How to Make Separate Finances Work: An Interview with J.D. and Kris

Redbook magazine coverEvery couple has its own way of managing money. Some folks share their finances completely. Some — like my wife and me — keep their finances completely separate. Most couples fall somewhere between these two extremes.

Writing for the June issue of Redbook magazine, Virginia Sole-Smith highlighted what she calls the new money rules for couples. Experts don't agree on how couples should manage their money, Sole-Smith says. That's because there's no “one size fits all” solution. What's most important is to find a system that works for you and your circumstances:

Clearly, the real experts are you and your partner, and it's critical to find an arrangement that suits your exact situation, as pairs who bicker over bills once a week or more are 30 percent more likely to get divorced than those who squabble about it less, according to research from Utah State University.

Her article profiles four couples who have developed unique systems for managing their personal finances — including the laundry agreement Kris and I use.

Due to the nature of the article, Sole-Smith couldn't possibly include all the info we provided when she interviewed us by e-mail. She had two paragraphs to explain our system, but we wrote over 2000 words. Rather than let all that info go to waste, though, I thought it'd be fun to share the entire interview here at Get Rich Slowly. This may answer some of the questions we often get from new readers.

Note: Just as Redbook edited our responses to fit their article, I've performed some judicious editing to remove redundancies and to protect privacy.

 

Redbook
How old are you? What are your occupations? How long have you been married? Do you have any kids?

Us
J.D. is 42 and a writer. Kris, who will turn 41 in late June, is a scientist. We've been married since August 1993. We have three cats but no children.

Redbook
Can you give a ballpark figure for your household income and, if relevant, who contributes the bigger portion?

Us
Kris makes about $60,000 per year. J.D.'s income is too varied to give a meaningful answer. Sometimes it's less than that, but some years it's much more.

Redbook
I've seen on the blog that you keep finances separate. What was the inspiration for this decision?

J.D.
I'm not sure it was an actual decision at first. We dated — and then lived together — for several years before getting married. We both contributed equally to household expenses, but from our individual accounts. When something was out of whack — say, I wanted to eat out more often than Kris — then one of us would pick up the slack based on who was causing the increased expense.

When we got married, our system worked fine, so neither of us felt any pressure to merge finances. Plus, Kris didn't like how I spent my money. She didn't want my foolish expenses draining the money she'd worked hard to save.

Kris
I knew from the start that J.D. and I had different money skills and financial habits. Since we didn't plan to make one spouse financially dependent on the other, it made sense to us that we were each in charge of our own salaries. Of course, major purchases were shared, but I could follow my “saver-tendencies” to prepare for a rainy day even during the years that J.D. was living paycheck-to-paycheck.

If I had felt that he was spending “my” money as well as “his” money, it would have been incredibly stressful for me. Now that he's reformed his spending habits, there's less of a reason to keep things separate, so the lines have blurred a bit.

Redbook
How does that work in practice? How do you decide who pays what bills? How many bank accounts do you have? Basically, what are all the nitty-gritty details of the day-to-day money management stuff?

Us
We each have our own checking accounts and savings accounts. We each pay some of the utility bills (we divided them up so they are roughly equivalent on an annual basis) from our own separate accounts, but when we were doing lots of remodeling on the house we had a joint account to pay the contractors. Kris buys most of the groceries while J.D. usually pays when we eat out. J.D.'s income is larger now, so he tends to offer to pick up the tab for more of the “splurges”. For day-to-day stuff, J.D. keeps a spreadsheet to show various expenditures and once in a while one of us will write out a check to the other one to even it out.

Redbook
How often do you talk about money and how much do you know about your spouse's financial situation at any given time? For example, even though everything is separate, do you keep each other in the loop about the state of various credit card bills or payments sent? Or are things so separate that you don't even know what the other person makes?

J.D.
I have a general idea of what Kris makes and a general idea of what she spends, but I don't know the specifics. I have no idea what her monthly salary is — just her annual income. (And yes, I can divide by twelve to get a rough guess.) I've never looked at her credit card bill, and I've never checked to see how much she's spending on anything. I trust her. I don't need to check up on her. As long as she's contributing her share of the household expenses, she can do whatever she wants with her money!

Kris
Pretty separate in terms of the day-to-day bills and expenditures but we have an overall picture of the other's financial state. My mind is much more at ease than when he was struggling with debt. I feel free to mention it if it looks to me like J.D. is making too many impulse purchases, but he has become much more self-aware about his spending habits and triggers and monitors himself.

The laundry agreement

 

Redbook
Of course, we want to talk about the laundry agreement. J.D., I already have your take on this from the blog post (unless there's anything you want to add!) but Kris, it would be great if you could weigh in on how this works from your perspective.

Kris
I love it. I got to trade a task that I don't mind at all (laundry) for a chore I hate (gassing up the car). Now if I could only get him to put his socks in the laundry hamper!

Seriously, I think all successful relationships have cooperation like this to some degree — ours is just more overt than some. In some families, one person does the earning while another runs the household. In others, one partner pays the bills while the other fixes the car. Why not make the most of the individual strengths to make life run more smoothly?

Redbook
Anything else super quirky or unusual about how you manage money besides the laundry deal?

Kris
To us, none of this seems quirky or unusual! I can't imagine being in a relationship where one partner or spouse controls all the finances. We know couples where one spouse gives the other an allowance. That works for them. Our way works for us. Some people (commenters on the blog) seem to think that separate finances means that we aren't fully invested in our marriage, but that simply isn't true.

J.D.
Here's another one related to the fact that I'm a slob: We have a housekeeper that comes in every two weeks. I pay for two-thirds of that cost, Kris pays for one-third. I think she'd actually like me to pay 100%.

Also, we used to be very anal-retentive about splitting grocery receipts. We shopped together, and after every trip one of us would sit down and itemize the expenses. What did I buy? What did Kris buy? Which were joint expenses? Whoever paid would then be re-imbursed by the other person.

We did this sort of thing with a lot of expenses, actually. But after we moved to a new house in 2004, things gradually changed. We didn't merge finances, but we stopped being so detailed about balancing them. Instead, we sort of developed “bailiwicks”. That is, Kris started paying for most of the groceries, but I paid for eating out. Kris bought a lot of the household necessities, but I was in charge of entertainment. And the vacations we've been taking are funded by the money that I make during the good years.

Redbook
How do you think your financial arrangements impact your marriage? I think I saw something on the blog about how this ensures that you fight much less about money — how and why?

J.D.
Oh, I think this absolutely prevents fighting about money. I used to say that we've never fought about money — not once. But we had a fight a couple years ago about how much to spend on remodeling, I think. Still, the principle holds. Because we trust each other, and because we both uphold our end of the marriage, we don't fight about finances. Now, this may just be because of who we are, but I think the separate accounts has a lot to do with it.

Kris
I'm the lucky one because over the years, J.D.'s money habits have grown to be closer to my own natural tendencies. He's had to do the hard part of changing. J.D. and I each value our marriage, and each other, but we also value our own individuality and what makes us different people. We don't have to overlap completely to love each other deeply. Our independence to make our own decisions (and mistakes) about our finances is mirrored in the independence we try to give one another in other areas as well.

Redbook
Can you imagine any scenario where you would want to handle money differently or merge finances to a greater degree?

J.D.
Good question. If it ain't broke, why fix it? Maybe if there were some Big Life Event. If we were to move to another country — which we've talked about — maybe then we'd merge finances. Or maybe if one of us became gravely ill. Or if we planned to have children. (I've talked with folks who kept separate finances, but abandoned that once kids came on the scene.)

Kris
If we had children, we would have had to re-assess this method of money management. But I think I would have still wanted to have separate accounts, and also joint accounts for specific purposes.

Also, since J.D.'s salary has climbed much faster than mine has, if we want to take a major trip together, we'll come to an agreement about what proportion each of us will pay. If I had to pay my entire share of 50%, we wouldn't get to travel as much as we both would like. This is something that we've just started over the last year, and it still requires some mental adjustment on my part. In return, I try to help J.D. with his blog when I can.

We have separate retirement investments, and it will be interesting to see how that works out when we get to the age where we start drawing from them. At this point, we're both where we want to be in our retirement savings.

