Joint or Separate Accounts? - Married Couples

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

Hello All!

I hope this is a simple question. I plan on getting engaged this year and we are trying to figure out our financial standpoint.

I know that I make quite a bit more than my future fiance (~$40K) and I wanted to see how all of you figured out your accounts.

Do you and your wife/husband have separate accounts and one single account in which all the bills are paid from or how did you figure out what the best way for finances is once you got married?
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Joint or Separate Accounts? - Married Couples

Post by sscritic »

Checking, savings, or investments? IRAs can't be joint. As for checking, we always had three: his, hers, and ours.
traveler90
Posts: 206
Joined: Wed Nov 13, 2013 2:46 pm

Re: Joint or Separate Accounts? - Married Couples

Post by traveler90 »

I'm also curious about taxable investment accounts
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

sscritic wrote:Checking, savings, or investments? IRAs can't be joint. As for checking, we always had three: his, hers, and ours.
This would be specific to checking/savings accounts.

For the "ours" what would that consist of? Because we both work (obviously) and our pay check goes into our checking accounts directly. What is allocated into the "ours" account?
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Joint or Separate Accounts? - Married Couples

Post by sscritic »

In my state assets you have before marriage are separate property. If you want to keep them separate you need a separate account.
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Joint or Separate Accounts? - Married Couples

Post by sscritic »

HardHitter wrote:
sscritic wrote:Checking, savings, or investments? IRAs can't be joint. As for checking, we always had three: his, hers, and ours.
This would be specific to checking/savings accounts.

For the "ours" what would that consist of? Because we both work (obviously) and our pay check goes into our checking accounts directly. What is allocated into the "ours" account?
That's up to you. You could put both paychecks into joint for joint bills and then parcel out some to each of the separate accounts for "no one is looking over my shoulder" spending.
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

sscritic wrote:
HardHitter wrote:
sscritic wrote:Checking, savings, or investments? IRAs can't be joint. As for checking, we always had three: his, hers, and ours.
This would be specific to checking/savings accounts.

For the "ours" what would that consist of? Because we both work (obviously) and our pay check goes into our checking accounts directly. What is allocated into the "ours" account?
That's up to you. You could put both paychecks into joint for joint bills and then parcel out some to each of the separate accounts for "no one is looking over my shoulder" spending.
See that is what I'm having trouble understanding right?

Let's say that the total income split is 70% me/30% her, then how would you "parcel out some to each of the separate accounts"? Whatever is left over is a 70%/30% split?
uncaD
Posts: 68
Joined: Mon Jun 24, 2013 12:21 pm

Re: Joint or Separate Accounts? - Married Couples

Post by uncaD »

We have three sets of accounts: his, hers, and ours. 75% of each regular paycheck goes into the ''ours', the remainder goes into the 'his/hers'. 100% of all bonuses go into the 'ours'. Joint expenses are paid out of the 'ours' account; the 'his/hers' accounts are free to be used as the respective owner sees fit, no questions asked. We have never had a serious argument about money in over 5 years of marriage.
Hashy
Posts: 37
Joined: Sun Jan 29, 2012 7:37 am

Re: Joint or Separate Accounts? - Married Couples

Post by Hashy »

When we got married a year and a half ago we each kept our own checking accounts and setup a joint account to be used for bills. We left a small chunk of change in each separate account as 'fun money' and changed out paychecks to be directly deposited into the joint account. We decided to pay all bills, credit cards included, from the joint account. We like earning the cash back from our credit card use and always pay the bills in full, so 99% of what we pay for comes gets charged and paid out of our joint account and the separate accounts haven't really been touched. I'd be interested to hear from others with a similar setup what they use the separate accounts for and how they use those accounts, ie do you write a check or withdraw cash?
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Joint or Separate Accounts? - Married Couples

Post by sscritic »

HardHitter wrote: See that is what I'm having trouble understanding right?

