Marriage & Finances - Joint vs. Separate Checking/Savings?
Marriage & Finances - Joint vs. Separate Checking/Savings?
I'm getting married in May and would like to poll the forum on how you are set up.
I'm honestly not sure what we'll end up deciding, but we have both agreed that I'll be doing most of the finances since she doesn't like to deal with it. Obviously, IRAs/401ks will be separate since I understand that they only carry one name.
Any words of wisdom?
I'm honestly not sure what we'll end up deciding, but we have both agreed that I'll be doing most of the finances since she doesn't like to deal with it. Obviously, IRAs/401ks will be separate since I understand that they only carry one name.
Any words of wisdom?
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Now why would you want to do that?wootwhoop wrote:I'm getting married in May and would like to poll the forum on how you are set up.
I'm honestly not sure what we'll end up deciding, but we have both agreed that I'll be doing most of the finances since she doesn't like to deal with it. Obviously, IRAs/401ks will be separate since I understand that they only carry one name.
Any words of wisdom?
Prior to getting married, my wife had her assets and I had mine. We left pre-marriage assets alone, all assets/liabilities from day one of marriage has been jointly held down to the last penny. The IRA's and 401k's require a beneficiary - we changed those so that my wife is my primary beneficiary as I am for her accounts.
Regardless if you or she does the finances, I'd recommend you run any major financial decisions by her first and make sure you keep her informed on how you are progressing in comparision to your financial goals. You have talked about financial goals, right? You have 3 months to get it together if you have not.
Good Luck!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Yes, we have! We're very excited and have communicated a lot about finances. I even showed her my spreadsheet. Right before her eyes glazed over. I'm making her sound bad, but we'll have zero debt!Grt2bOutdoors wrote:Regardless if you or she does the finances, I'd recommend you run any major financial decisions by her first and make sure you keep her informed on how you are progressing in comparison to your financial goals. You have talked about financial goals, right? You have 3 months to get it together if you have not.
Good Luck!
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Everything prior to the marriage is still in our individual names, everything since is joint. The pre-marriage non-retirement stuff isn't very much, except that I had a lot of equity in my first home that I will simply rollover into our present home once the first one sells. It seems ridiculous to keep that separate and pay interest just to avoid comingling.
JT
JT
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We have joint everything (that can have joint account), although there have been debt previously (autoloan) that only have myself as the loaner. Both of us did not have any significant assets before the marriage. My primary concern is to make sure that DW knows how to get to our accounts if I am gone since I'm the one primarily managing all the finances.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
This is a personal choice for most people, and both ways work fine.
My wife and I didn't have much when we got married. She kept her individual bank account and visa card. I have transitioned to using our joint checking and credit cards for everything. We have seperate investment accounts at Vanguard. I have a 401k. She has a SEP-IRA.
I think the more established you are, the more likely you will want to use individual accounts for assets held prior to marriage.
If you have income disparities, or if one of you stays home to look after the kids, then you may want to consider some individual accounts for spending money. Or use cash if that's easier. It's nice to retain some ability to spend as you want and not be subject to oversight.
My wife and I didn't have much when we got married. She kept her individual bank account and visa card. I have transitioned to using our joint checking and credit cards for everything. We have seperate investment accounts at Vanguard. I have a 401k. She has a SEP-IRA.
I think the more established you are, the more likely you will want to use individual accounts for assets held prior to marriage.
If you have income disparities, or if one of you stays home to look after the kids, then you may want to consider some individual accounts for spending money. Or use cash if that's easier. It's nice to retain some ability to spend as you want and not be subject to oversight.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
It is a personal preference so there is no right or wrong answer. Sometimes people don't like having to ask "permission" from a spouse to spend money (whether on new golf clubs or a spa makeover day). Having 2 individual checking accounts for personal purchases plus a joint checking account for household purchases helps keep the peace in some people's relationship. My experience is that many working women and people in second+ marriages use this approach and the view is that it maintains equity in the relationship (a marriage of two equals). Of course there are many people who happily use one Joint checking account.