J.D.
I agree that retirement is a big question. I suspect that we'll need to pool our resources more when we're finished working.

Redbook
J.D., since you write about finance and hear from readers on this all the time, do you think the way married couples are managing their finances has changed in the past five years or so? And if so, what are you seeing, and what are the factors at play (recession, more women working, etc)?

J.D.
I don't think anything radical has changed in the past five years, but I think things have changed radically in the past twenty or thirty years. Yes, more women are working. There are more stay-at-home dads. Couples are seeing that sometimes traditional methods aren't necessary for the modern world.

Tradition is fine if you value it and it's useful; but it doesn't make sense to cling to old habits just because “that's the way they're done”. I think many people in their twenties and thirties (and even their forties) recognize this, and they're willing to try new things to see if they work. That's a good thing.

Further reading: To learn more about the systems couples devise to manage their money, check out Virginia Sole-Smith's article describing the new money rules for couples at the Redbook site (or in the June 2011 issue of the magazine). How do you and your partner manage money? Share your tips in the comments!

 

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Jess
Jess
9 years ago

This sounds almost exactly like the way my husband and I manage our finances. At some point, we did get a joint credit card to put certain joint expenses on (groceries, home improvement stuff, eating out), but we each have our own checking and saving accounts and additional lines of credit. He takes care of certain utilities and I take care of others so that they roughly even out. It’s worked out fine for us, and I can’t ever remember having a fight about money, either.

Nicole
Nicole
9 years ago

Neat interview!

We’re a one-pot couple. http://nicoleandmaggie.wordpress.com/2010/08/17/couples-and-finances/

We have never ever fought about money.

Amanda
Amanda
9 years ago
Reply to  Nicole

We are 100% joint and have never fought about money also.

I track the money, DH is SO GOOD (!) about asking if we have money available for purchases. I know that our system wouldn’t work for most people–I have an amazing husband.

Our system is based on compromise though. If he asks for things we can’t afford I try to make a way to move things around in our budget so that at some point we can do the thing or get the thing he wants.

We each get $15 every Friday to do with as we please.

Kestra
Kestra
9 years ago

Interesting. We do things completely separate too, but the day to day is a bit different. I track everything for both of us, so know more about our spending and assets than he does. He’s just not that interested as long as he’s saving a decent portion of his income. He pays the rent; I pay everything else. We use the same credit card for the reward points. Since I track everything anyway, I just figure out who owes who for the month and we write a cheque out. He’s a bit more picky about fairness – he wants to… Read more »

Amanda
Amanda
9 years ago
Reply to  Kestra

If we were joint I’d be like your DH. That’s how I am with friends borrowing money or treating. I want to treat them for an equal amount next time…

I can’t help it, I think it’s a neurological problem. 😉

kim
kim
9 years ago

It’s so interesting to hear how other families do their finances.

We have joint everything, but then I’m a stay-at-home mom so I don’t have an income myself. We do each have “fun money” in the monthly budget that we can save and spend as we wish without discussing, otherwise we make all decisions jointly. We haven’t ever fought about money. Thankfully even before we married we had similar views on finances, and our views have evolved together during our marriage.

Maureen
Maureen
9 years ago
Reply to  kim

We handle finances very much like you. It’s worked well for us for 28 years!

Megan
Megan
9 years ago
Reply to  kim

I’m a freelancer and a SAHM, so right now, DH is the main breadwinner. We have joint everything, too, but it works for us.

Money is such a complex, personal issue, and there’s no real one answer that will work for everyone!

Stacy
Stacy
9 years ago
Reply to  kim

This is what we do too although its me who works and my husband who has been in school/job hunting. We had a few money fights until we hit on the “fun money” idea. We have his fun money, my fun money and our fun money (for date nights).

Russ
Russ
9 years ago

We keep separate accounts, but our approach is inverted. We both have our salaries paid into a joint account, and immediately transfer an ‘allowance’ into our respective personal accounts. That allowance is used by each of us for individual expenditures (e.g. martial arts classes and expensive shirts for me, dance classes and ornaments for her) or we can invest it individually. Everything else – mortgage, groceries, bills, eating out – comes from the joint account. Anything left in there at the end of the month goes into mortgage overpayments. This way, we both get to spend some of our money… Read more »

KS
KS
9 years ago
Reply to  Russ

This is pretty much what we do as well; I’m the breadwinner and my husband manages the finances day-to-day (he’s a freelancer and has more flexibility than I do). We each get an “allowance” as well.

So useful and interesting to see how others do it!

Sara
Sara
9 years ago
Reply to  Russ

This is how we handle our finances, too. Works for us!

Jan
Jan
9 years ago

Joint account—-BUT we keep our own overtime and allowance
Mine is spent on our trips (like Kris- without this my husband would rarely travel)
His is spent on wood working for the house!

Sarah
Sarah
9 years ago

This is very, very tangentially related… Kris is a scientist? What kind of science? 😀 I don’t think I knew this (or if I did, I am getting evermore forgetful).

J.D. Roth
J.D. Roth
9 years ago
Reply to  Sarah

Kris is a chemist. I’ll let her say more, if she wants to. She used to teach high school chemistry and physics, but now does other work. Yes, she’s coy about the nature of that work, but for good reason.

karen
karen
9 years ago
Reply to  J.D. Roth

but redbook named her workplace!

( i’m in her industry….)

Dan
Dan
9 years ago
Reply to  J.D. Roth

If she’s a chemist, how come you guys don’t like to make home-made detergent, soap and shampoo like Trent does?

K
K
9 years ago
Reply to  Dan

Chemists don’t bring their work home.
That’s why I don’t cook- all these
Instructions n measuring stuff n temp control
is too much like science work.

Nancy L.
Nancy L.
9 years ago

Our system is very similar to yours, and it works great for us. We periodically take a look at the household expenses and divide up the bills proportional to our income. For example, I pay the electric bill, and my husband pays the cell phone bill. I think we both like being in charge of our respective “domains”, and it keeps us both active and engaged in what’s going on with our finances. We do have one shared account for our emergency fund, but we try not to touch it other than to make our monthly deposits.

Bill
Bill
9 years ago

My wife and I share our finances completely, in fact we were just discussing couples who don’t a few weeks ago. I have to admit even after reading your post I am still confused. I genuinely want to understand your viewpoint but I’m having troubling reconciling your comments with any definition of marriage I’m know of. You write that it would stress you out when “he” spent “your” money. When he shoulders more than half the cost of a large expense you feel indebted to him. These ideas are antithetical to the concept of marriage which entails the joining of… Read more »

J.D. Roth
J.D. Roth
9 years ago
Reply to  Bill

No worries, Bill. I’m not offended by your question. I’m sure Kris will chime in with her own answer later, but my basic response is: Marriage is not just one thing. That is, your definition of marriage differs from my definition of marriage, which differs from another person’s definition of marriage. Right? So, you’re using the system that works best for you, and we’re using the system that works best for us. Our system wouldn’t work for you because your definition of marriage is different.

Des
Des
9 years ago
Reply to  J.D. Roth

Hmm…I don’t think you can say that marriage is “defined” one way for one person and another way for another person. It is a word, and it has a meaning. If we don’t agree on the meaning, it is useless to have the word. In this case, we need to agree on a meaning that is generic enough that it properly encompasses the way most people understand the concept, without being so generic as to be rendered useless.

