Combining finances – is this a good method? How do you do it?

posted 2 years ago in Money
  • poll: How do you deal with finances in your relationship?

    Separate finances

    Split all expenses 50-50

    Proportional-to-income contributions

    Everything joint, and every month we each get a certain amount of $ for personal spending

    Everything joint - all household and personal expenses come out of here directly

    Other

  • Post # 16
    Member
    490 posts
    Helper bee

    We are married and we do basically what you are proposing, OP. (I didn’t see that option in the poll so I clicked ‘other’). Both of our paychecks get split 50-30-20, which makes everything proportional to our incomes (my spouse earns more than me).

    • 50% joint monthly expenses
    • 30% savings
    • 20% personal expenses/personal savings (aka splurge money, gift money, solo trip savings, individual education expenses, or providing parental assistance to our maiden families).
    Post # 17
    Member
    1679 posts
    Bumble bee
    • Wedding: July 2021 - Glacier National Park-Montana

    We’re not married yet, but we will keep everything separate.  We both contribute equally to household bills.  I have 4 children and he has an early retirement plan he’s been saving toward his whole life.  Additional he has another house and an undeveloped property he keeps up.   Eventually we’ll probably have a joint account for bills.  Right now he just writes me a check every 6 months for his half of the upcoming 6 months bills.  This way we can manage our own money.  We’re both responsible and have savings goals and no debt but my mortgage. We split vacation and big expenses and pick up the check for eachother at dinner.

    Post # 18
    Member
    223 posts
    Helper bee
    • Wedding: October 2021 - Concord, Ontario

    Once we got full time jobs in our fields we combined our finances, we have a savings and a chequing account. We still don’t live together and won’t until we are married. 

    Post # 19
    Member
    111 posts
    Blushing bee

    Everything goes in one savings/checkings.  It just gets too complicated and exhausting with so many accounts/rules/credits cards.  We just decided the simpler the better.  Any purchase over $100 we discuss together.  I buy 99% of everything and pay all the bills and update him where we are at every month financially.  When we got married about 5 years ago we owed $100,000 in student debt and car loans, and now we are down to just $8,000 left plus our motgage.

    Post # 20
    Member
    55 posts
    Worker bee

    View original reply
    ewdl :  

    Marriage evolved as the concept of two people being joined as a single legal entity, so joint ownership of property in a marriage was the default (and its progeny is community property today). The assumption underlying this was that one person (default the husband) acted as principal for the single entity.

    These days marriage is better viewed (in my opinion) as a partnership, not a merger. And partnerships involve sharing partnership asets but maintaining indepedent identities, unlike a merger. So whatever solution you end up with, i always recommend to have a checking account and a credit card purely in your name, and get your earnings deposited to your accounts.

    You can subsequently contribute to the joint accounts as much as you have agreed (in absoltue or percentage terms) from there. But to proceed differently makes you less autonomous, and no one can predict the future.        

    Post # 21
    Member
    1016 posts
    Bumble bee

    There’s no right or wrong way to do this.  We divide all household expenses (from mortgage to groceries) proportionally by income: ie, one of us pays the mortgage, groceries and some household bills while the other pays for other household bills, property taxes, & insurance. The higher earner also pays for the majority of child expenses (school tuition, activities, clothes, etc). 

    We each know how much the other is contributing to savings and retirement and check long-term statements about 2X each year.

     

    Cars, fun money, gifts, travel etc come from our individual accounts.  

    We keep everything separate but being married of course we see everything we have as “ours” regardless of the name on the accounts. We also have legal docs in place so the individual accounts don’t go into probate should one of us suddenly pass. 

    Our system works because we both have VERY similar views on spending money. We aren’t frugal but we don’t spend money we don’t have and we do aggressively save & invest. I don’t care if he buys a new suit or running shoes because I know if he buys them he needs them. He doesn’t care what car I buy because he trusts I’ll buy something I can afford (every 10 years, ha!) and it won’t jeopardize our financial health. Our system would not work if we had wildly different money philosophies or a history of fighting about money or money secrets.