I would strongly recommend that she keep her own credit cards to maintain her own credit history.
I would strongly recommend that she keep her own credit cards to maintain her own credit history.
Warning: I am about 80% satisficer (accepting of good enough) and 20% maximizer
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Technically, we have all joint accounts, but we each use our own checking accounts and credit cards. Paychecks are direct deposit into our respective checking accounts instead of into 1 primary account. I manage the whole "system" to make sure we have enough money in each account when it's needed to pay whatever bill and also when/how much to transfer out to a savings account/529/Roth IRAs.
Advice: Make sure both of you can access all of the accounts, just in case you're physically separated and one of you needs to access money. You can figure this out however you want. My wife has a listing of every account number, username, password, and a rough idea of the account balance if she needs to access it...I keep this info in my head.
Advice: Make sure both of you can access all of the accounts, just in case you're physically separated and one of you needs to access money. You can figure this out however you want. My wife has a listing of every account number, username, password, and a rough idea of the account balance if she needs to access it...I keep this info in my head.
- ruralavalon
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Joint accounts or joint ownership for everything, except where not possible (like IRAs etc).
Did get separate Visa cards, but that was just to get double the miles offered for signing up.
Always discuss big financial decisions, even if the decision is always left up to you.
Did get separate Visa cards, but that was just to get double the miles offered for signing up.
Always discuss big financial decisions, even if the decision is always left up to you.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
Wiki article link: Bogleheads® investment philosophy
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Since you asked what we are doing I responded joint which applies to most accounts, but, I do have a couple of individual savings accounts. My recommendation, however, is that if a couple enters with significant individual assets or debt they should probably keep some accounts as individual and add a joint account for household expenses.
Bob
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We are joint tennants on all account. We maintain separate checking and credit card accounts, but consolidate everything into mint and jointly review at least monthly... Often weekly. Works great. We feel on the same team financially.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
This is a good point. We have pretty big income disparity for various reasons, but that by no mean means disparity of "contribution" towards making a happy and successful marriage. The way we do it is to combine all income, then allocate all budgets and saving goal together, and have two "discretionary" accounts for each of us that receive equal amount each month. You can use "mental accounting" or two separate accounts for this, whatever works for you. We agree that each of us can use our part of this discretionary money for anything we want, no question asked.tyrion wrote:If you have income disparities, or if one of you stays home to look after the kids, then you may want to consider some individual accounts for spending money. Or use cash if that's easier. It's nice to retain some ability to spend as you want and not be subject to oversight.
It's funny that it turned out, at least last year, that I used most of mine to get DW something (that she wanted but not willing to spend money for), and vice versa.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
This is actually a big part of the reason why we made all of our accounts joint. We have always had an income disparity, passing from one to the other as we each move through various stages of graduate degrees/work. Combining everything seemed to make sense because we could rely on each others' higher incomes and not be held back by the lower earning partner. We also had a situation where one partner had high education debt while the other had none, so combining allowed us to tackle that debt faster. I know some use this as a reason to keep things separate, but our logic was "what will the other person do with the money that they aren't using to help the indebted partner pay down debts? Go on a vacation by themselves? Go get a new car that is now 'separate'?" We viewed getting married as taking our situations as what they were and moving on with them together, for better or worse.tyrion wrote:If you have income disparities, or if one of you stays home to look after the kids, then you may want to consider some individual accounts for spending money. Or use cash if that's easier. It's nice to retain some ability to spend as you want and not be subject to oversight.
We have found that combined everything is nice because we each have different skills that complement each other well when things are combined (she's good at not spending money, I spend time on things like Bogleheads figuring out what to do with the money we didn't spend) where if they were separate, we wouldn't be making as great a use of each others' skills. We have a (securely) shared document that contains all important financial information and we review at least monthly, if not weekly. I would greatly suggest that you sit down and plan out your initial budget and savings goals now if you haven't already.