Bill
Bill
9 years ago
Reply to  Des

This is probably beyond the scope of this blog but that’s sort of the question I was trying to ask Des. What definition of marriage would allow for independent financial lives and yet would still have meaning? I don’t understand how that situation is different from two unmarried people simply living together. I’m not saying there isn’t a difference I just don’t know what it would be. The only thing I can think of are various legal protections afforded to spouses. I’m really not trying to be difficult but what is the difference between a couple before and after marriage… Read more »

Nancy L.
Nancy L.
9 years ago
Reply to  Des

My husband cares about spiders. I want to squash them. In our marriage, we agree that he will be 100% responsible for removing them safely, so that I don’t feel threatened. I on the other hand care about having more than one cat while he would rather we didn’t. So I am 100% responsible for taking care of the cat box. My husband does the laundry, I do the scrubbing of the bathroom. We split those chores up and both of us begrudgingly do the dishes. These types of “minor” negotiations and agreements are pretty much a standard part of… Read more »

Bill
Bill
9 years ago
Reply to  Des

Well said Nancy, I agree with you completely. I think I wasn’t as clear as I should have been in my comments. I don’t want to get hung up on semantics. If a couple keeps separate accounts because it is practically simpler I have no confusion about that, that’s great. Your post said it better than mine, what matters is not wether you call your accounts joint or separate but whether at a high level you are willing to share the burdens of your spouse. I took away from the interview that this was not the case which is why… Read more »

phoenix
phoenix
9 years ago
Reply to  J.D. Roth

This is such a fascinating discussion. I have the same question as Bill. J.D., you feel open to discuss,and I agree that everybody defines marriage differently, but I’m just curious about what your definition of marriage is. The concepts of “mine” and “yours” in a marriage confuses me–particularly when one goes thru a grocery receipt to find whose food is whose. I totally get dividing chorse based on what each spouse likes/dislikes. (I do lauundry and dh does dishes) but I don’t think I’m doing “his” chores when I do dishes because he’s sick or working late that night. I… Read more »

Kate
Kate
9 years ago
Reply to  phoenix

To expand upon your point, I agree that it creates a feeling of “separateness” in the relationship. My ex and I split finances when we first started living together. At the time, our salaries were fairly commensurate, and things worked out just fine. However, we relocated for his job, which involved me giving up (both!) of mine. At first we thought I’d be able to find work again without a hitch – but it was ten months before I was employed. This put an impossible strain on us. We hadn’t appreciated the realities of how a 50/50 system would work… Read more »

partgypsy
partgypsy
9 years ago
Reply to  Bill

My husband and I have a joint account, but if my husband started spending more than what I feel is fair and it compromises other aspects of the our relationship, our ability to retire and save, yes I would feel worried and stressed (especially if there were children involved). Just because you are married does not mean the other partner is given a free pass of expectations or responsibilities. I don’t understand why you feel that is a necessary component of marriage. Marriage is full of compromise and negotiation, especially when there are shared financial goals.

Bill
Bill
9 years ago
Reply to  partgypsy

Oops! I didn’t mean to imply in anyway that a spouse is given a free pass from expectations or responsibilities. I meant the exact opposite! Because our finances are completely shared we each have a greater responsibility to each other to not use them in a way that harms the other. If my wife liquidated our savings account I would be stressed out too. But I wouldn’t marry a person like that, I trust my wife completely to not take advantage of me in that way. If I didn’t trust her to that extent I wouldn’t have married her. I… Read more »

lefawn
lefawn
9 years ago
Reply to  Bill

I trust my husband completely. I know we share similar values, dreams, and long term goals. However, I don’t need to know every minute detail of his spending and he doesn’t need to know every minute detail of mine.

Elizabeth
Elizabeth
9 years ago
Reply to  Bill

Bill, in my marriage one of us carried in a situation with the IRS from the past. We keep things separate so that the non-IRS spouse isn’t affected. To do otherwise would risk losing real property should the IRS get shirty with the non-owing spouse.

It’s not always so black and white as not being willing to share.

Rosa
Rosa
9 years ago
Reply to  Bill

My level of risk-taking nearly gives my partner a heart attack. His blindness to opportunity cost makes me insane. If we were jointly managing all our investments, we would fight all the time – he literally wakes up at night worried that his stocks are going down, despite being 30 years away from retirement. So we each have our own stock investment accounts, our own 401ks, and our own Roths. We had them before we hooked up, we manage them separately now. It’s not that we don’t trust each other – I have all his passwords, I *could* log in… Read more »

Slinky
Slinky
9 years ago
Reply to  Bill

Personally, my husband and I have separate accounts because it makes it simpler to reconcile the accounts. I do my spending, he does his. I budget for me personal savings, goals, and expenses, he does his. Joint expenses, savings and goals are negotiated just like a couple with joint accounts would. We mostly split things 50/50, but not if it doesn’t make sense. The fact that you question why to get married if you’re not combining finances, makes me wonder what you think a marriage is. My husband and I made a commitment to spend the rest of our lives… Read more »

SEinSF
SEinSF
9 years ago
Reply to  Bill

The way I understand it, a marriage is a union of two people who share their lives and hopefully love each other. How the work, chores, bills, etc. are divided is irrelevant and has no impact on the legitimacy of the marriage. Each couple needs to figure out what works for them. Why would a couple be more or less “married” if they split up some responsibilities and share others? Money is emotionally loaded so it is hard for some folks to extend the concept to finances, but think about other chores or tasks like laundry or dishes. Are you… Read more »

chacha1
chacha1
9 years ago
Reply to  SEinSF

The “what is marriage” thing ALWAYS comes up when J.D. mentions his financial arrangements. Here’s the thing. There IS NO one definition of “marriage.” As a legal construct, in the USA “marriage” is different from state to state, and elsewhere it is different from nation to nation. As a religious construct, “marriage” is different from faith to faith. Even within faiths, “marriage” is different depending on what sect you follow or what Bible you read, or whatever. Personal financial arrangements may be part of how you define YOUR marriage (that is a general “you,” not specific to any commenter) …… Read more »

Bill
Bill
9 years ago
Reply to  chacha1

I am not trying to convince anyone Chacha, I really do want to understand your point of view. It’s obvious from my comments that if my personal marriage did not entail a financial union I would consider it to be less meaningful. It’s also obvious from the number of posts and strong opinions of others that many don’t agree with me. I respect that completely, people can disagree with me. Many people are saying that financial entanglement is not a necessary component of a successful marriage. My question is simply, “What are the necessary components?”. I’m sure they exist and… Read more »

Bill
Bill
9 years ago
Reply to  SEinSF

I apologize again for not writing clearly SF, this internet commenting thing is harder than it looks. I never said that finances need to be shared “equally” only that they should be shared. Your hypothetical couple that insists on sharing the chore of laundry equally is more analogous to a separate financial account system. A husband who wants a “man cave”, a couple where one kills spiders and the other doesn’t, and a couple with a joint financial plan are all similar examples. I agree completely that it is irrelevant how those are divided, as long as both partners acknowledge… Read more »

Heather
Heather
9 years ago
Reply to  Bill

“I never said that finances need to be shared “equally” only that they should be shared.” But the example you give at the end of that comment indicates otherwise. Your wife paying more for a more expensive phone plan is still “sharing expenses.” My take on your comments is: you’re looking for spouses not to be concerned with whether or not the other spouse spends more or less money, not that both spouses are involved. Not everyone’s spouse can be trusted to make good financial decisions when money is accessible. I know married couples who don’t live together. I can’t… Read more »

Bill
Bill
9 years ago
Reply to  Bill

I’m not sure how the quote you give and my phone plan example are inconsistent. I contribute 2/3 of our income and my wife uses 75% of our cellphones, that is a unequal sharing of expenses. I am absolutely looking for spouses to not be concerned when the other spends more or less money as well as both spouses being involved in their finances. If your spouse can’t be trusted to make a good financial decision when there is money in their pocket that’s perfectly fine! If I had little willpower to resist frivolous spending I would forfeit my credit… Read more »

Heather
Heather
9 years ago
Reply to  Bill

My point is that you said you never said partners needed to be equal, just involved, but splitting bills according to use *is* being involved. Having completely separate bills would not be. The only “this is what marriage IS” that might be consistent for all married couples is “two or more people who have gone through the religious or secular procedures to be considered married within their faith and/or other community.” What else is the same? Not everyone is monogamous. Not everyone lives together. Not everyone shares money. Not everyone eats the same food. Not everyone has kids. Not everyone… Read more »

Bill
Bill
9 years ago
Reply to  Bill

I see what you are saying and it depends what you mean by splitting a bill. If we both go to the grocery store and I pay for the food then later at home you pay me back. That’s not splitting the bill. That’s the grocery store ringing up two separate bills on one receipt and us rectifying it later. Clearly to you marriage has simply a legalistic definition. If you have a marriage certificate then you are married. That’s a fine way to define it, it’s a consistently applicable definition. I accept that’s how many understand it. But a… Read more »

Heather
Heather
9 years ago
Reply to  Bill

No, that’s not actually my definition of marriage at all. You asked for what marriage *is* and what I gave you is, as far as I can figure, the only positive definition of marriage that would include all marriages that exist. Are all of them good marriages? Certainly not.

