Marriage and splitting expenses
Marriage and splitting expenses
I've been with my spouse for some time, but we've never lived together (married recently, no kids, and currently long-distance because of work), so our finances have been completely separate. We're moving in together this summer, and we're trying to figure out the best way to divide expenses.
Spouse makes $140k and I $70k. Neither have any debt. We live in a HCOL, and rent & household expenses are going to be over $3k a month.
I want to contribute 50-50 to common expenses, but obviously, that leaves spouse with much more free money than me. In particular, an even split will make it tight for me to max out my 401k. I'm sure many of you have dealt with this sort of situation. What's the best way to handle it? Some options I was considering:
1. Each person contributes proportionally to their income.
2. We contribute 50-50, but spouse "reimburses" me for part of my 401k and Roth, given that my retirement savings are beneficial to both of us.
3. Spouse pays for most of the rent, but I pay for groceries, utilities, travel, etc.
4. Other ideas?
Spouse makes $140k and I $70k. Neither have any debt. We live in a HCOL, and rent & household expenses are going to be over $3k a month.
I want to contribute 50-50 to common expenses, but obviously, that leaves spouse with much more free money than me. In particular, an even split will make it tight for me to max out my 401k. I'm sure many of you have dealt with this sort of situation. What's the best way to handle it? Some options I was considering:
1. Each person contributes proportionally to their income.
2. We contribute 50-50, but spouse "reimburses" me for part of my 401k and Roth, given that my retirement savings are beneficial to both of us.
3. Spouse pays for most of the rent, but I pay for groceries, utilities, travel, etc.
4. Other ideas?
Re: Marriage and splitting expenses
Seems like expenses are well below income here.
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
I wish I had learned about index funds 25 years ago
Re: Marriage and splitting expenses
Combine incomes and think of it as one pot? Max out eachother's savings accounts equally each year. Consult each other before big purchases but also let each person have monthly fun money. If the person with the much higher income agrees to this then it would work perfect!
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Re: Marriage and splitting expenses
5. Since you're married and (hopefully) joined for life you pool your incomes and pay everything from the $210K pot. It's no longer my money and spouse's money. It's our money.
The surest way to know the future is when it becomes the past.
Re: Marriage and splitting expenses
I think we're a little wary of fully combining assets right away... giving up financial freedom and privacy so suddenly may not be the best idea. Perhaps after a year or so.JoinToday wrote:Seems like expenses are well below income here.
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
Also, we're trying to aggressively save for a downpayment, so if you include that in the "expenses", it's not all that much below the income.
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Re: Marriage and splitting expenses
Trying to bite my tongue here, but it doesn't seem you're really married except in a legal sense. What really concerns me is the comment on privacy. Keeping secrets from each other isn't the best way to run a marriage. End of mini-rant.thedele wrote:I think we're a little wary of fully combining assets right away... giving up financial freedom and privacy so suddenly may not be the best idea. Perhaps after a year or so.JoinToday wrote:Seems like expenses are well below income here.
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
The surest way to know the future is when it becomes the past.
Re: Marriage and splitting expenses
Maybe privacy was the wrong word to use -- it's not secrecy. Just in the same way that having separate e-mail accounts, or having separate hobbies are healthy, I think it's important to have some financial freedom of our own. I'd like to be able to buy gifts for my spouse without them seeing it appear on the bill, for example.
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Re: Marriage and splitting expenses
There are other ways to achieve that:thedele wrote:Maybe privacy was the wrong word to use -- it's not secrecy. Just in the same way that having separate e-mail accounts, or having separate hobbies are healthy, I think it's important to have some financial freedom of our own. I'd like to be able to buy gifts for my spouse without them seeing it appear on the bill, for example.
- separate credit cards,
- separate deposit accounts with small balances.
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Re: Marriage and splitting expenses
That's where the idea of an allowance suggested by Sents could apply. If you have an allowance you can spend it on whatever you want.thedele wrote:Maybe privacy was the wrong word to use -- it's not secrecy. Just in the same way that having separate e-mail accounts, or having separate hobbies are healthy, I think it's important to have some financial freedom of our own. I'd like to be able to buy gifts for my spouse without them seeing it appear on the bill, for example.
The surest way to know the future is when it becomes the past.
Re: Marriage and splitting expenses
This is a little off topic, but I believe in 3 things: 1. Simplify, 2. Simplify, and 3. Simplify some more.
