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tell me about finances for couples

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As time goes by…

I’m a happy singleton, so I don’t know much about couple or relationship finances. I won’t let that stand in the way of an opinion though ;) .

As far as I can tell, there are three main options (with variations) for the practicalities of joint finances:

  1. totally combined finances, one pot where all the money goes
  2. totally separate finances, two (or whatever) pots with each person paying their share
  3. mine, yours, and ours finances, one pot for joint money plus separate pots for each individual

I’m a deeply independent person, I can’t imagine wholly combining finances with another person, the closest I’d be likely to go was mine/yours/ours but I’d probably want to have quite a bit of control over the system.

As I say though, I’m single, so I’m throwing this out to everyone else:

How do you manage joint finances, and why? 

Image by Hamed Masoumi 

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27 comments for “tell me about finances for couples”

  1. Most of our money goes to the joint account for bills, savings, and fun expenses(vacations, etc). The rest we keep in individual accounts for items that we as individuals enjoy, gas money, gifts, and lunch money.

    It works for us. My husband got the flat monitor for his computer and I had no problem because he saved the money in his account and I spent some money on video games I like.

    We both have a general idea of how much money is in the account (monthly statements) and we don’t sweat it. It’s worked for us. We’ve been married a little more than a year.

    Posted by Laura | February 28, 2008, 1:33 pm
  2. Our finances are totally combined. It hasn’t been an issue since we’re both willing to actually talk to one another about things.

    I have one friend though that has completely separate finances and another that has the your’s/mine/ours thing going on.

    It’s really just whatever works for you. I’ve seen all scenarios work out well for people. We just choose to do it together. It’s also more lucrative to invest together than for each to do our own thing.

    Posted by Fiscal Musings | February 28, 2008, 1:36 pm
  3. Ours are separate too, and have been since we met nine years ago, but we revisit our respective responsibilities every year or so.

    So I pay the mortgage, utilities, and investments/savings because I’m a bit of a control freak so this makes me happy. I also pay for travel. He does car (which is minimal), cellphones, and household, because he’s a bit of spender so can go wild in the bakery aisle. Our salaries are very uneven at the moment, when we’re back to earning more similar amounts we’ll reconsider.

    Posted by guinness416 | February 28, 2008, 1:45 pm
  4. I do the same thing as Laura and we’ve been doing it that way for 6 years (since we got engaged). The idea is that right now most of our bills are for joint items (house, kid, retirement (though I try to keep that equal too), etc.), so most of the money goes into the joint account. The plan was that as we got more financially well off, we would increase the money going to our separate accounts so that it less of it was going to the joint. Of course, now that we’re into it, I somehow suspect the joint things will continue to take up the majority of our expenses. But we’re pretty comfortable with the situation.

    The funny thing is, though, that several years ago I started actually managing my husband’s accounts also. That’s not to say that I spend money out of them, but rather I keep his checkbook (so to speak) and pay his credit card. I even suggest and implement investments for his stash of money.

    So for me this turns out to be a bonus because I enjoy doing these tasks, and yet we still both have independence in our financial choices. His are just heavily influenced by me. ;)

    Posted by Caro | February 28, 2008, 1:46 pm
  5. I keep my finances separate from my spouse. We each split the bills in such a way that the smaller ones go to her and the larger ones come to me, except for her cell phone which she pays for herself. Since she is the one with less income this works out well.

    When we are mid-winter and the power bill is so large that I can’t pay myself it works out that I pay the first 200, she pays the next 200 and then I pay the rest after that. So if it’s 350, I pay 200 and she pays 150, 400 we each pay 200, 450 I pay 250 and she pays 200. In the summer it’s less than 200 bucks usually so it’s not a problem.

    We dropped our cable TV, so that’s not a problem anymore. I wish more people would do this, TV is the destructor of society.

    Posted by Traciatim | February 28, 2008, 1:59 pm
  6. Well, we’ve got everything together right now. We may eventually split off small allowance accounts for each person to get a certain special amount to save or spend at their discretion. The disadvantage of having fully separated ones is that it’s hard to figure out who should buy food or pay the rent. You have to keep track of two separate balance sheets so that neither account runs out when you actually have plenty of money that happens to all be in the other account.

    Posted by Mrs. Micah | February 28, 2008, 2:03 pm
  7. I’m completely and utterly single, but I’ve witnessed how my parents handle things. Everything is held jointly, except my dad’s 401k and my mom’s new IRA, and my mom handles all of the day to day bill paying, account balancing, etc. At one point, my dad was not even sure what banks they had cd’s with.

