Spinoff: How do you and your spouse/SO handle your finances?

[noppenbd]

The post about the mother in trouble with her husband spending out of control got me thinking.

How do you handle finances within your marriage or relationship? Do you have separate checking accounts + a joint for paying bills? Or do you have everything co-mingled in one account with "allowances" coming out for each person? Or something altogether different?

I think all kinds of situations can work, depending on the personalities involved. For instance my wife and I have a single checking account for all of our income and expenses and use cash for spending. On the other hand, my parents keep separate accounts, and they've divvied up the bills between them based on how much they make.

[tifnglen]

Well we are not married but live together at the moment. We, of course have separate accounts and split the bills. All things like food and entertainment, whoever has the money pays. But since we are not married we are not legally responsible for each others expenses. But in a marriage shared finances would be ideal.

[LuxLiving]

We've always put Hubster's income into a joint account and we both get an allowance. When I worked a full time job I put mine in there as well. After my auto-accident it was his choice that I not work - I could have gone back to office work. I've been a SAHM for many years now.

I have always maintained a separate checking account to put my allowance and grocery and household supplies dollars into. If I can manage to feed us well and everyone have toothpaste & toity paper when they need it, as far as he's concerned I can use the excess in any way I please. Usually I pack it in the savings account I also have only in my name. POD to him. Hubster is not a saver. When we bought our first house together, it was a good thing I did, because the day of the closing we found out there was an additional $3800 needed. Guess who had it socked away?

My small business account I keep separately and use to boost the funds going to my retirement accounts and to pay the premiums on Hubster's life insurance policy.

His allowance money and anything he sells, trades, or gets cash for goes into his wallet. He can keep money in there for quite a while, but doesn't like to put it into a bank.

We pay household bills/clothing/vacations out of the joint account. Gas and snack foods bought out of household budget. You want to eat fast food at work instead of brown bagging? You pay for out of your smallish allowance. Luckily he's frugal minded as well and takes his lunch. He smokes and needs a haircut once a month, therefore his allowance is larger than mine.

[project15]

Both our checks go to one checking account and we take equal allowance out every week that covers eating out, toys, entertainment, and other personal wants.

Any extra money we make (overtime, web design work, babysitting) gets decided on its purpose. Sometimes the person keeps all or a portion of it, sometimes it goes to a fund - depends on a couple factors for each case.

[CouponAddict]

In an ideal world...MY DH and I would have one joint checking account & joint investments, with each a little mad money.

But my case is complicated and I think that maybe the more complex the lives of the two people get the more they may differ from the joint everything and mad money for both idea.

We have one joint checking account, two individual checking accounts.
This is where it gets crazy, one individual account is just open with no transactions until it needs to be used. The joint and second individual account have different direct deposits into them and bills are paid with both ... example the mortgage is XXXX one check book has more money in it currently so it gets paid out of that one and the other smaller bills will be divided up based on keeping the ending balances about even !! Then because I am the main bill check writer/checkbook balancer/carrier of the checkbooks in my purse, my DH gets CASH mad money.

[Spud]

We have joint one joint checking account. All our money goes into that account. Husband is a professional, I am a SAHM with a small part-time job.

I use Quicken (theoretically monthly, but I'm supposed to be reconciling accounts now, and look what I'm doing instead!) to reconcile our accounts and watch our spending. I enter every receipt and split out sales tax (for tax deduction at the end of the year), and code the spending to a category. Then I reconcile the accounts. When I'm done with the month, husband and I sit down and look at our income & expenses, and compare that month's spending to previous months' spending, and talk about what we did and why we did it, where we can shave spending, and where we can't. We also discuss our short term purchase goals (we would like a new TV and to finish our basement), and our long term goals (we would like to retire), and how we're doing on those goals.

Neither one of us gets allowances per se, but neither one of us is big spenders on random items either. He knows I won't spend money he wouldn't approve of, and I know he won't, so we don't worry about that.

I truly believe the monthly discussions and 'open-faceness' of our finances is what keeps us both happy, secure, and on track.


P.S. This is an interesting thread. I'm enjoying reading how other people handle these things!

[brig2221]

I'm glad that someone else noticed the situation regarding the person whose Mother now has a home foreclosure due to her spouses financial infidelity.

My wife and I have joint checking and savings accounts, and everything is together under both our names. I actually handle 99% of the finances. I pay all of the bills, move the money around to interest accounts, etc. I certainly keep her in the loop as to what I am doing, and always consult her before making any large changes.

As I noted in the other thread, I cannot fathom how married couples would ever want to keep theiir finances separate. I know there are exceptions to anything, this being no different. That said, I am not talking about some financial exception where one spouse owns a business, and for tax reasons etc, they keep a separate acccount. I am talking about your average married couple where both spouses work, and they decide to keep their paychecks separate in their own bank acocunts, and jointly pay their bills.

