Marital Finance Idea

[disneysteve]

Originally Posted by Seeker

I'm not sure what you mean by gambling, but if this were an uncontrolled habit that you intend to keep separate, please realize that it's almost impossible for the other party not to feel the stresses that occur in this type of living on the edge. If it's a once-in-a-while thing with money that can be lost and neither of you care about that loss, then whatever works between the two of you. But the winnings should be shared in my opinion because your SO has lost time with you while you were playing.... the partnership has a sharing price.

I think you are reading too much into the gambling comment. I take it you are not a gambler. Gambling does not equal addiction. For most people, gambling equals entertainment. My wife and I both enjoy going to the casino - we were just there on Saturday. So she is not losing time with me while I'm gambling because she is nearby doing the same thing. The question from the OP was how to handle a nice win. If my wife hit a jackpot on a slot machine, or I had a really good run at the blackjack table or hit a royal flush on video poker, we would certainly consider any winnings to be joint money, just like everything else in our lives.

[tripods68]

You are single now. I would keep things separate including all the gambling and lottery winnings under a separate single account. But I agree with most, if you are compatible in keeping things separate financially best while married I don't see it a problem.

[Seeker]

Originally Posted by disneysteve

I think you are reading too much into the gambling comment. I take it you are not a gambler. Gambling does not equal addiction. For most people, gambling equals entertainment. My wife and I both enjoy going to the casino - we were just there on Saturday. So she is not losing time with me while I'm gambling because she is nearby doing the same thing. The question from the OP was how to handle a nice win. If my wife hit a jackpot on a slot machine, or I had a really good run at the blackjack table or hit a royal flush on video poker, we would certainly consider any winnings to be joint money, just like everything else in our lives.

OP listed this as an "exception" so I may have read it properly -- or I may not have read it right.

I have no issues with the type of gambling you're describing Steve.

I have been to Vegas, and I've played BJ. DH does not gamble however; nor does he desire to play with any money. And I have never done so if I were not willing to forego that entire amount.

We have friends in Vegas too, and the last time we were there, neither of us went gambling. So it's not a big thing for either of us.

But this issue was separated out by the OP. And as an "exception" it means something separate. $5000 in three days... I cannot really tell. But if he wants to keep winnings separate... I would submit that it's a contradiction in the "fairness" of what is being proposed.

But I'll also admit the issue may be too close to me for any proper response on that point.

My Dad gambled. My Mom did not work. I've said before there was either money in the household or sometimes there was not. I did not really know my Dad growing up. He was either working or off at some table playing. The stresses on the family are great. We all knew when he had lost. When he won, there was money and it helped pay for clothes and food and everything else that were the necessities of life. No word had to be spoken on whether or not there was money around; we felt it. I don't know how Mom dealt with this... I respect her more than she could ever know.

I'm fairly certain that I would not have married my DH if he was the least bit interested in gambling.

But what you do in a family manner, and in a sharing manner, I have no problems with.

[moneybags]

Originally Posted by disneysteve

we would certainly consider any winnings to be joint money, just like everything else in our lives.

In the OP's case, I wonder if gambling costs are split 50/50 since the winnings are. Gambling is ultimately a cost, even if you hit "big" once in a while.

[pfblueprint]

I think that the only plan that works is the one you discuss together, start using, and tweak for your needs. My wife and I use Steve's plan, everything goes into the same pot, but then again my wife and I have similar spending habits and future goals. If you take a spender and a saver and push them into that "one pot" method, you run into problems as the saver starts judging the spender's expenses and the spender sees the saver in a negative light.

Test and tweak, test and tweak, until you get a system that works best.

[Seeker]

Originally Posted by Relmiw

There are two exceptions to splitting income. One is the interest earned off of personal accounts simply because of the extra complication. The second is any income received from gambling with personal funds. These would remain the sole property of the individual, with the exception of winning at least $5,000 within a couple days. Half of any amount equal to or over that would be shared.

OP's only talking about "up to or over 5k" as a splitting or sharing. So if he "wins" $4999.99 over a period of 3 days he gets to keep it all for himself.

And why the time factor? Why 3 days? Gambling is full of wins and losses. He could win 3k the first day, 3k the second, and then lose 7K the next.... does SO get nothing?

Yes, he's only seeing that it's "personal money".... not seeing the loss in terms of "time" or the loses that inevitably happen before winning. So when does the 3-days begin?