    This system would probably work better if my parents got along and communicated. As it stands, my dad tends to play a big role in larger purchases like appliances and cars but has little connection with their typical spending. He nonetheless seems to think my mom should defer to his suggestions. He argues that this is because he is more logical, and I suspect it has something to do with his earning the vast majority of their income as well. She has worked part-time throughout my life, and now that my brother and I are older is working more hours but is afraid to transition to full-time since she needs flexiblity to care for my grandmother.

    Financially, my parents are doing ok, but my dad neither likes nor respects my mom. It makes for a lot of fights.

    Posted by E.C. | February 28, 2008, 2:12 pm
  8. It definitely depends on the couple… my hubs and I make vastly different salaries, since he is a student, and we have similar views and communicate well about money, so we’ve completely combined our finances. When we each make similar salaries I would like to open separate “fun money” accounts so we don’t have to question each other about certain selfish purchases, but right now it doesn’t make sense because of the salary differences.

    Posted by CHB | February 28, 2008, 2:15 pm
  9. One of my research assistants described the system she and her husband have: she runs the whole arrangement with an iron fist. No joke: he hands over his paycheck and she puts that and her own pay into bank accounts with her name on it–not his! Fortunately for him, she’s very smart and savvy about money, and she doesn’t appear to be about to run off to Las Vegas with a harmonica player.

    My ex- and I kept everything in common, but he insisted on handling all the money with no input from me. The resulting 3/4 of a million bucks in debt was the immediate reason for my departure from that union.

    In the U.S., some states have what is known as “community property” laws. These ensure that everything a couple earns–OR mingles–belongs 50-50 to both partners. So when you divorce, everything you own can be split up 50-50.

    To keep your hands on money you had before you married or on an inheritance that comes to you after you marry, you have to be careful not to “mingle” it. That means it has to be kept in an entirely separate account without the other person’s name on it, and you absolutely cannot put so much as one penny in that account that was earned after you married or that has ever been in an account with the other person’s name on it. The instant any money goes into a joint account, it becomes community property; the instant any money from a joint account goes into a sole-&-separate account, everything in that account becomes community property. Material objects, such as furniture or jewelry, that were bought and paid for before the marriage remain sole & separate.

    It’s amazing how many Americans are unaware of this or don’t understand it.

    Posted by Funny about Money | February 28, 2008, 2:58 pm
  10. We do the same as Laura (comment #1) - where most goes into a joint account for all of the big bills (mortgage, food, utilities etc), and anything that’s left is kept in our own accounts. That also allows my other half, who’s better at sort out things like bills, to get everything paid on time.

    We both like a little bit of independence, although it can cause friction from time to time. Luckily, our incomes are pretty much the same, so there isn’t too much of a worry about one person being able to spend more than the other.

    Posted by Rob Lewis | February 28, 2008, 4:16 pm
  11. My SO and I have separate accounts, we have a shared credit card but that was because we had to get a secured card to build credit in this country and it was easier to get one than two, if we were back in the UK we probably wouldn’t have any joint accounts. We each pay off our own purchases each month.
    I don’t anticipate having a joint account unless we buy a property or (god forbid) have children.
    We split the bills pretty much 50:50, he pays for the car since I don’t drive it, if we go on long road trips I’ll split gas and parking with him. It works for us.

    Posted by Looby | February 28, 2008, 4:46 pm
  12. Seems like there’s a nice healthy variety of ideas here. It looks like a slim majority have some sort of joint financial product for convenience.

    @Funny about Money:
    I think I’m going to investigate how community property works in the UK. At least there are only three different sets of laws here :) .

    Posted by plonkee | February 28, 2008, 6:43 pm
  13. We combine everything. That being said, there are line items in our budget for “his” money and “her” money. But everything is in a joint account.

    Posted by Lynnae @ Being Frugal.net | February 28, 2008, 7:00 pm
  14. We have joint accounts only. I created the budget that separated everything out from consistent bills to what we had to run the household. I keep a daily track of everything on a spreadsheet. Since I now have a general idea of how much we need left for groceries I can tell my husband about how much we have to work with. On 21K a year and two kids not many wants get satisfied and we have cut our so called needs by a half.