A few years back I cancelled a pile of credit cards, reduced accounts, etc, so I have much less to keep track of. One checking account (but 4 check books: one for bills in the bill box, one in my car, one in wife's purse, and one in my golf bag ). Everything gets paid out of the checking acct. Everything: credit card bills, utility bills, taxes, checks, etc. I only need to look at the total debits at the end of the year to see how much we spent for the year.
Your spouse makes 2x what you make. Combine assets. (Just dont get on your spouse's case if he buys a $500 driver, $350 Titleist Scotty Cameron putter, cordless screwdriver, etc. )
Simplify. It pays dividends.
A few years back I cancelled a pile of credit cards, reduced accounts, etc, so I have much less to keep track of. One checking account (but 4 check books: one for bills in the bill box, one in my car, one in wife's purse, and one in my golf bag ). Everything gets paid out of the checking acct. Everything: credit card bills, utility bills, taxes, checks, etc. I only need to look at the total debits at the end of the year to see how much we spent for the year.
Your spouse makes 2x what you make. Combine assets. (Just dont get on your spouse's case if he buys a $500 driver, $350 Titleist Scotty Cameron putter, cordless screwdriver, etc. )
Simplify. It pays dividends.
I wish I had learned about index funds 25 years ago
Re: Marriage and splitting expenses
This is the way my wife and I have done it. We both have had separate bank accounts since before we were married and we have our direct deposits set up to our respective bank accounts. We have separate credit cards which we pay off with our separate bank accounts. For all the money left over after paying off our separate credit cards, we transfer that money to a joint online savings account with ~1% interest. We use that as our emergency fund, short term savings, source for funding our taxable account, etc. We have found this to be a good solution for us. It lets us keep track of our spending separately, but still have all of our savings in the same place long-term. Of note, we don't have a "budget"; we just trust each other's spending and overall spend a very low percentage of our income. If strict budgeting is a concern, this solution is a little harder to monitor.thedele wrote:Maybe privacy was the wrong word to use -- it's not secrecy. Just in the same way that having separate e-mail accounts, or having separate hobbies are healthy, I think it's important to have some financial freedom of our own. I'd like to be able to buy gifts for my spouse without them seeing it appear on the bill, for example.
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Re: Marriage and splitting expenses
^ That sounds like a good plan. My lady and I have our own accounts as well, and our trust is absolute. That is the important piece. We both do basically whatever we want. None of this "checking in" nonsense. I cringe when I see these "I need to check with my spouse" posts; who the heck wants to live like that? And OP, nothing wrong with keeping some autonomy. I think a lot of relationships would be healthier when each person has some space, as you have indicated. Sounds smart to me.
Re: Marriage and splitting expenses
Option 1, paying the same percentage of your income, seems like an equitable arrangement if you don't want to mix finances. It also seems to create good incentives for both parties to save and spend. This is not how my wife and I do it (we pool everything), but it's what I would propose if my wife wanted to keep accounts separate. You should just make sure to clarify what type of expenses are common and proportionally divided, and what type are not.
Re: Marriage and splitting expenses
My spouse and I use option 1 and what we also did was figure out how much was needed to run our household on a monthly basis, with a cushion for unexpected emergencies and/or short term savings. Then we each contribute enough, based on salary, to deposit that amount into a joint "house" account. Out of that house account I pay all the ongoing bills and each month I try to go over the spending and what's in the account, although he doesn't usually seem too interested. This system works very well when there is a disparity in income as in this situation. For years when our kids were young and I worked part time our percentages were something like 90 (him) 10 (me). As I ramped back up we got to 50/50 but the beauty of percentage budgeting is it accommodates any balance of income very easily.
We each contribute to our 403b plans at work, and we each have our own bank accounts with checking and savings individually. When we've had situations in which we need more money for something we just figure out how much we need to put into the house account and make the deposit. Just did that last week in fact to buy a new engine for our boat. I know exactly how much is in his individual accounts and vice versa. He is a much more 'frugal' saver than I am, so his cash cushion is huge and that serves, for example, as the emergency fund/ballast in our overall financial picture. But we certainly don't look at our entire pool of funds, in whichever accounts, as not being a resource for us as a couple, far from it.
It works great for us and there are no trust issues--people who can't fathom anything other than 'put it one pot' are just judging based on their own experience. There's nothing magic or marriage-enhancing about the way in which a couple chooses to manage money in my opinion. What is magic and marriage-enhancing is having a system that works for both partners, that doesn't cause conflict and perhaps most important that leaves each person feeling respected, comfortable and empowered.
