Co-Mingling Incomes

[cicy33]

W
PS - If he doesn't save for retirement (which he does), then I guess he'll be working at least part time, and I'll be taking some nice vacations with friends I may even spring for him to come along occasionally .

this is the part that baffles me. by no means am I judging. only trying to understand. If my SO and I reach retirement and he does not have enough to retire I could not just make him work while I go on vacation. Even if he was loosey goosey with his money. I would feel bad. To me that is just a part of the deal you make when you marry someone, you know, for richer for poorer, for bad and good, etc. I guess it works for some but for me no matter what it is a joint effort. and as Disneysteve said, sometimes I make more, sometimes he makes more. I just don't see how we could decide who gave more or how to split it?

[MonkeyMama]

It's funny the independence thing comes up because my spouse and I are both extremely independent. I guess for us we don't see how combining our income compromises our independence. I think marriage itself changes things more than how we handle our finances.

To each their own, I have no issue with couples who do things differently. Whatever works! I just don't personally equate separate finances with independence. I do however feel we would be less united overall if we took a "separate finances" attitude.

[sandrark]

If both spouses earned approximately the same income, I guess it could work, but I still don't know how that would play out. What happens if one spouse chooses not to fund his retirement account?

We have joint and separate accounts. For retirement, it's one of our "agreements" - since I'm the saver, and he's not. We discuss it, and it eventually gets to a reasonable solution. It's called negotiation and compromise.

Our agreement is that I save whatever I feel I "need" to from my income, since I'm a saver. In fact, I'm currently saving ~ 20% of my gross income, and maxing out my retirement accounts.

As a result, DH has agreed to max out his SEP-IRA each year. It's about 1/3 of the amount I put in. Overall, we're putting ~ 14% of our gross income to retirement accounts.

What if one spouse decides to buy a new Coach bag instead of paying her share of the utility bills?

Ah, but that's the beauty of BOTH individual and joint accounts. We both contribute equally to our joint account. Anything left over of our income can be spent as we wish. The contribution to the joint account means utilities will all be paid.

But the funds left in our personal accounts mean if I want to spend $125 on a massage, or $400 on a Kate Spade bag, I can.

What if one spouse wants to get a new leather sofa and the other doesn't?

Even if all your money is co-mingled, you'd STILL have to have that conversation, right? For us, our contribution to the joint account includes a line item for payments to savings for furniture, house improvements, and vacations. So when the time comes, we write a check from joint savings.

We have been together for 25+ years, married for 11. And we didn't have joint accounts until after the wedding. We have NEVER argued about money, because we always have a good mix of couple and individual unity and independence.

Sandi, the rugged separatist

[swanson719]

Well said Sandrark. I have friends who do this as well and have no problems, but then another couple we're friends with argue more about it than anything else. As Steve suggested, it would make sense with similair incomes. The couple that argues has an almost identical income. They are engaged, and she has a kid from the previous marriage, while he has no kids. So the alimony and child support go to cover the cost of the kid, and then they have the joint account with separate accounts too. What I laugh at is that my friend loves to soup up his truck. So one day he went to do something with it, and she yelled at him for being irresponsible with money. Another day she called him 6 times at work until he returned one his diet supplements he had bought. So while they have separate accounts, she still controls his spending. This doesn't work for me.

DW and I still like nice stuff though too. She'll want a big screen TV, or a new coach purse, etc. But then I show her our finances, and she'll find something affordable to want instead. When we want to make big purchases, we both get the same amount. She wants $300 for new clothes, so I'm getting a $300 tree stand. We both get what we want, and no arguing.

[kork13]

I always laugh when this topic comes up (which it does every couple months)... As evidenced by all the responses so far, it really just depends on the couple, and what works for them.

As for myself, I'm not married yet, but looking forward, I think my preferred method would be to be mostly joint (both paychecks go to joint accounts for paying all the bills and family expenses), but also have personal accounts for each to use as a discretionary account. Funded by an agreed-upon "allowance" from the joint accounts, they'd be there for your personal pleasures, whatever that might be -- day at the spa for one, a set of golf clubs for the other.