- JupiterJones
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
IMHO, the most important thing is that you and your spouse have shared goals, transparent finances, frequent communication about money, and a philosophical sense that all the money (and everything else) is really "both of yours" when it comes down to it.
When you have all that, then where the money actually lives is almost irrelevant.
JJ
When you have all that, then where the money actually lives is almost irrelevant.
JJ
"Stay on target! Stay on target!"
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Joint. We have have similar salaries and similar savings habits, so separate seemed overly complicated.
- DiscoBunny1979
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We live in a Community Property State and therefore for us it's important to maintain Separate Checking Accounts for money earned that's considered Separate and a Joint Account for money earned that's considered Community Property.
Here's the breakdown thus far . . .
Social Security earnings are NOT Joint Property - they belong to the person to whom the benefit was earned, therefore separate property
Social Security Disability Income - separate property
Privately funded Taxable Disability Income - joint income (because it's considered compensation as continuation of pay from work)
Compensation shown in box 1 of a W2 - joint income
Inheritance - separate property
Individual Taxable Investment Accounts (Interest and Dividend earnings) - belongs to the person that contributed the funds and therefore separate.
IRAs - separate property
We maintain Separate Checking accounts with Rights of Survivorship whereas money from inheritance or Social Security or other forms of 'separate' income is deposited. The reason it's important to not put everything into a "joint account" when it's separate is because of lawsuits. If one person in a marriage or Domestic Partnership is sued, all joint income is subject to that lawsuit. If money can be 'assigned' as belonging to only Spouse "a", if the other spouse 'b' has the lawsuit, then those funds belonging to the other spouse 'a' are protected.
Here's the breakdown thus far . . .
Social Security earnings are NOT Joint Property - they belong to the person to whom the benefit was earned, therefore separate property
Social Security Disability Income - separate property
Privately funded Taxable Disability Income - joint income (because it's considered compensation as continuation of pay from work)
Compensation shown in box 1 of a W2 - joint income
Inheritance - separate property
Individual Taxable Investment Accounts (Interest and Dividend earnings) - belongs to the person that contributed the funds and therefore separate.
IRAs - separate property
We maintain Separate Checking accounts with Rights of Survivorship whereas money from inheritance or Social Security or other forms of 'separate' income is deposited. The reason it's important to not put everything into a "joint account" when it's separate is because of lawsuits. If one person in a marriage or Domestic Partnership is sued, all joint income is subject to that lawsuit. If money can be 'assigned' as belonging to only Spouse "a", if the other spouse 'b' has the lawsuit, then those funds belonging to the other spouse 'a' are protected.
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We have various accounts that happen to be separate, but we share access to all accounts. My wife was initially slightly annoyed when we changed the passwords to something different for each account because that's how I handle online logins, but she doesn't have to deal with it much because we just add all the accounts to her Mint account.
We have been consolidating our separate checking and savings accounts to simplify things, and we only have a few main credit cards (for rewards) with each other as additional signers.
We aren't really big spenders, so we just check with each other on the irregular large purchase. We also have a spending/saving budget set up that we check from month to month to see if we're on track for our goals.
We have been consolidating our separate checking and savings accounts to simplify things, and we only have a few main credit cards (for rewards) with each other as additional signers.
We aren't really big spenders, so we just check with each other on the irregular large purchase. We also have a spending/saving budget set up that we check from month to month to see if we're on track for our goals.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We may not have started with three, but we always ended up with three. Twice. That's checking. Savings was joint the first time around, separate the second time.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Early in marriage , we had a joint account.
It was my problem to
1) track down checks written but not entered in register and
2) wrong amount or no amount shown on register.
Once we got separate accounts, I had no further problems.
My wife became much more careful once it became her problem.