The only advantage I can see in doing that, is the ability for each spouse to purchase things that are important to them, but not to their spouse, without having to get into any arguments or justifications of said expenses. That's it, that is the only advantage I can think of, and I happen to think it isn't something that should be at the top of the financial priority list.

As far as the negatives, where to begin. The first thing that comes to mind is a disparity in income. Certainly in some instances, spouses might make very similar incomes. That said, I can also envision many instances where one spouse makes a considerable amount more or less than their spouse.

If that is the case, and you are splitting bills, how does this work? Does the spouse who makes more pay their half of the bills, and then have a bunch of expendable income to do with what they please?

Does the spouse with a lower income pay their same half of the bills, and then have nothing left to spend?

Does the spouse with a higher income and more expendable money get to do such things as go to lunch with co-workers every day, while the other spouse has to bag it?

Are large purchasing decision based solely on the lowest common denominator? That is, incomes combined, we could easily afford a payment on a $250K mortgage. However, since both spouses are responsible for paying half the bills, do you need to adjust downward so the spouse with the lower income can support their half of the billing obligation?

Does the spouse who makes more money get all of the power in making major decisions? If the spouse with a lower income does not have much money after paying bills, then all expenses such as car purchases, vacations, retirement planning, etc, would fall to the spouse who actually had the funds to make these things happen, right?

If the spouse who does not have a lot of income after paying bills has the right to determine what the other spouse does with their expendable income, because it is the only expendable income in the family, then what purpose does having their money separated serve? If the spouse does not have the right to influence how the families only expendable income is allocated, then what kind of marriage are we really talking about here?

I once knew a lady friend at work who literally told me that she had to ask for a loan from her husband to pay one of the bills she was responsible for?

Then there is the question about separating bills. If I am not responsible for paying half of the bills in my household, it would only stand to reason that I am not worrying about, or tracking the payment of those bills. If I am still tracking the payment of those bills even though they aren't mine to handle, I ask again, why are we even doing this in the first place? If I am not tracking the paments made on my spouses bills, then how exactly do I know that the other bills are being paid? This is where I think you get situations of a spouse neglecting "their bills", and it hurts the entire family. We have another thread in this section with a home foreclosure for this exact reason.

I guess that is what it boils down to me. When you are married, you are in it together, you are a team. When you separate out the finances, and one spouse doesn't carry their weight, guess what, it hurt's you just as much as it hurts them. Even if for some reason it were to only hurt your spouse and not you, I ask, why are you even married?

I would like to end in stating that this was my opinion only, and certainly is not fact. I also would like to note that I am sure there are several posters here who do in fact separate their finances, do it successfully, and could not be more happy.

I would only note that I think the posters of this forum do not nesessarily relfect the general populus at large, and that your average married couple will experience many more problems than solutions with this arrangement.

[noppenbd]

To answer my own question...we have a setup similar to (but probably not as fine-tuned as) Spud's. Both of us work and both checks get DD into the same checking account, out of which we pay all bills (online mostly). We withdraw a certain amount of "miscellaneous" cash each week and make it cover eating out, shopping, etc. Gas and groceries we use a debit card out of the same account. We reconcile the account in Quicken and use a spreadsheet for future planning. Large amounts of extra money (bonuses, tax stimuli , etc) get apportioned on a case-by-case basis. Any unexpected purchases over $100 are talked about on a case-by-case basis.

[Snave]

We attempted a joint account and then each would have a separate account. All money would be deposited in the joint and then "fun money" would then be transferred to the individual accounts. This never really worked (too much hassle). My account has had $1.28 in it for about a year now. We just need to close it. My wife closed hers. She typically handles the check book, so she would just account for her fun money from there. We have been on and off the envelope system so that we use cash for many years now. Currently we are on it, so we just pull the fun money out at the beginning of the month in cash. I am a cash person anyway. So I just need to be given my "allowance" and I am fine. This is probably bad to say, but I am not sure I know the pin to my debit card anymore (actually that is probably good!) and I have written 2 checks in the past several years. And, of those 2 checks, one was me screwing it up (check was for $7500 and I wrote it fro $750), so I had to re-write the check. So, technically 1 check written. It is probably stereotypical, but she is the day-to-day finance person in the house and I deal with the investments.

[Broken Arrow]

I think the bottom line is that a couple needs to be on the same page with a collaborative system that best suits both parties....

The problem with my ex and I is that, despite changes in the way we managed finances (an eventual progression from her handling everything to me handling everything), we were never quite on the same page in the way we approached our finances.

