Several months ago I mentioned in passing that my wife and I keep separate finances. I promised to eventually explain why, and to discuss the pros and cons of doing so.
Our story
When I was a boy, my parents fought about money often. And loudly. They had joint finances, but it didn’t seem to matter. Each accused the other of being financially irresponsible. (Both were right.) Their example left me disenchanted with the notion of mutual money management.
During the years Kris and I dated, we had our own accounts. From the beginning, I was a spendthrift and Kris was a saver. She always made smart financial decisions. Because my money was my money, and her money was her money, my poor choices did not drain her savings.
When we were married in 1993, it didn’t occur to us to combine our finances. I can’t recall that we even discussed the issue. It seemed natural to maintain the status quo. Some people find this strange; they feel that it fundamentally undermines the nature of marriage. But it’s one of the best things we’ve ever done. This system works for us because:
- We have no children,
- Our salaries have always been roughly equivalent, and
- We’ve found a way to split household bills evenly.
This system also works because we trust each other to take care of financial obligations. (Even when I was a spendthrift, bills and household expenses always came first.) Now that I’m making smart choices, we do have one joint account for use solely as an emergency fund.
Pros and cons
Which is better: joint or separate finances? Both sides offer strong arguments. Good reasons to combine finances include:
- Religious beliefs. Some religions encourage joint finances.
- Pragmatism. Some people believe that joint finances make a marriage work more efficiently.
- Convenience. It’s easier for some couples to have a central pool of money from which all expenses are paid.
- One partner is better at handling money. I know a couple in which the husband has no concept of money. He deposits his paycheck, and buys the things he wants, but he has no idea how to budget or how to keep track of bills. His wife is the just the opposite. For them, joint finances are a must.
- One partner’s income is higher than the other. Nickel recently wrote in the forums: “My wife stays at home and I’m the one that earns the money. However, I wouldn’t be able to do what I do without her doing what she does… Keeping separate accounts under such circumstances would just be [wrong.]“
- It costs less. When a couple has fewer accounts, they pay fewer fees. Also, they can sometimes obtain better interest rates.
- You want to combine finances.
On the other hand, there are also good reasons to keep your finances separate:
- Religious beliefs. Some religions encourage separate finances.
- Pragmatism. Nobody enters a marriage believing it will be one of the 50% that ends in divorce, but some people feel that they should play it safe just in case.
- Convenience. It’s easier for some couples to have separate pools of money.
- Both partners are capable of handling money. If either partner lacks financial discipline, joint accounts are best.
- Both partners have about the same income. If one person is the primary breadwinner, joint finances are best.
- You want to keep separate finances.
I don’t believe there’s one right answer to this question. The best choice is the one that works for you and your partner. This is something that you need to decide. Don’t let anyone — not your church, not your parents, not your friends, not some personal finance guru — tell you that there’s only one right way. Each relationship is different.
The bottom line
I love my wife, and believe that maintaining separate finances has strengthened our relationship, not weakened it. But that might not be true for you and your situation. If you and your spouse are happier with joint finances, if joint finances strengthen your marriage, then use joint finances. But don’t combine finances just because you think it has to be done that way. It doesn’t..
What’s most important is honesty and communication. Any system in which the partners are open about their money habits is a good one. Ultimately, it comes down to this: Do what works for you.
You can find more excellent discussions and advice about this subject at these sites:
- Marginal Revolution: Should couples keep separate finances?.
- 11D: Got my mind on my money and my money on my mind — The comments are the highlight here, not the blog entry.
- The Weight of Money: Avoiding the ‘I’ in joint finances — This is a great real-life example of the issues involved with merging finances.
- Getting Finances Done: 3 keys to making your personal finances work as a couple
Your turn
Do you and your partner keep joint accounts or separate? How has this arrangement worked for you? How long have you been together? How equitable is your income distribution? Who pays the bills? How often do you fight about money? What else can you tell us about the way you handle your finances?
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Do you and your partner keep joint accounts or separate?
She has a separate account, my account is now joint with her. We did this because we needed to have an account with the bank for our loan (direct debit). My paychecks more than cover it, but she makes more than me, so she has to reimburse me.
How has this arrangement worked for you?
I’ll let you know.
How long have you been together?
2 and a half years, been doing a 60/40 split on expenses which is about the split in our incomes (she’s a sugarmama)
How equitable is your income distribution?
Much better than when we started, she was making double what I was making. I got a better job =)
Who pays the bills?
She does. She’s much more on time then I am
How often do you fight about money?
Never, so far. We can discuss money without fighting, and while finances are a strain with the home addition, we discuss our options and she trusts in me to make the best decision.
What else can you tell us about the way you handle your finances?
We try to live well below our means
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My wife and I have now been married almost a year and I handle all the finances. For us, the idea of having separate accounts was never discussed. As a financial analyst, it was always just understood that I would handle the money, pay the bills, and be responsible for saving in retirement accounts. My wife loves this setup because she doesn’t know that much about finances and has no interest in learning.
She lived at home for about a year after she got out of school and before we got married, so she never had to worry about life’s expenses (utilities, mortgage, etc.). The biggest challenge for us has been her getting used to keeping a budget and tracking our expenses so closely in Quicken. She always used to have plenty of money to spend on clothes and the like because her only monthly bills were a car payment and insurance (she had no idea that a 403(b) had been set up for her automatically at work).
I think part of the reason that this setup works for us is because both sets of parents did the same thing. One person in the family handled all the expenses growing up, so that was our expectation when we got married.
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My wife and I have always had separate accounts. I had little preference, but it was something that was very important to her. We’ve been married 14 years.
When my wife wasn’t working and our incomes were out of balance, I wrote her a check every month. During her childhood, Linda had watched her mother have to ask her father for money whenever she needed to buy something. By writing her a “paycheck” every month, we could avoid some of that power imbalance.
That’s the key actually, you can’t let money become a source of power for one, because partners have to be equal.
Over time, the task of handling bills has consolidated on me, so now Linda writes me a “paycheck” every month.
Here’s one tip I learned the hard way: each of our individual checking accounts is actually a joint account. She has a joint account at her bank, and I have one at my bank. When my wife had a stroke and could not sign her name (or even make a mark), all of her accounts were effectively frozen, short of legal intervention. Luckily we had one joint account that I could use for deposits made out in her name (like paychecks that came after the stroke). It turned out ok, but having your money tied up just when you might need it is a drag.