To say that people who don’t have a marriage like yours aren’t really married or don’t have a real marriage is very narrow-sighted and lacks an acknowledgement that not everyone is like you.

Just having joint finances doesn’t make people unified and just having separate finances doesn’t make people not unified.

Slinky
Slinky
9 years ago
Reply to  Bill

“To split the inputs and outputs to and from our marriage exactly evenly would negate the meaning of marriage.”

….of YOUR marriage. Not mine. That’s just splitting up the financial burden of needing to eat. My marriage has nothing to do with money. It’s about love and sharing and encouragement and support and growing and all that good stuff. Money is just a means to an end.

Mom of five
Mom of five
9 years ago

I enjoyed reading this interview. Whatever works. We’re a one pot couple and I handle all the finances. We’ve also never fought about money and have picked up each other’s better money habits over the years. He’s always been more willing to search for a bargain for larger items while I might have been inclined to just buy something we needed to get the shopping over with. However, I’ve never bought nearly as much stuff as he and have always been much more mindful of the latte factor. Two decades later, now I also search for a bargain while he… Read more »

t.e.
t.e.
9 years ago

I found it pretty interesting that none of the 4 couples profiled in the article had 100% shared finances. Does that mean few people share fully anymore? Do all the “we share finances” people have their own “fun money” or whatever they call it? We do – we generally share everything, but we have one exception from that rule.

Bill
Bill
9 years ago
Reply to  t.e.

My wife and I do the 100% shared arrangement. We have two joint checking account and one joint savings account. We have three credit cards that are all joint accounts. We both work full time and I make approximately 2/3 of the household income. We don’t budget any “fun” money. If my wife wants to buy something I trust her judgment that it is a wise purchase and she is free to do it with whatever account she wants. She trusts me to do the same. If I weren’t sure about a purchase I would discuss it with her first.… Read more »

Amanda
Amanda
9 years ago
Reply to  t.e.

What’s your exception?

Heather
Heather
9 years ago
Reply to  t.e.

We’re 100% joint. The exception is if one of us picks up a little money from a side gig ($50 or something fairly small), we can just keep it to spend on whatever we’d like or donate it to the pot. The exception to the exception is if we have significant expenses that are recently coming or going, it goes into the pot.

Alison Wiley
Alison Wiley
9 years ago

I like your intentionality! and the way you’ve let your habits evolve, rather than stay rigid. My husband and I pool our money, yet what our marriage shares in common with yours is mutual respect and healthy, responsible finances. The goal in my view is to have a joyful marriage or relationship at the center of your life — and a financial arrangement that support that. I don’t think it’d work to knock yourselves out having finances that are perfect down to every detailed penny, and then a marriage or relationship that’s in effect secondary or ‘on the side’. Money… Read more »

Marcella
Marcella
9 years ago
Reply to  Alison Wiley

Hi Alison, do you have to spruik your blog every time you post? It does getting a little tiring seeing these spam links.

KM
KM
9 years ago

If you’re married I’m not sure it makes any actual difference how you deal with your money. A person may feel like she is dealing with her different money styles by keeping her finances separate, and one person may like saving money while the other person likes the freedom of spending it, but you literally are spending each others’ money anyway. If you split up, the court determines who gets what–and it’s all considered “marital property” if you earned it while married. It doesn’t matter if you were a saver and your partner wasn’t, it doesn’t matter if you kept… Read more »

beth
beth
9 years ago
Reply to  KM

Actually, in most states, the assets are split in a divorce based on if they were acquired individually before the marriage or together during the marriage. In Virginia, all assets acquired individually prior to the marraige (car, house, savings, 401k, valuables) below soley to that individual. Only assests acquires during the marraige are divided.

Betsy
Betsy
9 years ago
Reply to  beth

I think that is what the previous comment said. (“it’s all considered ‘marital property’ if you earned it while married.”)

Debbie M
Debbie M
9 years ago
Reply to  beth

To me, the difference is the motivation. When one person keeps spending so long as there is money in the account, the fake borderline between that person’s money and the spouse’s serves as stopping point on the spending. That allows the other spouse to also be able to predict and budget the other part of the money.

Mike Holman
Mike Holman
9 years ago
Reply to  KM

I agree with KM. Sure, whatever works for you, but I don’t think your money is ever truly separate if you are married.

The issue isn’t just relevant in the case of a split – what if one person has enough to retire and the other doesn’t? Same thing with vacations. Does the “saver” go on a nice holiday while the “spender” does a staycation? How exactly does that work?

Mike Holman
Mike Holman
9 years ago
Reply to  Mike Holman

Just to add to my comment – I don’t think that the success of a couple is determined by having separate or combined finances.

I believe that if the partners are (at least somewhat) on the same financial page and the family finances are in good shape, there will be less (if any) money arguments. In that case it won’t matter how the accounts are set up.

Heather
Heather
9 years ago
Reply to  KM

Unless, of course, one spouse cleans out the joint account and takes off, which happened to my aunt. She was left with literally no money.

Deborah
Deborah
9 years ago

Ours are separate too, and that has caused many raised eyebrows (“It’s like you’re already planning the divorce!” is one thing I’ve been told). It’s great to see so many commenting that are doing the same thing.

Betsy
Betsy
9 years ago
Reply to  Deborah

Well, that comment is made in ignorance, anyway. Because during the divorce, actually, the money and assets that were acquired during the marriage are divided right down the middle. (The exceptions are inheritances, gifts to one of the parties, and assets acquired prior to the marriage.)

So it doesn’t matter how separate you keep your finances, it wouldn’t matter in the event of a divorce, anyway (unless you have a pre-nup).

Sarabeth
Sarabeth
9 years ago
Reply to  Betsy

This varies by state, folks! Not all states are community property states (although most Western ones are, Oregon is not). Check the law in your state of residence before relying on the principle to protect your interests.

Jen
Jen
9 years ago

We’re a one-pot family, as well. I’ve worked at various jobs, but never at a salary that is more than 1/4 of his. When I’m working, that goes almost entirely into savings (the almost is the extra clothes and other costs associated with working). I handle all the money and try to keep him informed at least quarterly on some aspect of our finances! This works for us because we are both not spenders and so far we’ve raised thrifty children as well. That is, they’re happy to have us buy them things, but when it comes to their own… Read more »

Jay
Jay
9 years ago

i’ve always found it interesting how guarded JD is as to how much money he makes off this site. I don’t really care, just found it interesting considering how open he is with all other aspects of his and kris’ finances.

J.D. Roth
J.D. Roth
9 years ago
Reply to  Jay

In an ideal world, I’d talk about how much revenue the blog generates. In fact, I used to do this. But eventually my wife, my lawyer, and my accountant all told me, “Stop!” So, I fight my inner nature, and keep that info private. I want to tell, though.

Tyler Karaszewski
Tyler Karaszewski
9 years ago
Reply to  J.D. Roth

Can I ask *why* they wanted you to stop? It’s not like you’re going to get fired for revealing company secrets or something.

