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

[cptacek]

We are still getting everything joined together. He had a checking account, a pickup loan and some farm loans at his bank, and 3 credit cards. I had 3 checking accounts, three savings accounts, a Roth IRA, a 401(k), a taxable mutual fund, 2 credit cards, a pickup loan and some farm loans at my bank.

So far, we've paid off his 3 credit cards and canceled the ones with a monthly fee, got me on his checking account at his bank, got him on 2 of my checking accounts (the other one of them is in TX and requires him to actually show them ID to put him on the account, so as soon as my pickup is paid off I'll probably just close that one), refinanced two of my loans in both of our names, etc. It is just a pain to do, so it has been slow getting it done.

We have both been single forever. He is 33 and I am 30, and we've never been married before. Our philosophy is that it is our money, and we make decisions jointly...of course we don't ask each other if we can spend $20 at the store! But if he is buying mineral or something for the farm (usually if he is going to spend more than a couple hundred dollars that day), he'll call and make sure I agree.

One of the things we do when I get home Thursday night is sit down and relax after supper. We'll watch tv, and during the commercials, I'll mute it and we'll talk about our cash flow situation in general terms and where we want to be in a few years. I actually love doing that. We are both bouncing ideas off each other and both bringing our expertise to the table and just dreaming. And we have BIG dreams! Sometimes we'll go beyond the end of the commercial, but that's ok! It isn't too intense that way, talking about money, and we really get to connect.

On Sunday nights, before I leave for work early the next morning, we balance the checkbook. He tells me what he bought, what it was for, and we file the receipts in the correct folder. That is one thing that has taken some time for him to get used to! Filing receipts instead of throwing them in a box! But, he saw how easy it was for me to do taxes this year, and he's called me a few times to ask where something was and I'll say "check the file box" and he finds it (!) so he is starting to appreciate it. I'll tally everything up and we'll look at the balance and talk about what he is going to spend money on the next week. I am kept in the loop, even if I am away most of the week, and he doesn't have to keep calling and asking.

Before he was on my checking account, I was leaving a check for him to deposit with how much we thought he was going to spend, and that didn't work. There was no way to tell what was going break that week, or what he would need, so once he could sign check from my bank, it got easier.

Re-reading this makes it sound like I am controlling all the money and "letting" him have some of it. I don't feel that way, I don't think he feels that way, but I am the one interested in finance and cash flow and interest etc, so I am taking care of the books and paying the bills and keeping track of loan payments, etc.

[pearlieq]

We have had everything merged since we were engaged. I would not have accepted separate finances--I also believe that we are a team and everything needs to go in the common pot.

We both take a weekly amount of spending money, which is used for gifts and self-indulgence. We set it up that way so we would both have a small amount to spend for fun, and for which we were answerable to no one. That's important for both of us. I think DH would like a little more, but we're not quite there yet.

I'm manage our money, mostly because I have the time and inclination. Frankly, I think DH is thrilled that he can trust me to steer us well and not have to worry about it himself. He's said before that he would never have what he has today if it weren't for me.

We function a lot like the offense/defense model discussed in The Millionaire Next Door. DH is a big earner and has an entreprenurial spirit. He's great at bringing in money, but not so inclined to manage it. I earn a more moderate income and don't have an entrepreneurial bone in my body, but I'm good at planning, strategizing, and saving.

We make a great team.

[scfr]

We're a "community property" couple.

Suze Orman would not be happy to hear this, but like many of you, all of our personal assets are held in joint accounts. DH has an account for his business, but I am an authorized signer on it. We each have our retirement accounts, but have each other listed as the sole beneficiary.

I do almost all of the "grunt work" as far as seeing that the bills get paid on time, checkbook balanced, etc. I update our asset list (same as our net worth since we have no debt) monthly, and show DH. I also do our budget, total our expenses, and make suggestions where we might want to reign in spending.

We do have allowances, but honestly they never get spent in full. Neither of us have any complaints about how the other spends. If we make a big purchase (generally anything over $100), we discuss it with each other first.