    We discuss everything we want and come to a consensus on what we will actually get. We also save at least 10% of our income a month, it comes straight off the top and then put whatever else we can that month into savings. Right now we are working hard to purchase our housing so we save most everything we can. We have some interesting discussions on whats more important, to replace our broken computer or get some basic tools for my spouse. We don’t fight but we do disagree. Since we can do everything rationally it works really well for us.

    His next raise he is getting his own “work” budget so if he forgot his lunch or buys girl scout cookies off a co-worker he can do that without talking to me. He also gives me input on what to get for groceries but I make most food decisions and with good humor he has tried many generics and rejected most of them.

    Also we yearly go over how to access all of our accounts so that if I die he won’t be up a crick without a paddle.

    It should be more interesting when we can start affording wants. We will both have to objectively figure out what is more important for the household - we prefer to try and agree rather than work out a tit for tat system. Other people find taking turns works better for them - they find it more fair.

    Posted by Marie | February 28, 2008, 7:16 pm
  15. I loved this post (and the comments) for one primary reason — we are actually trying to figure this out right now, this week. So its perfect timing. Such good suggestions from all -

    For us, we’ve had one shared account for years, but we each “sock away” a little cash, which has really come in handy. For example, for a present for my wife we went to the bookstore and rather than having to worry about what was in the account, if she could afford those books, etc., I was able to offer her my $100 “emergency money” on the spot so that she could buy a handful of books with no worries.

    That said, we think there has to be a better way. Our current plan is to have two checking accounts - one for bills and “hard” expenses (utilities, mortgage, etc.) and the other for what’s left after savings. It’s a completely untested theory, but its our current leaning.

    Thanks to the comments here, there may be a few more options we should consider!

    Thanks to everyone -

    Posted by metroknow | February 28, 2008, 8:25 pm
  16. I have been married almost 28 years. Our finances have always been joint. Every year, we give ourselves an allowance to spend on whatever we want. This allowance is put into our own personal accounts. I notice that neither of us spends very much of that allowance and we now each have sizable amounts accumulated. Both of us have been willing to live below our means and we don’t make crazy purchases. Cars, TVs, computers, home mortgage - it is all joint. Our friends are the same way so there is no need to spend to impress. We live comfortably but no yachts!

    I manage all of the bills and investments and filing -and at least once per quarter my husband looks at quicken expenditure and net worth reports I prepare. (I update quicken almost daily) If I am making significant investment changes, I will talk to him about them first to make sure our goals are aligned. He does 90% taxes.

    Bottom Line - Choose your spouse and friends carefully. If you are married and in a community property state, it is almost impossible to really “protect” your assets from one another. It is much better to be in this thing together.

    Posted by Carrie | February 28, 2008, 11:13 pm
  17. Totally combined. We didn’t have a pot between us when we married so nothing really to protect. We also needed all of the money togeter because most of our bills needed to be joint paid. I think it really is dependant to where you are in life,

    Posted by RacerX | February 28, 2008, 11:59 pm
  18. My boyfriend and I just moved in together this year. We keep everything separate, and we each “own” some of the bills - but since I make about 2.5 times what he does, I “own” most of the bills. He pays for TV/phone/internet/some groceries, I pay for everything else. I think that if we get married, we will combine - we’re just wary of joining our finances before we are legally a couple.

    Posted by Victory | February 29, 2008, 2:38 am
  19. My partner in life and I have a totally combined financial arrangement. We have one checking account and all the money goes into that one account. That has enabled me to be 100% secretive with regard to how much money we have at any one time. My PIL doesn’t even have the user name or password to the online banking. Reading this, I sound like some sort of svengali but I am just being honest. I have had total control over the family finances and I’ve made some pretty big decisions, often dragging my PIL along kicking and screaming. My PIL always has to ask my permission before being able to buy anything, yet I have done pretty much whatever I want. I am disgusted and guilty of abusing our finances. I am a gambler and, right now, I am gambling with our future.

    Posted by MoneyBlogga | February 29, 2008, 3:51 am
  20. Having separate accounts doesn’t mean one or both parties are defensively trying to protect “your” money, that’s a bizarre and cynical inference.

    Posted by guinness416 | February 29, 2008, 3:53 am
  21. @MoneyBlogga:
    If your joint finances really are as you describe, then at the very least I think you need to loosen your control. Even something as small as making sure that your partner has some money that can be spent on anything they like would be a start. Being disgusted and guilty isn’t helpful unless you actually change what you are doing - it just makes you feel ill (as I’m sure everyone knows from bitter experience).

    I agree with you. Having separate accounts, means whatever it means to the couple involved. Other people’s aims with their separate accounts are irrelevant.