It was my problem to
1) track down checks written but not entered in register and
2) wrong amount or no amount shown on register.
Once we got separate accounts, I had no further problems.
My wife became much more careful once it became her problem.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
In a community property state, disparity of income disappears. Half of her humongous salary is his, and half of his puny salary is hers. In other words, total and divide by two; the total can then be transmuted into two equal amounts of separate property. Put it all into the joint account and move half to each separate account at the end of the month after paying community bills if you wish.
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Everything is joint except our retirement funds though we're each other's primary beneficiary for those accounts. Neither of us had very much prior to marriage, except student loan debt, since we were both in grad school and now we share everything. I make significantly more than she does for now but that doesn't, and shouldn't matter in a marriage, because once you're married, you're partners. Just my opinion.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Joint. We pretty much had nothing prior to marriage, so it was easiest to do joint. I am the breadwinner in the family and DW has good spending habits--so no need to complicate things and give her an "allowance" for her own checking account. We each kept our own credit cards, since we already had them before we got married; but recently added a joint card to make things even more simple.
- Sunny Sarkar
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Two joint accounts - one for each spouse as the primary - operated as individual accounts essentially, but joint just for the purposes of TOD and simple stuff like depositing tax refund checks easily.
I believe that the feeling of financial empowerment and independence is essential in a marriage, and in case of a single joint account, one spouse inevitably/unconsciously takes over at the detriment of the other.
I believe that the feeling of financial empowerment and independence is essential in a marriage, and in case of a single joint account, one spouse inevitably/unconsciously takes over at the detriment of the other.
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We started out with his/hers/ours accounts, using the "ours" account to pay for everyday expenses and the separate accounts to fund our hobbies. Over time, our needs and interests evolved to the point where it just didn't make sense to keep separate accounts, so we merged everything into joint checking and savings.
I've become responsible for managing finances, but that hasn't posed a problem as we're each frugal, have common savings goals and don't place onerous spending restrictions on one another. If you're unsure how to proceed, you could start out with a his/hers/ours approach and assign purposes to each account. Then you could ultimately merge when it makes sense for your family.
I've become responsible for managing finances, but that hasn't posed a problem as we're each frugal, have common savings goals and don't place onerous spending restrictions on one another. If you're unsure how to proceed, you could start out with a his/hers/ours approach and assign purposes to each account. Then you could ultimately merge when it makes sense for your family.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We have both. Joint checking for household bills and joint savings for whatever. And then separate savings and checking for each of us.
It works well. My wife likes the independence of her own accounts. All balances except for the joint and separate checking accounts are on the Family Fortune spreadsheet that I update and "publish" each quarter. We don't keep much money in checking - enough for the next month's bills. Separate savings account balances are there for both to see.
Don't see it as a matter of lack of trust on her part. I have access to all our joint accounts along with her big time cash savings account. She has access to none of my accounts (has never asked for it). Her taxable brokerage account I can buy and sell as I see fit but not withdraw any money. Can also do whatever I want with her retirement account investments.
We have an agreement. I take care of the investments and taxes - she pays the bills. I grocery-shop and cook - she cleans.
You just gotta trust each other and work out a system you both agree with. There is no longer the two of you so to speak. You're a partnership. But partners need their own autonomy within the framework of the partnership (if that's what they want).
For reference - we're in our forties and very happily married for 7 years. Her first marriage - my second.
New Years Eve was funny. She was itching to know the Family Fortune balance for the end of the year. I would not reveal it until the next day. She tried guessing to get me to give up the total. Her guesses were low by a good $30,000 so Jan first she commented on her surprise. All I said was "stick with me baby".
It works well. My wife likes the independence of her own accounts. All balances except for the joint and separate checking accounts are on the Family Fortune spreadsheet that I update and "publish" each quarter. We don't keep much money in checking - enough for the next month's bills. Separate savings account balances are there for both to see.