But as I said, not married yet, so we'll see what really happens later on. However, this is largely similar to what my parents have done for their entire marriage, and it seems to work fairly well for them.

[ewrealty]

I always laugh when this topic comes up (which it does every couple months)... As evidenced by all the responses so far, it really just depends on the couple, and what works for them.

As for myself, I'm not married yet, but looking forward, I think my preferred method would be to be mostly joint (both paychecks go to joint accounts for paying all the bills and family expenses), but also have personal accounts for each to use as a discretionary account. Funded by an agreed-upon "allowance" from the joint accounts, they'd be there for your personal pleasures, whatever that might be -- day at the spa for one, a set of golf clubs for the other.

But as I said, not married yet, so we'll see what really happens later on. However, this is largely similar to what my parents have done for their entire marriage, and it seems to work fairly well for them.

this is exactly what the wife and I do. It works well for us.

[disneysteve]

Ah, but that's the beauty of BOTH individual and joint accounts. We both contribute equally to our joint account. Anything left over of our income can be spent as we wish. The contribution to the joint account means utilities will all be paid.

But the funds left in our personal accounts mean if I want to spend $125 on a massage, or $400 on a Kate Spade bag, I can.

This is where I have trouble with the separate account method, and this is just my personal view. I don't mean to criticize those for whom it works - just trying to explain why it wouldn't work for us.

I feel that EVERY dollar that I spend on anything affects our household's bottom line. I feel that EVERY dollar that my wife spends on anything affects our household's bottom line. If I went out and bought some costly tech toy or my wife went out and bought an expensive handbag, that is money that is gone and no longer available for other purposes. It wouldn't be fair of either of us to spend household assets in that way (unless we had previously agreed to do so). Since we would never go out and make a big purchase without discussing it first, there is no need to ever keep separate accounts.

Does that make sense?

[sandrark]

Steve, it does make sense, and you're not wrong.

For us though, we don't want EVERY CENT and EVERY DECISION to be negotiated. Neither of us would typically buy expensive individual items, but we do once in a great while. For example, DH wanted a digital SLR camera for years. He waited for 6+ years until they came down into "reasonable" territory. So he bought it with his saved money.

My saved money tends to go to retirement and savings.

What keeps us from getting frustrated is that we've set guidelines: 15% gross to retirement, 20% to savings, prepaying on the mortgage to get it paid off in 8 years...and everything else is gravy.

It would be easy to be my in-laws. They've scrimped, saved, and denied themselves for more than 50 years of marriage. Everything ends up being a price tag, even amazing opportunities. As a result, they hoard their cash, and rarely do anything that brings them joy or fun - which seem to be words that have been lost from their vocabulary. And so they are our anti-models. We want a BALANCE of long term and short term. A balance from practical and fun. And setting up some separate cash allows us to do so.

As we say...if *we're* the "flighty" ones in the family, the others need to get out more.

Sandi

[disneysteve]

Steve, it does make sense, and you're not wrong.

For us though, we don't want EVERY CENT and EVERY DECISION to be negotiated. Neither of us would typically buy expensive individual items, but we do once in a great while. For example, DH wanted a digital SLR camera for years. He waited for 6+ years until they came down into "reasonable" territory. So he bought it with his saved money.

We're the same way. In a situation like that, my wife would know that I've wanted the camera for 6 years. She would know that I've been waiting for the price to come down. And she would know that we have plenty in savings to cover the purchase without affecting any other financial goals or needs. It wouldn't matter in which account (or in whose name) that money was. I guess I don't get how it matters that the money is in his account vs. being in your joint account.

I realize that a lot of this is mindset about money. There are lots of things people do with their money that we don't see the need for. For example, lots of people have a vacation fund, a separate account earmarked for an upcoming trip. Other people have a new car fund or an account for home repairs or whatever. We don't see the need to compartmentalize our money in that way. We have one checking account and one savings account. The money in those 2 accounts gets used for pretty much everything: monthly bills, entertainment, dining out, groceries, medical costs, travel, home and car repairs, etc. All income goes into one pot and all spending comes out of that one pot. It works for us.