All our credit cards are joint. When DH immigrated to the US he had no credit history and couldn't even get a gas card on his own, so I just added him to mine. Now we have a couple CCs, and both of us are primary card holders on different accounts, with the other as a secondary.

A few years ago we made a concerted effort to coordinate our portfolio of retirement accounts. Prior to that, we had each sort of done our own thing, although we conferred with each other. We realized it was better to look at our retirement savings as a whole.

I agree wholeheartedly with those who say that the best system for a couple is whatever works for them.

I too am happy I have such a good financial team mate!

[Gruntina]

My husband and I joined our accounts after marriage. He was willing to let me handle the finance as it is not something he never cared to do in a organized way. He had a few debts and I applied the snowball method and other methods I learned from this site with our finances. It has not been easy at all but we are on the same page as far as aiming for the same big picture.

Since I was very adamant about paying off a 60k debts I had prior to the marriage and was on this site a long time before I met my hubby, I was very careful with what I spend with and how I paid the bills. I made sure to use only one debit card so I can track my bank statements with my receipts and kept things simple so it would be less frustrating work trying to figure it out. His habit was so different. he liked having cash on hand, use more than one credit cards (ebay and online purchases) a debit card and two gas cards so I would get receipts from him for all these different form of payments and trying to track it all in our budget spreadsheet and checkbook balance which is exhausting.

At least he is a good sport and open to transitioning to a system that will not give me a headache when trying to track down all the finance in-going and out-going. We are still newlyweds and not yet been married a year so I am seeing this a good sign so far as we come a long way and still positive about tweaking our finance management to a smoother system.

As far as allowance, we really do not have a set amount for each other each month as it can vary but balanced as far as both of our needs getting met.

[moneybags]

He makes it, I spend it . Actually, he makes most of it, and I manage it: pay the bills, investments, etc. All money is held jointly. We don't have allowances, just buy what we want. Luckily neither of us overspends. We do discuss big purchases before they are made.

[Seeker]

I sort of answered this in the other post, but wanted to respond to this specifically....

[QUOTE=brig2221;159163] I certainly keep her in the loop as to what I am doing, and always consult her before making any large changes. [/qoute]

DH and I always keep each other in the loop. I just got 11k bonus for last years work.... and DH got a 1.5k bonus for last years work. The money is going toward his old education debt to pay it off in it's entirety.

He told me that he wants me to buy a digital camera for me (we got him one last Christmas or maybe two years ago). But I with my blurring vision really don't feel like using a camera at all anymore.... and I probably will continue to ignore spending money for a "want" that I probably won't use.

There are agreements and there are disagreements. If I disagree with his buying another computer program when he just bought another not too long ago under the joint account, then he knows that he can save his own spending money for that program. We both have the same spending money for "wants."

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.

I don't know what the ratio of failed marriages is in today's standard... but I think it was like 50% of marriges do fail. With that kind of a failure ratio, I wouldn't advise any woman with assets of her own (pre-marriage) to combine them. Nor would I advise men to do so.

And as far as my situation, my DH came with a bunch of debts and no assets. 50% of my paycheck was 100% of his paycheck. This amount goes into our joint account. The remainder goes into my sole account. This has always been the case; when I wasd making 50% less, DH was making less than 50% of his current. The ratio has held mostly true.... but if you want to include bonuses, my contribution is a bit more.

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?

This is normally the case. And normally "bills" are split 50/50 regardless of the reality. He eats much more than I do -- groceries come from the joint account. I's not an avid clothes purchaser or shopper; I wear no makeup and have never been to a hairdresser (trim my own hair). He wears out shoes faster, he wears out clothes faster. His pricklyes wear out the pillowcases faster too! Essentially I think most everyone who does separate finances, does use a joint account for paying most of the bills.

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?