I agree with the comment about cringing when I read or hear of people asking permission for spending, or never spending without running it by a spouse. We definitely communicate with each other and in practice 99.9% of our finances are managed for the good of our family. However I made a vow when I was first earning a living that I would never put myself in a position of asking permission to spend my own money nor would I expect a partner to ask me.
We each contribute to our 403b plans at work, and we each have our own bank accounts with checking and savings individually. When we've had situations in which we need more money for something we just figure out how much we need to put into the house account and make the deposit. Just did that last week in fact to buy a new engine for our boat. I know exactly how much is in his individual accounts and vice versa. He is a much more 'frugal' saver than I am, so his cash cushion is huge and that serves, for example, as the emergency fund/ballast in our overall financial picture. But we certainly don't look at our entire pool of funds, in whichever accounts, as not being a resource for us as a couple, far from it.
It works great for us and there are no trust issues--people who can't fathom anything other than 'put it one pot' are just judging based on their own experience. There's nothing magic or marriage-enhancing about the way in which a couple chooses to manage money in my opinion. What is magic and marriage-enhancing is having a system that works for both partners, that doesn't cause conflict and perhaps most important that leaves each person feeling respected, comfortable and empowered.
I agree with the comment about cringing when I read or hear of people asking permission for spending, or never spending without running it by a spouse. We definitely communicate with each other and in practice 99.9% of our finances are managed for the good of our family. However I made a vow when I was first earning a living that I would never put myself in a position of asking permission to spend my own money nor would I expect a partner to ask me.
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Re: Marriage and splitting expenses
I would combine incomes into one pot from now on, but keep your individual assets from before the marriage separate. This gives you the best of both worlds - sharing and independence. Be careful that the before-marriage assets are actually kept separate. If you mingle them in mutual accounts, etc. some or all of that is lost.thedele wrote:I think we're a little wary of fully combining assets right away... giving up financial freedom and privacy so suddenly may not be the best idea. Perhaps after a year or so.JoinToday wrote:Seems like expenses are well below income here.
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
Also, we're trying to aggressively save for a downpayment, so if you include that in the "expenses", it's not all that much below the income.
I would also definitely have a separate ongoing pot of money for each person to spend as they like.
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Re: Marriage and splitting expenses
There is no separate anything.
This is like social security. People imagine that they have been putting in their share for years and will get their share when they retire. The reality is that people put their share into a one big pot. Nobody has their own share. That's called divorce. If you need your own account/money, then the accounts can be marked "mine" and "my Ex's".
This is like social security. People imagine that they have been putting in their share for years and will get their share when they retire. The reality is that people put their share into a one big pot. Nobody has their own share. That's called divorce. If you need your own account/money, then the accounts can be marked "mine" and "my Ex's".
Bogle: Smart Beta is stupid
Re: Marriage and splitting expenses
Joint accounts or separate accounts for married couples?
http://www.bogleheads.org/forum/viewtop ... 2&t=149856
http://www.bogleheads.org/forum/viewtop ... 2&t=149856
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Re: Marriage and splitting expenses
Have you bought a house and not gotten insurance, Jack? Do you look both ways before you cross the street?Jack FFR1846 wrote:There is no separate anything.
This is like social security. People imagine that they have been putting in their share for years and will get their share when they retire. The reality is that people put their share into a one big pot. Nobody has their own share. That's called divorce. If you need your own account/money, then the accounts can be marked "mine" and "my Ex's".
Re: Marriage and splitting expenses
Similar here. Though with kids.
All money goes into a common pot. We spend on what we need first, including savings. We spend on wants next and sometimes that is more for me and sometimes more for wife (and kids of course). This requires some negotiating if wants are greater than the amount available. Often there is something left over and that goes into liquid savings. Every once in a while, say for vacation our wants exceed what is available and we hit the liquid account (or say we need a new car).
There is no his or her money, there is only our money. My wife makes less money but does not work less hard. Why should she have less spending money?
I highly recommend if you guys are partners vs roommates that you adopt an Our attitude to your life.
We don't have his and her play money accounts but I can see that working out well for many people. That gets funded however you negotiate, but one does not get more simply because they make more money.
Just my two cents, you'll work out whatever seems best to you.