We are definitely not like your in-laws. I think we have very good balance. We dine out fairly often, love to travel, enjoy Broadway shows and do plenty of other fun things. In fact, my wife and I just got back a few hours ago from an overnight trip to Atlantic City where we met friends for dinner last night, did some shopping and a fair amount of gambling.

Our theory is pretty much the same as yours. 20% of my gross goes to savings. 50% of my wife's gross goes to savings. How the rest gets spent really doesn't matter because I know we can meet our long term goals with that plan.

[TBH]

Yes, this topic does come up pretty often on here, but I also like to see the new responses.

We use a combination, like others have said. We have a joint checking account and our paychecks go in there. We also have a joint savings account and put money in regularly for emergency savings and use it as a kind of sinking account for regular large expenses like annual insurance premiums, etc.

But we also both maintain our own checking and savings accounts, and our retirement accounts are separate. Similarly, we have a joint credit card, and we also each maintain a credit card of our own. Neither of us uses our personal checking accounts or savings accounts, although we each keep a few thousand dollars separate that never really grows or changes, and is just left over from before we combined our finances.

We do this partly because we are not married, and we feel we need to maintain a full financial infrastructure (savings, checking, credit) that we could use if something happened to the other person. Inheritance laws for unmarried couples can be funky, so we each want to know that we could keep meeting our family's financial obligations if one of us was incapacitated, if our joint assets got frozen or something. I'm sure it's just paranoia, but because we're unmarried we don't feel as confident that others (banks, the IRS, etc) would view us as a financial unit if something bad happened.

So the separate accounts are mostly there to serve a purpose, but we do consider ourselves a financial partnership, and we are named as beneficiaries on all our life insurance policies, accounts etc. We own a house together and have a child together, and make all major financial decisions together.

We do fight about money, although not very often. The fights are usually because I tend to be anxious about money, and he is more relaxed. He is very frugal and generally good with money, but if things are tight it annoys him that I don't want to reduce the amount we're saving or dip into our savings account. When I get anxious about money I tend to get, um, a little bit controlling, which of course he doesn't like.

Others have mentioned trust--I agree that it would be very hard, maybe impossible, to be in a relationship with someone I didn't trust. I do trust him to spend money wisely, work hard to do his share to support our family, etc. He tends to be forgetful about financial tasks like paying bills, which makes me crazy, so I handle all the bills etc, but really I think we compliment each other well in this area.

Also, as others have said, I do think our system works well for us because we make roughly the same amount of money, with slight variations from year to year.

[Seeker]

I know this has been discussed before but I like seeing the new posts myself. I am one of the old school ones too. I believe that when two people are working toward a common goal it just make sense to keep it together. Question for those that separate: how do you save for purchases? By this I mean, some have stated that their money is theirs and hers is hers. So if you want to buy a television for example, does each have to come up with 50/50 or ? Also, what about saving for retirement and stuff?

Usually joint accounts are for things such as TV that both parties benefit from. Some of the his 100% his and hers 100% hers, means that common needs, a TV, will be split 50-50. People each uniquely need to decide how is should work between the two of them.

DH and I have separate & joint. Retirement, if both are working is through the separate workplaces with supplemental Roths being created in equal amount from our joint accounts.

Some of us that do things separately, do not do so entirely and drastically, as many of you seem to think. There's mingling of funds and benefits to both regardless of handling and regardless of separateness. We discuss major purchases and some minor ones too.

We're not out to hurt our SO... some of us are just "better" at handling financial issues; and some of our SOs do not want to have to do anything with regard to bills, money, etc. All my DH wants is his cash allowance each month. His "history" with financial matters is the reason why.

My "history" is not great either, but I'd not want to relinquish what control I do have because of my own insecurities.

So you could say we're a very unique pair. But I assure you it's not a lack of "trust" or "love" or even working toward that common goal. It's because I do love him that I can save something separate for us...

[kork13]

We're not out to hurt our SO... some of us are just "better" at handling financial issues; and some of our SOs do not want to have to do anything with regard to bills, money, etc. All my DH wants is his cash allowance each month.

hahaha this (and particularly the bolded part) reminded me immediately of a friend of mine. He happily entrusts all finances to his wife (and he's the sole wage-earner at present), only caring about their finances to the point that his wife gives him *this much* each month as his personal "fun money," to do literally whatever he wants with. All else, she takes care of for them. A very funny working relationship with regards to money in my view, but it apparently works very well for them, and they're both quite happy with the arrangement. ^_^ sorry for the tangent, just wanted to share a chuckle.

