Separate and joint finances

[skydivingchic]

I've said it before and I'll repeat it here: I believe separate or joint finances can work for a couple provided they are in general agreement about how to handle money. DBF and I keep ours separate. We are currently planning our wedding. After the wedding the ONLY thing that will change is our tax filing status. We've discussed it and agreed that day to day mechanics will not change. We each earn our own money, contribute equally to joint expenses, and are free to spend the rest as we see fit. No consultation with the other party necessary. We do sometimes discuss purchases with each other, much like we discuss anything else, but there is no requirement that we do so.

This only works because we both have similar money philosophies. We save aggressively for retirement, pay CCs in full and on time every month, don't take out crazy car loans, don't have hobbies and habits that aren't covered while still living below our means, etc. This way of handling finances is certainly not for everyone. But neither is joint finances.

It sounds to me like you are generally happy with your financial arrangement and your mom needs to butt out.

[LivingAlmostLarge]

skydiving what happens if one of you loses a job post marriage?

[cptacek]

Sometimes, those that are commenting on our lives are actually projecting their lives onto us. Maybe your mom feels she doesn't have any say in her finances?

[skydivingchic]

We each have EFs to weather any storms like unemployment. If one of us were unemployed for an extended amount of time, we would discuss changes to how things are handled. But we see no reason to completely change a method that has worked for us for years on the rather small chance that one of us becomes unemployed for an extended amount of time at some unknown point in the future.

[LivingAlmostLarge]

skydiving do you earn the same amount? Or are expenses just split proportionally?

[disneysteve]

skydiving do you earn the same amount? Or are expenses just split proportionally?

And how do you handle stuff that one of you wants but the other doesn't, like maybe something for the house. Let's say he wants a new sofa and you don't or he wants to go out to dinner and you don't or you want to take a trip and he doesn't?

[skydivingchic]

LAL - It varies. Historically he has made more than me - anywhere from 10 - 30% more. I believe there is one year I made more. Right now we are about even. He is self employed, so it is a bit hard to do an apples to apples comparison.

I find the idea of being financially dependent on someone else to be and will never willingly put myself into that type of situation. Thus the 50/50 split.

Disneysteve - For house stuff, it depends whether the thing would stay with the house when it is sold. If yes, we must come to an agreement and split 50/50. That's never been an issue. Over the years we've purchased all major appliances and replaced the hot water heater. Next on the list will likely be either some kind of kitchen cabinet replacement, a bathroom remodel, or flooring, but we are a ways out from any of that. Stuff that would move, like a sofa, one of us purchases and that person gets to keep it in the event of a split up. Thus if we ever split up, he will be able to watch his giant TV, but will have to sit on the floor and I'll have lots of places to sit, but no TV to watch.

As far as trips, we travel together regularly and agree on most destinations and activities. Our list of places we want to go is long and unlikely to be covered in our lifetimes. But we've each had specific trips we've taken on our own and paid for ourselves. He really wanted to take 4 weeks to ride his motorcycle to Alaska. I flatly was not interested in spending 4 weeks on my bike. So off he went and he had a great time. I wanted to go to South America to do a Spanish language immersion program. He wished me well and helped me set up my blog.

What I don't understand is how you handle these things when finances are joint. What if your wife really, really wants to go on a particular trip, but you'd rather listen to fingernails on a chalkboard than go on this particular trip? How does that work? When he wanted to do the Alaska thing, I wanted him to go because I knew how much he wanted it. Why would I be anything but supportive of his dream? But my desire to see him fulfill that dream didn't change the fact that I would have been pretty miserable living on my bike for 4 weeks. Likewise for my immersion program. I certainly don't expect him to share my every interest, but I do expect him to support and encourage me, which he did.

We certainly understand that we each have a responsibility to not only ourselves, but to each other, to be responsible with our money. We understand that how we handle our individual finances impacts the other person as well and that after we are married it will have a legally binding impact. But none of that dictates pooling resources in joint accounts.

Again, this is the method that works for US and I'm certainly not advocating it for everyone. But just like the "credit cards are evil" mantra, "joint finances in marriage is the ONLY acceptable option" gets really old.

[disneysteve]

What I don't understand is how you handle these things when finances are joint. What if your wife really, really wants to go on a particular trip, but you'd rather listen to fingernails on a chalkboard than go on this particular trip? How does that work?

It could work exactly the same way: She could take the trip and I could stay home. I can tell you that in our case, that would never happen as she would never go off on her own like that but that's a personal decision, not a financial one.

[LivingAlmostLarge]

Nope I'm listening skydivingchic and interested in the other side. And my mom is completely not into joint finances. She completely controls hers and my dad his. Same with my in-laws for differing reasons.

We have traveled separately, but the big thing about that is we are on a limited budget period both time and money. We usually travel together because when my DH had only 10 days off a year he wanted to spend it with me. Same with me. Plus we were too broke to do much traveling except family and camping. Sure camping with other guys/girls only if it met our budget requirements. It's was the same rules i had while single, only cheap trips.

Here's an interesting question, how do you visit your families? It is nice to go with your partner to see their family, do you pay your own way? Or does the partner pay for you because it's their family? So visiting say his family is more expensive than yours. Or vice versa? Do you split a hotel or car rental if your family has space but his doesn't? Or is it based on whose family it is?