Let's say that the total income split is 70% me/30% her, then how would you "parcel out some to each of the separate accounts"? Whatever is left over is a 70%/30% split?
I wouldn't do it that way. If you jointly make a lot, then you are jointly better off (it's a marriage) in your joint savings and investing. As for separate spending, whether the right amount is $200 a month or $1000 a month, each of you should get the same amount for fun spending (just my opinion).
RNJ
Posts: 863
Joined: Mon Apr 08, 2013 9:06 am

Re: Joint or Separate Accounts? - Married Couples

Post by RNJ »

Everything held jointly since the beginning (~17 yrs). Wouldn't have it any other way. Good luck!
Last edited by RNJ on Fri Mar 07, 2014 7:43 am, edited 2 times in total.
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

uncaD wrote:We have three sets of accounts: his, hers, and ours. 75% of each regular paycheck goes into the ''ours', the remainder goes into the 'his/hers'. 100% of all bonuses go into the 'ours'. Joint expenses are paid out of the 'ours' account; the 'his/hers' accounts are free to be used as the respective owner sees fit, no questions asked. We have never had a serious argument about money in over 5 years of marriage.
That is both what we are leaning to in having a single joint account really to put money in it to pay for our expenses that are shared.

Would you consider the following items to be "shared" payments?

House - I bought the house before we started dating. I current rent one room out to my college friend. After marriage, my housemate would move out and my wife would move in. Do you believe this is a "shared" cost where we both pay the mortgage/home expenses 50/50?

Student/Car Loan Debt - She currently has student and car loan that she is paying. After marriage, do you believe this is a "shared" cost where I will have to pay student/car loan debt 50/50 from my pay checks?
jackholloway
Posts: 1065
Joined: Mon Jul 08, 2013 3:45 pm

Re: Joint or Separate Accounts? - Married Couples

Post by jackholloway »

We started married life tracking all sorts of crud, like the different amounts we each made, then splitting expenses along the same lines. We also had most of her salary swept into her 457, and trued it up later.

After years of this, we realized it was some kind of strange spreadsheet fetish, and simplified. My paycheck goes into joint checks, and all expenses come out of it. Each paycheck and every expense is split into virtual envelopes by our budgeting software, so I can ask at any time how much our vacation or investment virtual envelope has.

A few accounts are kept in joint savings as they will be around longer, and getting a bit of interest (woo hoo 10$ per 10k).

We each have a personal checking account that gifts for each other, or toys, come out of. They get funded each paycheck. When they get low, we put more money in.

Purchases out of joint over about $50 we talk about whether they are joint or personal. Books and movies used to be personal, but last year became joint since we spend close enough that we do not care. Music was joint, until we figured out that I buy a LOT more than she does, and most of it is stuff she hates, so it became personal.

Eventually, we will move half our envelope money from savings to i bonds, but the tracking will stay the same. Not there yet.
jackholloway
Posts: 1065
Joined: Mon Jul 08, 2013 3:45 pm

Re: Joint or Separate Accounts? - Married Couples

Post by jackholloway »

HardHitter wrote:
uncaD wrote:We have three sets of accounts: his, hers, and ours. 75% of each regular paycheck goes into the ''ours', the remainder goes into the 'his/hers'. 100% of all bonuses go into the 'ours'. Joint expenses are paid out of the 'ours' account; the 'his/hers' accounts are free to be used as the respective owner sees fit, no questions asked. We have never had a serious argument about money in over 5 years of marriage.
That is both what we are leaning to in having a single joint account really to put money in it to pay for our expenses that are shared.

Would you consider the following items to be "shared" payments?

House - I bought the house before we started dating. I current rent one room out to my college friend. After marriage, my housemate would move out and my wife would move in. Do you believe this is a "shared" cost where we both pay the mortgage/home expenses 50/50?

Student/Car Loan Debt - She currently has student and car loan that she is paying. After marriage, do you believe this is a "shared" cost where I will have to pay student/car loan debt 50/50 from my pay checks?
Car loan, student loan, home mortgage all sound like plain old debt to me. Money goes in to joint, payments come out.
mlipps
Posts: 1099
Joined: Thu Jun 21, 2012 9:35 am

Re: Joint or Separate Accounts? - Married Couples

Post by mlipps »

My husbands makes $92k & I make $38k, but we have 100% joint checking/savings w/no disagreement. Maybe we're just lucky, but the income discrepancy has not been an issue for us. We have separate credit cards, but I track them from our joint budget & pay them out of our joint account.
flybynite
Posts: 138
Joined: Wed Oct 02, 2013 8:14 pm
Location: DC burbs

Re: Joint or Separate Accounts? - Married Couples

Post by flybynite »

RNJ wrote:Everything held jointly since the beginning (-17 yrs). Wouldn't have it any other way. Good luck!
+1, 15 years here.
schoolboyguy
Posts: 61
Joined: Fri Feb 14, 2014 5:13 pm

Re: Joint or Separate Accounts? - Married Couples

Post by schoolboyguy »

I'm pessimistic and I'm not trying to start a debate, but I would take a hard look at divorce rates before making anything joint....... or getting married.