Dan
Dan
9 years ago

Especially since he ball-parked his wife’s salary for the redbook article. If both his accountant and lawyer are telling him to stop, then I’m pretty sure it might be an IRS issue. If he starts listing his revenues, it could be ammunition for the IRS if they were interested in auditing him. I’d hate for JD to get dragged into tax court and have his blog posts used against him as evidence. Because his income is highly variable, he could say “in good months, I make $X” but if he reports $.5X on his returns, they just might want to… Read more »

Barb
Barb
9 years ago

Interesting article. We were also a one pot family for twenty five years. While I “did” the money, no one controlled the finances. I was just the person with the more patience in sitting down and doing the paying andthe paperwork. for us at least, one pot was easier. I would say from your description that you folks spend a lot more “time” on finances between you than we ever did as a one put family-but that may be personal style

cc
cc
9 years ago

interesting interview! we’re in-betweeners. he brings home the majority of the bacon, but i contribute a pre-determined amount every month to cover my rent and his extra fees for adding me on to his insurance. whoever is closest to the grocery store gets food. the utilities come out of the rent check, and we handle our own cell phone and other personal bills ourselves. i also like to think that i keep the place tidy in exchange, but let’s not go too far 😉 in a previous relationship we split bills to the penny, but it was exhausting and frustrating.… Read more »

Matthew
Matthew
9 years ago

I believe that what works between spouses is the best for them. I worry about separate finances because there are so many places where I think they can cause problems:

Income inbalance between spouses (including stay at home parents or job loss)
Kids
Low discretionary spending (the lower this is the more fighting about how it is used)
Retirement

Stacey
Stacey
9 years ago

We have 3 children ages 11, 7 and 5 and actually find it easier to have separate accounts because sometimes a month goes by before we can talk about where we’re at with our finances. Oftentimes when we’re super busy during the school year and I get hit up for lunch money (we put $100 or so at a shot into their lunch account), piano lesson fees, scholastic book orders, state wrestling T-shirts, etc., etc., as the kids and I are walking out the door and my husband has already left for the day, you can bet it’s a lot… Read more »

Jim
Jim
9 years ago
Reply to  Stacey

My wife and I operate the same way – although all of our accounts are “joint” accounts with both of our names on them – her accounts are separate from mine (we use different financial institutions so this is really very easy). We just don’t write checks, use ATM cards, or open mail from each others accounts. This works well for us because her accounts are in the small town that we live in, while my accounts are mostly in the larger city that I work in, so 98% of the time we have a bank, CU, ATM very close… Read more »

calliope(Greece)
calliope(Greece)
9 years ago

Our ways are pretty similar. And it was my choice from the beginning, my husband didn’t mind and, I think, had never even thought about it. But, I was a bit concerned about his spending habits and didn’t want to be thrown into dangerous waters. In the long run, I believe that our system has made my husband A LOT more careful and mindful while I’ve also loosened up and learned to relax with the occasional splurge. I know where my every cent will go, he is happy with a more relaxed approach. It took us a few years to… Read more »

Lisa
Lisa
9 years ago

When we first got married, we pooled our money together and DH took care of all finances. After the first child, we decided I would be a SAHM while he worked. Unfortunately, I did not receive any allowance and was not able to make purchases of any kind for myself. So, I got a PT minimum wage job on weekends. DH became upset that I purchased clothing for myself. I kept my job after the second child. I still continue working and have taken on some bills as well. Since DH lost his job, I have now gone full-time for… Read more »

Suzanne
Suzanne
9 years ago
Reply to  Lisa

This doesn’t sound like a good solution – you are getting the short end.

Amanda
Amanda
9 years ago
Reply to  Lisa

I’m sorry you’re in this situation. It doesn’t sound like a good compromise. I’m basically a SAHW and I track the finances and know where we’re at. Since I have more free time I feel like I spend most of the money!

Crystal
Crystal
9 years ago

We are a one pot couple out of necessity-my SO hates *HATES* to deal with/think about $-he grew up in a house where any discussion about $ were seen as shameful. Plus he has the most…ok I’ll say it-stupid- ideas about $ and retirement. The last time I tried to get his input as to whether to add more to our IRA or increase 401K he said to me straight faced ‘we should buy Spider-Man #1. It’s worth like 30K now-it should be worth a MILLION when we retire! We would never have to worry about a thing!’ At that… Read more »

PB
PB
9 years ago
Reply to  Crystal

HaHa! This sounds so exactly like my husband! He looks at the bills and looks at the money and sees no relationship between them at all. Before we were married, he spent his entire rent money on Furtwangler’s recording of Wagner’s Ring Cycle, and then lived on hotdogs and dried soup for two weeks until his next paycheck. I took over paying the bills shortly after our marriage and have been doing it ever since. All of our accounts are joint, but he only writes about three checks a year (usually related to a dog or two), and has been… Read more »

Amanda
Amanda
9 years ago
Reply to  PB

That’s what DH would do before we were married! Spend on whatever he wanted and live on top ramen. I started tracking our budget as soon as we were married. It was natural since I’m an accountant by trade. He did have close to $10 k debt, some no doubt related to courting and engagement, but we worked it down to nothing and now we save. =)

Holly
Holly
9 years ago

My first husband was very irresponsible about his spending, so we kept separate finances. Obviously that didn’t work out very well. My current husband is really good with money, but doesn’t like to be bothered with admin stuff so I manage our finances. We are both frugal, so we spend what we spend and reconcile at the end of the month. If there is a big expense we discuss it. We have only ever had one area of our financial life that we fought about regularly, support for certain family members. Our ultimate decision to manage this is to create… Read more »

Brenton
Brenton
9 years ago

Honestly, I dont think it makes much sense for most married couples to have separate finances. Its far more efficient to pool the money and allocate it jointly. Keeping things separate doesnt protect you either. One person could rack up all sorts of debt, and because you have joint assets like a home, you both stand to lose.

But hey, obviously its not my place to tell other people how to manage their money. I’ve just never heard an explanation that makes sense to me.

Stacey
Stacey
9 years ago
Reply to  Brenton

It works well when you have a lot of trust in your relationship! (and maybe it helps that we’re both pretty frugal, responsible people with our finances…) I could not imagine combining finances and I only make 1/3 of the family income!

Brenton
Brenton
9 years ago
Reply to  Stacey

To me its a matter of efficiency. Combined finances gives you more financial flexibility. It gives you a much easier time of properly allocating resources and diversifying wealth. Its certainly possible to have everything properly aligned with separate finances, but its just more work. If there is trust in the relationship, I dont see why combining would be an issue, and therefore since it is more efficient, then why not do it? There is another way to look at it. Im not trying to pick on JD, because I love this blog and especially what he writes himself. His posts… Read more »

Rosa
Rosa
9 years ago
Reply to  Brenton

It’s only more efficient if you don’t have to spend a lot of time discussing it.

The amount of time & effort my partner puts into things like choosing a single pair of pants is more than I put into all the other family shopping. It’s more efficient for us if he doesn’t have to look at my expenditures.

Brenton
Brenton
9 years ago
Reply to  Brenton

Why would your partner need to discuss his/her pant purchase with you each time?

Once the budget is set, you dont need to haggle over each purchase.

Rosa
Rosa
9 years ago
Reply to  Brenton

I must be arguing too much today, because I keep having to respond to people too many comments in for the reply button to work. Brenton, my partner rethinks decisions all the time. He’s a perfectionist, I’m not. When I wasn’t working and all the purchases I made were coming out of the joint account, just seeing when I bought pants, baby shoes, a backpack, name-brand canned beans, made him have to review my decision to see if he thought it was the best one. He’s like this about his own purchases too. The effort of making the best possible… Read more »

Slinky
Slinky
9 years ago
Reply to  Brenton

I think it’s less efficient with joint. My husband and I are separate and we think of it more as ‘divide and conquer’. I reconcile my accounts, my husband does his. He budgets his individual expenses, savings, etc, as well as his share of any joint goals we’re working on and I do mine. It’s quicker because I know what I bought at target last week, but have no idea what he bought at the drug store 3 weeks ago. For me to reconcile a joint account, I’d either have to bug him all the time or at least keep… Read more »

Bruce
Bruce
9 years ago

I’ve been reading this blog for over a year now. It was nice to get fuller picture of just who the two of you are. Thanks for sharing the whole interview, it pulled a lot of things together.

Dan P
Dan P
9 years ago

“Some folks share their finances completely. Some – like my wife and me – keep their finances completely separate. Most couples fall somewhere between these two extremes.”

Since when is sharing your finances an extreme?

J.D. Roth
J.D. Roth
9 years ago
Reply to  Dan P

Since when is sharing your finances an extreme?

Ah. I don’t mean “extreme” as in “crazy”. I mean it in the sense that you have two polar opposites — 100% shared or 100% separate — and there are infinite combinations in the middle. In this case, both 100% shared and 100% separate are extremes because they form the outermost points. Does that make sense?

Nicole
Nicole
9 years ago
Reply to  J.D. Roth

That would be an awesome TLC show though. Personal Finances Extreeeeeeme!

Tyler Karaszewski
Tyler Karaszewski
9 years ago
Reply to  Nicole

That’s the only way it would ever be a TV show, nobody is going to make “Personal Finances: Reasonable!”