Does that mean no kids? Would you split kid expenses 50/50? Would you expect both parties to buy the exact same care to be able to drive said kid(s) around? Or will one person buy the kid car and the other can have the fun two seater?

I'm curious how that works. The only time I've seen separate finances has been second marriages, mostly because people usually have kids from the first marriages.

[princehall78]

Hello To All!

I've been a lurker for a while now and just recently decided to register for an account. I've been following this topic closely as I share some of the same ideology as skydivingchic and decided to make my first post here.

My wife and I both have separate accounts and one joint account for all family expenses (mortgage, bills, groceries, household items, kids, etc.). We are both military and contribute an agreed upon amount to the joint account each payday.

Just wanted to touch on some of the questions asked by LivingAlmostLarge in the above post:

How do you visit your families? It is nice to go with your partner to see their family, do you pay your own way? Or does the partner pay for you because it's their family?

My family is in IL while her family is in CA. We usually alternate going to CA one year and then traveling to IL the next. Regardless of where we go we each pay for our own tickets while the ticket for our daughter comes out of the joint account.

So visiting say his family is more expensive than yours. Or vice versa? Do you split a hotel or car rental if your family has space but his doesn't? Or is it based on whose family it is?

Visiting her family is alot more expensive than visiting mine. Because of that she willfully pays for things such as the rental car. We usually take turns paying when we eat out. If we decide to take a trip to Vegas while there all cost are usually split down the middle. If someone pays a bit more its no biggie to the other as we're not making sure every thing is split down to the penny.

Does that mean no kids? Would you split kid expenses 50/50? Would you expect both parties to buy the exact same care to be able to drive said kid(s) around? Or will one person buy the kid car and the other can have the fun two seater?

All child expenses come out of the joint account. Both of our vehicles have enough room for a few kids so that's not issue.

Having separate accounts can and will work if that's what both parties want. It is not wrong and its not right (married or not), but while it doesn't work for some we have to realize that it Does work for others.

Jermaine

[disneysteve]

skydivingchic, we're not criticizing but I've said many times that I simply can't comprehend how separate finances would work. I didn't get married to keep everything separate. I got married to join my life with someone. I didn't get married to take separate vacations. I got married to have someone to share experiences with. I don't want to go out to dinner and have to split the bill with my wife or figure out whose turn it is to pay.

In our house, all money is joint money. It has been that way since soon after we got engaged and totally true once we were married. I just can't imagine doing it any other way - not saying it is wrong to do so, I just can't figure out how it would work or why we would even want to do that. If I didn't trust my spouse with my money, I never would have married her. So if I trust her 100%, why would I have any need to keep things separate?

Again, I'm not criticizing at all. This is just one of those things that has always baffled me. My mind simply doesn't work that way.

[DebbieL]

I've always liked separate finances. Things like rent and joint household expenses can be paid out of a joint account (or 50/50 split), but beyond that the money is your own. It always worked great for me. I never combined finances with anyone. Only very recently DH and I have joined things more. We do still each keep our own money too though.

I've never fought about money with DH (or my exes). There is never anyone to have to answer to if I want something, or vice versa. I think for two independent people this method works great. I like having control of my own money.

As for what happens if someone is out of work, etc? When DH was laid off for a short time, I just took over paying for everything. I know he would do the same for me. I didn't keep a tally or anything. Things just went back to normal once he was back at work. We have savings, so really never had to dip into the savings anyways since my income covers all expenses. Normally what he makes (he earns far more than me) is all money we can put towards saving.

If he wanted to go on a trip and I didn't he's free to do so, and vice versa. The whole money issue hasn't been a problem for us. We have only very recently combined finances more than we used to. I am perfectly happy with separate finances, and think it is often a very good thing.

[skydivingchic]

LAL - We've been together for 15 years now - met in community college. Our families live in the same state in the Midwest. They used to live only 20 minutes apart, but my parents have since moved about 5 hours away. We go back once a year at holiday time and spend some time with his family and some time with mine. We each pay our own plane ticket. When we go back for weddings or funerals we each pay our own ticket as well. I don't see either of our families moving out of the state, so I don't forsee this being an issue.

Kids - don't have any, don't want any. I can see how having kids would complicate matters, though we'd likely end up with some type of system similar to what pricehall outlined.

Disneysteve - I didn't think anyone was criticizing me. I was just trying to point out that as with all things, different strokes for different folks. We don't see this as a trust issue at all. We're just two highly independent people who prefer to control the money we earn and not feel like we have to ask permission before making purchases.

[Aristippus]

I think separate finances can work, even with a kid in the picture. It's what my wife and I did up until about 2004. We maintained separate accounts, split propotionately any household expenses, and retained what was left in each of our paychecks as our own discretionary funds. It worked just fine (although, since many expenses for men tend to be cheaper than expenses for women -- for example, right now my wife spends 5x what I do on a haircut -- I tended to have a lot more walking-around money than she did).

We gave up this system when we went down to one income for a while, and even though we're back to two full-time earners we've kept things merged, probably mostly out of inertia. And while merging our finances works for us, it does have its downside: for example, now I have to convince my wife that "we" should spend money on concert tickets that she doesn't care much about, whereas in the past I could have just treated her to the concert.

[DebbieL]

Skydivingchic, you sound very similar to me in your thinking on this issue. The only difference is I did have a kid - and it didn't make any difference to these arrangements whatsoever. Even when I lived with her father still, we never combined finances.