There's my 2 cents.
I'm out
ddunca1944
Posts: 941
Joined: Fri Apr 01, 2011 1:49 pm

Re: Joint or Separate Accounts? - Married Couples

Post by ddunca1944 »

Everyone does what works for them. When we married, we kept our accounts separate for a while. Over the years (23 now) our system evolved into what it is now.
Joint account -all income goes into it
His account gets $500 mo for his personalfun money
My account gets $500/ mo for my personal fun money
Household expenses are paid from the joint account.
The RMDs from the IRA accounts go into the joint taxable account and are used for energencies and/or travel.
User avatar
Index Fan
Posts: 2587
Joined: Wed Mar 07, 2007 11:13 am
Location: The great Midwest

Re: Joint or Separate Accounts? - Married Couples

Post by Index Fan »

Both approaches are viable. Personality definitely comes into this decision, as does past experience (or lack thereof). It's often more of an emotional issue than anything else.

For security's sake, one could argue more than one account is a good idea (in case one is hacked or has some problem).
Last edited by Index Fan on Thu Mar 06, 2014 5:07 pm, edited 1 time in total.
"Optimum est pati quod emendare non possis." | -Seneca
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

schoolboyguy wrote:I'm pessimistic and I'm not trying to start a debate, but I would take a hard look at divorce rates before making anything joint....... or getting married.

There's my 2 cents.
I'm out
I mean, no one wants to look at the bad side of things. I'm holding out on marriage for a reason and that's because I do not want to go through a divorce or anything specific so I want to be 200% from the both of us that we are both ready and that we are going through this "til death do us part"

With that said though, in a worse case scenario that a divorce does happen. The only things that get split would be anything within a joint account or I guess that's a separate subject to start in its own.

I'm sure all of you discussed this (this meaning joint accounts or separate) prior to getting married as well to ensure you were both on the same page and there were no surprises.
Last edited by Cmpliance on Thu Mar 06, 2014 5:00 pm, edited 1 time in total.
User avatar
rob
Posts: 5247
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: Joint or Separate Accounts? - Married Couples

Post by rob »

We moved very quickly to just all joint stuff.... to the point, I still get caught now and then when I call a credit card company only to find out she is the primary and they will not do something I want e.t.c. We don't bother with split off his/her spending money.... and it's NOT wrong if that works for some. As above.... it's a personality/relationship thing and whatever works work.

It's one of the reasons this her ira, his 401k bother me so much.... because we don't think of it that way.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
User avatar
TomatoTomahto
Posts: 17158
Joined: Mon Apr 11, 2011 1:48 pm

Re: Joint or Separate Accounts? - Married Couples

Post by TomatoTomahto »

We have his, hers, his as representative payee for a child, and ours. Things move relatively fluidly between accounts (I'm a SAHD, so my income is 1% of my wife's).

Because I have two children from a previous marriage and two children with my wife, keeping separate investment accounts simplifies our wills.
I get the FI part but not the RE part of FIRE.
raginrapids
Posts: 10
Joined: Sat Mar 09, 2013 8:24 pm

Re: Joint or Separate Accounts? - Married Couples

Post by raginrapids »

First thing my wife and I did after getting her new SS card and drivers license was create a joint checking account. We have no individual accounts other than tax-advantaged accounts. Our taxable investing and emergency fund (money market) are also held jointly. Our tax-advantaged accounts are managed as one portfolio.

We just felt this was the best way to do it. We have the same life and financial goals and this makes it easier, IMO. There is no "my" money or "your" money, its all "ours." We budget for blow/splurge money each month. Now that my wife is staying at home with our kid and brings in no income- the transition has been smooth because we have done everything jointly.
kingomri
Posts: 46
Joined: Tue Feb 25, 2014 10:19 am

Re: Joint or Separate Accounts? - Married Couples

Post by kingomri »

I highly recommend having joint accounts once you get married (but not before - keep things separate while you're engaged because you're not married until you're married). I haven't been married long (just over a year), but this is how we do it and it works out great. Your salaries aren't your (singular) money and her money, they're your (plural) money. I can't imagine how weird it would be to split bills between the two of you, especially if one of you gets laid off and the other feels like they're bearing an unfair burden or something like that.