Don't see it as a matter of lack of trust on her part. I have access to all our joint accounts along with her big time cash savings account. She has access to none of my accounts (has never asked for it). Her taxable brokerage account I can buy and sell as I see fit but not withdraw any money. Can also do whatever I want with her retirement account investments.
We have an agreement. I take care of the investments and taxes - she pays the bills. I grocery-shop and cook - she cleans.
You just gotta trust each other and work out a system you both agree with. There is no longer the two of you so to speak. You're a partnership. But partners need their own autonomy within the framework of the partnership (if that's what they want).
For reference - we're in our forties and very happily married for 7 years. Her first marriage - my second.
New Years Eve was funny. She was itching to know the Family Fortune balance for the end of the year. I would not reveal it until the next day. She tried guessing to get me to give up the total. Her guesses were low by a good $30,000 so Jan first she commented on her surprise. All I said was "stick with me baby".
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Great idea on the quarterly family financial update, I'm going to start one now!
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We have a his-hers-and ours approach. Separate investment accounts (each other as beneficiary). Separate savings, checking, and credit cards with each of us responsible for our own personal expenditures as we choose. We have separate last names. House owned jointly. We share all living expenses and decide larger purchases jointly. Before retirement I had a bit more income than she so I've contributed a larger chunk of most of our expenses (mortgage, taxes, travel, etc.). Because this is my second marriage and her first, and I have grown children and she has none, we both want to leave things to different heirs and treat things differently at that juncture. We're married almost 20 years. It's a wonderful relationship we're both deeply committed to. Of the very few and small disagreements we've had during our marriage, none has ever been about money or finances.
“The only freedom that is of enduring importance is freedom of intelligence…” John Dewey
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
With the failure rate of marriages and likelihood of vindictive behavior when things are going downhill, I maintain separate accounts. I look out for each of our best interests independently then our best interest next. I have had this discussion with my wife and she is accepting. I manage both our finances independently. I have a accelerated my debt payoff so only the mortgage remains, with little concern for free cash. She on the other hand feels the need to have cash on hand yet carry high interest balances. With this in mind I have shift her debt to minimize interest and opening a roth ira for 2012 and 2013 to earn interest on her available cash. Until we can find a middle ground this arrangement will remain. I have always had to fend for myself and she was supported by her parents into her late 20s, I think this is the reason for the differing views on finance.
Nothing is free, someone pays...You can't spend your way to financial freedom.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Combo. One for bills for each-other (Home/Child/Etc.) And two separate accounts for each other's personal expenses. Reason being, it is common sense. Neither should keep all in one basket. Emergencies happen. Mistakes like being over-drawn happen. If one spends more than the other, why would you allow your share to be over-drawn too?
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
To me marriage means joint
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Both joint and separate. Everything gets deposited into joint (with which the bills get paid) and each month we have automatic ACH withdraws into our separate accounts (equal $$). I make significantly more than her but I don't want her to feel like she needs to ask me to spend money on every purchase she makes. We have two joint credit cards (we use our amex for everything but have mc for those places that don't take amex) and each have our own individual credit card.
Quarterly we sit down and go over everything so there are no surprises in our individual accounts.
Quarterly we sit down and go over everything so there are no surprises in our individual accounts.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
My wife and I still have separate checking accounts, but all financial decisions are made jointly. I feel we are really on the same page, which I think is the key issue.
I think I would probably rather have a single joint account, but I'm just too lazy to do it. I have all these automatic bill-pays and direct deposits set up and so does the wife on each account separately.
I think I would probably rather have a single joint account, but I'm just too lazy to do it. I have all these automatic bill-pays and direct deposits set up and so does the wife on each account separately.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Joint saving, checking, credit cards, and investment accounts.
When we calculate our net worth, we add our 401Ks and IRAs together and manage them as one portfolio.