Juliana
Juliana
9 years ago

We’ve been married for 4 1/2 years, own a home and have an 11-month old daughter. We had separate checking and savings accounts and credit cards before marriage and saw no reason to change anything. Yet I would consider us a “one-pot” family in mindset – there is no “his” and hers”, it’s all “ours”. He pays the mortgage and utilities bills, I pay the daycare and the cell phone bill. I happen to be the one who does the grocery shopping so I pay for all of the groceries. If we’re out to eat or in a store together,… Read more »

Bella
Bella
9 years ago
Reply to  Juliana

We’re in a really similar situation. It is honestly easier for us to maintain two checking accounts. One of the reasons I have for keeping separate checking accounts, since we both use check cards profusely we would have to have a significant buffer to insure we didn’t both access the same money and overdraw the account. Two accounts lets us keep checking balances to a minimum – maximize saving and isolate our account that is out there – and more susceptible to identity theft or credit card fraud, from the one that has the money. We do use the phrase… Read more »

Justin
Justin
9 years ago

The wife and I both have separate checking/savings accounts plus a shared for household bills. It’s worked for us so far.

abby
abby
9 years ago

I’m so glad to read this. My boyfriend and I will be merging households at the end of this year, and how we’ll handle finances is already on my mind. I’m with JD, there’s no “one size fits all” solution here. Thanks everyone for sharing what works for you!

Laura in Cancun
Laura in Cancun
9 years ago

Great interview! My husband and I have 100% combined finances, but it’s interesting to hear how separate finances work.

JD – I’m curious about what happens down the road. How would retirement look with separate finances, especially if one spouse has more retirement savings than the other?

partgypsy
partgypsy
9 years ago

This is my question. Obviously we know JD and Kris save for retirement, but for other couples with seperate finances, what if one spouse contributed their fair share to joint expenses but saved no money for retirement? Or decided to invest all their retirement money in a single company stock, putting retirement money out of balance and possibly at risk? Seems like there has to be joint discussions at the least about this.

Rosa
Rosa
9 years ago
Reply to  partgypsy

Well, what happens with a one-pot couple that lets one partner be in charge of the investments (which seems typical) when that one partner under-invests or sticks with all one stock or pulls it all out to buy gold? At least in the separate-finances couple, the more conservative partner still has some money left in the end. My one red flag is the “I don’t look at her accounts” – I think that’s bad practice no matter what kind of division of responsibility you have. My partner never wants to look at the account statements and I make him, because… Read more »

Dan
Dan
9 years ago
Reply to  Rosa

To me, there’s a different aspect of accountability: You can’t tell me you don’t care, and then when something turns out bad, blame me for it.

Just how like when we go out, my wife sometimes tells me she’d be really really happy if I ordered an extra bottle of wine. “It’s only $30.” But at the end of the month, she can’t turn around and say, “Why aren’t we saving any money this month?” and act like it’s all my fault.

Rosa
Rosa
9 years ago
Reply to  Rosa

@Dan – There’s a difference between “I trust you” and “I don’t care”. I have a friend whose father bankrupted the family with addictions – by the time he went to prison the family was homeless and broke, no retirement savings, no family business. I guarantee that all those years his wife was saying “I’ll sign it, I trust you” she wasn’t saying “Do whatever you want, I don’t are if the kids have to support themselves in their teens.” And for all you know, Kris would have cheerfully supported spendthrift JD in his old age because that was her… Read more »

Slinky
Slinky
9 years ago
Reply to  Rosa

I don’t look at my husbands accounts, but I DO know how much he makes, what kind of savings and debt he has, what goals he’s working on and how he’s doing on those. I don’t need to know every little thing he’s buying, but I do want to know what’s going on and that things are going in the right direction.

Curtis
Curtis
9 years ago

My girlfriend and I are moving in together in a couple months and we have been discussing finances the past few days. Most advice I see recommends keeping separate accounts and repaying each other for differences at the end of the month. She wants to get a joint account for rent, a few joint bills and groceries. What do you guys think is best? For those who live with their boyfriend/girlfriend, what do you find works best?

Brenton
Brenton
9 years ago
Reply to  Curtis

Curtis – Before we got married, when my future wife and I moved in together, we kept separate finances. We split all the joint expenses in half. Rent and utilities we would write two checks each for half the amount and mail them together. For groceries I would pay her $40 a week for my half. Entertainment and everything else we left it up to each other. This worked great since moving in together before marriage is in essence a trial run before marriage, to make sure you can truly live together before committing. So it makes more sense to… Read more »

Rosa
Rosa
9 years ago
Reply to  Curtis

It really depends on how you do things.

We’re not very good at physically writing and mailing checks, so we have a lot of autodeductions out of a joint account, and we each put half our paycheck in there (we both have salaried jobs and automatic deposits we can split between two accounts.) I watch the account just to make sure things dont’ go wrong, but everything is set up to be automatic.

If we weren’t both salaried with direct deposit, settling up with actual checks would work better, I think.

Panda
Panda
9 years ago
Reply to  Curtis

My bf and I have opened one joint checking acount that we both put money into equally and then use to pay our groceries and eating out together expenses. If we were renting, we’d pay rent and utilities out of it too.

The rest of our money and bills (car payments, insurance, gas, etc) come from our own individual accounts.

Daniel
Daniel
9 years ago
Reply to  Curtis

Before we were married my wife and I had largely separate finances. We kept this through being engaged for the most part, although she was still in school while I was working so on some occasions I did help with some larger purchases because they would have been difficult for her.

Once we got married everything was combined.

Sara
Sara
9 years ago
Reply to  Curtis

We set up a joint checking account when we moved in together. We figured out a monthly total costs – rent, electric, phone, groceries – and we each put in half. Then we paid only those bills out of the joint account. Since we each put in 50/50, all the bills got paid 50/50, and we didn’t have to worry about the accounting part of it. We did each continue to pay our individual bills (car payments, student loans, credit cards, etc) separately from our own accounts.

Stephanie F
Stephanie F
9 years ago
Reply to  Curtis

My partner and I worked out how much our monthly expenses were on average. We split that 60/40, since he brings in 60% of the income and I bring in 40%, and each month we have that electronically transferred to a joint account.

We each pay for our own things like clothes, gas for our cars, student loans, eating out without the other person, etc. The only change we’ve done recently is to get a debit card for the joint account so we can more easily pay for groceries and restaurants out of it.

Fat Daddy, Esq.
Fat Daddy, Esq.
9 years ago

I remember reading about your travel plans about a year ago and it prompted me to write about the importance of shared finances. After reading this interview, it is apparent that your system is not from a position of selfishness and it seems to work well for you. I think any approach can work if you have the right mindset and a little communication.

elisabeth
elisabeth
9 years ago

I think it “doesn’t matter” what method one uses when there’s enough money. If there’s enough for all the bills, retirement, emergencies, etc. then a lot of different arrangements will work just fine. It’s when there isn’t enough money that the choices made will make a huge difference. And, I think that the psychological meaning that money holds for you also makes a difference. When I was younger, money = independence for me and so any thought of joint accounts made me anxious. That did change over time, and we finally (after 30 years of living together!) got a joint… Read more »

Jay
Jay
9 years ago

Separating finances seems preposterous to me. My wife and I have separate checking accounts, but we are co-signers on each other’s, meaning our family’s financial corporation has two checking accounts. We would no sooner claim separate financial ownership than we would claim to parent one of our two children, or live in 50% of our home. We never bicker about money because A) we have the same financial objectives, and B) we keep a strict monthly, quarterly and annual budget. I am the primary money manager, but every month I give her a report of our financial spending.