It's written as if it's supposed to be encouraging to the SO.... "yeah, go out there and win +5k so that we can share."

It's written as if it's a lonely activity. And it's written to his advantage...

I suppose it could be said that it's his hobby, but the her in this relationship is the real person who "loses" multiple times and in multiple ways. At least the way in which the exception was posted.

[ScrimpAndSave]

Yeah...I read the first two lines and that I got confused and stopped...

[Almond73]

Originally Posted by pfblueprint

I think that the only plan that works is the one you discuss together, start using, and tweak for your needs. My wife and I use Steve's plan, everything goes into the same pot, but then again my wife and I have similar spending habits and future goals. If you take a spender and a saver and push them into that "one pot" method, you run into problems as the saver starts judging the spender's expenses and the spender sees the saver in a negative light.

Test and tweak, test and tweak, until you get a system that works best.

Reality speaks.

[Relmiw]

Hello everybody.

I'm sorry it has taken me this long to respond. I have been very busy and have not been able to sit down and think about all this. I didn't expect to get this many well thought out responses to sort through but i am glad i did. I will try to answer all of your questions, ask a few of my own, and hopefully come out of this with a better plan.

Here are some things i read from you guys that i think we can all agree on:
- splitting expenses 50/50 almost always makes no sense
- sometimes individuals benefit from joint finances, some from a mix of joint and personal, and in some cases, such as with a spender and a saver, you are going to have problems.
- all parties involved need to be aware of what is happening financially

seattlemanicurist

I have been with my SO for 3.5 years and we live together. We keep our finances completely separate and we will continue to do so regardless of whether we get married in the future. It has worked out very well and I have no desire to change things for any reason. I was married before and shared an account with my ex and it was the biggest mistake I ever made.

Seattleman, what went wrong with your ex that you shared finances with?


GoodBuyGirl

Your idea is good in theory ,but one persons half will sooner or later end up being more than the other persons half. And that will end up causing friction.
Once you are married you become one. It won't matter how may baskets you put your eggs in you will still be responsible for each others debt and spending. If one of you is a spender and one is a saver sooner or later the saver will have to use their savings to pay for the spenders mistakes.
If you are not financially compatable having seperate bank accounts will not solve that problem for you.

You mention the friction caused by the inequality of wealth when one person ends up with more money, despite a percentage of each income being shared.
If there was no shared income and all bills were split in half, there would be much more friction.
If there was no individual accounts, the spender you mentioned would be free to spend a much greater amount. I see how friction can arise, but with a spender it seems to me there would ultimately be friction whenever that person approaches the end of their money. If some money was separated for that person to spend, as well as some for the saver to save, strikes a balance.

[Relmiw]

disneysteve

Keeping separate accounts will not solve incompatibility problems. What happens when the saver wants to go on vacation and the spender doesn't have enough in "his" account to pay his share? What happens if the saver doesn't want to lay out money for some home renovation or repair and would rather just deal with it the way it is and save the money? What happens when the spender has overdrawn her account and has no cash to pay her share of the utility bills?

Vacations would be payed for by the joint account, so either the couple has enough money for the trip, or they do not.
The question about a household repair is an excellent one. I think this is a case where communication within the marriage is key and the couple would have to work out on a case by case basis what to do.
Like vacations, utility bills are taken from the common account.

That is interesting to hear about your sister in law living above her ex-husband.

[Relmiw]

Seeker

Thank you for going through my ideas in such detail.

So essentially, lottery= 50% to joint... 25% to each of the married people? Seems fair to me.

What i meant when i said that is that half would go to the joint account while half is given to the person who won the lottery, or worked for that paycheck. If the bills are not being paid with just 50%, that percentage would have to be raised.

So what happens if he wants a Hummer and she doesn't really care what she drives? Is this still a "shared" expense? What happens if she wants to go out with her friends, but cannot afford it this time because she's already spent her remaining half of her income? Does she have to wait until next month? What happens if the cleats you mentioned broke and you absolutely needed to get some new ones for an upcoming game, yet you had no money for this this time? And what is the plan for retirement? What happens if one of you loses their job? Or becomes disabled and unable to work? Does that person forego all spending from that point forward?

If the hummer is a personal car, it would be a personal expense. If it is going to be used by both people, which i imagine almost all vehicle purchases would be, then both people need to agree to it. The nice thing about giving each person some money of their own is that they are free to do something like buy a hummer if they really want.