Nope, again I married rather late in life and had assets of my own. And my hubby-to-be had financial troubles and did not want to handle the money. He trusted me to do the right thing, and I can only hope that I've been fair about everything as I try to be. I do love him and I do want him to be able to take care of anything if anything happens to me.

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?

We're talking about safeguarding your assets if the other party goes crazy. The orignal posting that created this thread... things might have been better with separated assets. What he did is wrong.... but it's not unusual.

I'd like to think that everyone would be moralistically fair and everything can be split 50/50.... but it cannot always. My DH cam from a foster parent situation where his money while he saved in the military, was stolen from him and he had nothing. Was that right?

People need to protect their assets. Protect their earnings. Even then, something can go wrong. Even a stroke (blood-clot in the brain) could change your partner in such a way, that something no longer works right.

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?

This has too little info to make a fair judgement on.... what was the bill for? A "need" or a "want"? If they did not discuss it beforehand... it may have been the right thing to do. If this lady's practice was to overspend... it may have been the right thing to do. There is such a thing as "tough love."

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.

It just depends, I doubt that many people truely separate out his expenses/ her expenses. While it's easy to do with income, it's not so easy to do with expenses.

I pay everything for our bills from the joint account. Association fees and mortgage fees come from my account. But again, the bonus coming from work gets split just like normal salary. And we are paying 100% of his old education debt (8.02 interest rate) off.

We have a mortgage and a new car to still pay off. The new car is his, but in both our names. If anything happens to our marriage (not likely anymore) then he will have the car, maybe 50% of the property in another state (that is paid off), I will have my home and my old car.... and there probably will be no contesting this or that (we have no children).

I love my husband and he loves me. We are a team -- and there's the problem with the bolded part above.

You've merged a physical thing (finances) with an emotional thing (marriage/team/love). It does not work that way in all cases.

My DH trusts me enough to let me handle that which I've handled well enough pre-marriage and I love him enough not to betray that trust. Obvisouly this works for us // but we are somewhat unique; we both married late in life.

Many people who choose to combine their finances do so for the same reasons. But it's a discussion that needs to be done pre-marriage. There's no right or wrong.... and you may not understand.

My husband was a sole child, I grew up with two other brothers; I am female and of a culture that concentrates on the male sons more than female.

I was always in competition while growing up; my hubby never had to compete with peers. I am 100% more controlling than he is and will ever be.

In reality, this just works for us.

[moneybags]

I don't know what the ratio of failed marriages is in today's standard... but I think it was like 50% of marriges do fail. With that kind of a failure ratio, I wouldn't advise any woman with assets of her own (pre-marriage) to combine them. Nor would I advise men to do so.

I'm all for pre-nups. When I got married, neither of us had anything & we were young, so there was no need. If I were to marry & I had any assets, I would definitely protect them.

[Brokemofo]

He makes it, I spend it . Actually, he makes most of it, and I manage it: pay the bills, investments, etc. All money is held jointly. We don't have allowances, just buy what we want. Luckily neither of us overspends. We do discuss big purchases before they are made.

This is pretty much how my Wife and i do it. We both make about the same income. Both our checks get DD into checking after 10% goes to 401k. We both use debit cards and spend the money on dinner out, movie, golf, or whatever we do. She pays all the bills, and from time to time I peep on the balances just to be sure we're not broke. We will talk about major purchases like last years motorcycle before we do it. Works for us.

On a side note. I pull credit reports for a living and talk to a lot of people about their debts. It always cracks me up when a spouse wants to borrow money to do whatever. But when I ask if she wants to borrow more to pay off the $60k in credit card debt, she says "God no, why would I pay off my stupid husbands credit cards?" Well, maybe because if you don't, you are definitely declined for this loan.

[LivingAlmostLarge]

Hilarious. Ever heard the old adage "His money is my money, but my money is MY money!" LOL.

