talk about it, and pay end up pooling money - or we'll do as @Freedomin5 did and pull everything from his account into the joint to pay for all the life stuff.

I'm not concerned on the prenup side because although we don't have a prenup, we got together and married quite late, and had our own investments. My condo is still in my name (though I know he'll get the appreciation from the time we were together), our townhouse is in both of ours, and we both have separate investment accounts.

LinneaH

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Re: Family finances pre and post children
« Reply #16 on: March 19, 2019, 02:41:26 AM »
I see you already have a lot of good answers, just want to add our way and some thoughts.

We have our own account where salary goes in. We both transfer all of that into a joint account. Currently he makes slightly more than me, but there has been time I made very little or he made way less than me. We have always pooled and see all money coming in as family money.

From the joint account we both transfer money into our own accounts. We take the same (rather small but not too small) amount and this is our private spending money. I use mine for haircut, clothes, coffee w/friends, books etc. Also for birthday gifts etc to husband, which I don't want him to see.

All bills are paid from joint account or paid by one of us but then we reimburse ourselves from the joint account if it is a "family bill" or "family cost". I.e. when I buy kids clothes or pick up medicine (bc I work in the city and can easily do that during lunch or on my way home). That last part is important I think, since kids clothes is mostly my task to buy for practical reasons, but that does not make it my cost. This is similar to what you said about groceries, it may be natural that it is your task to buy, but that does not mean you should cover the cost.

Good luck with money decisions and I really hope all goes well with the baby! I was never exactly in that situation but we had other tough challenges. Luckily for us it ended well in the end and I wish the same for you.

DadJokes

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Re: Family finances pre and post children
« Reply #17 on: March 19, 2019, 10:37:58 AM »
I know this isn't a popular opinion on these forums, but we opted for the traditional religious idea of marriage. Once we got married, we became one. That means that we share everything, including finances.

I don't think it matters which spouse makes more money. You are both bringing in income for the unit that is your household. In our case, we use a joint checking account, run everything out of that account, and we each get an equal amount of personal discretionary money every month. It doesn't matter that I make more than my wife. She's equal in our relationship. Since my wife is not financially-savvy and has no interest in it, I create the budget and handle our finances, but it should be a collaborative effort in most marriages.

I think that the main argument against sharing finances is lack of trust, but if you don't trust the other person with your finances, why marry them? There may also be resentment if the spouse who makes more gets the same spending money than the other spouse gets, but that just shows that the two are basically just roommates with a certificate.

I don't know how Canadian courts see it, but in America, if y'all were to get divorced, keeping your finances separate means absolutely nothing. They are still treated as joint assets. Depending on the state, debt can be treated as joint as well, even if it is only under one spouse's name.

FLBiker

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Re: Family finances pre and post children
« Reply #18 on: March 19, 2019, 02:33:46 PM »
+1 for pooling everything.

I found it really helpful mentally -- I came in with some savings (lets say $100K) and DW came in with some student loans (let's say -$50K).  A friend told me when we got engaged that there was no longer my / her money.  Just our money.  And I feel like that saved me a lot of angst in the long run.  We've been married almost 9 years, 1 kid, house, 1 car.  We started out with similar earnings, I now earn almost double.  Part of the reason for that, though, is that DW went back to teaching in order to be home for summers for when DD is out of school.  She also took 2.5 years off when DD was born, which was only possible as a teacher.  I can't begin to imagine how we would quantify these choices if we were keeping things separate.

Similarly, one of the most helpful pieces of advice I got re: having a kid was from the nurse as we were leaving the maternity ward -- "Remember dad, right now it's the baby's watch, the baby's calendar and the baby's wallet."  Honestly, it is a tremendous mental relief not to think about things in terms of "my" time and "my" money (or, at least to do it much less than I used to).

reeshau

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Re: Family finances pre and post children
« Reply #19 on: March 20, 2019, 04:45:19 AM »
Plenty of people have said they pool their money, and I did too--not because it was easier, but because that was our commitment.  We have good friends who have kept their finances separate, but are clearly a loving couple and one unit.  In their case, he was a business owner so there were clear reasons for separate ownership, although they were transparent with each other in terms of their status and activity.  It works for them.  (I would add: they have no kids)

But as for advice, I would ask what were your specific reasons for not pooling money?  Are they still valid?  Pre-nups were mentioned; there can also be reason for certain assets to be in single names for liability limitation.  It is true that separate finances makes financial life and financial planning more complex.  Children add categories of costs, and will affect your earnings as you said, so the complexity has increased.  (case in point: funding college)  I can only say that you need to re-weigh you decision; open up the conversation for this new balance, and come to piece with the new decision--either to continue as-is, or take the more common approach.  (at least in this thread)  But don't continue on out of inertia--just because that's what you have done.  Kids change everything.

Good luck!

EricEng

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Re: Family finances pre and post children
« Reply #20 on: March 20, 2019, 08:46:52 AM »
We didn't combine finances right away when we got married, but we were fully combined by the time we had kids and it made it a ton easier.  We've had several interruptions in income during that time and so one account gave us a much better picture of where we stood as a couple.
I second that.  We didn't pool until 1-2 years of being married.  You should strongly consider just pooling income into one checking account by the time a child arrives.  This is assuming both of you are about equal on saving/spending spectrum.  Don't pool with spendypants.