If someone wants to go out with friends, but they don't have the money, then they don't go out. Eventually a spender needs to hit a wall. If they hit that wall without draining the all the money from the relationship then that is an effective counter to poor spending habits. The same applies to needed cleats.
If one person absolutely wants the money for one of these things they can write it down on a log shared with the other person as borrowed money and then borrow the cash until they can pay it back.

Retirement is a very interesting area, i have not come up with a plan for that as yet.

If someone becomes disabled or unable to work, i think the same basic plan would work with the introduction of an allowance. Assuming the disabled person gets $200 per month of disability and the working person makes $4,000 per month working, the percentage going to the joint fund will almost certainly have to raise. Let's suppose it goes from 50% to 90%.
each person is taking to their own personal spending budget a respective $400 and $20. The working person could then give money to the disabled person in the name of payment for household chores. If the disabled person is near completely incapacitated then we are in a whole new ball game.

So 75/25? What happens if the person graduates and does not use their degree? What happens if a person decides that they "like" school and decides that they want to stay there as long as possible? People don't always use their degrees and some degrees are more prolific than others.

The questions you asked are actually exactly why the school expenses are split in such the way that they are. You indicate that someone might, in a way, take advantage of the the fact that they other is paying for some of their schooling. This is an example of why shared finances are not always a good thing. However, unless finances are completely split, which would not work, the fact that both people will often benefit from schooling is an example of why they should help each other complete their scholastic goals.
A 75/25 split of school expenses, via half being payed by the joint account, is enough to discourage someone going to school for fun. It's also enough to help the person who really wants to complete a goal. School costs are often enormous up front ventures, but the log used to buy cleats in a pinch or go out to eat it with your friends can also be used to help cover tuition if necessary.

Interest income????? Huh. So if one chooses better investments and gets more interest, it's theirs? How are taxes done?

That's right. I havn't figured in taxes because i imagined joint taxes would be payed jointly and individual taxes, say, on a personal hummer, would be payed individually.

If you're striving for fairness and equality, 1/2 of all income means that the person earning more, contributes more. So the second person may or may not desire to "grow." It is extremely rare for both persons of a couple to earn a similar income.

I have thought about the danger of one person losing the desire to "grow", but that would only be exacerbated by 100% joint income.

Household chores as well as caring for children would be split. If for whatever reason one person is not working as much or needs extra income, this can be used as a way to balance income and time.

[Relmiw]

I think the issue of gambling needs some clearing up. I am sorry to hear about your father's habits while you were growing up Seeker

OP's only talking about "up to or over 5k" as a splitting or sharing. So if he "wins" $4999.99 over a period of 3 days he gets to keep it all for himself.

That would be correct.

And why the time factor? Why 3 days? Gambling is full of wins and losses. He could win 3k the first day, 3k the second, and then lose 7K the next.... does SO get nothing?

the time factor is mentioned so there is some way of keeping track of it. If the agreement is to split any winnings over $1,000, but there is no time frame, $1000 can be won via $2 scratch off tickets over a decade and then be brought up. The time frame is meant to provide some distinction as often times people do a lot of different gambling at once.

Yes, he's only seeing that it's "personal money".... not seeing the loss in terms of "time" or the loses that inevitably happen before winning. So when does the 3-days begin?

The time frame would begin at whatever time that would include the most winnings

It's written as if it's supposed to be encouraging to the SO.... "yeah, go out there and win +5k so that we can share."

The rules are a discouragement. If all the money used to gamble with is personal money, and the the winnings are either personal or shared if large enough, the gambler would gain even less money for themselves as they normally would.

It's written as if it's a lonely activity. And it's written to his advantage...

I'm not sure how it can be written to my advantage as the same rules apply to each person.

I have never spent a penny at a casino and the only lottery tickets i have ever done are given to me as presents. My girlfriend has only ever been to a casino once that i know of and it was to go to a concert with me. She doesn't buy lottery tickets either.
No one in the relationship has issues with gambling, the idea is there in case we come upon $3,000 and are unsure what to do about it. In such an occasion it would be best to know ahead of time.

The rules i mentioned were set up in such a way as to discourage gambling via shared jackpots and personal expense, yet not take away from the gambler the fun of sitting down at a table for a few minutes.

[Snave]

Originally Posted by maat55

Being I'm old fashion, I vote for Steves plan.

