Separating Finances when Married

[Lisa71]

We do a joint account and have separate funds for fun..we share and borrow those if needed but that is really rare. We were single for 30 years and my ex-husband ruined my finances. We have no secrets but it is nice I occasionally buy something for DH without him seeing the bill..or get a groupon for a massage. Whatever works for you works. We decided small bonus money was ours to keep and anything over 100 goes in the community chest. I get fewer of those but it is nice to work extra and have a little for fun.

 

[angwill]

I didn't read through to see what others suggested but what I have seen the experts advise in this situation is that you have 3 accounts his, hers, and bills. figure out what he makes compared to you and divide it up by percentage. If he makes 25 percent of total income and you make 75% then take all bills and add them up including savings. Divide that and you pay 75 percent of the bill total and he pays 25 percent the leftover is your spending money when it's spent too bad so sad there will be no ATM for the bills account or the savings. Unless it is an emergency and money is withdrawn from the emergency savings. HTH

 

[grafxgirl]

My husband rocks when it comes to finances!! He reads and writes contracts for a living so he deals with budgets everyday at work. We put all our money into a single account. He has an Excel spreadsheet with all our bills on it, how much is due, when it is due, interest owed if any, and deposits. He has our budget planned out for the next several years. He goes over it with me every week so we can see where we stand. This is when he lets me know how much money the two of us have available for the week. I am visual so this helps me to really understand our expenses.

 

[kathy884]

We do the yours, mine, and ours money thing, and it has worked out really well for us. I set this up with DH in 1984 before we got married.

Joint: Monthly expenses including funds for larger bills (taxes and insurance) - we set aside monies each month to cover these, emergency funds, home improvement funds, and vacation budget (each gets a monthly contribution with the exception of emergency funds if they are fully funded).

Individual: Charitable contributions (we favor different charities and I think giving back a percentage is an important thing to do and make that a monthly priority), car fund, clothing and personal incidentals (tennis, gym, etc.), date night expenses (We do one a week and take turns paying), I fund our kid education fund as that's not a big priority for DH, but is a huge priority with me. It may sound like a huge thing for me to take on myself, but I have enough to put a monthly amount in this fund and tend to put extra personal money left over after budgeted items in here. Guessing at what DS will be doing after high school at the rate I'm going I'll be underfunded by about $20,000, but DS can do some contributions too. Also both DH and very likely will probably throw some extra money we get in here when we receive bonuses, which over time might make up that shortfall. // I'm not overly impressed with what DH does with his personal money, but it's his to do with what he wants, and he contributes a ton to the overall family budget.

I'm guessing something like this is probably easier to do when there seems to be a reasonable amount of money to go around. It also helps that we are on the same wave length with spending on big things like house, cars (comfortable - house, safe/reliable - cars, but modest). We're not keep up with the Jones kind of people at all.

Our biggest expense for sure are taxes, and it's very important for us to keep a handle on that, make sure if we are under withheld that we are putting aside monies / budgeting for that tax liability.

 

[ilovemk76]

We do the yours, mine, and ours money thing, and it has worked out really well for us. I set this up with DH in 1984 before we got married.

Joint: Monthly expenses including funds for larger bills (taxes and insurance) - we set aside monies each month to cover these, emergency funds, home improvement funds, and vacation budget (each gets a monthly contribution with the exception of emergency funds if they are fully funded).

Individual: Charitable contributions (we favor different charities and I think giving back a percentage is an important thing to do and make that a monthly priority), car fund, clothing and personal incidentals (tennis, gym, etc.), date night expenses (We do one a week and take turns paying), I fund our kid education fund as that's not a big priority for DH, but is a huge priority with me. It may sound like a huge thing for me to take on myself, but I have enough to put a monthly amount in this fund and tend to put extra personal money left over after budgeted items in here. Guessing at what DS will be doing after high school at the rate I'm going I'll be underfunded by about $20,000, but DS can do some contributions too. Also both DH and very likely will probably throw some extra money we get in here when we receive bonuses, which over time might make up that shortfall. // I'm not overly impressed with what DH does with his personal money, but it's his to do with what he wants, and he contributes a ton to the overall family budget.

I'm guessing something like this is probably easier to do when there seems to be a reasonable amount of money to go around. It also helps that we are on the same wave length with spending on big things like house, cars (comfortable - house, safe/reliable - cars, but modest). We're not keep up with the Jones kind of people at all.