[simpleyme]

when Dh and I got married we had nothing so we never had his then hers just ours
if I was ever widowed I would do things differant if I were to remarry,I would probably have to marry someone who had a similar net worth and work ethic, I assume I will not remarry with those standards LOL

[simpleyme]

after reading my own post I realize I would do things just the same as before since I would choose a mate with a similar networth and work ethic, funny

[Seeker]

when Dh and I got married we had nothing so we never had his then hers just ours
if I was ever widowed I would do things differant if I were to remarry,I would probably have to marry someone who had a similar net worth and work ethic, I assume I will not remarry with those standards LOL

LOL -- you don't always get a choice in whom you fall in love with. Trying to marry someone with similar worth is not always the best way to go -- you may find yourself pretty lonely.

My DH is the kindest most giving and trusting person I know. When I get into my competitive streak or controlling mode, he laughs at me and makes me laugh at myself too. It's just a difference in us probably because of how I grew up. We accept each other as we are... too old to change I guess.

I could never be like him in many many ways. If I had to do it all over again, I'd still marry him, in spite of all the financial issues I've had to help him settle.

[brig2221]

Many people who choose to combine their finances do so for the same reasons. But it's a discussion that needs to be done pre-marriage. There's no right or wrong.... and you may not understand.

I just wanted to respond to your thoughts above that I bolded. That is, you may very well be correct, I may not understand.

I did my best to make sure that I have clearly stated that these are my opinions only.

However, I can't help but wonder about the mindset we have today in America. I think two separate people in these threads mentioned a 50% divorce rate, pre-nuptuals, having to have a backup plan in case your spouse goes crazy, etc.

In reality, all of these things happen every day. That said, I can't help but think that thoughts like these, and actions like these, are really just a self-fulling prophecy in and of themselves.

If you are entering into a marriage, concerned about what was your money, and how you can set things up to protect yourself from your spouse, to still safely keep your money, it almost sounds like an escape plan, a just in case. Besides, what ever happened to a man and a woman becoming one, and everything going from mine and yours, to ours?

Well, if you are entering into a marriage with a financial escape plan already in place, isn't it very convenient and easy to jump out of a marriage at the first sign of trouble, or when things get difficult, like they do in every marriage?

I'm not trying to pass judgement on you or anyone else. I just happen to think that this kind of thinking in general, is the reason why we do see so many divorces today, divorces of convenience.

I think that DisneySteve hit the nail on the head, the most important thing being to find someone that holds the same, or very similar values to you when it comes to money.

[disneysteve]

I think that DisneySteve hit the nail on the head, the most important thing being to find someone that holds the same, or very similar values to you when it comes to money.

Couples talk about religion. They talk about how many kids they want. They talk about where they'd like to live, what they like to eat, what type of vacations they like to take, what kinds of movies they like to see, etc. But they all too often don't talk about how they handle money until after they are married, and by then it is too late.

I know a couple who love each other very much. They got married and after a few years, had to split up because the guy wasn't very good with money. If he got it, he spent it. One year, they told their family that they were low on funds and wouldn't be able to give any holiday gifts, which everyone was perfectly okay with. What happens? The guy ends up getting a bonus at work and, on his way home, stopped and spent all the money on gifts for the family. The wife was furious because they were barely making ends meet and really could have used that money for important stuff like bills.

End result is they got divorced and now live in a duplex, one on the first floor, one on the second floor. They are together almost all of the time but financially and legally lead separate lives. They love everything about each other but could not function as a couple because of the financial differences.

[BabyBear]

Right now, BF and I live together, but I pay for everything. He owns a business and we don't pay him a paycheck--it all goes into the business.
I have one checking account for bills and another for "other" stuff, where I have my Debit Card attached. I get paid weekly and deposit 1/4 of the bill amounts into the bank and keep the rest for groceries, gas, etc.
The business is now up for sale, though, so it will hopefully be gone soon! Then, he can get a "real" job and will equally contribute to everything.

The plan is for me to cut my deposits for bills in 1/2 so that he can pay the other 1/2. Then, I will be able to throw more towards savings, retirement and mortgage, and he can as well!!