Now, she is on my accounts at the bank, and I am on hers. Among other things, it simplifies depositing a joint tax return, or doing internet banking in either name. Obviously, some accounts can’t be joint, like our IRAs. We do hold the substantial part (about 1/2) of our emergency fund jointly, and some small part individually (1/4 each).
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My wife and I started out with three accounts. One for her, one for me and a joint account. We both contributed to the joint account to pay for our mortgage and bills and we could do whatever we wanted with our personal account. We split bills based on a percentage of income. After six years of marriage we moved to just one account. My wife pays the bills and I make the monthly investments. I can’t remember having a fight about money in the 12 years we have been married. (We do fight about other issues such as our two kids, snoring and household chores.) I remember she was upset when we were first married that I had about $1,000 in credit card debt and she made sure I paid that off fast. Although I did have about $80k in my 401(k) at the time.
We have a rule if a purchase is over $100 we talk jointly about it. We have tracked our net worth every 6 months for the past ten years in Excel. We have a written budget but we have gotten so good at it we just take a look at it once a year. We both are very frugal and like to save and invest as much as we can but still take a nice trip each year. We have no debt at this time.
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I am getting married in August and this has been an issue that we have had to discuss. She has her bank, I have mine and we both like our respective banks. It is definitely an issue that we have to agree upon.
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For me personally, separate finances make no sense. You both live in the same house. So who pays for the house (or rent or whatever)? Do you 60/40 split it? Again, that doesn’t make any sense? First, it seems the overhead in shuffling all this money around to pay your house payment isn’t worth it. Second, that’s not really separate finances anyway, since you’re sharing the cost.
So some people split the bills. He gets the house payment. She pays the food bill. He pays the utilies. She pays the car payment. That may work for awhile. But then let’s say you decide to get cable. Who gets to pay for this new expense? What if you each make your own car payment, but his car breaks down?
To me, separate finances just don’t make sense. I feel the best way to manage is to give each spouse an allowance. He can then buy that large screen TV if he wants. She can buy the Louis Vuitton purse if she wants.
To each his own I guess.
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My fiance and I (engaged a year, dating a year before that, good friends six years before that) plan to join accounts once we’re married. Keeping our accounts separate during the engagement has been okay, but we both like to see how we’re doing as a household rather than separately, and we’ve already got joint savings goals and such, so we’re looking forward to the joint accounting to make things simpler. (Also, he and his previous wife had separate accounts and he didn’t like it.)
I make about a third more than he does, and I’m currently paying about a third more of the household bills. We pay for things like gas and clothes separately. I have a lot more in savings, because he’s been paying off car and credit card debt and is now acquiring student loans, but I’m satisfied that the credit card debt is gone, and once he’s done with school he’ll be making approximately as much as I do, so I consider it a good “investment.”
Right now I pay the mortgage and the electric bill, and he pays the rest of the bills plus assorted household expenses like food. Once we’re married I’m most likely going to be taking care of the bills, because he’s bad at paying them on time. He’s probably going to be handling our investments, because he knows more and is more interested in that end of finances. I guess you could say I trust him with my money but not with my bills.
We haven’t fought about money yet, and our spending styles are similar (now), but we have slightly different ideas about things like how much we should keep in savings versus paying cash for purchases or how much we should put in riskier investments. I don’t think that’s going to lead to much fighting, more to discussion about our respective risk and debt tolerances and how much to respect them.
We’ve agreed to talk beforehand about major purchases (anything joint, and anything personal over around $100, using common sense–a bunch of work clothes doesn’t count, for example). I think my agreeing to consider buying him a $3000 computer for a combined Christmas/birthday gift (his birthday is in July, but it would be next year’s birthday) has relieved his mind on how tightfisted I might be, which I think he was slightly concerned about when we first got engaged.
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Do you and your partner keep joint accounts or separate?
Actually both. We both have our own checking accounts. However, we drain those every other month of the savings and join that into our joint house fund.
How has this arrangement worked for you?
So far so good.
How long have you been together?
Going on a year in June.
How equitable is your income distribution?
My wife is the major earner.
Who pays the bills?
I tend to pay the smaller bills while she pays for the bigger ones like rent. We also both pay off our own Credit Cards in full each month.
How often do you fight about money?
Never.
What else can you tell us about the way you handle your finances?
I probably have the most interest in finances while my wife can just kinda goes by feel on how much she has spent and when she is getting close to the budgeted amount for a certain area. It probably helps that we currently have a goal we are trying to reach so we can look for a house.
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I live with my boyfriend, so this may not exactly apply because we are not married, but we do have to worry about finances.
We split rent 50/50, and everything else is close to that. However, he makes about 3 times more than I do and we argue about it sometimes. He has school loans to pay and hasn’t started saving like he wants. I have no debt and have some money in the bank (not a ton, but at least in the five figures). He keeps looking at our situations relative to our ages (we are 5 years apart, I am doing better financially then he was 5 years ago) whereas I do not. I feel like it’s unfair that I should pay half when he makes 3x more, while he feels it’s unfair if I don’t pay half because he has more debt. We get along great in all other respects, but money is an issue for us.
Right now this situation is acceptable to me, because we are not married. Yet we do plan for a future together, and I only hope that one day, once his debt is gone and he’s saving like he wants, that we can work out our money differences and come to a better compromise. I love the idea of 3 accounts.
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We keep joint accounts, from 1999, and it´s working fine. We are making almost the same ammount and our income distribution is alright. About the bills, every month we sit down and get organized for the next, and we “distribute” tasks for each other. Never had a big fight about this issue. We discuss of course, but the “blood never reachs the river” (an expresion here in Argentina to say that an issue finished before it gets to serious).
And another topic, we learn a lot from blogs like this one, really. It´s incredible that in spanish there aren´t so many as in english. I made one in spanish, to begin changing this.
Good Luck!
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We’ve had joint finances since getting married five years ago, and we also use the $100 purchase guideline. It has never been a issue for us other than being able to see how much presents to each other cost (not really an issue).