Tyler Karaszewski
Tyler Karaszewski
9 years ago

Why does Kris expect you to pay for more than your share of travel when she puts a third of her money directly into savings, or whatever it is (you’ve mentioned that before)? If you’re really going for separate finances, why do you spot her money for things like that? What makes finances “separate” in my mind is not the names on the accounts, but who gets the benefit of the money. If partner 1 is driving a three year old Lexus, gets a bonus at work, and uses the money to upgrade to a brand new Mercedes, all the… Read more »

Nicole
Nicole
9 years ago

In economics terms: The marginal utility that JD gets from travel is greater than the marginal utility that Kris gets from travel. The marginal utility that JD gets from having Kris accompany him is greater than the marginal utility he gets from that additional fraction of money he’s spending on travel. Therefore, Kris is willing to pay less than JD to travel absent of companionship and JD is willing to pay more to get Kris to accompany him. It makes perfect sense. They could totally be a micro econ textbook problem. “What is the amount that JD should pay towards… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago
Reply to  Nicole

The great thing about the marginal utility argument is that it works for absolutely everything. The not-so-great thing about it is that this makes it not necessarily relevant. There’s a story (probably not true) about president Abraham Lincoln telling his carriage driver to stop on the way to an important meeting so that he can get out and rescue a pig that was in some way in need of rescuing. He ends up showing up late and dirty to the meeting. This has been used to discuss some philosophical point about why we do nice things (for the good of… Read more »

Nicole
Nicole
9 years ago

You were making arguments about fairness. If Kris and JD are both better off with him contributing more to travel, then that’s fair. The other argument was about separate vs. joint. That’s where the roommate example came in, illustrating that just because someone is paying for something doesn’t mean finances are joint. Grace’s sister from Graceful retirement paid for her to go to Japan. That doesn’t mean Grace has joint finances with her sister. Not that the labels are at all relevant. But seriously, every time JD does one of these posts you make an argument about how your way… Read more »

Tyler Karaszewski
Tyler Karaszewski
9 years ago

No, I was making an argument about separateness. And yes, I keep making the argument that my way is the only way because in practice, my way is the only way I’ve ever seen actually happen. I’m sure their are exceptions somewhere, but until I see the guest post titled “how I evicted my wife for not paying her half the rent” after said woman lost her job, then I’m going to keep arguing that calling married people’s finances “separate” is only a semantic and not practical separation. And no, buying your roommate dinner does mean you have joint finances,… Read more »

Random Anonymous
Random Anonymous
9 years ago

I think there is a name for the guest post titled “how I evicted my spouse”… it is called divorce.
This simply reinforces your argument that while finances may appear separate, it is mostly a semantic rather than actual distinction.

Mike Holman
Mike Holman
9 years ago
Reply to  Nicole

@Nicole – I think you just proved that Kris is JD’s paid holiday escort. 😉

Nicole
Nicole
9 years ago
Reply to  Mike Holman

@Mike: Is there anything wrong with that?

Mike Holman
Mike Holman
9 years ago
Reply to  Mike Holman

@Nicole – Nope!

Kris at GRS
Kris at GRS
9 years ago
Reply to  Mike Holman

🙂 Works for me!

Ely
Ely
9 years ago

I think Tyler is absolutely right. We say we have separate finances because we have no joint accounts. But we also don’t keep track of who paid for what or who owes what. I save money while he pays off his debt; he gives me a fixed amount monthly for the mortgage and insurance; everything else (utilities, groceries, eating out) goes back and forth with no system or regularity. It just depends. Since I have the savings, I paid when we went to Scotland and when we needed a new roof, but that works just fine for me. I didn’t… Read more »

Jay
Jay
9 years ago
Reply to  Ely

Ely: I understand your hesitation, but the incentive for wealth accumulation is enough to make someone interested in bottom line accounting. In our family, we examine our spending each quarter in relation to the budget. (All big-ticket items are scheduled at least six months out so we can pay cash.) As a family, we try to create a profit margin each quarter, and from this profit margin we allocate a dividend to all four members of the family–me, my wife, and our two kids. While this doesn’t give me or my wife an increased incentive to live below our means… Read more »

Ely
Ely
9 years ago
Reply to  Jay

This may seem weird to you, but some people are actually NOT interested in wealth accumulation. So no, it is not an incentive. Takes all kinds.

Jay
Jay
9 years ago
Reply to  Ely

Some people are NOT interested in wealth accumulation? Really? Let me tell you a story about people who thought they were superior to wealth accumulation, because such behavior was only performed by the selfish. The story is of my parents, who saved nothing in life: no IRA, no Roth IRA, no stocks, bonds, nothing. Their only investment was a house they mortgaged in 1987, but used the value of the home as an ATM machine. Now they are retired, living on social security and a modest fixed pension and cannot sell the house because what they owe is more than… Read more »

Rosa
Rosa
9 years ago
Reply to  Jay

So obviously your parents weren’t motivated by wealth accumulation. Whether they ought to have been or not, clearly they WEREN’T, and if you gave them a plan of action 20 years ago that was based on the idea that they’d be motivated by future wealth, they wouldn’t have followed it.

Dan
Dan
9 years ago

You’re quite right. Although I have the final say in regards to the money I earn, my wife is involved with the decision making process, and quite frankly, partakes in just about everything I spend money on. Heck, she even drives the new car “we” bought, and I drive the 12-year-old beater (first car I ever owned… bought it 10 years ago)… It might be my name on the paycheck and my name on the accounts, but I’ll be @#$%@# if she doesn’t receive some benefit from every $ I spend. I say this just to illustrate that there is… Read more »

Heather
Heather
9 years ago

“Also, not only do I not know anyone who actually operates on the “Lexus->Mercedes” model mentioned above, but I think that if I actually did meet someone like that, and told anyone about it, everyone I know would think that he is gigantically selfish asshole” My college roommate ended up in a situation like that. Their finances were 100% separate. He paid the mortgage and she paid the bills and bought groceries. She got pregnant and stayed home with the kid and ended up taking out loans to pay the bills, while he bought himself a second car and a… Read more »

Slinky
Slinky
9 years ago

I often say that we have separate accounts, but joint finances. It’s more “divide and conquer”, than “Mine! Don’t touch!”

Suzanne
Suzanne
9 years ago

I find it interesting that so many split bills evenly, particularly when one partner makes significantly more. I always heard it was a good idea to aplit as a percentage of income. Is anyone doing that?

It seems as though (like with J.D. and the travel), if you do everything at the level that the poorer partner can afford, then you’re giving up opportunities which, as a couple, you could enjoy.

Dan
Dan
9 years ago
Reply to  Suzanne

My wife and I talk about doing that when she starts working, but I honestly think that won’t work. Why? We want to buy a house in the Washington DC metro area. For us to do that, we pretty much need her income. We function just fine on mine right now, but for us to come up with a $40k down payment any time in the near future, that will take a vast majority of her income for 2-3 years. We could try to split everything based on income percentage, but I think that would just complicate things. It’s easier… Read more »

Rosa
Rosa
9 years ago
Reply to  Suzanne

We do the percentage of income thing, sort of – we each put in half our salary to a “house account” that covers mortgage, insurance, utilities, child care, etc.

It is screwed up a little, because the industry I used to work in pretty much died and then we had a baby. Now, instead of him making 2x as much as I do, he makes 4x. The big change is that, instead of large expenses coming out of the house account, they usually come out of his stock options or bonus money, putting most big costs on him.

Rosa
Rosa
9 years ago
Reply to  Suzanne

We did percentages for a long time, but our incomes got so different now my partner pays more than his percentage of expenses, because I just don’t have the cash on hand for things like a new furnace or new windows.

Sarah
Sarah
9 years ago
Reply to  Suzanne

We did the percentage split when our incomes were vastly different (I had the lower income). This worked really well when we were living together before marriage and in the early years of our marriage. We loosely followed Suze Orman’s system in “Young Fabulous & Broke”. Then, when I stopped working to go to nursing school (and then worked very part-time towards the end of school) my husband’s income paid for everything and we each had an allowance for spending on whatever we want. What little income I brought in went towards credit card debt, beefing up savings, or an… Read more »

Slinky
Slinky
9 years ago
Reply to  Suzanne

This was before I was married, but when I was in school working part time and he was working full time, we always split some bills, he always paid some of them and others I paid what I could when I could. It was basically up to me what I could afford that month and still save the money I needed for school or whatever else we were doing. And I always budgeted at least a small allowance for myself.

This obviously doesn’t work if a couple is dead set on “keeping score” and making everything exactly even though.