Looking back at it, it seems so obvious....

Still, our one saving grace is that we've kept our finances separate. Even when one of us managed everything. If nothing else, it made tracking cashflow much easier.

[disneysteve]

We have had our financial lives merged into one since we got engaged. We made all accounts joint. All investments are in both names. Both of us have equal access to everything. The only exception is we each have a Discover card that is in our own name only that we had before we got together.

I handle pretty much all of the financial stuff - paying bills, managing investments, etc. but it is no secret. DW knows where the checkbook is. All the bills and statements are filed in my desk drawer. And I keep a spreadsheet of our investments and net worth on the computer. There is also a master list of all of our accounts and holdings with account numbers, insurance policies and contact info that is kept in a secure location with other important papers.

A few times each year we have a "financial date" when we sit down and I review everything with her.

Neither of us have a spending problem so we've never seen the need to have allowances or spending limits. We spend what we need to spend.

[kork13]

I'm not married yet, but I believe this is how my parents have done it for a while:

Both have their paychecks direct-deposited into a single joint account, but then they also have an agreed-upon amount (for these purposes, say 10% of my father's pay, and 15% of my mother's pay--she's the bigger spender) from their paycheck automatically sent (also via direct-deposit) to individual accounts for each of them. That has allowed the majority of their combined incomes to become shared money to pay expenses, with a small portion of their pay going to a personal account which is completely unaccountable to the other.

This works really well for them because my father is VERY frugal (borderline cheapwad), so he likes to save/invest alot of his personal money, but disagrees with how much my mom enjoys getting all sorts of stuff like collectibles, decorations, etc., then saving a smaller portion of her personal money. She pays for that stuff with money they both understand is her own to do with as she pleases, so that eliminates most disagreements on account of spending.

They, like myself, purchase almost everything on credit cards (for the rewards/benefits), so they also have a couple of joint credit cards for expenses, plus individual cards for their own spending as desired. Each card is paid for exclusively from their respective accounts--joint cards paid from the joint account, personal cards from their personal accounts.

This has worked really well for them, and I expect that eventually, I'll probably end up doing something similar.

[PrincessPerky]

We share all money...responsibility of making sure the check goes out on time is mostly my job...making it is mostly his.

Technically he has his own 'mad' money from ebay selling, but in reality I spend it too and we have a joint splurge amount...anything above the bills and not secreted away to the savings account..which we generally decide to spend together.

[simpleyme]

all money we get is ours, we do not do allowances we just have money and we can spend it or not , I pay all the bills out of our account ,I try to keep him up to date but since we have no debt there is not much to talk about ,
we do discuss long term financial planning and such but since we have the exact same goals its an easy discussion

the only thing we have separate really is not separate at all he got a small pension (10K)that he turned into an Ira at an investment firm, at the same time I got a identical amount from a 401k every time we get statements on these 2 accounts we compete to see who is winning and getting rich and who is going to die broke LOL (of course it is all in fun )

[Caoineag]

I was actually thinking about this too.

We do separate but we both have access and can control the flow of money as needed. Our budget is being done as one budget now and I basically control all of our money (he pays rent and buys our out to eat dinners). He is supposed to be getting a bigger allowance then me but I think he's been sneaking me the money while I am not looking, lol. His account has been feeding mine money (based on what he tells me he can give) to pay off our remaining debt which is in my name and paid from my account (we paid his off last year).

This is the closest we have ever come to merged finances. We can peek at each other's accounts if we want to know what's going on but we still both have a voice in the matter and have our individual splurge money.

Up till now we both made the same (in fact at one point, I was the sugar momma). Now, his income is going to make mine look like a drop in the bucket here shortly. Since the budget is just one budget, it shouldn't really matter because we will use all our money to fund one budget.

As to why bother? Its an easy way of forcing us to work together and both be responsible. I want him to have to decide how to spend his money. Being informed as to how the money is spent isn't the same as actually being forced to control money. If something happens to me, I want him to be able to pick up where I left off.

I also can't justify my toys from a joint account, even if technically its the same thing. There is nothing you can say to make me comfortable spending someone else's money. Which means shortly into a shared account, I would be miserable because nothing was my own. Somehow, I see that as a quick way to end a marriage. And he feels the same way about spending my money. Given this little mutual psychosis about money, I think we are better off this way.

Maybe over time we will be able to get down to one account but I am having enough of a panic attack about letting him assist me with paying off my debt that I think that isn't going to happen soon.

As to determining how expensive to go, that's easy. All of our fixed expenses should fit on my paycheck, if they don't, we are living too expensively. But then we would like to be financially independent fairly quickly in life. This insures that we always have enough to save and enjoy.