In the end, I don’t think it really matters one way or the other unless your willing to leave your partner behind on a vacation or spend your retirement swinging in a hammock eating lobster while your partner eats a PB&J sandwich in the break room at Wal-Mart because s/he mismanaged their own accounts. If you’re sharing all the things that the money gets spent on, separate accounts are not much more than a thin, dotted line that divides names and numbers.
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My parents always kept seperate accounts, but my mom was stay-at-home.
Recently some friends of mine were married, and i thought what they did was very smart – they have a pool of money that goes for everything – savings / house / cars / etc… but they also each get an equil amount that goes in each of their own accounts. (3 accounts total) This way, all personal expenses (clothes, night out with friends, etc.) come out of your own account. Also all gifts come out of your own account. This also helps balance the fact that they dont make the same ammount at their work.
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Joint or separate? …Joint. Except we have separate IRA accounts. But for all intents and purposes, everything is shared.
How has this arrangement worked for you? Great.
How long have you been together? 4 years dating. 4 years married.
There
How equitable is your income distribution? I work. She raises our beautifully raises our 2 year old and 4 month old.
Who pays the bills? Technically, I do. Practically, she initiates the bill payments. I audit at our monthly financial planning.
How often do you fight about money? Fight is strong. Disagree and discuss, regularly. Once a month at our financial planning meeting.
What else can you tell us about the way you handle your finances? My father was a roller coaster; a doctor with a startup mentality. He wanted to instill a sense of financial responsibility at a young age. Therefore, at the age of eight, my began an allowance that lasted until my 16th birthday.
Many would consider it an extremely generous allowance. It started out at $20 cash a week and increased by $5 a year. I was required to create a budget, accounts represented by white envelopes, and keep the books on ledger paper. I met with my parents once a month to account for my finances. If there were errors, there were punishments. At first I was punished by a month of reduced allowance. Later, and quite infrequently, we simply discussed problems that might occur.
Now, before anyone deems $100 a month for an 8 year old and $200+ for a 15 year old irresponsible, I should explain that I purchased nearly everything. Sure there were occasions that my parents purchased things for me. Food, shelter, activities as a family, Christmas and other celebrations, etc. However, other day to day financial responsibilities fell on me.
Therefore, I learned budgeting quite early in my life. I had to obtain approval for my allowance account allocations, but I was required to draft such allocations. Typically I divided up using the following formula:
10% charitable donation
10% personal savings
10% my future religious mission
15% college
30% clothes
20% “fun”
5% school supplies
It might be important to note that the allowance was not associated with chores or other family obligations.
When I turned 16 I was required to find my own job. Book keeping was no longer enforced, so I stopped. And, I admit, the pendulum swung to the opposite extreme. I bought a ’73 Blazer (this was ’94). I couldn’t afford the gas. I could afford the damage I inflicted during offroading on the weekends.
My parents bailed me out time and again. My father would have one on one discussions about how I was lacking personal and financial responsibility. I ignored him, being the typical belligerent teenager.
I went to college under the same mindset. At this time, my father attempted to financially intervene one last time and gave me “The Richest Man in Babylon” as a gift. I shelved it.
Time passed and I gave it a try. It changed my outlook forever. I became quite thrifty. Not cheap, but very cautious on every purchase. I was the guy that had spreadsheets of my personal finances for the next semester all mapped out several months beforehand. And to my parents satisfaction, I was completely self-reliant by my junior year. Tuition, rent, books, food, car, recreation, etc. without loans. (Prolific application for grants and scholarships is another topic). Seeing my success, they would graciously offer to help, but I frankly told them I didn’t need it.
One of the (many) things that attracted me to my wife was her thrifty attitude. We were like minded and our dating showed that. We favored inexpensive recreation like camping, hiking, running, and dancing over more expensive alternatives.
The first year of marriage was tough financially. Confusing and disorienting, to say the least. We were both still students. I in my masters and she completing her bachelors. To add to the disarray, we had our first child. We had arguments over money all the time.
As that stage in our marriage ended upon graduation and getting a “real” job, we discussed how we can make this weakness a strength in our marriage. We explored many ideas but settled on a version of my parents’ system 10 years earlier.
Here is our system. We use an online service to create “virtual” envelopes on top of our actual accounts. At the beginning of each month we “fund” our envelopes and discipline ourselves to follow three rules:
1. Don’t spend more than what is in the envelope
2. Don’t change the month funding amount without agreement
3. Don’t transfer money between envelopes without agreement
The service synchronizes with all our financial institutions and expenses are categorized into envelopes. We make all financial decisions by consulting the envelopes. Here’s a typical conversation…
“I don’t feel like cooking.”
“I have meetings and can’t get home until 6:30.”
“Can you pick something up on the way home?”
“OK, let me check envelopes. Um, we’ve already spent our ‘Eating out’ envelope for the month.”
“Its winter and I’m not planting in the garden. Can we borrow from ‘Gardening’?”
“Sure.”
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My partner and I keep separate checking and “small savings” accounts, because each of us organizes our money totally differently.
IMO, that’s the biggest question. If you both like to track every detail, or you both hate it, maybe joint accounts won’t make you crazy. But if you are on opposite ends of that spectrum, joint accounts are a recipe for fighting, IMO.
BTW, I disagree with JD’s assertion that, “If one person is the primary breadwinner, joint finances are best.”
I make almost 3x what my partner makes, and I pay slightly more than that of the bills. We didn’t divvy them up according to any kind of scientific plan, it just sort of happened, but it’s approximately in proportion to what we earn.
FWIW, I’m in charge of all of our retirement accounts. She’s not interested, and I am. (One useful benefit of being in a same sex relationship — you can call customer service on their account and just pretend to be that person. Much easier than trying to get them to do it when they don’t really care.)
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My wife is a wonderful stay-at-home mom and homemaker, so I’m the only revenue stream right now. Separate finances probably wouldn’t make too much sense. She also does all the bill paying and all that, although I’ve started playing with Wesabe to try and get a glimpse of our spending trends to curb things. We don’t (yet) have a written budget.
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My husband and I treat our money like our own small business, and so to us we think of collective income, outgoing expenses, and investments at a team level.
We have one checking account, which we call the “bus depot”. Money doesn’t stay in it for long unaccounted for; it’s either for an upcoming bill or we put it to work by transferring it to a brokerage account.