One thing my wife and I do that I like, however, which it looks like others have already mentioned, is have small "personal spending" accounts. In our budget is $50/month for each of us, which is plenty for us, since we're both frugal. All of the spending, saving, and budgeting is joint except for that $50/month each. We can spend that money however we want, and gifts to each other come out of that fund. That way, even with joint finances, gifts to each other actually feel like gifts and require some sacrifice on the part of the giver.

As far as your question above about student/car loans, I see it as you are acquiring that debt as well when you get married, and it is absolutely a shared cost. When my wife and I got married, she had around $11k in student loan debt, which I was happy to pay off with the savings I had accrued before marriage (particularly because she was laid off last summer, and because she has been a SAHM since our first baby was born last month).
schoolboyguy wrote:I'm pessimistic and I'm not trying to start a debate, but I would take a hard look at divorce rates before making anything joint....... or getting married.
I quote this because I think it's a common concern worth addressing. My view on this is: If you're making contingency plans in case of divorce, that tells me either you're not certain enough or not committed enough to be getting married in the first place. If finances are a concern and you have serious discrepancies in your spending habits, that's something you need to seriously and solidly hammer out before you get married.
User avatar
yatesd
Posts: 1040
Joined: Sun Nov 03, 2013 7:19 am
Location: MD

Re: Joint or Separate Accounts? - Married Couples

Post by yatesd »

We combined everything right away...didn't even give it a thought. Both names on just about any asset/liability unless it was simply more convenient to just use one. 21 years and counting...
Lars_2013
Posts: 217
Joined: Sun Dec 15, 2013 1:00 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Lars_2013 »

If you do go for joint accounts for most expenses, you may want to retain your individual checking / savings accounts for backup. A colleague with only a joint account with his spouse created a minor household crisis when he lost his wallet and reported their joint bank card and all their credit cards stolen, thereby preventing his wife from being able to get gas, etc. she was pretty annoyed for a few days.

My partner and I were recently married and haven't changed our separate banking and investment arrangement. He owns our primary residence and has the mortgage, I pay him a reasonable rent for a room renter in our area and pay half the utilities. I have a rental property in another state for which I'm responsible for all costs (it used to be my primary residence). We don't worry about truing up groceries, gas, or meals out. In the past we shared use of a car that he brought to the relationship; we recently traded that in and I bought our current car. We do charitable giving separately, but discuss it a bit.

I think both being established adults with somewhat complex financial situations influenced our choice to keep accounts separate.

L
Quickfoot
Posts: 1166
Joined: Fri Jan 11, 2013 12:03 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Quickfoot »

There's no right answer, do what works for you. My first experience with combined bank accounts left me very unhappy and I swore I'd never combine bank accounts with anyone again. I greatly surprised myself and my wife when I suggested we combine bank accounts, most surprising thing was I genuinely wanted to.

I make > 100K and my wife makes in the mid thirties and we have a joint account, that said she has no interest in our financials and I run most things financially. We both maintain our own seperate credit cards (paid in full each month). I keep her very informed of what our accounts look like but she's content to not be involved in the day to day aspects. I'm lucky because she is not a spend thrift.

If your partner is unable to control their spending or follow a budget I'd keep seperate accounts and allocate bills based on the percentage of income. If you can be on the same page maintain 3 accounts, one checking for each of you for fun money and one joint for household expenses and bills. Having only one checking account makes it almost impossible to buy gifts for the other person without them seeing the charge.

Make an investment / financial plan jointly so that you can both be onboard with your financial goals. Also get life insurance on each other (either 20 or 30 year term) when you get married, you'll both be dependant on the other person's income. I actually have both 20 and 30 year policies (issued at the same time) on myself and a 20 year on my wife.
uncaD
Posts: 68
Joined: Mon Jun 24, 2013 12:21 pm

Re: Joint or Separate Accounts? - Married Couples

Post by uncaD »

HardHitter wrote:
uncaD wrote:We have three sets of accounts: his, hers, and ours. 75% of each regular paycheck goes into the ''ours', the remainder goes into the 'his/hers'. 100% of all bonuses go into the 'ours'. Joint expenses are paid out of the 'ours' account; the 'his/hers' accounts are free to be used as the respective owner sees fit, no questions asked. We have never had a serious argument about money in over 5 years of marriage.
That is both what we are leaning to in having a single joint account really to put money in it to pay for our expenses that are shared.

