Marital Finance Idea

[Well Spent]

Do you want to be partners or roomates?

[Ima saver]

I have been married the longest. First time was 12 years, 2nd time is now over 31 years. All money has always been jointly held. We never fight about money. I pay all the bills and always save a certain percent. Anything extra gets saved also.
We both get an allowance. His allowance is for his gas and anything else he wants to buy, like snacks!
My allowance is for my gas, liquor and eating out for both of us!

Fortunately for my dh, I have never been a high maintenance person and hate to go shopping. I only buy something when I really need it. I find it a lot more fun to save money than to spend it.
Dh lets me know when he needs a tool (he is a builder) and he can always charge it cause I pay off the charge card every month.
His only money weakness is cars and since he works 7 days a week including holidays, I do indulge him in his love of cars! You need to enjoy your money too!!

[disneysteve]

for example I do not get paid, which makes my husbands family tradition of his bills and her bills quite useless.

Even when both partners work, it is highly unlikely that they will have similar incomes. When my wife worked full time, I earned about 7 times what she earned. Splitting expenses made no sense. Then she was a SAHM for 10 years and earned nothing. Now, she works part-time and after putting 50% in her 401k, takes home next to nothing. Whatever she does bring home, though, just gets added to the pot.

[seattlemanicurist]

Joint accounts work if you are compatible. Separate accounts work if you are compatible. Nothing works if you are incompatible.

This I can agree with.

[Seeker]

Since you asked what I think.... here goes:

One is that half of all income is grouped together, greater percentage if needed. Paychecks, gifts, small job payments and a $1,000,000 lottery ticket would all be taken in half with half allotted to a joint set of finances.

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

The second essential idea is that the shared amount would be what is used to pay for all common things. Household supplies, pets, children, joint vehicles and vacations would all fall under this category, whereas some new cleats or one of the couple going out with friends would be paid for by the individual sources of money.

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?

-School expenses would be split in half, with half being a personal expense and half being a joint expense. This is because while both benefit from one member's schooling, the one taking classes would benefit more so.

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.

-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.

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

Gambling???? Ummmmm. If either party "gambles", then I would suggest that winnings as well as losings are a partnership. I'm sorry, but the stress level and the conflict level of the party not gambling (the one relying on the other to do "right" with money is in conflict with "gambling"). The stress level of the person not-gambling is great enough to warrant a sharing of the winnings. The person not-gambling has also lost time that would have probably been spent in "sharing." There is already a sharing of the losings there should be a sharing of the winnings as well. There are also tax considerations here.

Personally, I'd recommend absolutely EVERYTHING being separate if there's a "gambler" in this relationship; and frankly, I'd not live or be married to someone who thought of "gambling" as a way of life. Once-in-a-while, with money that you AND your SO don't mind if lost entirely, is fine. But gambling winnings separate? Why? Isn't this for fun and sharing? Doesn't the SO lose time with you when you're out doing this?

Also i have been thinking of a different system where all money is given to the joint account, with the same two exceptions listed above. Money would then go to personal accounts once a set amount, such as $6000, is reached in the joint account in a ratio equal to one person's income vs. the other.

What do you guys think?

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.

Splitting 50/50 is not usually fair or equivalent even if incomes are the same, because it's very rare for the other aspects of living to be shared 50/50.

Chores both indside and outside the home will also need to be split. If there are children, how do you split their care or put a monetary value on that? Or adult parents who might need to be cared for as well. Sometimes the SO does not work outside the home at all; does that mean that they have no monetary say to what their partner earns?

Ultimately, if the marriage fails, then usual fact of the matter is that a court will split everything 50/50 unless there's some other factor impinging on the marriage -- a third party. In that case, the person who involved with that 3rd party will get the lower ratio since it's usually looked upon as that's the person who cause the marriage problem.

Ultimately, if the couple cannot agree on how things should be split, than a 50/50 is normal in a court of law. If children are involved, then it becomes way more complicated.

I agree with Steve and the others that have posted where the gist is that it's ultimately all shared. For protectional purposes, if one of the two married people do not have control nor desire control of the money (because of a lack of interest or a feeling that they just don't want to be responsible for everything), then it's up to the other person to be fair are share regardless of the "split." And if each keeps everything separate 100% and does their own thing, that's fine too if both parties agree that that is how'd it'd work for them.

You and your SO needs to decide what is viable for the two of you. Nobody else here knows either of your personalities & temprament with regard to $s. Nobody else, except the two of you, should decide.

If your SO is uncontrolled with money and desires to let you manage, then do so. But COMMUNICATE about what is being done and why; give them a say in what happens with all the money, explain and list things so that if anything happens to you as the money manager, your partner will know what to do. Same thing if the reverse, if your SO is the better at numbers and managing these things, then listen and ask questions when s/he is explaining.

The key to marriage is collaboration and discussion. Contention over money can be an issue with two strong personality types, but it can also be a non-issue if the two of you know each other and trust each other. That's really what marriage is about -- that partnership -- however it works in each family.

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.

But ultimately, you and your SO need to discuss what is "right" for the both of you.... nobody else really can determine what will work for you and your SO. Nobody knows your financial contraints, habits, needs & wants, NOR that of your SO. That's why there's collaboration and compromise. There's no one-size fits all... the BEST way, is the way that works for both of you without either of you feeling that it's not fair.

[disneysteve]

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]

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]

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]

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]

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.