When we calculate our net worth, we add our 401Ks and IRAs together and manage them as one portfolio.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
It shouldn't matter what WE do. You have to figure out what works for YOU. If you find that what you're trying doesn't work, change it.wootwhoop wrote:I'm getting married in May and would like to poll the forum on how you are set up.
I'm honestly not sure what we'll end up deciding, but we have both agreed that I'll be doing most of the finances since she doesn't like to deal with it. Obviously, IRAs/401ks will be separate since I understand that they only carry one name.
Any words of wisdom?
Don't forget that the spouse that isn't "interested" still needs to know enough to manage if he/she ends up alone, even temporarily (illness, business, military, extended family situations). If you will be signing joint tax returns, you are both legally responsible for what you report on it.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Checking/Savings was what I thought the question was about... so I answered "joint". I think that makes the most sense. My personal opinion is that if you cannot come together on short- and medium-term finances, then I'm not sure marriage makes sense.
We have left any equities we acquired separately separate: So that includes stock awards, inheritance, etc. We've done that mostly because I didn't know what would be involved in changing title, figured that whatever would be required wouldn't be worth it, that the keeping separate of such moneys doesn't actually hurt anything and doesn't reflect anything other than "neatness", etc. - to a great extent, just laziness. More recently, I've come to the conclusion that it might be time to do away with the three separate investment buckets, and so next time reallocation or revision to investment strategy calls for selling what we have in individual accounts, we'll probably deposit the proceeds into the joint account and re-invest the proceeds jointly.
Note that we don't have children. If we did, I would feel the way I feel doubly-so, and probably would have consolidated individual holdings together as joint sooner.
We have left any equities we acquired separately separate: So that includes stock awards, inheritance, etc. We've done that mostly because I didn't know what would be involved in changing title, figured that whatever would be required wouldn't be worth it, that the keeping separate of such moneys doesn't actually hurt anything and doesn't reflect anything other than "neatness", etc. - to a great extent, just laziness. More recently, I've come to the conclusion that it might be time to do away with the three separate investment buckets, and so next time reallocation or revision to investment strategy calls for selling what we have in individual accounts, we'll probably deposit the proceeds into the joint account and re-invest the proceeds jointly.
Note that we don't have children. If we did, I would feel the way I feel doubly-so, and probably would have consolidated individual holdings together as joint sooner.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
My wife and I were older (34/39) than a lot of other first-time married couples when we got married, we both had established financial histories, and we both continued to work at similar jobs with comparable salaries. So we kept our previous checking accounts (where our paychecks get deposited) and set up a new joint account for household expenses and joint activities. We periodically replenish the joint account with equal contributions from our separate accounts. We each pay for our clothes, hobbies, etc. out of our own accounts.
We file a joint tax return so we each know where the other stands as far as investments, retirement accounts etc. are concerned.
We file a joint tax return so we each know where the other stands as far as investments, retirement accounts etc. are concerned.
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We have joint accounts. In theory, my wife might have liked to maintain separate accounts when we were first married (and may have done so for some period of time, I don't recall), but we ended up with joint accounts because it was much simpler to manage. Our budget allows for discretionary spending by each of us; so long as we each stay within our discretionary limits, there's no reason for either of us to exercise oversight of the other.
This system works for us because we share common habits, philosophies, and temperaments about personal finances. That, more so than the structure of the accounts, is the important thing, but if we didn't have that shared understanding then I would imagine separate accounts would be necessary.
This system works for us because we share common habits, philosophies, and temperaments about personal finances. That, more so than the structure of the accounts, is the important thing, but if we didn't have that shared understanding then I would imagine separate accounts would be necessary.
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Joint everything. Except for her Nordstrom card... and she does love her Nordstrom card.......
"Don't be emotional about investing. So even a first investment should not be exciting." - livesoft
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Both.
We figured out our shared monthly costs - rent, utilities, groceries, etc. Divided the total by 2, and we each deposit that amount into a joint account. We use that account to pay those bills. A friend of mine whose income is higher than his wives does a ratio of income (60/40 for instance) into a joint fund like this.