Would you consider the following items to be "shared" payments?

House - I bought the house before we started dating. I current rent one room out to my college friend. After marriage, my housemate would move out and my wife would move in. Do you believe this is a "shared" cost where we both pay the mortgage/home expenses 50/50?

Student/Car Loan Debt - She currently has student and car loan that she is paying. After marriage, do you believe this is a "shared" cost where I will have to pay student/car loan debt 50/50 from my pay checks?
I would probably consider these to be joint expenses.
abracadabra11
Posts: 408
Joined: Sat May 01, 2010 2:09 pm

Re: Joint or Separate Accounts? - Married Couples

Post by abracadabra11 »

My wife and I are in a similar position to you and your wife (income-wise). We made basically the same amount for ~ 4 years, but she now makes about ~40k less than me (after taxes).

We each have our own checking/savings - no joint checking/savings.
I pay all the bills from my account and then she sends me half. We reconcile the difference by me saving more in our taxable account.

Bottom line - this works for us; now you need to figure out what works for you.
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

Thank you all for all of your feedback. It seems as though there is a good mix of separate and joint account couples.

As with anything else in life, I think a sit down and shared discussion with my future fiance is needed to ensure that we are both on the same page.

I know from a spending standpoint, we are both moderate when it comes to saving. I have budgets in place and stick to them to ensure that I am comfortable financially. My future fiance is also careful with money but I think it is due to the fact that she has loans so she understands the importance of saving and paying off debt. Even after 4 years of dating, she still pulls her credit card out if we go to dinner or some adventure to split the cost 50/50 which is impressing seeing that my previous gf's wouldn't even bring their wallet or purse when we went to dinner :greedy
Lars_2013
Posts: 217
Joined: Sun Dec 15, 2013 1:00 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Lars_2013 »

Quickfoot wrote: Make an investment / financial plan jointly so that you can both be onboard with your financial goals. Also get life insurance on each other (either 20 or 30 year term) when you get married, you'll both be dependant on the other person's income. I actually have both 20 and 30 year policies (issued at the same time) on myself and a 20 year on my wife.
I agree about the investment / financial plan. This can also prompt a wider conversation about life goals (Do you want to save a lot while working to be able to travel in retirement? Is passing on money to charitable causes or relatives important to you?)

But if you are not having kids and are not ramping up your lifestyle you may not be dependent on the other person's income. My partner and I are each living below our own means (and could cover the other's share of the rent/mortgage) and therefore do not need life insurance. Purchase insurance you need, but don't purchase insurance you don't need.
User avatar
FrugalInvestor
Posts: 6214
Joined: Thu Nov 06, 2008 11:20 pm

Re: Joint or Separate Accounts? - Married Couples

Post by FrugalInvestor »

HardHitter wrote:
sscritic wrote:Checking, savings, or investments? IRAs can't be joint. As for checking, we always had three: his, hers, and ours.
This would be specific to checking/savings accounts.

For the "ours" what would that consist of? Because we both work (obviously) and our pay check goes into our checking accounts directly. What is allocated into the "ours" account?
Our checking, savings and investment accounts, other than IRAs which must be individual, are joint. Once we were married we considered everything to be 'ours' and have always operated that way. We have always been on the same page as far as finances and financial goals so there has been no friction. One positive side effect is that we both know the other is aware of what is going on financially so there is no temptation to try and slip something by the other. This M.O. has been very positive for our financial health. Transparency is good, for us anyway.
Last edited by FrugalInvestor on Thu Mar 06, 2014 7:38 pm, edited 1 time in total.
Have a plan, stay the course and simplify. Then ignore the noise!
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

I am lucky enough, that if ever needed, I am able to support both myself and my future fiance.