Our biggest expense for sure are taxes, and it's very important for us to keep a handle on that, make sure if we are under withheld that we are putting aside monies / budgeting for that tax liability.

How do you handle funding your retirement? What happens if you get to retirement and only one of you saved?

 

[Patience]

How do you handle funding your retirement? What happens if you get to retirement and only one of you saved?

I've wondered about this too. How do you plan for retirement? And for college for your kids if you think that's important like we do?

We've been married 21 years and have always just had one joint checking account and one joint savings account. I have some investment and retirement accounts just in my name and so does he but we contribute to those accounts from our joint money for planning purposes.

 

[Eastern]

I guess I just don't understand the separate accounts thing if you're married. You share the bills, you share the home, you share the kids. What does it matter if one person makes more?

Should your husband have a better car because he makes more?

And how does it prevent problems? If your husband is spending more on things you disapprove of, does it matter if he does it out of his own account vs a joint account?

It seems like a lot of extra effort and stress and like each person is being sneaky in their own way.

 

[kathy884]

How do you handle funding your retirement? What happens if you get to retirement and only one of you saved?

That could be a problem. I'd encourage people if they can to have both spouses do the up front max contribution to the 401K and maybe do an IRA at least if you don't have a 401K option, to be putting at least something aside. If they start in their 20s, they can have a pretty good chunk.

I also sort of wonder if retirement (a new thing in the last 100 year) is maybe obsolete. Maybe a more realistic reality is that like in the really old days people will work as long as they can and just stop if they can't anymore due to health reasons.

Funny -- looked at Fidelity Investments retirement recommendations and four years ago with the stock markets down so much the programs said that I was super underfunded for retirement and should try to put in an extra $1500 a month into retirement savings. I said, no way. Now (no change in my retirement savings percentages), the stock market has recovered quite a bit, and the same programs tell me I'll have more than I'll need by quite a bit with their most likely projections.

We're cool for retirement I think (knock on wood) unless everything crashes and burns. I've been putting the max allowed in by 401K since I was 21, when I got my first job out of college. DH hasn't put in the max, only puts in 10%, but does get a nice company match and he's been doing that regularly every since we got married in January of 85. (DH thinks that our retirement income tax rate will be higher than our working income tax rate because the government is so underfunded and will raise tax rates overall, so isn't sold on the standard financial advice of stashing untaxed dollars into retirement that get taxed later. Sounds like he'd be the perfect person for a Roth IRA, but they only allow people below a certain income level to do that.)

 

[ShannonMB]

Wow, what a personal topic! I just typed up a really long response, but then I realized it was just TMI!

DH and I do totally separate money and it's the only way I would have it. OP, good luck getting things rearranged!

 

[dawnball]

Sounds like he'd be the perfect person for a Roth IRA, but they only allow people below a certain income level to do that.

He could do a backdoor Roth. It does mean paying a lot of taxes now, but if he's concerned, it's possible.

 

[kathy884]

I guess I just don't understand the separate accounts thing if you're married. You share the bills, you share the home, you share the kids. What does it matter if one person makes more?

Should your husband have a better car because he makes more?

And how does it prevent problems? If your husband is spending more on things you disapprove of, does it matter if he does it out of his own account vs a joint account?

It seems like a lot of extra effort and stress and like each person is being sneaky in their own way.

Only talking about my own personal experience -- a whole sample size of one couple. // Probably a financial planner who works with couples on budgets would be a much better contributor

One thing that I think makes a joint account and two individual account work for us is having the higher earning spouse (my husband) contribute more percentage wise overall, leaving each of us a similar amount of personal discretionary money. Both people have to agree for something like this to happen. DH makes quite a bit more than I do, but thinks I'm much better with money than he is, so wants me to have at least an equal share of discretionary money for our overall financial well being, for example. Maybe it's his ways of contributing to my savings goals that he doesn't really believe in (the post high school education fund).

I do make a good salary too, though, and could provide for me and our son without him.

We both buy modest cars and drive them 200,000 miles, so there is no car envy for us. I put money in a car fund monthly and buy a new modest car for cash before replacing the timing belt a second time on the older car that I'm driving. DH doesn't save ahead of time for his car, but buys one when his hits about 200,000 miles too, usually for cash with bonus money.