Dan
Dan
9 years ago

My wife didn’t really know how to manager her finances before we met, and had a poor credit history. For those reasons, I want her to have her own stuff and get used to managing something and paying bills, and building a good credit history… even though she just graduated and doesn’t have a real source of income yet. I transfer in money for her when it is necessary. I don’t keep much on hand in my checking account, and lots of money comes and goes. Between due dates on a bazillion different credit cards, my student loan payments, car… Read more »

Amanda
Amanda
9 years ago
Reply to  Dan

I think it’s good advice to have a LOT of communication regarding finances.

Spider-mike
Spider-mike
9 years ago

The separate finances works for some people I can see. Not for us. When my wife had free reign we were incurring late fees/other fees, money was being spent at fast rate by her on stuff we didn’t need, and we had money issues because she racked up credit card debt. After the 3rd credit card debt surprise in 5 years, I took over the finances. 3 years later her credit score is up 150+ points to a respectable level, I’ve paid off all non-mortgage debt, she no longer has use of a credit card though and she gets a… Read more »

Mike Moyer
Mike Moyer
9 years ago

I don’t really get the “we don’t fight about money” because we have separate finances argument. It would seem to me like if you are trying to split everything down the middle, it could be a common cause of arguments and a serious threat of resentment.

Splitting up hundreds of transactions each month is bound to lead to one person disagreeing with how things should be paid for at some point.

I would tend to think that JD and Kris don’t argue about money simply because of their personalities, not their financial arrangement.

Slinky
Slinky
9 years ago
Reply to  Mike Moyer

“Splitting up hundreds of transactions each month is bound to lead to one person disagreeing with how things should be paid for at some point.”

We’ve never had an argument about it, and we’ve only run into two cases that didn’t seem clear cut to us. One is that gifts for people are paid for by whoever that person is attached to. So if it’s MY friend’s wedding, that’s my responsibility, if it’s a mutual friend, then we split it. The other is that we carpool to work, so I help pay for his gas.

Des
Des
9 years ago

I think this set up only works because 1) you make *roughly* equivalent salaries. If you made $200k a year and she made $20k would you really split the mortgage 50/50? and 2) you guys make enough that you don’t need to be “meticulous” about tracking your money. A couple making minimum wage raising 3 kids on WIC wouldn’t be able to be so flippant about “you cover eating out, I’ll take groceries”. More like “we each get $5 mad money this week.” That doesn’t mean it is bad, obviously everyone has to do what works for them. But I… Read more »

tpp
tpp
9 years ago

My wife and I have separate finances as well. The way we do it is that each pays for their personal / frivolous spending. This includes student loans and other debt accrued prior to getting together. We then split the joint expenses (utility bills, mortgage, groceries, kids stuff, etc.) proportionally depending on how much we’re earning. Because we pay all of these with credit cards (we don’t carry a balance…reward cards have gotten us free vacations about every two/three years). Right now my wife is a stay at home mom, so I pay 100% of all joint expenses. Historically it’s… Read more »

ktmarvels
ktmarvels
9 years ago

DH and I are a one pot family for a number of reasons: 1.I wasn’t really earning an income while I was finishing up school. 2.He’s in the military and it makes more sense for me to be the one paying the bills since he could be out of the country. 3. I enjoy managing the finances more. I’m curious to learn more about your separate retirement funding. DH and I currently have Roth’s which are IDENTICAL, and just recently have started contributing to his TSP, so that we save 10-20% of our COMBINED income. I don’t have access to… Read more »

Amanda
Amanda
9 years ago
Reply to  ktmarvels

You can’t legally create joint retirement accounts.

Becka
Becka
9 years ago

I’m always fascinated by how up-in-arms people get on this topic. “You don’t have a real marriage because you don’t share your finances.” “You’re obviously planning for divorce because you don’t share finances.” “You say you don’t share finances BUT YOU REALLY DO.” “You become one unit in every other way when you get married, so why wouldn’t you become one financial unit as well?” [Yikes: no thanks on all counts.] Combining finances completely works really well for a lot of people. It doesn’t work as well for others. Choose what works for you, adapt as needed, and shut up… Read more »

Rosa
Rosa
9 years ago
Reply to  Becka

Amen!

“What marriage means” actually really is very individual, emotionally – legally is a different issue, but watching friends of mine couple up and marry has been really fascinating, because it does vary so much.

I mean, watching my parents very traditional, religious marriage gave me a definition of marriage as “a way for dysfunctional people to legally and religiously ensnare codependent people” but I certainly am glad to see other couples not doing it that way.

Dan M
Dan M
9 years ago

My wife and I had separate finances while we were dating, kept them separate when we moved into an apartment together, and still left them separate when we got married. What made us join them was buying a house. We didn’t want to sort out who owed who for mortgage payments, we knew from sharing an apartment that it was a pain sorting out how to split big purchases (like appliances and furniture), and we were sick of managing who pays for which bills. In the end, joining our finances has made our lives easier, but it took us a… Read more »

Peter
Peter
9 years ago

JD- Wouldn’t it be infinitely easier, especially since you are both out of debt now, to pool your revenue and then disburse individual “allowances” to personal accounts each month? You could then pay for everything but your personal stuff (i.e. comic books, etc) out of a common account and jointly invest any remaining. You could even have the allowances tailored to who brings in more revenue if you wanted. I guess I still fail to see the point in not joining assets. You’re working toward the joint goal of retirement (although that might admittedly look different for you two) and… Read more »

Ely
Ely
9 years ago
Reply to  Peter

This is your problem: it “sounds like the only real option to me.” Guess what: it isn’t. Do what works for you.

Peter
Peter
9 years ago
Reply to  Ely

For the most part, I was merely suggesting it would be much more efficient and easier to join assets. I still believe that this is the case. People should certainly do what works for them, but they should also consider why they’re doing it that way. They might be avoiding issues that need to be addressed.

Slinky
Slinky
9 years ago
Reply to  Peter

A cohesive plan doesn’t require joining assets. Just that you’re both working together. If we need to save $10k, does it matter if WE save $10k, or if we EACH save $5k, or even if I save $7k and he saves $3k? Not as far as I can tell. Also, the very act of switching systems introduces enough difficulty to make it pointless unless there are actually good, valid reasons that one system works better for you. I don’t see the benefit to a joint system at all. It just sounds like more hassle and confusion and that’s not even… Read more »

Roberta
Roberta
9 years ago

Here’s another version of separate marital finances that works for me and my husband, but might confuse or offend some readers! We have separate accounts, and he earns more than quadruple what I earn. He pays all the bills from his account: mortgage, utilities, vacations, home repairs, eating out, almost all groceries. I write him a check once a month to contribute to household expenses, but it doesn’t even cover half the mortgage payment. What is left in my account I use to pay for my gas, hobbies, gifts, some groceries, etc. Our retirement savings comes from his income, as… Read more »

AC
AC
9 years ago
Reply to  Roberta

Depends. If he has children from that previous marriage you are better off.

kristen
kristen
9 years ago

We have a joint account. Thankfully, we are both pretty good with our finances. When we first got married, my husband did all the finances. I didn’t even know how much we made, or how much we had in our account at any time. We both worked part-time jobs and didn’t make a lot of money. We were young and lived on love. : ) When we moved across the country five years ago, my husband asked me to take over the finances. At the same time, I stopped working to stay home with the kids. He is the sole… Read more »

Dan
Dan
9 years ago
Reply to  kristen

“I’ve had people tell me I was crazy for not knowing what our financial situation was, but I trusted him.” “Trust” is an interesting word in married people’s finances. I’ve had my own name on my accounts for a long time (I was 30 when we got married) and one of the first things my wife would ask me about was when she would get access to my credit cards and bank accounts. We were married for almost a year when I finally made her an AU on one of my cards. She would get upset, because she thought that… Read more »

krantcents
krantcents
9 years ago

We have a joint account and it works fairly well. My wife and I have been married nearly 43 years, so it makes sense to us. Any extra ordinary or large purchase we discuss together. Savings for us is a priority and we live on what is left.

Sandra
Sandra
9 years ago

When my DH and I first got married and bought a house, we opened a joint account and put a proportional share of our salaries into what I called the “house account”. Eventually, since I was the one handling all the finances, it became too much and we closed out the individual accounts. Occasionally, DH will get interested in our finances and threaten to take over, but backs off when I remind him about his previous method of crisis bill management (as in a turnoff notice means the water bill is overdue) :-).

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