You can still keep separate saving/investment accounts that you both had prior, but pool the new money that is coming in.
Quote
I don't know how Canadian courts see it, but in America, if y'all were to get divorced, keeping your finances separate means absolutely nothing. They are still treated as joint assets. Depending on the state, debt can be treated as joint as well, even if it is only under one spouse's name.
Actually only true for new income/assets.  In most states separate assets you already prior to marriage that you bring into a marriage stay separate if you keep them from becoming entangled.  IE:  Don't dump some of your paycheck from a joint account into your individual brokerage account you had prior to marriage.  If you had little assets before marriage then it won't matter and anything gained during marriage will be shared.  However, most states do let you keep what you had prior if compartmentalized with good documentation and lawyer to boot.  Of course nothing is certain in divorce court.
« Last Edit: March 20, 2019, 08:53:20 AM by EricEng »

The Blunderbuss

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Re: Family finances pre and post children
« Reply #21 on: March 25, 2019, 05:23:44 PM »
Prior to our son arriving in February of this year we were in exactly the same boat as you, our income was paid into individual accounts and we each transferred an equal amount into a joint account to cover our joint expenses. 

We talked about a few options, but ultimately we decided that all income (his wages and my paid parental leave while I get it) would be paid into the joint account.  The main reason for this is that as the non-earning spouse I didn't ever want to be in a position of having to "ask" him to transfer "his" money into the joint account to cover bills.  It's not that I think he'd be reluctant to do it, but 1) he tends to do things on his own time and 2) he's not particularly interested in our finances, so I was worried about creating a dynamic that felt uncomfortable to me after working and earning my own money for 15 years.

This is quite a mindshift for us, because we're both used to having full autonomy over what we did with our "own" money (after we'd sent the agreed amount to cover the bills).  To make it more palatable we decided that rather than going completely to a one pot system and using the joint account for our personal expenses, we've kept our personal accounts, and get an "allowance" transferred into them.  We've got a pretty broad definition of "personal", it's really anything discretionary -ie if we went out for dinner (one can dream!) one of us would pay for that from our personal account.
 

Off the Wheel

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Re: Family finances pre and post children
« Reply #22 on: March 25, 2019, 08:17:03 PM »

We talked about a few options, but ultimately we decided that all income (his wages and my paid parental leave while I get it) would be paid into the joint account.  The main reason for this is that as the non-earning spouse I didn't ever want to be in a position of having to "ask" him to transfer "his" money into the joint account to cover bills.  It's not that I think he'd be reluctant to do it, but 1) he tends to do things on his own time and 2) he's not particularly interested in our finances, so I was worried about creating a dynamic that felt uncomfortable to me after working and earning my own money for 15 years.

 

This is exactly us! I told him I didn't want to ask, he said he wouldn't mind, and I said *I* would. And definitely on his own time and less interested in our finances. He's a great saver but I'm the one with the spreadsheets. ;)

And it's definitely so odd now that people get married and have kids later in life... I've been a professional for over a decade. I've had my 'own' money for 18 years. I do not want an allowance. (Unless we both get one!)

The Blunderbuss

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Re: Family finances pre and post children
« Reply #23 on: March 27, 2019, 08:02:56 PM »
That's just how our conversation went.  We use the term "allowance" a little bit ironically as one example of how our life has changed now we've left the DINK years behind. We both get exactly the same amount and its about us each having a small amount of money that is entirely under our own control.

6 weeks in I feel like it was the right call for our situation.   Your life and relationship change so much as new parents and the more you can do/plan in advance to reduce potential causes of friction/resentment the better.
« Last Edit: March 27, 2019, 08:06:42 PM by The Blunderbuss »

Hargrove

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Re: Family finances pre and post children
« Reply #24 on: March 30, 2019, 04:07:12 PM »
I was all about the pooled finances, and still am, in principle. However, after I married my fiance in November, I was surprized to find we... never got around to it, at the account level. She didn't care much, and eventually decided she liked being in "charge" of a few expenses from her own paychecks, because she felt more concretely that she contributed (when she could point to the specific things). She was proud to cover her own trips etc. without tapping "my" income, which is mostly surplus (and mostly going to FIRE). When we have a goal beyond the range of her current job, I just handle it.

I pay rent/utils, she does groceries and her spending budget. She feels self-conscious having left a higher-paying job to pursue a dream career (which I was always on board with), and half her "extra" money is investing in freelance work and conferences.

With "my" money, I load up our retirement accounts and invest in taxable.

In principle... it's still all pooled anyway. In practice, it looks like it's separate. What works for you, in the end, may surprize you - but one thing is for sure about joint accounts. You will probably quickly realize if you're NOT on the same page about money.

Teachstache

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Re: Family finances pre and post children
« Reply #25 on: March 31, 2019, 08:25:58 AM »
We kept separate accounts and expenses during our first 4 years of marriage. Once we bought a house in year 4, we combined expenses and accounts. Once we had a kid, it made things that much easier.

Caroline PF

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Re: Family finances pre and post children
« Reply #26 on: April 17, 2019, 04:43:06 PM »
+1 to pooled income in a joint account, and personal allowances into separate accounts.

Don't focus on the juvenile nature of the term allowances. It is actually very freeing, especially when the couple differs in terms of saver vs. spender. My husband is the spender, and I don't have to be watching to make sure he's not spending too much, and he doesn't feel like I'm judging his purchases. And on the opposite side, it gives me permission to spend, rather than thinking that I have to save everything.

We started this when we got married, but it made the finances much easier when we had kids, and my husband became a SAHD.