Good luck
All money goes into a common pot. We spend on what we need first, including savings. We spend on wants next and sometimes that is more for me and sometimes more for wife (and kids of course). This requires some negotiating if wants are greater than the amount available. Often there is something left over and that goes into liquid savings. Every once in a while, say for vacation our wants exceed what is available and we hit the liquid account (or say we need a new car).
There is no his or her money, there is only our money. My wife makes less money but does not work less hard. Why should she have less spending money?
I highly recommend if you guys are partners vs roommates that you adopt an Our attitude to your life.
We don't have his and her play money accounts but I can see that working out well for many people. That gets funded however you negotiate, but one does not get more simply because they make more money.
Just my two cents, you'll work out whatever seems best to you.
Good luck
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 and splitting expenses
We have a rule that solves the splitting expenses issues: "What is mine is hers and what is hers is hers."
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
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Re: Marriage and splitting expenses
+1 Just to addRodc wrote:Similar here. Though with kids.
All money goes into a common pot.
Every job success either of us had was due to the partner's unending support, tolerance, encouragement and willingness to pick up the slack. So my wife's pay raise was OUR pay raise and vice versa.
Oh, and its OUR kids not 42.1 % mine and 57.9 % hers.
And it's OUR retirement, and OUR house.
It's even OUR whim fun expenditures.
Re: Marriage and splitting expenses
My wife and I have two separate accounts with cash in them. We never use them, but they are there. It's enough cash for a short term emergency; not significant compared to our assets, but not an insignifigant sum.
Not once in eight years of marriage have we discovered gifts bought for each other despite using the same credit cards and it's not like we don't look at the bills (it's also not like the bills suggest what we purchased, only where). I just don't see a legitimate "privacy" issue there. Are y'all being honest with yourselves about this?
I understand that you haven't lived together, but that is all the more reason that this is stuff that needs to be worked out immediately, not a year from now. Disagreements about money can cause serious strain on your marriage, a risk with infinitesmally greater consequences than discovering each others gifts.
If it were me, I would maintain a separate account and perhaps agree on an equal amount that goes into each account each month if you really need to have that. Everything else after that goes into the main joint account (after 401k and other deductions). I know some people divide up expenses, but I don't see the necessity for a first time marriage with no children on either side. If there is a reason, there might be a problem in the first place.
The big thing is that you need to be discussing this with your spouse. You may just be seeking advice before doing so, but if you are more comfortable discussing this with strangers than your betrothed, there's another red flag. Resolve it immediately.
I'd suggest a long weekend together where you can work these issues out. Have a few fun things planned during the weekend to give you a break every so often, but get it done. The real time to do this was before getting married, but I'd be afraid if you wait too long, the more difficult it will be to discuss and "impose" on each other down the road.
Good luck,
JT
Not once in eight years of marriage have we discovered gifts bought for each other despite using the same credit cards and it's not like we don't look at the bills (it's also not like the bills suggest what we purchased, only where). I just don't see a legitimate "privacy" issue there. Are y'all being honest with yourselves about this?
I understand that you haven't lived together, but that is all the more reason that this is stuff that needs to be worked out immediately, not a year from now. Disagreements about money can cause serious strain on your marriage, a risk with infinitesmally greater consequences than discovering each others gifts.
If it were me, I would maintain a separate account and perhaps agree on an equal amount that goes into each account each month if you really need to have that. Everything else after that goes into the main joint account (after 401k and other deductions). I know some people divide up expenses, but I don't see the necessity for a first time marriage with no children on either side. If there is a reason, there might be a problem in the first place.
The big thing is that you need to be discussing this with your spouse. You may just be seeking advice before doing so, but if you are more comfortable discussing this with strangers than your betrothed, there's another red flag. Resolve it immediately.
I'd suggest a long weekend together where you can work these issues out. Have a few fun things planned during the weekend to give you a break every so often, but get it done. The real time to do this was before getting married, but I'd be afraid if you wait too long, the more difficult it will be to discuss and "impose" on each other down the road.
Good luck,
JT
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Re: Marriage and splitting expenses
Your examples are of independent actions not dependent actions. Buying insurance is independent of the house. and looking both ways is independent of the driver. The two events do not affect one another.dolphinsaremammals wrote:Have you bought a house and not gotten insurance, Jack? Do you look both ways before you cross the street?Jack FFR1846 wrote:There is no separate anything.
This is like social security. People imagine that they have been putting in their share for years and will get their share when they retire. The reality is that people put their share into a one big pot. Nobody has their own share. That's called divorce. If you need your own account/money, then the accounts can be marked "mine" and "my Ex's".