    Posted by plonkee | February 29, 2008, 9:07 am
  22. My wife and I have always kept our finances together, because we are not a joint venture, we are a partnership and we share all of the available resources. We both have “blow” funds where we can spend $50/month of something trivial if we want without much scrutiny, but besides that we pay everything from one account.

    Posted by Frugal Dad | February 29, 2008, 3:18 pm
  23. My wife and I have completely joint finances. (The only fair system since I make several times what she does.) We do not have separate “blow” funds either since I think this encourages irresponsibility. My wife enjoys buying stuff more than I do, so I simply don’t want or need the kind of spending money that she wants; it would be wasteful for me to participate in an “arms race” of spending with her. Our system is that neither of us spends money unless the other one agrees. She has never actually vetoed me (her trust in me when it comes to money is absolute - she knows that if I spent money, I had a very good reason). I used to veto her frequently (”this computer game you want looks very similar to a computer game you haven’t played in five years; why don’t you pull that one out and play it again instead?”). I now veto her very rarely as she is 100% committed to my financial strategy now that she’s seen how well it works. It took about four years to convince her out of the twelve we’ve been together. Twice a year, she gets a fairly significant sum of money to spend any way she wishes. (Her birthday and Christmas are exactly six months apart, so this normally tides her over very nicely.) However, she knows that when I ask her not to spend money, it’s not because I want to spend it on myself, but because I want her to have continued financial stability and the ability to spend it in the future.

    I like to say that I handle strategy and she handles tactics. I determine the basic outlines of the budget and she figures out how to actually spend the money. I never go shopping so she has complete latitude over groceries and household supplies. She picked out the car; I gave her a budget (cash, of course). She plans the vacations; I figure out how much she can spend (and she always comes in under budget). I do handle all the tactics of investing and taxes. She is fully informed of where all our various accounts are and how much is contained in each one, more informed than she wants to be actually. But I think it’s important that she know my strategy and how to access our money in case anything happens to me.

    I do believe that joint finances, while not necessary to a healthy relationship, are very useful to a healthy relationship, if you’re both on the same page. Joint finances encourages teamwork and a sense of partnership. My wife and I have a very tight bond, almost a “you and me against the world” attitude, and a lot of that is due to working together as a team to reach our financial goals.

    By the by, it’s hard to imagine anyone more independent than I am. My entire goal in finances is to become independent. Once I am financially independent, I don’t plan on retiring early. I’ll probably keep working and give my salary away. There is no contradiction between independence and joint finances once you’ve met a person you want to give your life to.

    Posted by Andrew Stevens | February 29, 2008, 5:55 pm
  24. At our house, we have always done it this way:

    She spends it, I make more.

    Posted by Tony Lawrence | February 29, 2008, 7:34 pm
  25. @Plonkee:
    I am afraid to loosen control at this time. I have “handled” the finances for so long. If my partner sees what a mess we are in, and how much interest we are really paying on mortgages, it will be an untenable situation.

    My goals for 2008 are:
    1. Pay the mortgages on time so that the credit score goes up and I can refinance.
    2. Put money away in savings to make up for the 401K loans that were taken out against the partner’s wishes.

    That’s it. If I can show the partner a substantial savings account AND refinance the mortgages to a lower rate, I will have gotten away with what amounts to financial suicide. I just have to keep it together long enough for those two situations to occur. I know it sounds crazy but this is how we have been living for a long, long time. The partner does not like discussing money - it always ends with a tense stand-off that neither of us enjoys very much - and I’m sure that Daffy Duck could’ve done a better job than I have done. You’re right about the guilty part - it has caused me a lot of sleepless nights and a strange pain in my guts.

    Posted by MoneyBlogga | March 1, 2008, 2:44 am
  26. @Moneyblogga:
    It sounds like you are in an unfortunate position. Personally I’ve rarely been able to fix disastrous mistakes and keep them hidden. You know your partner better than I do, but you might find that if you’ve started moving in the right direction, and you own up now, you’ll be better off in the long run.

    Posted by plonkee | March 1, 2008, 9:55 am
  27. We went the very traditional, combine everything route. We do have separate credit card accounts so that if something awful were to happen to one of us, the other would have an independent credit history and source of credit. I like knowing where all of his money is, and he knows where all of my money is as well. It makes keeping track of our finances easier as well, especially since I manage all of our day to day finances.

    Posted by Chief Family Officer | March 5, 2008, 4:48 am

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