For me personally, DH spending money on things that I think are wasteful and stupid is more tolerable and not something that I hassle him about because it's his own money. My overall thinking (maybe I'm a Pollyana) is that he contributes so much to joint making us much more comfortable than I ever thought we'd be, makes a really good salary, and should with the basics taken care of be able to do what he want with some of his money even if I think his choices don't make any sense (I think it's reasonable for him to have some benefits from his high salary, hard work, and good career choices).

And you'd think that maybe I'd be POed that what I tend to do with my extra discretionary money is put it in our kid's college education fund. I have a set amount that I put in that each month and throw any extra left over in there too, as it's a little underfunded, based on what DS is thinking about doing career wise. But I feel like I have enough money to do everything I want to do (am satisfied with our lovely little house, a reliable car, the contributions I can make to charities and my retirement, that I can afford indoor tennis time and any clothes I need, have a decent vacation budget for a nice week long trip and extra little mini trip each year).

I also, have no problem with DH keeping all of his own bonus money. He usually though, unless he needs to buy a car lol, splits it into three equal pieces (a third for him to blow, a third for one of our joint funds, and a third for me to do whatever I want to with it.)

 

[ilovemk76]

Only talking about my own personal experience -- a whole sample size of one couple. // Probably a financial planner who works with couples on budgets would be a much better contributor

One thing that I think makes a joint account and two individual account work for us is having the higher earning spouse (my husband) contribute more percentage wise overall, leaving each of us a similar amount of personal discretionary money. Both people have to agree for something like this to happen. DH makes quite a bit more than I do, but thinks I'm much better with money than he is, so wants me to have at least an equal share of discretionary money for our overall financial well being, for example. Maybe it's his ways of contributing to my savings goals that he doesn't really believe in (the post high school education fund).

I do make a good salary too, though, and could provide for me and our son without him.

We both buy modest cars and drive them 200,000 miles, so there is no car envy for us. I put money in a car fund monthly and buy a new modest car for cash before replacing the timing belt a second time on the older car that I'm driving. DH doesn't save ahead of time for his car, but buys one when his hits about 200,000 miles too, usually for cash with bonus money.

For me personally, DH spending money on things that I think are wasteful and stupid is more tolerable and not something that I hassle him about because it's his own money. My overall thinking (maybe I'm a Pollyana) is that he contributes so much to joint making us much more comfortable than I ever thought we'd be, makes a really good salary, and should with the basics taken care of be able to do what he want with some of his money even if I think his choices don't make any sense (I think it's reasonable for him to have some benefits from his high salary, hard work, and good career choices).

And you'd think that maybe I'd be POed that what I tend to do with my extra discretionary money is put it in our kid's college education fund. I have a set amount that I put in that each month and throw any extra left over in there too, as it's a little underfunded, based on what DS is thinking about doing career wise. But I feel like I have enough money to do everything I want to do (am satisfied with our lovely little house, a reliable car, the contributions I can make to charities and my retirement, that I can afford indoor tennis time and any clothes I need, have a decent vacation budget for a nice week long trip and extra little mini trip each year).

I also, have no problem with DH keeping all of his own bonus money. He usually though, unless he needs to buy a car lol, splits it into three equal pieces (a third for him to blow, a third for one of our joint funds, and a third for me to do whatever I want to with it.)

You can do the same with joint accounts and less work. All money into one account and each gets $X/week to spend as they please.

 

[kathy884]

You can do the same with joint accounts and less work. All money into one account and each gets $X/week to spend as they please.

What you're saying has a lot of merit.

The one advantage of separate account that probably most people would not need is:
-- If the money is in one person's name, the other person can't touch it. DH, for example, thinks it's good that I have the college education fund in my name (cash part and stock part) only so he's not tempted to use it for other things.

Also, record keeping can be a little tricky if you have one account and three balances. I guess it's really the same as three account, but with the three the bank statements have records of the transfers vs. the transfers being funny money transfers that you personally record.

 

[Luvchefmic]

Well, that is a leap of faith for sure. And the reason I took over the bills way back when and have a hard time letting them go (DH lovingly calls that "controlling" ). But I often wonder if he overspends because he knows that I have a cushion and that his $7 here, and $12 there won't kill us. But it adds up fast. I'm not trying to be his parent or raise him - that is not in my job description, but I also want him to take financial responsibility to take some of the burden off of me having to make all of the financial decisions all the time.