We DO have separate brokerage accounts, and within those are our IRAs, 401(k), savings in the form of money market mutual funds, and various investments for long term and short term goals.
BTW I am a stay at home wife (no kids) and hubs would rather shoot bamboos up his fingernails than talk money. But, he has learned alot about money management and investing since we met 8 years ago (he learned from me).
Bottom line: I totally agree, each couple is different, and the end goal should be working as a team towards shared goals, otherwise you dilute the impact you can have on reaching said goals.
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My boyfriend and I (we’ve been together 9 years) have separate accounts and then we just opened a joint account for household expenses. Since we have just recently opened this joint account, we don’t really know how to use it yet.
Question for couples that have this set-up: how do you maintain this joint account? Each paycheck, does each of you contribute a specified amount to it that will cover household costs?
My boyfriend and I also have a joint ING account and two joint CD’s. We have a pretty good system going, but we are new to this whole taking-control-of-your-personal-finances thing and reading everyone’s comments is making me see that we need to split things up more equitably. He makes more than me (another 60/40 split) and we split bills evenly, I am the one that usually pays for the groceries, and we contribute equal amounts to our ING account. Hmmmm…. I still think we are doing pretty well, though, especially for beginners – we live below our means and contribute over 20% of our incomes to savings, not including retirement.
The thing we are having the biggest problem with is budgeting. I just started a budget this month and it has taken some getting used to. I am trying to get him to do the same, but he has trouble remembering blah blah blah. I guess this sort of thing takes practice.
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My wife and I both work and we keep separate accounts. I pay the mortgage and a couple of small bills, she pays the utilities, car insurance, cable, & phone. We’ve been married for over 4 years and haven’t had one fight about money (I should mention we also have no kids). I can’t imagine doing it any other way.
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My husband makes way more than I do. But we still have separate finances. However, I manage most of the bookkeeping for his business, including writing his paycheck (and mine) and I deal with transferring the money from the business account into my own account to pay things like the mortgage.
We maintain separate accounts but we share the money. My paycheck is steady, twice a month. His money comes in irregularly. So I always buy groceries, but he goes out for a sandwich once or twice a day. He is not a frugal person, and I try to be frugal.
Our behaviors with money and spending are wildly different, but I am also very independent-minded and could not tolerate sharing an account, I am pretty sure. I kept my own last name, I have my own credit cards, I have my own car in my own name (even though he paid for it!
) and so on.
I’m an only child, and my parents used to having horrible screaming matches about money. It got so bad that when I saw the checks arrive in the mail, I would go get on my pony and ride away. I never want to be like that.
From above:
“For me personally, separate finances make no sense. … First, it seems the overhead in shuffling all this money around to pay your house payment isn’t worth it. Second, that’s not really separate finances anyway…”
Actually, the shuffling of the money IS worth it to me. Further, “separate” finances can be whatever works for the couple. Obviously separate finances do not or will not work for you, so you don’t do it.
I want to also thank the person above who mentioned having the spouse on the accounts in case of medical or other emergency. I do have my husband’s PIN for his accounts but I don’t think he has mine… and we should probably get our names on the others’ accounts, just in case.
By the way, my husband and I have been married almost 7 years and we don’t fight about money. Our arguments are usually about my (our?) dogs, because he goes around untraining them and this upsets me.
I am the responsible one, since he does not even open his mail half the time. 
All the utilities are in my name so that I get those bills and pay them (with my money or with the business money, depending on if it is a deductible expense).
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My husband and I have been married for 3 years and have a 2 year old with another on the way.
We have separate accounts, with one joint savings account that we each contribute to every month. We have never taken money out of this account.
Our checking accounts are separate because he doesn’t want to balance a checkbook. I prefer this too because I always know exactly what’s in my account.
We also keep separate credit card accounts.
We don’t have a formal bill payment process. He typically pays for the mortgage, car, insurance and phone. I typically pay for everything else. We mark a bill as paid, log it into Quicken, and file the stub in our filing cabinet. It works really well for us.
We both work full time and also own two small businesses. One of the businesses he owned prior to our getting married and it’s still in his name only. This is mainly because it costs so much money to change all the paperwork (mainly attorney fees). The second business is jointly owned.
We have our own 401ks, IRAs and investment accounts that we started long before we were married.
We never fight about finances, but we are financially very similar in what we earn and how we spend and invest. I believe our model of success would be a failure to couples whose financial personalities differ.
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Your question presupposes a first, young marriage. Older adults often carefully segregate their finances/assets and write up a mutual pre-nup. Among wealthy younger first timers this is also starting to be done.
The point is, you want to protect your money for your heirs. My mother, who grew up during the Depression, was frugal for 40 years. I am grateful that when she died and my dad remarried, he had a tight prenup. That money which my mom helped preserve is now paying college tuitions, and is not in my [wicked] stepmother’s checking account! When prenups are missing, there naturally can be a lot of resentment and upset.
Re: my husband and I, married 33 years. We share our finances (one checking account, joint investments, et al) but have separate credit cards. I thought it was important to develop a credit rating in my own name, and also I resented him handing me all his credit card slips, since I am the bill payer. I thought it was kind of infantalizing, somehow. I really like that he now manages and pays his own credit card bills! Silly, but symbolically important.
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Q. Do you and your partner keep joint accounts or separate? How has this arrangement worked for you? A. Separate accounts for me and my SO. We have been cohabiting for a year now, and separate finances works out perfectly.
Both of us were stung by ex-spouses who were irresponsible with money and both of us were left with big debt after the split. Financial independence is very important to both of us now, and in SO’s words, “If my credit gets hosed again, at least I’ll have the comfort of knowing I hosed it all by myself.”
Q. How equitable is your income distribution? A. As a business owner, he makes considerably more money than I do. However, he reinvests a great deal of his profits back into his business, so in the end, our take-home pay is roughly equal.
Who pays the bills? I do. He lives in my house and does not contribute to the mortgage so we don’t get into any sticky territory there. I totaled up the monthly household expenses, (utilities, groceries, conveniences like cable, land line, etc.) halved them, and he writes me a check twice a month.
How often do you fight about money?
Never. He spends his money however he pleases, and I do the same. The bills are paid on time and the house is harmonious.
What else can you tell us about the way you handle your finances? After being subjected to “financial abuse” from an irresponsible spouse, I will never do joint finances again. I was young and stupid when I agreed to joint accounts, and I’m older and much more educated now!