Being of simple mind, I vote for Steve's plan also. Way to confusing to have multiple accounts and I can say that from a failed attempt. My wife and I tried it for a few months when we first got married. We had a joint account where all paychecks were deposited and then slid money over into a "his" and "hers" account for any personal fun money we wanted. My wife realized that the joint account was technically "her" account also since she took the responsibility to pay the bills, etc... It was silly for her to then slide money over into another account. As for my account, it is still open and has about $1.50 in it and has had that amount for about 5 years. It doesn't have any fees, so I guess that is why I haven't closed it. She just gives me my "allowance" in cash. I never spend money, so this just works fine. Most of the time the money hasn't even left my desk drawer by the time the next "allowance" day rolls around.

[noppenbd]

Relmiw,

These ideas sound great in theory, but the problem with them is that people are not robots. If you are married to a spender that truly cannot control themselves, when they run out of money, they will just charge it on a credit card. If they are spending more than their allowance, they will run a deficit every month and eventually run up a lot of debt. What happens atthat point?

In most marriages, I think the "saver" would end up paying off the debt, one way or the other. Either it would come directly out of the saver's account, or, more likely, out of the joint account or stored savings. In any case, the spender's behavior cannot be controlled by rigid spending systems with complicated rules. If a person wants to spend more than they make, there is really nothing that can stop them. The only thing that will control that is communication between the spouses. In my opinion, the system that is the most simple and transparent will work the best.

For us, that involves one joint checking account where all income is deposited and all bills are paid, and small personal savings accounts for personal expenditures ($40-50 a month plus any gifts received). In no way to I try to compensate for the fact that my wife makes half of what I do, because there are other things that she provides that are not monetary in nature. For instance, she only works 3 days a week, so the other 2 days she cares for our daughter. Plus, the nature of her work (social work) does not provide the same pay scale as mine (engineer).

Sure, we could work out a system where she gets less spending money because of her lower pay, and compensate for the time she spends doing child care, but I really don't think that would result in a happier marriage. Fairer, in a market-based sense? Maybe, but I doubt it would result in less arguments about money.

[disgruntable]

I'm certainly no financial or marriage expert, but after some trial and error, here's what worked for us.

Have a joint account to pay family bills out of (mortgage, utilities, groceries, etc)
Each person have a "fun money" account to do whatever they want with

Whatever money we have leftover after paying the bills and saving goes into "fun money". Once it's in fun money, it's guilt free spending. Feeling guilty about spending money was a major issue for both of us when we only had the joint account.

[Seeker]

Originally Posted by Relmiw

I have never spent a penny at a casino and the only lottery tickets i have ever done are given to me as presents. My girlfriend has only ever been to a casino once that i know of and it was to go to a concert with me. She doesn't buy lottery tickets either.
No one in the relationship has issues with gambling, the idea is there in case we come upon $3,000 and are unsure what to do about it. In such an occasion it would be best to know ahead of time.

The rules i mentioned were set up in such a way as to discourage gambling via shared jackpots and personal expense, yet not take away from the gambler the fun of sitting down at a table for a few minutes.

Okay, your clarifications do help somewhat.

Ultimately, if you and your GF agree to follow these rules, then it'd probably be okay for the two of you. In that case, I have no problem with any of it; it's not my say.

The implication of your OP, is that you came up with this alone; you didn't state that, it's just a feeling I had when reading it. My feeling is that your GF had no say in this plan and she probably does not know that you've written it. Have the two of you discussed this?

As an female individual, I can definitely say that I personally would never agree to the education splittage, nor the gambling/lottery splittage. I would not marry a person who did not intend to share his future with me, both the good and the bad.

Under marriage, in the eyes of the law, the two of you are a team and both "entitled" to 50/50 of your earnings and the SO earnings during that period that you are married, and this is true NO MATTER where the money comes from (with the exception of gifts issued to a specific individual; legally the winnings from those gifts would be shared).

If you are still BF & GF, then you need to come to terms with this: only the "now" matters in marriage, you can plan for the future and should.... but don't be so inflexible that there's no room for change. THERE WILL BE CHANGE. The things required for a marriage to succeed is collaboration, understanding and compromise. Talk to each other.

Finances can work in many different ways, but I can tell you definitely.... it will NOT work if you and your GF have not agreed to this plan. It definitely will not work if one of the two of you feels unfairly treated.