And, your questions bring up the exact reason why I posted here in the first place, so thank you. I need to hear other people's experiences so I can make the best choice

I didn't read all the answers but I have been in your shoes re- feeling like the parent being called controlling etc I tried several things over the years, " Sit down with me let's go over the budget/finances " on a regular basis ( he eventually got bored) I tried the " Ok you take over " ( we almost lost a house ) and a few times I picked up the phone to have no dial tone

The day I pointed out to him he had a $ 35.00 overdraft fee due to a SODA purchase at a 7-11 ( a few miles away from our house ) was the day he willingly handed over his ATM/Debit card and admitted he absolutely had no head for basic math that I was the one who knew what I was doing

I would rather be called "controlling " than " homeless " Although he has NEVER said that word again as a condition of me handling it all We have one joint account he gets an allowance if that's what anyone wants to call it If something bigger than his weekly $ can handle is needed ( barring emergency of course ) he just has to tell me ahead of time so I can budget things around to handle it...not giving him permission just no surprise hits to the bank account It has now worked for years like this

We've been together since 1986 Everyone has strengths and weaknesses and he finally admits to that Honestly we could have lost our marriage over the stresses we went through with that foolishness Now, you have to really sit down and make your DH realize what a serious commitment it is to stay on top of the finances he says he wants to handle

I hope it all works out for you and him

 

[ilovemk76]

What you're saying has a lot of merit.

The one advantage of separate account that probably most people would not need is:
-- If the money is in one person's name, the other person can't touch it. DH, for example, thinks it's good that I have the college education fund in my name (cash part and stock part) only so he's not tempted to use it for other things.
I guess this is where we are different. DH would never just cash in our investments to buy himself something, neither would I. I do sell investments to balance our portfolio. I do not need to tell DH as he trusts me.

Also, record keeping can be a little tricky if you have one account and three balances. I guess it's really the same as three account, but with the three the bank statements have records of the transfers vs. the transfers being funny money transfers that you personally record.

We never keep track to that extreme. If he needs cash in his wallet, he know where to get it. He leaves the receipt for his purchases and ATM withdraws on the desk.

We each knew that the other was good with money before we married. There is not way I would have married a man who would have been bad with money.


If both checks go into a joint account and then $X per week is moved to a account for each person, that would be basically the same as joint.

 

[Kathryn Merteuil]

We have separate accounts. I really don't think I could deal with it any other way. It has worked for us for 15 years.

 

[kellyg403]

Separate accounts with one joint household account here as well. Both divorced before, so the financial aspects of our relationship were colored by a little baggage.

We each have our own separate accounts belonging to each individually, with access by the other should there be an issue. I do not have a debit card to his account, nor does he. Those were the accounts that got our Child support payments and a portion of our paychecks. The joint account we put a portion of our paychecks for household including groceries. There is also a joint savings account we both deposit into.

In our situation I am the spender and dh is the frugal one. We attempted the joint account only and I became really resentful. As in your case OP, DH handled everything because that is the way he likes it and I really didn't care. I was the bill payer in my previous marriage and I was happy to not have the stress. However, I realized that if I took 10 bucks out of the account I had to account for it, yet DH never had to tell me when he did. I too forget I used the debit card and wouldn't put it in the register. It wasn't done with bad intent, I just didn't really think about it until later since there was plenty of money in the account. I had access to all information. If dh decided to pay something off, he did it and never really consulted me on what I thought we should pay off. He decided pretty much everything. We had a big blow up and we decided the separate account thing was better. I could use my portion to do as I please without having being questioned if I decided to buy something and he could manage his funds as he saw fit. It has worked so much better for us.

ETA: I also wanted to add that dh always made the right decisions with out money, it just felt like he never needed/wanted my opinion on what was best for 'us' with money 'we' were putting in the bank, if that makes any sense at all
Kelly

 

[SEA333]

Separate accounts with one joint household account here as well. Both divorced before, so the financial aspects of our relationship were colored by a little baggage.

We each have our own separate accounts belonging to each individually, with access by the other should there be an issue. I do not have a debit card to his account, nor does he. Those were the accounts that got our Child support payments and a portion of our paychecks. The joint account we put a portion of our paychecks for household including groceries. There is also a joint savings account we both deposit into.