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We have been married 5 years now, and have always joined our money. Granted, we make it work by doing the finances together from the joint account, this takes the pressure off one person and also holds both people accountable.
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My boyfriend of seven years and I have the three account system. We earn nearly the same salary, which goes straight into the respective personal accounts. At the beginning of each month, we both deposit the same amount of money into the joint account. The mortgage, household expenses, and some shared activities come out of the joint account. We save, donate, and buy personal things out of our separate accounts.
I think this arrangement has worked out great for us. We have very similar financial habits in general, which I’m sure helps. I currently save more than he does, but he is slowly increasing that amount – I hope we will stay fairly close in savings despite that being one of our “personal” choices.
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Like financegirl above, my husband and I treat our finances like a small business. We have one checking account, out of which we pay all of our bills. His paycheck (I’m a SAHM)is deposited into our savings account, which also functions as an emergency fund. Right now, it has about a year’s worth of living expenses in it.
At the beginning of the month, we tally the bills and transfer whatever we need to cover them into checking. We pay everything electronically, so there is hardly any money in that account past the first week of the month when the bills hit.
For everyday expenses (e.g., groceries, eating out, gasoline, etc.), we use cash, which we get from the ATM at the beginning of the month. I maintain that money, since I do most of the shopping. When the cash is gone, it’s gone, and if that means we eat beans & rice for a few days at the end of the month, so be it. It’s a good reminder to be more careful the following month.
We have one joint credit card, which we use for travel, and we make it a habit to pay off the balance immediately. We maintain separate IRA’s, which we fully-fund each year. My husband also contributes the max to his 401k, and our two young children have 529 accounts for college. He also contributes 5% of his income to an ESOP. As of this year, we don’t have a mortgage anymore.
We never fight about money. Never ever. We married as college students seventeen years ago and are well-suited financially. We are both tight-wads, who love to talk money and plan for the future. We have our financial planner on speed-dial and are addicted to personal finance blogs!
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My husband and I have a joint account. We’ve been married for just over 1.5 years, but have had a joint account for about 2. There are several reasons why we did this. He came from a family that didn’t teach their kids a thing about finances, so it started as a learning tool. I’m from a family that taught me how to save, save, save. He likes the dollar signs and showing him how much money two salaries could do, he instantly became interested. It looked better to him. Now, 2 years later, he’s 100% better at finances. He’s interested about what’s in the bank and how much can we put away or what can we pay off. Another reason is looking at our parents situations. His parents had separate and there was a lot of fights about money. Mine had a joint account. Money wasn’t as big as a factor in their fights growing up (not that it wasn’t at times the center). But definately comparing situations led us to combine our accounts. We make about the same salary wise, but his debts were greater than mine. Therefore, most of my paycheck now goes to pay off debts he had accrued during college. It’s worked well so far. We have our moments, like any couple who is still learning how to co-habitate, but we our learning together and our marriage has grown much stronger because we talk about our money and what we want to do with it.
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My partner and I have our personal accounts, and then a joint account for bills, as well as a joint investment account.
All bills are paid from the joint account [rent, groceries, hydro, etc.], and we each transfer an equal amount in to that account, to cover the next month’s expenses, plus a little bit.
We also contribute approx. $100/month each to the investment account [for our future home purchase].
Whatever is left over for each of us is ours to do with as we please. Currently, she is earning a lot more than I do, but I don’t begrudge her that, and do not feel entitled to her money, as she has earned it, the same way that I have earned mine.
There has been moments of tension over the winter, as I work seasonally during the summer [but earn slightly less than she does for the whole year], and there seemed to be expectation that I should be doing more around the house, but that is less about money, and more about what qualifies as “work”.
I am usually the one to take care of bills, as I like to keep to a budget and have more investment/financial experience, so she is usually happy to leave it up to me.
When I ask about her personal finances, and offer help to get that aspect of our life organized, there is sometimes a feeling of spying/prying, that it isn’t my business, but if we are going to be purchasing a home, I think that having open books — even if I can’t access the actual funds — is incredibly important.
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*Do you and your partner keep joint accounts or separate?
- Separate.
* How has this arrangement worked for you?
- Fine, we’re happy.
* How long have you been together?
- 8 years.
* How equitable is your income distribution?
- I earn $90K, my husband earns $45K.
* Who pays the bills?
- He pays all household bills, car bills (which are minimal) & most grocery bills from his account. I pay the mortgage, propertytax, insurance and savings and investments from my account. I pay for all flights (we’re both immigrants, travel a lot). Dinners out etc could be either of us.
* How often do you fight about money?
- Never.
Bloggers love this topic! We’ve no kids yet either. I’m curious to know what religions encourage or discourage separate finances? I’m Catholic, he’s Muslim and we were never brought up with that experience.
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[...] Source: Which Should You Choose: Joint or Separate Finances? ? Get Rich Slowly [...]
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Our finances are an evolution over a 14-year relationship. We started out young (I was 21, he 24) and we kept seperate checking accounts and started a joint savings right after we moved in together. Then we moved towards joint checking, each contributing equally and getting an allowance. Then, we got accepted to college and while we were getting financial aid, we decided to seperate our finances. Then, we got married while still in school, and kept things more or less separate until I graduated with my masters.
Now, he has a separate checking where he gets his allowance, we have a joint checking and savings, and I pay all of the bills. We talk about finances weekly – this is what I’ve paid, this is what is coming up, this is what we have left, etc. I earn about 72k/yr, and him about 55k/yr. I think this works for us for many reasons: I was an only child to a single mother, and I had a good role model as far as women handling money. From the time I was 8 or 9 years old, she always clued me in on our household expenses, budget and why or why not we could make a purchase. He grew up with a stay at home mom, 4 siblings, and a traveling dad, and his mom handled all the finances as well as 5 kids, so this arrangement seems natural for him, too. We save 25-30% of our income between 401k’s, cash savings, etc. and pay bills after we pay ourselves. We follow a budget, but not with laser-precision. We do trust each other and very rarely question any purchase decisions. I pay everything out of the joint account, and do 90% of the purchasing for the household, but he has a bit of a cushion in his account so that if he needs to run to the grocery, or buy some household tool, or buy his lunch, that he can do it without having to transfer money. Ultimately, our attitude is that this is OUR money for OUR future, and neither of us is greedy, needy, or sneaky about it. There is no HIS or MINE. But again, this has been an evolution. We never fight about money, ever. Heck, we hardly ever fight, period.