Once marriage happens, I see the following changes in income/costs:

- I lose $1000-$1200 a month of income from my housemate moving out
- I gain the cost of her student and car loan which is estimated to be $42-$52K
- I gain whatever income she brings in which I'm estimating a $50-$60K income before taxes (I currently have a $100K income)
Last edited by Cmpliance on Thu Mar 06, 2014 6:03 pm, edited 1 time in total.
User avatar
rob
Posts: 5247
Joined: Mon Feb 19, 2007 5:49 pm
Location: Here

Re: Joint or Separate Accounts? - Married Couples

Post by rob »

Lars_2013 wrote:If you do go for joint accounts for most expenses, you may want to retain your individual checking / savings accounts for backup. A colleague with only a joint account with his spouse created a minor household crisis when he lost his wallet and reported their joint bank card and all their credit cards stolen, thereby preventing his wife from being able to get gas, etc. she was pretty annoyed for a few days.
It's a fair point and what I do :-
- I never use a debit card - better if you can get them to give you non mc/visa branded debit cards.
- Most of our credit cards are joint BUT I have some that are his/hers... so both of us have cards that are not shared.
- Some of th join accts have his/her card in a safe... so some cards only have 1 card in use.
- I also have an Amex and they use different numbers for each party so you can stop one side and not the other.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
herbie
Posts: 77
Joined: Mon Feb 10, 2014 5:06 pm

Re: Joint or Separate Accounts? - Married Couples

Post by herbie »

For the mechanics of a his/hers/ours system:

All paychecks go into joint. Each month there is an auto-transfer of fun money to his and hers (equal amounts). We each have credit cards in our own name and we have a card we use for joint expenses (like when we go out to eat together). We each pay our individual credit cards from our own checking accounts, and transfer in money for half of the joint card (in reality we put budgeted expenses on there, too, so we have a spreadsheet to track those expenses and calculate the "fun" portion owed).


We both came into the marriage with assets (much larger in my case due to an inheritance) and those are still in our own names, but we haven't added to the accounts or withdrawn any money from them. We paid down his student loan debt from joint money, and purchase cars from joint savings.
jmg229
Posts: 373
Joined: Mon Jan 31, 2011 12:21 pm

Re: Joint or Separate Accounts? - Married Couples

Post by jmg229 »

sscritic wrote:
HardHitter wrote: See that is what I'm having trouble understanding right?

Let's say that the total income split is 70% me/30% her, then how would you "parcel out some to each of the separate accounts"? Whatever is left over is a 70%/30% split?
I wouldn't do it that way. If you jointly make a lot, then you are jointly better off (it's a marriage) in your joint savings and investing. As for separate spending, whether the right amount is $200 a month or $1000 a month, each of you should get the same amount for fun spending (just my opinion).
I'd agree with this. If you are going to do his, hers, ours, I'd make it equal amounts. Personally, we combined accounts as soon as we moved in together (~6 months after being engaged, once we were no longer living on opposite coasts). I don't buy the whole "wait until you are married" argument. To me, getting engaged is the more important action, despite the lack of legal stuff behind it, but that may be just us. Wife made double what I did the year we were engaged, I have made double her since. Never a problem. My question when it comes to the 70/30 split thing is: What are you going to do with your extra 40% that doesn't in some way benefit both of you? Go on vacation without her? Buy a new big TV that only you can watch? To us, all big decisions are joint, all little ones we are free to do within the budget. She wants to go on vacation with her college friends? Fine. I want to go to Vegas with the college buddies. Fine. We want to go to South America together, awesome. I have trouble thinking that different levels of personal money won't lead to resentment at some point.
SimonJester
Posts: 2500
Joined: Tue Aug 16, 2011 12:39 pm

Re: Joint or Separate Accounts? - Married Couples

Post by SimonJester »

flybynite wrote:
RNJ wrote:Everything held jointly since the beginning (-17 yrs). Wouldn't have it any other way. Good luck!
+1, 15 years here.
+1 +1 `15 years for me as well!

Right now keep everything separate but begin talking about how you both handle finances. See if you both are on the same page about spending habits.

One you are married you are working together as one team. Sit down and both of you come up with a monthly budget, you each get an equal vote on where to spend the money where to save the money. Communicate with each other...
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
Topic Author
Cmpliance
Posts: 602
Joined: Wed Jan 08, 2014 10:41 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Cmpliance »

So I sat down with my gf tonight and we went over a "plan"

Paychecks would go into our personal checking accounts. At the beginning of each month, we would deposit a 50/50 amount of total expenses and budgeted items for the month. That way, we can be sure to stick to the budget by checking how much money we have left in the joint account to where we are in the month and what's left to be paid.

Whatever is left over, we would agree on a certain percentage that would go into a joint savings account and this would be an account where we have as an emergency fund but primarily for big purchases (down payment on another house). The remaining percentage is able to be kept into our personal checking or savings.