In our situation I am the spender and dh is the frugal one. We attempted the joint account only and I became really resentful. As in your case OP, DH handled everything because that is the way he likes it and I really didn't care. I was the bill payer in my previous marriage and I was happy to not have the stress. However, I realized that if I took 10 bucks out of the account I had to account for it, yet DH never had to tell me when he did. I too forget I used the debit card and wouldn't put it in the register. It wasn't done with bad intent, I just didn't really think about it until later since there was plenty of money in the account. I had access to all information. If dh decided to pay something off, he did it and never really consulted me on what I thought we should pay off. He decided pretty much everything. We had a big blow up and we decided the separate account thing was better. I could use my portion to do as I please without having being questioned if I decided to buy something and he could manage his funds as he saw fit. It has worked so much better for us.

ETA: I also wanted to add that dh always made the right decisions with out money, it just felt like he never needed/wanted my opinion on what was best for 'us' with money 'we' were putting in the bank, if that makes any sense at all
Kelly

Yes! Your feelings are exactly what I think DH feels. Every dollar he spends over his weekly cash needs to be accounted for by me, because I know what I have paid that week, or what I have planned, and he doesn't know. Even though I do not spend frivolously, if I know we have a little extra cash and I am at Target, I never tell him that I spent an extra $50...not that I hide it, and if he asked, I would tell him or even volunteer the info, but while he kind of *has* to tell me so we don't overdraft, I don't really have to account to him my total grocery bill or when I buy new socks for the kids. This makes him feel like I have more financial freedom than he does. And it drives me nuts when I *think* we have a little cushion, then I check our balances and the cushion has been nickel and dimed.

My thought with separating the accounts is for him to have the opportunity to manage part of the budget/bills so even though it doesn't change much as far as disposable free cash every week, he will start feeling like he has a say in where his money goes and how much he gets to spend.

I don't think it says anything less about our marriage or communication, just that we have always done it one way and maybe it's time to explore other options.

 

[Eastern]

wow, I just never knew that so many people used the 3 account method in their marriage. I'm really shocked. To me, that is what I would possibly do in a newer relationship (engaged?), and I can understand if it's a second or third marriage.

Overall though it just seems like a lot of extra work for the same end result. Sometimes my husband spends money I wouldn't have and same here but it's not a major argument. It would probably be more tense if we were budgeting every last dollar; that could be stressful.

I really think I would end up divorced if my husband continually overspent our budget and if he snuck money out of the college fund, forget it.

 

[kellyg403]

Yes! Your feelings are exactly what I think DH feels. Every dollar he spends over his weekly cash needs to be accounted for by me, because I know what I have paid that week, or what I have planned, and he doesn't know. Even though I do not spend frivolously, if I know we have a little extra cash and I am at Target, I never tell him that I spent an extra $50...not that I hide it, and if he asked, I would tell him or even volunteer the info, but while he kind of *has* to tell me so we don't overdraft, I don't really have to account to him my total grocery bill or when I buy new socks for the kids. This makes him feel like I have more financial freedom than he does. And it drives me nuts when I *think* we have a little cushion, then I check our balances and the cushion has been nickel and dimed.

My thought with separating the accounts is for him to have the opportunity to manage part of the budget/bills so even though it doesn't change much as far as disposable free cash every week, he will start feeling like he has a say in where his money goes and how much he gets to spend.

I don't think it says anything less about our marriage or communication, just that we have always done it one way and maybe it's time to explore other options.

My dh finally understood where I was coming from. It took some communication and few arguments. I was not disagreeing with his decisions per se, just wanted to have input. For example, we have been paying down debt. We had a few cc that had higher interest rates, dh decided which ones and how to do. I would have preferred to get rid of the two that had little balances and then add those payments to the higher interest ones. The way he did it was pay large payments to the higher interest and pay them off first. Ok, I didn't disagree. But, I would have liked to have input. While he was making the higher payments, I wasn't aware unless I checked the bank account online. He would say oh yeah, I forgot to tell you I decided to pay xxx to xx this month. Yet, if I went to the grocery store or had lunch I had to tell him either before or right after. So, for him it felt like his decisions with the money were for the greater good and he knew he could spend 10 bucks on lotto, yet because I was not involved in the bill paying I had to account.

Communication and separate accounts has pretty much erased all arguments about money.

Kelly