We are expecting our first baby in July, which has thrown a bit of a loop into our debt-shunning tendancies. But we aren’t too stressed about it – we are buying what we can for cash off of Craigslist, and trying to use credit wisely otherwise. I love a good bargain and hate paying retail for anything, but there are some things that you just have to buy new when you have a kid coming. But if we stick with our long term goals, keep talking about money, and just enjoy this experience together, I know we will be just fine.
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I’m not married yet, but I’m planning on having a combination of individual accounts and a joint account for household expenses. I like the idea that Suze Orman suggests, “set up three accounts: two individual checking accounts, to use for private needs and wants, and one account for joint expenses, in which both partners deposit equal percentages of their income, not equal amounts of money.”
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Do you and your partner keep joint accounts or separate?
We now have only joint accounts, but for the first six years or so that we were together, we had personal accounts and a shared finances account. Bills were paid out of the central account; both of us had divided direct-deposit of our pay checks so that some money went into our personal account and some went into the shared one.
How has this arrangement worked for you?
It’s very much evolved over time. That said, we’ve never had any significant disagreements about money. We both have good intentions re: paying the bills, but both of us have had periods of falling behind. We’ve handled this by having one of us be solely responsible for the bill paying; responsibility shifts as soon as there are late payments (or we ask the other person to take over).
How long have you been together?
Eleven years.
How equitable is your income distribution?
Not very. For much of the last eight years, I have been in grad school and so earning a small fraction of my husband’s income.
Who pays the bills? How often do you fight about money? What else can you tell us about the way you handle your finances?
I mostly answered these above, I think. Overall, flexibility, trust, and communication have all been vital. Both of us had examples of what NOT to do in our parents, but basically nothing about what SHOULD be done, so we’ve been making it up as we went along.
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My husband and I (both in our 40s) have been married 2 1/2 years and lived together for 3 years before that. We’ve been keeping separate accounts because our money styles are incompatible and because merging money with an irresponsible (now ex-)husband was a disaster that cost me decades of financial progress.
We both spend less than we earn, are on track for retirement, and have no debt except a mortgage, but the similarities end there. I plan carefully and track every dollar moving through my accounts. In contrast, when I moved in, he had all his savings in a checking account, earning no interest. Why? “I don’t want to have to worry about balancing my checkbook.” Under my influence, he now has an interest-bearing checking account with a high enough balance to keep him comfortable and a money market account for the rest. He feels strongly that his responsible behavior has earned him the right not to think about money, and I can’t really argue with that.
We don’t fight about money (or much of anything). We know each other’s account balances, at least roughly, and tend to consult each other about purchases that are major or feel self-indulgent. Both names are on all the checking accounts, but we don’t have direct access to each other’s money market or retirement accounts.
When we got together, I was making about 80% of his salary. Courtesy of a promotion and a side business, I now make 50-60% more than he does. It hasn’t seemed to make much difference to our relationship either way.
We try to split expenses 50-50. I pay the mortgage because he had equity in our house before I moved in. Household bills are autopaid out of a joint account, which I keep track of. When it runs low, we take turns refilling it. We used to reimburse each other carefully for all joint expenditures, even writing checks to equalize our wedding and honeymoon costs. Since we got married, we’ve become increasingly sloppy about that, and about six months ago we stopped keeping track altogether.
This new system that we’ve drifted into screws up my accounting. With his permission, I recently went through a year of his checking and credit card statements to see what we were really spending on my budget categories. (He seemed only politely interested in the results.) I think we’re heading toward merging our money, but first we need to figure out how to handle the style problem gracefully.
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My husband and I got married last September, and we both kept our individual bank accounts; partly out of laziness, partly because we both like our banks and couldn’t agree on which one should move to if we consolidated, but mainly because it simplifies things and we couldn’t really come up with a compelling reason to keep a joint account.
Since I’m currently the sole earner, and since about all of our debts were brought into the marriage by me, and since in spite of that I still turned out to be the one who is better at money management, I handle all of the bills. Once all of the bills and necessities are taken care of and savings are set aside, we divvy up the rest equally between us for personal spending. He puts his in his bank account, I keep mine in my checking, and we’re both free to spend our share however we see fit.
I followed your link to Getting Finances Done, and it’s interesting that we kind of instinctively followed the three keys listed there for making finances work as a couple. Not to the letter, but that’s all pretty much the pattern we fell into, and it’s worked pretty well so far. We have yet to have a single fight about our finances, although we have regular discussions about how much we have and where it’s going.
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Really enjoyed this post b/c I just got married last year and we are in the middle of talking about how to combine finances. I was also talking with one of my good friends about this issue and she’s been married for 10 years and found our debate about finances funny. She mentioned that when she got married her and husband had so little it never occured to them not to combine accts. I started talking her through our accounts, we have 4 checking accts, 2 reg. savings accts., mult. online savings accts., mutlitple mortgages on multiple properties, 2 401ks, 2 IRAs, 1 misc. stock acct., 2 529 plans for my brother’s children. When I was done, she understood the dilemma. Our finances are complicated but I think we are going to work to combine our personal checking (2 accts.) with our house acct. and also comine our personal savings (2 accts.) to reduce 5 checking accts. to 2 checking and 2 savings to 1 savings. Mostly we are considering this because we are working on a major debt repayment (husband’s MBA student loan debt) and its hard to budget and keep track of spending when I don’t have access to all accts. I also want to automate 1 mort. payment, the 1 my husband pays, and I can’t do so until we combine accts.
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My fiance and I have been together 2 1/2 years, getting married in August. Before we moved in together we had a money talk to get everything out on the table. I came from a family that watched money very carefully, his not at all. Fortunately for me, he has been very eager to improve his financial situation and adopt better habits, and thus far we have not had any fights about money.
We currently split rent relative to our income, and all other bills 50/50. He rarely spends money on non-essential items, and keeps to a tight budget, including a $100-$200/month contribution to a savings account he started after meeting me. He talks to me on the rare occasions he withdraws money from the savings account.