Here is an example:

- Jan 1 - Both transfer $1,678.50 into joint checking
- Jan 31 - Joint checking account should = $0 or have a surplus if we stayed under the budget for that month of food or anything that is a variable budget
- Jan 31 - We would deposit 50% of our disposable income from our paychecks into the join savings. I would contribute lets say $1,290 and she would contribute $390.75. The remaining $1,290 and $390.75 would be put into our personal savings account.

Now in the end, I'm pretty sure those personal savings accounts will go into the joint savings account, but I have a significant amount in my savings account in comparison to hers ($70k vs ~$5k). My plan for those "savings accounts" would realistically be for my hobby things (cars). I don't want to have to go through a permission process to purchase a car but I know that when I get married, that I have to put the family first and I'm pretty sure that I'll have to think if it really makes sense to put a large amount of money towards another car.

Any thoughts or suggestions based upon our plan?
mnvalue
Posts: 1107
Joined: Sun May 05, 2013 2:22 pm

Re: Joint or Separate Accounts? - Married Couples

Post by mnvalue »

1. Don't run your joint account literally to zero. That's asking for an overdraft. Treat $500 or whatever as "zero".
2. Make sure that retirement savings, sinking funds for expenses (including car replacement!!!), building up the emergency fund, and saving for other goals (house downpayment) is a budgeted item. If you're depending on "money left over" for these things, you will fail.
User avatar
Riceman
Posts: 215
Joined: Sun Aug 11, 2013 5:50 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Riceman »

We also have a personal spending allowance each month, but we didn't create separate accounts that we transfer money into. If we were in a place where credit cards were commonly accepted, we might, but we aren't.

Instead, we add this allowance to our Mint "Budget" tab. We each add our own transactions, and Mint automatically adds to the budget each month. If I didn't spend any one month, the budget shows I'm Negative $$$, so it's easy to track the carryover as well.
User avatar
yatesd
Posts: 1040
Joined: Sun Nov 03, 2013 7:19 am
Location: MD

Re: Joint or Separate Accounts? - Married Couples

Post by yatesd »

HardHitter wrote:So I sat down with my gf tonight and we went over a "plan"

Paychecks would go into our personal checking accounts. At the beginning of each month, we would deposit a 50/50 amount of total expenses and budgeted items for the month. That way, we can be sure to stick to the budget by checking how much money we have left in the joint account to where we are in the month and what's left to be paid.

Whatever is left over, we would agree on a certain percentage that would go into a joint savings account and this would be an account where we have as an emergency fund but primarily for big purchases (down payment on another house). The remaining percentage is able to be kept into our personal checking or savings.

Here is an example:

- Jan 1 - Both transfer $1,678.50 into joint checking
- Jan 31 - Joint checking account should = $0 or have a surplus if we stayed under the budget for that month of food or anything that is a variable budget
- Jan 31 - We would deposit 50% of our disposable income from our paychecks into the join savings. I would contribute lets say $1,290 and she would contribute $390.75. The remaining $1,290 and $390.75 would be put into our personal savings account.

Now in the end, I'm pretty sure those personal savings accounts will go into the joint savings account, but I have a significant amount in my savings account in comparison to hers ($70k vs ~$5k). My plan for those "savings accounts" would realistically be for my hobby things (cars). I don't want to have to go through a permission process to purchase a car but I know that when I get married, that I have to put the family first and I'm pretty sure that I'll have to think if it really makes sense to put a large amount of money towards another car.

Any thoughts or suggestions based upon our plan?
Once you get married, everything should be equal...no, I make more than you, I do more chores...etc. I would split the remaining balance equally. Of course, I wouldn't split it at all. If you have kids are you going to pay her a childbearing fee? :wink:
nostalgic
Posts: 41
Joined: Fri Jan 31, 2014 5:27 am

Re: Joint or Separate Accounts? - Married Couples

Post by nostalgic »

Joint accounts for 11+ years with no problems, arguments or otherwise. I couldn't imagine it any other way.
User avatar
Crimsontide
Posts: 729
Joined: Fri Oct 25, 2013 5:32 pm
Location: DFW Metromess

Re: Joint or Separate Accounts? - Married Couples

Post by Crimsontide »