    Post # 22
    Member
    84 posts
    Worker bee
    • Wedding: April 2020

    We kept our independant accounts and opened a joint account we both contribute the same amount to every month. That covers our mortgage, utilities, groceries and eating out budget. We kept our individual checking, savings and credit card accounts to have the ability to spend freely and buy gifts etc. I have worked really hard for my money my whole life and know that I would be mad if money was spent differently than I do. This allows us to hold each other accountable to our savings goals and split money but still manage our own expenses. We are both accountants by degree and career and are very open with our finances. 

     

    We started this early this year and got married Saturday 4/4/2020. So far this has worked very well for us. We were also very open about debts and such before ever opening the joint account.

    Post # 23
    Member
    89 posts
    Worker bee

    I think you need to think about finances less as I spend and ask questions later, but rather budget and build. The logistics of how many accounts and where and joint or not will come from that plan. 

    If you don’t have a spending plan and goals, any organization of your finances is really missing the point.

     

    Post # 24
    Member
    340 posts
    Helper bee
    • Wedding: December 1969 - Montsalvat, Victoria

    We do exactly what you’ve proposed here but in addition to our joint account/joint savings and personal accounts/credit cards we also have a seperate joint emergency fund with a seperate bank. We leave the card for this account in a bedside drawer so it doesn’t come out with either of us and we let the balance build for emergency situations (e.g. one of us losing our jobs, medical emergency etc). I like the way the joint credit cards work – we both have $10K limits and can spend on what we like. I don’t think I’d like having to justify a handbag purchase or trip to the spa and I don’t think my husband would like having to justify purchases relating to his hobbies/activities. It works well for us and we individually ensure that we’ve paid our CC’s every month. We don’t discuss our CC purchases however if it’s coming out of the joint account we’d run it by one another eg: I just organised someone to come and fix our leaking roof and this will come from the joint account. 

    Post # 25
    Member
    519 posts
    Busy bee

    We have everything together. I don’t think there’s any reason to have things partly joint and then have separate credit cards for personal spending. You can still have everything together and have personal spending, just don’t spend too much if you shouldn’t be! I feel like people want separate accounts for that so they won’t have to worry about taking the marriage into consideration. Must be a team working towards the same goal. Even surprises, don’t worry about surprises. Especially around birthdays and holidays, for example, we just say don’t look at the details until after. 

    Post # 26
    Member
    262 posts
    Helper bee

    We have everything joint. Just one bank account with all paychecks deposited in there and bills paid from there as well. At first, we had seperate credit cards, but we now have joint credit cards so that we can accurate points together. Anything over 200$, we discuss the purchase beforehand to make sure it fits in the budget and we both agree it’s ok, to avoid any issues or resentment. When we buy gifts, we just tell the other person not to look at the statement for whatever period of time. FYI, we are married, but decided to get the joint account when we were engaged and bought a house together (similar to your situation). 

    Post # 27
    Member
    9221 posts
    Buzzing Beekeeper

    View original reply
    anev :  we kept separate credit cards because our credit was well established when we got married. It didn’t make any sense to close them, ding out credit, and open new joint ones. We just made each other authorized users on our old accounts and anything opened since marriage has been a joint card. We use Personal Capital so we can both easily keep tabs on all the cards though. 

    Post # 28
    Member
    403 posts
    Helper bee

    We have all joint accounts and everything goes into one pot, however we each transfer about 10% out for an allowance that we spend for personal use and for gifts.

    We have a joint travel credit card but we both also maintain a credit card in our own names as well. Mostly because we had them prior to marriage and there was no reason to close them.

    Despite the joint and separate scenarios, our financial situation is completely transparent and ultimately every decision we make is for our collective benefit.

    Post # 29
    Member
    5978 posts
    Bee Keeper
    • Wedding: June 2013

    The only thing of concern I see is what appears to be a lack of an overall budget. Or not even necessarily a budget but rather tracking where the money is going. 

    We don’t limit ourselves to a certain amount per category but we do track what we spend in each category so we can see where to cut back if needed. We have a set percentage we send directly to savings and as long as we don’t touch that we don’t micromanage what is being spent.

    Do you have any kind of budget set up? Emergency savings? 401k?

    Post # 30
    Member
    2914 posts
    Sugar bee

    View original reply
    ewdl :  Are you going to have monthly spending limits for your individual credit cards? This could cause problems if your spending habits are vastly different. The more frugal partner will come to resent the partner who spends more when each month it takes more money to pay off the big spender’s personal card. 

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