Combined expenses

[LuckyJB]

Im curious how couples manage their finances together.

Should you combine expenses before marriage? or as a couple (long or short term)? Thoughts/advice.

And how do you individually have your own expenses (personal savings/retirement) that is separate from your partners if you do combine expenses?

please share....

[disneysteve]

We opened our first joint account when we got engaged so that we would have somewhere to deposit engagement presents and later wedding presents. Once we got married, we made everything joint except for retirement acccounts which must be individual.

We are of the opinion that marriage involves two coming together as one. There is no more "mine" and "hers". It is all "ours". We are in this together. We work together to manage our finances, pay bills, make spending decisions, and plan for the future. We trust each other implicitly or else we never would have gotten married.

Even though retirement is technically individual, it is still treated as a joint issue. I have funded my wife's IRA as a spousal account for many years when she wasn't working.

It's all one big pot.

[rennigade]

A lot of people combine everything after they're married. Some keep their finances separate. People will try to convince you one is better than the other. Do whatever you and your significant other want to do.

[Fishindude77]

We have always been one for all, all for one on all of the major stuff; housing, savings, big expenditures, etc. However, we also each keep personal bank accounts and a little money of our own. This money comes from bonuses, etc. and hers comes from her part time job. Good to have a little mad money of your own tucked away to fund hobbies and fun stuff.

[disneysteve]

Good to have a little mad money of your own tucked away to fund hobbies and fun stuff.

No matter whether you do things joint or individual, I agree that it's important for each of you to have some freedom to spend money without having to get the other's approval. It's also necessary for gift-giving. It wouldn't work for my wife to go out and buy me a present that I see show up on the credit card bill before she has given it to me.

Doing this does not have to involve separate accounts, though. Or it can. Whichever works best for you. The key is that you both agree and are on the same page with how money is being spent - not every dollar specifically but overall.

[AJ444]

My wife and I have a joint account that all bills and savings are managed through. We also each have an entertainment account where we deposit x amount each month that we can each spend on whatever we want. It works well for us.

[kork13]

We are of the opinion that marriage involves two coming together as one. There is no more "mine" and "hers". It is all "ours". We are in this together. We work together to manage our finances, pay bills, make spending decisions, and plan for the future. We trust each other implicitly or else we never would have gotten married.

It's all one big pot.

We're basically the same, though not completely yet.

We didn't combine anything until after we were married (not quite 3 years ago), but ever since then, we've been doing most everything financial as one. It's been tricky for us though, because we were both very established before we met, so there are definitely still accounts & property which, at least officially, are definitely mine/hers/ours. We both owned houses, cars, and checking/savings/retirement/investment accounts before we were married. As we go, we're slowly selling/reclassifying all of these things to be joint assets. We've sold her car & house, about to sell my car. We've bought 2 new cars & a new house jointly now. My house (which we lived in after we married) is still held in my name only. She still has her old savings/checking accounts, though mine became our joint accounts. I'm slowly working on retitling my Ally savings accounts to be joint (which hold most of our cash savings), along with my taxable investment account.

One notable item that took me some time to totally process were her student loans. I came into the marriage with no debts besides my mortgage. She had her mortgage and ~$15k in student loans. I was initially hesitant about how to deal with them, but eventually recognized that we're in it together, so doesn't matter whose they were... They became OUR problem. So we funneled most of our free cash to those, then within 7 or 8 months, had them low enough that I paid them off with a chunk of my cash savings.

In my opinion, the most important thing is just that we're on the same page financially. We save basically 100% of her income, and don't make purchases (besides groceries, etc) above $100-$200 without talking about it. Mostly, we agree that the purchase is fine, though occasionally one or the other of us expresses concern, and we hold off on it.

[bigdaddybus]

I think either can work fine, as long as the couple has open communication regarding all financial decisions.

Over the years I have talked with several coworkers on the topic and have seen some financial trainwrecks where one spouse is hiding their spending from the other, being selfish saying "Its my money, I can do what I want" etc.