Once you get married, everything should be equal...no, I make more than you, I do more chores...etc. I would split the remaining balance equally. Of course, I wouldn't split it at all. If you have kids are you going to pay her a childbearing fee? :wink:
+1 had joint accounts all the way for the past 30 years... Also shared the housework, cooking, raising kids, supporting each others careers and educational goals, never an argument over spending. Guess we are just lucky that way...
likegarden
Posts: 3181
Joined: Mon Feb 26, 2007 4:33 pm

Re: Joint or Separate Accounts? - Married Couples

Post by likegarden »

We married 43 years ago and always had common checking and savings accounts. We always had two credit cards for the same Master Card account. We got married and everything became united, except IRAs and 401ks due to laws. I also share in all housework.
The Wizard
Posts: 13356
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: Joint or Separate Accounts? - Married Couples

Post by The Wizard »

Two separate checking accounts is the best way to go, especially if you can get no-fee accounts from your local Credit Union.
Deciding how to pay for various monthly expenses is easy enough to figure out based on income differences.

Since many of us no longer "balance" our checking accounts (see separate thread) by recording all ATM and auto-pay debits in our checkbooks, separate accounts will make money management and planning more deterministic. No potential conflicts where I'm planning to pay a $1500 CC bill in a few days, only to find that the spouse just transferred $1000 from the joint account to her Roth IRA, resulting in a too low balance.

Also good to have separate credit cards, partly so that if one gets compromised, you have ready backup.

As far as a taxable investment account at Vanguard, I see no reason why that shouldn't be JOINT...
Attempted new signature...
linguini
Posts: 262
Joined: Tue Oct 16, 2012 2:49 pm

Re: Joint or Separate Accounts? - Married Couples

Post by linguini »

schoolboyguy wrote:I'm pessimistic and I'm not trying to start a debate, but I would take a hard look at divorce rates before making anything joint....... or getting married.

There's my 2 cents.
I'm out
Individual accounts and joint accounts are both considered joint property in my state, and probably most states really except for non-comingled assets from before the marriage. I don't think this is relevant.
nostalgic
Posts: 41
Joined: Fri Jan 31, 2014 5:27 am

Re: Joint or Separate Accounts? - Married Couples

Post by nostalgic »

The Wizard wrote:Two separate checking accounts is the best way to go, especially if you can get no-fee accounts from your local Credit Union.
Deciding how to pay for various monthly expenses is easy enough to figure out based on income differences.

Since many of us no longer "balance" our checking accounts (see separate thread) by recording all ATM and auto-pay debits in our checkbooks, separate accounts will make money management and planning more deterministic. No potential conflicts where I'm planning to pay a $1500 CC bill in a few days, only to find that the spouse just transferred $1000 from the joint account to her Roth IRA, resulting in a too low balance.

Also good to have separate credit cards, partly so that if one gets compromised, you have ready backup.

As far as a taxable investment account at Vanguard, I see no reason why that shouldn't be JOINT...
I guess most joint-checking-account couples just communicate frequently enough to know when large withdrawals will happen. Credit card bills are especially easy since they will fall on almost the same day every month, for example.

That's what we do and it's works 100% of the time.
linakin
Posts: 152
Joined: Sun May 26, 2013 6:51 am

Re: Joint or Separate Accounts? - Married Couples

Post by linakin »

I would say be careful if you go with percentages since you make a larger salary than her. 10% for you would be twice as much as her since you're salary is 100k compared to her ~50k. This might lead to resentment if you're not both ok with things as you go purchase larger things for yourself since you have more in your own account than she does.
Mike Scott
Posts: 3579
Joined: Fri Jul 19, 2013 2:45 pm

Re: Joint or Separate Accounts? - Married Couples

Post by Mike Scott »

Everything that can be joint is and we hold reciprocal power of attorney documents between us. The financial plan and budget are mutually agreed on although I do most of the number crunching. It's more a philosophy of marriage than a financial planning technique but it works for that as well.
armeliusc
Posts: 549
Joined: Wed Dec 21, 2011 8:40 am

Re: Joint or Separate Accounts? - Married Couples

Post by armeliusc »

We basically pool our income and have "joint" everything that can be joint account, and allocate a fixed amount per month (i.e. $100) for each of us to spend "with no question asked" in two separate account. I put the same amount to our Roth IRAs per year. I happen to make considerably more than DW at this time, and in the future there might be some period of time when DW will stay at home with kids. I feel that the way we do it make the marriage more equal & fair: no one has more say just because they happen to make more income. Everything that we do for fun together or benefit everyone come out of the joint account.
Post Reply