When we were saving for a home downpayment, we just added our goal amount to the shared monthly costs and then transferred over to CDs occasionally. I liked having the same goal and working at it together. For saving, we both put an equal amount into 401k.
Then we each have separate accounts for the rest. I imagine when we have kids, this could change. But it is nice because we are both semi-frugal but spend money on very different things. If we didn't have separate accounts, we might argue about each other's spending even though the net amount is about the same. One other method would be to have all joint, with an equal amount of "spending on anything" (play money) money for both.
Lots of ways to do it. Like others said, as long as you sit down and put together goals and save money, you will be in good shape.
We figured out our shared monthly costs - rent, utilities, groceries, etc. Divided the total by 2, and we each deposit that amount into a joint account. We use that account to pay those bills. A friend of mine whose income is higher than his wives does a ratio of income (60/40 for instance) into a joint fund like this.
When we were saving for a home downpayment, we just added our goal amount to the shared monthly costs and then transferred over to CDs occasionally. I liked having the same goal and working at it together. For saving, we both put an equal amount into 401k.
Then we each have separate accounts for the rest. I imagine when we have kids, this could change. But it is nice because we are both semi-frugal but spend money on very different things. If we didn't have separate accounts, we might argue about each other's spending even though the net amount is about the same. One other method would be to have all joint, with an equal amount of "spending on anything" (play money) money for both.
Lots of ways to do it. Like others said, as long as you sit down and put together goals and save money, you will be in good shape.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
First - congratulations!
I agree with others who say it's really a personal decision that only you and your fiancee can decide.
Here's what's worked for us. We got married in our mid-thirties and both of us had a decent amount of assets for our age and no debt (other than mortgage). We also have similar spending habits and approaches to managing our finances. We decided to have joint accounts for everything that can be joint. We create a budget together and plan our investing strategy, so we are both on the same page here. Neither of us wanted to be subject to getting the other's approval for purchases though. We have a set dollar amount that either of us can spend on things we want without having to discuss with our partner first.
I also agree with other posters who say that although one partner may not be interested in actively managing the details of family finances, it's important that both partners are informed. My father died when my parents were quite young and because he worked in finance, he always managed the family finances. When he died, my mother struggled with taking over this management and made some decisions with a large negative impact now that she is nearing retirement. Some of which could have been avoided if she were better informed.
I agree with others who say it's really a personal decision that only you and your fiancee can decide.
Here's what's worked for us. We got married in our mid-thirties and both of us had a decent amount of assets for our age and no debt (other than mortgage). We also have similar spending habits and approaches to managing our finances. We decided to have joint accounts for everything that can be joint. We create a budget together and plan our investing strategy, so we are both on the same page here. Neither of us wanted to be subject to getting the other's approval for purchases though. We have a set dollar amount that either of us can spend on things we want without having to discuss with our partner first.
I also agree with other posters who say that although one partner may not be interested in actively managing the details of family finances, it's important that both partners are informed. My father died when my parents were quite young and because he worked in finance, he always managed the family finances. When he died, my mother struggled with taking over this management and made some decisions with a large negative impact now that she is nearing retirement. Some of which could have been avoided if she were better informed.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Don't marry unless she is richer than you. Realize that marriage today is a legal fiction; she can dissolve it unilaterally on a whim, and she'll get the kids and most of the money. Even if she commits adultery with an old boyfriend from Facebook who ends up living in your house. Read the following books:wootwhoop wrote:Any words of wisdom?
Women's Infidelity by Michelle Langley
Stolen Vows by Judy Parejko and/or Silent Revolution by Herbert Jacob
Taken Into Custody by Stephen Baskerville
I know you won't listen to me, but the question you are asking is so trivial compared to the questions you should be asking. And save the ad hominem, as I'm happily married myself and believe very much in the institution. I just know the score.