[Seeker]

hahaha this (and particularly the bolded part) reminded me immediately of a friend of mine. He happily entrusts all finances to his wife (and he's the sole wage-earner at present), only caring about their finances to the point that his wife gives him *this much* each month as his personal "fun money," to do literally whatever he wants with. All else, she takes care of for them. A very funny working relationship with regards to money in my view, but it apparently works very well for them, and they're both quite happy with the arrangement. ^_^ sorry for the tangent, just wanted to share a chuckle.

Kork13 -- it does work for some people.

I understand the view that if both start out with nothing, then mingling and working together to better both is the way most couples handle this. Not everyone starts out in a relationship, financially equivalent. And when two people enter into a relationship unequally, then problems can occur... not necessarily will, but can.

And some people whom earn earn significantly more than their mates in life, can also decide with their SO to go either way as well.

There's nothing wrong with mingling... there's nothing wrong with separateness either.

Before "marriage" is agreed to, there should have been many discussions about money & goals and the what if's for the future. It's also true that people can change in their views though if I thought I could change DH, it certainly would have been a mistake to marry him in the first place.

I met my DH late in life, me in my early 40's, and he in his mid-30's. He was not raised with blood-relatives as his folks passed on before his teenage years; he was in the Army and saved money, only to had it taken by his foster folks. His education plans thus foiled he went to college by borrowing and working simultaneously and renting.

He's got the most generous heart and personality I could ever hope for and I love him dearly.

But he had also had a car totalled (which thankfully he walked away from without a scratch), and he's freely given what little money he had to friends when they too sorely needed it. He ended up with a bankruptcy under his belt due to the dot.com busts and job outsourcing etc.

Ultimately we met at his place of work where they sat me next to his desk on a job. I left that work for something better and afterward we started dating. He was renting one room in a house owned by other people, had a leased car (nobody would qualify him for a loan), and literally no savings -- living paycheck-to-paycheck. He had defaulted on some 25k of education debt and it was well into the 30k if not 40k by the time we paid that off.

I on the other hand, had a fully paid off car and condo in my ownership. I was saving money and not really having any type of financial issues. Just me saving for the future in whatever form that would be.

DH & I spoke of money and financial what if's and he wanted me to handle everything financially. All he wanted was a monthly allowance to do with as he wills, and now that amount is $200/month. We often shop together and most of the time what he "wants" gets paid from the joint accounts. Everything I separately own has him named as beneficiary.

We've paid off all debts and now work together for retirement and whatever comes our way. I have no doubt that he's 100% happy with this arrangement because all our debts are cleared. He could not have done this alone, and I could not have done all of this without his willingness either.

[DebbieL]

All I can say is DH and I keep things separate and we are both ridiculously happy together. We have never argued about money or spending. We both contribute equally to the bills, then after that what's mine is mine and what's his is his. He is free to spend his money on anything he likes as am I. I have no desire to change our arrangement whatsoever. We are probably the happiest couple I know too! I say whatever works for that couple is what works for that couple. If someone is okay with joint everything - great for them. I will never do the joint everything thing.

PS - We do help each other out if needed. When he was unemployed for a few months I paid everything, and I know he would do the same for me. I take him on a date one time, and he'll take me out the next, etc. It all works out. We don't nickel and dime each other or anything. It isn't like I send him an invoice for his half of something. We both give to each other generously. We just really enjoy keeping our own finances.

[Caoineag]

We used to have separate accounts (8 years actually). Part of that was habit (I had been on my own for a couple of years) and part of that was not knowing how to comingle. Ever since I started to get strict with our finances, I have been gradually taking over all of the bill paying and financial planning. So for the past year, we have only a joint account that I control. He's happier because he was never really good with the finances and I am happier because there is no more nasty surprises.

I think the biggest issue with separate accounts is that it requires both people to be good with their finances (unless you are doing the dolling out of play money). I don't think that happens to often.