For my spouse and I its pretty easy. We recognize we have shared priorities as well as individual priorities for spending. I have had some expensive hobbies and she has wanted some expensive items over the years. We discuss spending and realize the need to compromise.

I prefer shared as I think its just better for communication between the couple, but I am sure either can work just fine.

[phantom]

My husband and I kept finances separate until marriage, the only exception being the house we bought together during our engagement. (Even though nothing bad happened, I question our judgement there.) Until we had a house, we had no common expenses or any reason to intermingle finances before marriage.

Once we were married, we started thinking of all of our financial life jointly. We took our time getting each other onto various credit cards and checking/savings accounts, and student loans and retirement accounts stayed in our individual names. But, in our view, once we got married, all our income, expenses, assets, and liabilities were joint advantages and obstacles on the path to our shared goals. We feel better about tackling big long term goals when we're working together on all aspects of the big picture.

For our sanity, we budget for each of us to have some money that can be spent however we like, no questions asked, no judgements passed, because we each value some things that the other sees as absolutely ridiculous. But, since the decision of how much money it's okay to spend freely is a joint decision, we still count that money as part of our shared financial decision making.

[LuckyJB]

The reason I ask this question and I have been doing some research on this topic is that I jumped into sharing same account with my partner. We have one paid off cc together along with one currently paying down credit line (approx 4k). I am starting to feel like this may have not been a great idea or perhaps some changes should be made.

Here are my thoughts:
(1) eliminate any combined debt - credit line and recent refrigerator purchase.

(2) Our income is somewhat similar, I make a bit more and I feel expenses can be cut down the middle for the time being.

(3) Make it known that we are responsible for our own school loan debt.
Me: approx 35K - currently paying $120 a month
Partner: approx 60K - currently paying $300 a month
We don't individually pay this from our own checks. Our deposits go into one account and we send total monthly bills to our joint. So I would say that I am contributing a portion of my income to her student loans....right??

(4) I calculated left over income I would have from monthly bills and I have a decent amount of discretionary income that I don't think is being utilized well given the fact that we have a shared checking and we spend on misc things quite freely (entertainment, food, other expenses).

I do agree that when or if married you combine expenses. May or may not necessarily include retirement.

[disneysteve]

my partner

Are you not married?

My response was strictly for married couples. If you are not married, then absolutely positively keep everything separate. There shouldn't be ANYTHING that is joint in that case.

[LuckyJB]

are you not married?

My response was strictly for married couples. If you are not married, then absolutely positively keep everything separate. There shouldn't be anything that is joint in that case.

not married.

[disneysteve]

not married.

Then my whole diatribe about "two coming together as one" doesn't apply.

Single people should keep their finances separate, even if living together. Work out a mutually acceptable plan for how much each partner contributes to joint expenses. Some couples do it as a percentage of income, so if person A earns 60% of the combined income, they pay 60% of the expenses, and person B pays 40%. Some people split certain expenses evenly, like the cable bill, for example. You just need to come up with something that both of you feel is fair and equitable.

As for debt, definitely each handles their own. And property should be purchased by one person only. Having unmarried people buy a property in both of their names becomes very messy if and when they split up. Of course, divorce is messy too, but at least there are legal protections in marriage.

[snafu]

I too believe unmarried partners need a clear agreement on how money is allocated. It's efficient to operate a joint account for joint expenses like rent, food, entertainment, travel and agreed joint purchases. The partners we know seem to operate on income based percentages. I notice they each carry the costs of their pre existing debt like student, car and personal loans, old CC debt etc. Should they split up, distribution appears to be based on percentages of current value.

BTW, who is the beneficiary of your life insurance, investment portfolio, assets? Who have you named as Advance Director or Power of Attorney? An emergency situation is not the time to make serious decisions.

Marriage changes my view, couples suddenly have legal commitments for each other's debt and support on every level.

[Outdoorsygal]

We are one in every way. Never occurred to me otherwise.

But I understand if someone has issues with finances and it is agreed upon that person not have access to such and such account.