If you still go through with it, read The Married Man Sex Life Primer by Athol Kay.
Depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for [non-financial] reasons. --wbern
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
I agree with this.Toons wrote:To me marriage means joint
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
TMI, friend.Kulak wrote:she can dissolve it unilaterally on a whim, and she'll get the kids and most of the money. Even if she commits adultery with an old boyfriend from Facebook who ends up living in your house.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
We only use joint. I can see some value in having small personal accounts on the side for small personal stuff.This is a personal choice for most people, and both ways work fine.
To some of the comments: I don't really understand keeping pre-marriage stuff separate unless this a late marriage, maybe with kids involved where you want to wall off some funds to bequeath to the kids later. I had what seemed like a substantial amount of networth (though way less than currently) prior to marrying and wife rather not so much. She had a young child I had none. So what would be the point of keeping pre-wedding money to myself? So I could be well off while my wife and step-daughter struggled? So I could take vacations and leave them home? Or maybe I could "treat" them to vacations so they were sort of just lucky I took them? So I could be controlling? Or maybe just be afraid of real commitment, holding back just in case? Yes, that is a negative slant, but I wanted a "real" partnership, not a roommate with privileges.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Same here. All in. We were fortunate enough that when we got married neither of us had debt. But shortly after our engagement we combined our finances so that it wouldn't be a culture shock as newlyweds. 7years later (short compared to some, I know) and money has never been an issue.Toons wrote:To me marriage means joint :
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
This violates the Efficient Market Hypothesis. A marriage should include an invisible hand.Kulak wrote:Don't marry unless she is richer than you. Realize that marriage today is a legal fiction; she can dissolve it unilaterally on a whim, and she'll get the kids and most of the money. Even if she commits adultery with an old boyfriend from Facebook who ends up living in your house. Read the following books:wootwhoop wrote:Any words of wisdom?
Women's Infidelity by Michelle Langley
Stolen Vows by Judy Parejko and/or Silent Revolution by Herbert Jacob
Taken Into Custody by Stephen Baskerville
I know you won't listen to me, but the question you are asking is so trivial compared to the questions you should be asking. And save the ad hominem, as I'm happily married myself and believe very much in the institution. I just know the score.
If you still go through with it, read The Married Man Sex Life Primer by Athol Kay.
Victoria
Inventor of the Bogleheads Secret Handshake |
Winner of the 2015 Boglehead Contest. |
Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
I was in your shoes not long ago. I'm 30, she's about to be 28. We've been married 1 1/2 years. We have joint accounts.
I understand the reasons for separate accounts,...especially in second marriages. In our case joint accounts made the most sense, and frankly, it makes us feel good.
I understand the reasons for separate accounts,...especially in second marriages. In our case joint accounts made the most sense, and frankly, it makes us feel good.
Re: Marriage & Finances - Joint vs. Separate Checking/Saving
The "invisible hand" depends on Rational Choice Theory, which is even more ludicrous in love than in economics!VictoriaF wrote:This violates the Efficient Market Hypothesis. A marriage should include an invisible hand.
Depriving ourselves to boost our 40-year success probability much beyond 80% is a fool’s errand, since all you are doing is increasing the probability of failure for [non-financial] reasons. --wbern
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Re: Marriage & Finances - Joint vs. Separate Checking/Saving
Congratulations!wootwhoop wrote:I'm getting married in May and would like to poll the forum on how you are set up.
I'm honestly not sure what we'll end up deciding, but we have both agreed that I'll be doing most of the finances since she doesn't like to deal with it. Obviously, IRAs/401ks will be separate since I understand that they only carry one name.
Any words of wisdom?
We do joint everything. We also talk a lot about finances and make all major decisions together. Marraige is a partnership and whether you recognize it or not, everything is shared. This includes time, money, happiness and sadness. Keeping separate finances to me is a denial of the fact that you are both in the same boat together. Don't deny it. Embrace it and make the best of it.