I’m planning to keep my finances separate from his for a while because he is a writer with small income and significant student loans. I have never intended to rely on someone else to achieve my life goals (e.g. house, kids, travel) and marriage isn’t going to change that. As long as he’s bringing in enough income to support himself, and making progress toward his writing career, I’m content.
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Now to answer the questions:
Do you and your partner keep joint accounts or separate?
We have 2 joint checking acounts and 2 individual checking accounts.
How has this arrangement worked for you?
Worked well until this year. Now that we are tracking our spending and trying to work with a budget its not working as well.
How long have you been together?
6 years, 3 years sharing a home, 6 months of marriage.
How equitable is your income distribution? I earn more than double what my husband earns and together we bring home quite a bit of bacon.
Who pays the bills?
I pay all the bills (household bills, mortgage on our primary home and mortgages on our investment properties [except he pays 1 mortgage, his previous home that is rented), I also manage the finances for our rental properties, keep track of rental income, expenses, leases, manage savings accounts for annual expenses for insurance, real estate tax, etc. (we don’t let the banks manage our escrow payments on our properties). I also manage our budget (a work in progress) and track our finances, etc.
Currently, he transfers a certain amount of money into our joint account to cover 1/2 our mort. on our primary home. The rest of the household bills (except for groceries) are paid for with ‘my’ money, I also cover the monthly escrow set aside for our tax and insurance on our primary home. I also pay the mort. on one of our investment properties that has no rental income (vacant land). I also pay the bulk of his MBA loan payment each month. He does the grocery shopping and pays for the groceries (I hat the grocery store with a passion).
How often do you fight about money?
Our fights about money really are not about money but instead have to do with different perspectives on our investment properties. He wants to spend money to accomplish certain renovation tasks/projects and I want our real estate investments to pay for themselves (rental income should cover mortg., tax, insurance, and any repairs). I think that sometimes because he is detached from the $ side of our real estate investments he starts to forget about how much they cost on a monthly basis. He also thinks that the money we put into the renovations/upgrades are worth it because it improves the property.
What else can you tell us about the way you handle your finances?
We also have an agreement that any transaction of $300 or more must be discussed (or at least mentioned) regardless of whether there are sufficient monies in the budget. This policy seems to work well but we don’t feel like we are checking in on every purchase.
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Do you and your partner keep joint accounts or separate? Joint accounts, neither of us wanted separate. Besides, if one of us goes down, the other has complete access to everything.
How has this arrangement worked for you? Works great. I’m more financially savvy, used Quicken since ’96, and have taken about 4 years of accounting classes. My wife knows how to handle the budget, work the accounts, balance a checkbook, but does not enjoy it like I do.
How long have you been together? Married 2 1/2 years, known each about 4 years total.
Who pays the bills? I maintain the books. Every quarter, my wife and I discuss where our money is going and what are goals are for the next quarter. Once a year, we discuss the years goals.
How equitable is your income distribution? I’m a full time software engineer. She is now a domestic engineer (mom). She is looking to expand her skills to work part time in an area that she can be passionate about.
How often do you fight about money? We don’t fight about money, since we discuss it monthly, quarterly and yearly.
What else can you tell us about the way you handle your finances? 1) Communication is absolutely vital. 2) Spending plan (hate the word budget with a vengeance) tells you both how you want to spend your money (dreams, goals, debt, living, etc.) 3) Emergency fund (working it back up) is essential.
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My husband and I have three accounts. We each have individual checking accounts and one joint.
Because I am a full-time student, my husband is the sole earner. We are saving to have a house built (on an Army sergeant’s paycheck, too!) so we have a mortgage on a piece of land.
Right now, his paycheck gets deposited into his account and he transfers money to the joint account for me to pay bills out of. With us living on two different continents with a nine hour time difference, trying to keep a joint account was…difficult.
We’ve been married almost three years, but have spent about 12 weeks of that living together (we did back to back tours in a lovely desert country), and we’re about to start our “real” living together in about a week, so right now, we’ve decided that his paycheck and my GI bill, along with my National Guard pay will all go into the joint account. We each will get $100 mad money (per pay period) to do whatever we want with, no questions asked.
Any money left over at the end of the month will be put into the Vanguard Money Market. Once we get that up to $10,000 (and we’re halfway there!), we’ll fund our Roths, and then start diversifying our portfolio. Oh yeah and pick up a mortgage payment. We don’t have car payments, we don’t have cable bills or anything like that. 99% of our bills are pretty static, so I think this will work for us.
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With separate accounts, if one of you were to die suddenly, it would take a lot longer to access this person’s money.
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When my wife first started working, we wanted to keep our accounts separate so we could just rely on my income for expenses and count anything she made as gravy. That way, if she decided not to work in the future, the weaning process taking us from two incomes to one would be simple. But my account soon felt too much like just that – “my” account, and hers became “her” account. That wouldn’t be a problem in the long run if we were to keep two separate accounts because I was making enough to cover expenses and then some. The reason we decided to combine into a joint account just a few months back is to make sure our account is “our” account, so if J stops working, she’ll feel just as comfortable using “our” account as she did using “her” account. And so far, so good. We both end up wanting to save every little penny we can anyway, so it’s a very harmonious joint effort.
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Hi, my wife and I combined our finances when we got married and I think she was probably more concerned about this because not only am I the spender in the relationship, she also makes nearly twice what I do! But honestly, this has never even been an issue and I can’t even recall one time that we’ve had an argument over money. I still like to spend from time to time, but she has taught me a lot about saving for the future and being smart with “our” money.
Two things that we do really seem to help:
- Even though we have joint bank, savings, and investment accounts we still have separate credit cards. (This was just because we haven’t gotten around to getting a joint credit card account.) But in many ways this is great because neither of us are nit-picking over little things. I can spend $50 on dinner with a friend and she isn’t going to be bothered with it.
- We have a rule that if you are going to spend over $300 on something, talk about it first. This is fair I think…neither of us has ever said “No, you can’t buy that” but it’s just more of a common courtesy “heads-up” about a larger than normal purchase. Often times your partner may suggest a better solution. I wanted to buy a 24″ Dell LCD for my current computer which is about 4 years old. So I ran it past my wife…she had also picked up on that fact that I’d like a new Mac (I was considering the mini or a laptop) in the next year or so and she suggested the 24″ iMac. After some investigation, this made way more financial sense than a 24″ Dell monitor, then replacing my current system with a mini or laptop down the road.
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When you get married you become one, why not combine your finances. Couple problems with the “his” account and “her” account are that it is just as easy to apply this logic to other things in your marriage. In reality, whatever money either of you make, is YOUR money together, regardless of your income levels.
When we first married we did the separate accounts, and eventually this lead to much less harmony. For instance, wife after having child, changed careers and was contributing a much smaller percentage to expenses. Every month when we would do our budget, it was brought up each time, who was contributing what and what percentage and all that. Its just not healthy for either party.
If I make $25 and she makes $50, we have $75 to spend next month. We make a new budget every single month, and we do this by sitting down together and plan the month’s expenses.
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Do you and your partner keep joint accounts or separate?
– We started keeping joint accounts when we were living together about 20 years ago and kept the accounts joint when we married. We made an agreement then that either of us could spend up to $200 on a single item, no questions asked, and that agreement has held.
How has this arrangement worked for you?
– Well. We realized very early on that making money a power issue would blow our relationship apart, so we worked hard at being equal partners.
How long have you been together?
– Since the late 1980′s. We met as teenagers.
How equitable is your income distribution?
– Not very. I earn more than my husband by a substantial margin. When we had kids, we realized we could make it on my income alone, but not on his alone. I was ready to go part-time, but in the end, he got to stay home with the kids most of the time until the second was in kindergarten. So his career kind of started later than mine.
Who pays the bills?
– We both hate it, so we switch off periodically. Right now I am, but he has done the day-to-day bill paying most of the way, while I organized our annual tax and plan routine. He is the main retirement and college payment planner for the household. I scout out mortgages. We’re just interested in different things.
How often do you fight about money?
– Can’t remember a money fight. We sometimes wrangle a little when I buy a book or he buys a CD full price when there is debt on the credit card. But even that is rare now. We are trying very hard to model rationality and openess about finances to our kids, who are teens now.
What else can you tell us about the way you handle your finances?
– It works for us. We calibrated our retirement investments, which are in 4 separate accounts, as a single portfolio, even though we own them separately.
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[...] Which Should You Choose: Joint or Separate Finances? This is a very complex choice for many couples, and there is no real right answer. This article, though, does a great job of moving through the pros and cons of both options – if you’re struggling with this issue yourself, this article is a must-read. (@ get rich slowly) [...]
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*Do you and your partner keep joint accounts or separate?
- Joint.
* How has this arrangement worked for you?
- It works really well for us. We consult each other before any purchase, no matter how big or small (even a $1 cup of coffee). Not only does it make sure that we’re not spending money the other person expects to be in the account, it keeps our spending in check. I can’t imagine how silly I’d feel saying, “honey, do you mind if I buy a Margaritaville frozen drink maker?” I know that he’d tell me to go ahead, but it makes us both consider where we’re putting our money, and gives us an excuse to have a brief mid-day chat
* How long have you been together?
- 3 years, married for 2.5 of those.
* How equitable is your income distribution?
- I earn a few dollars an hour more than him, but he has a 40 hour work week while I work 35, so our paycheques are pretty much even. When I first moved in with him I wasn’t allowed to work in the US, so we lived off one (very small for our area) income. Now that I can work and he has a better-paying job, “my” income goes into savings while we live off “his”.
* Who pays the bills?
- I’m the one to physically pay them, but they come out of our joint chequing.
* How often do you fight about money?
- Never.
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[...] 26th, 2007 · No Comments Otra vez una entrada de get rich me estimula a escribir. Uno de los temas más importantes para la vida en pareja, creo yo, es el [...]
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My husband and I have been married 12 years and have always had a “yours, mine and ours” approach to finances. We have a joint account for household expenses and we each have personal checking and personal investment accounts. Every year at tax time, we make up a budget for the coming year based on the previous year’s household expenses. Then we add up our combined income and figure out who makes what percentage of that total — this year he makes 75% and I make 25%. Next we determine the total amount of money that will need to go into the joint account per pay period (we each get paid every two weeks), and he deposits 75% and I deposit 25% of that amount into the joint checking account. This way, we are each contributing an amount commensurate with our actual earnings and neither has an undue burden or an unfair benefit. The rest of our money is ours to do with as we please, no questions asked.
Neither of us would have ever considered merging all our income together; in my opinion this removes a healthy amount of independence within a marriage. We have never had a single argument about money, ever, and in less than two years, we will be permanently retiring from full-time work in our late 40s with a net worth of well over $2 million, excluding the value of our home. We do not make an outrageous amount of money; we simply live very comfortably, well below our means, and are committed to saving steadily and diligently. Personally, I think the “yours, mine, ours” system is the way to go.
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My fiancee and I have seperate accounts and will continue to do so. We may or may not create a joint account to pay bills from after we’re married.
This arrangement works well for us. I electronically transfer my part of the bills to my fiancee who sends them out as they are mostly all in his name.
We’ve been together for about 4 years now and have never fought about money.
Until the beginning of this year, I made about 6k (college student) and my fiancee made in the 35-45k range. Quite the difference.
I didn’t so much move in as just stop going home, so I’ve been picking up the bills equally gradually. It started out with me paying half of any bill that would significantly increase because I moved in (grocery budget for instance). I also picked up whatever portion of the rent I could afford at the time. (I worked a variety of hours and jobs.) The expectation is that once I get my full time job next year, we will both pay half of the bills. Personal bills such as our seperate phones, car insurance, gas, school loans(mine), credit card(his) will be paid seperately. Any other income we have is ours to spend or save how we want. Gifts are handled by who the person ‘belongs’ to. I buy for my friends and family, and he for his, including christmas presents.
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To me, something seems inherently wrong with having separate accounts.
My wife and I have been married for 11 months, and we’ve had a joint account all along. She has been working the whole time too, but since she’s getting close to having our new boy, tomorrow is her last day at work. Though I make more than her, I have always considered the money we make to be our money. I don’t see marriage simply as a symbiotic partnership, it goes much deeper than that. We’re the same person. So to write my wife a check, or for her to have to pay me back for anything seems odd at best.
I’m 23, but apparently I’m old school that way.
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