When I use a crosswalk near my house that has no light I hold up my cell phone in camera style so the drivers can see it. That affects their actions, so we are no longer independent actors.
Nothing is a marriage is "independent". Everything affects the relationship.
Last edited by Professor Emeritus on Thu Apr 23, 2015 7:05 am, edited 1 time in total.
Re: Marriage and splitting expenses
Sorry, don't have any helpful hints. We've always combined.
But anticipating some new perspective as some of our friends do this (long term) and we've always been curious to see how that works. Been too scared to ask them money questions.
But anticipating some new perspective as some of our friends do this (long term) and we've always been curious to see how that works. Been too scared to ask them money questions.
Re: Marriage and splitting expenses
Combine everything possible and give each other an allowance/blow money each week/two weeks/month whatever works for you. Use that money in cash to spend however you want "secretly" without guilt (gifts, separate lunches when not together, random gum/pop/etc. at gas stations, etc.). Pay for bills/retirement/investments out of a combined checking account, and save in a separate account for big purchases (down payment). Communicate about your budget and spending, and have a set limit of if something costs more than "$X" (say $500) you need to talk to the spouse before spending the money. We personally use a "zero-based budget" spreadsheet each month to put in income and expenses and "spend" aka allocate all of the money before the month begins. We adjust slightly as needed, but there are very few surprises after doing this for a couple months.
Re: Marriage and splitting expenses
Love that.bengal22 wrote:We have a rule that solves the splitting expenses issues: "What is mine is hers and what is hers is hers."
My wife likes to pay with cash, I hate standing in line to pay for anything and never carry cash. So... she pays for everything whenever we go out. And she gives the kids cash to spend on little trinkets. My 4 y.o. thinks I'm broke. It's hilarious.
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Re: Marriage and splitting expenses
Frankly speaking, this was a conversation to have had way before you tied the knot.
Use one checking account - all net income goes in, all expenses get paid out of it. If you want to have some autonomy, each person takes out X dollars per pay period (let's call it $100 each), spend it or save it your choice. Expenditures over a certain amount (let's call it $250) gets mentioned to the other spouse so you are on the same page. There is no "I" in a marriage, there is "we" or "us". It's "we" make $210, not I make X, he makes Y. If you had any assets pre-marriage, I would keep them segregated in your name only and the same for your spouse. If you want to make an expenditure and your weekly blow money doesn't cover it, you can take it from your "pre-marriage" account. Anything earned from day 1 of marriage is "joint". Each spouse should have their own individual credit card - pay the bill out of the joint checking account. If you're planning on buying a house that becomes your home together, what will you do then? He pays the water bill, I pay the telephone bill, he pays half the mortgage, I pay the other half? No, no, no, no.......every bill gets paid out of the joint checking account where all of the net pay goes in. To do otherwise will create BIG problems down the road, plus be a "pia" when having to pay bills.
I've seen this "he pays this, she pays that" scenario play out before with relatives, it's never pretty, inevitably it leads to arguments because of things like this 1) she takes money out the ATM and doesn't tell me, then the checks start bouncing because I thought we had our budget all worked out, turns out we didn't and now we are in hot water with our creditors, 2) he spends money with reckless abandon, blow money for us was supposed to be $50 a week, until he arbitrarily decided to give himself a raise without telling me - he's been taking out a $100 a week spending it on god knows what, and now we have a huge hole in the budget. Those are just a few examples of what has created marital difficulties due to poor communication and listening skills that revolve around household finances.
My spouse and I keep one checkbook, we both know where it is, we know what are expenses are per month, we both have an ATM card linked to it, funds go in and funds go out. We sit down for a few minutes a month and go over finances. There are "no" secrets.
Good Luck! You still have time to "fix" it before it gets out of control.
Use one checking account - all net income goes in, all expenses get paid out of it. If you want to have some autonomy, each person takes out X dollars per pay period (let's call it $100 each), spend it or save it your choice. Expenditures over a certain amount (let's call it $250) gets mentioned to the other spouse so you are on the same page. There is no "I" in a marriage, there is "we" or "us". It's "we" make $210, not I make X, he makes Y. If you had any assets pre-marriage, I would keep them segregated in your name only and the same for your spouse. If you want to make an expenditure and your weekly blow money doesn't cover it, you can take it from your "pre-marriage" account. Anything earned from day 1 of marriage is "joint". Each spouse should have their own individual credit card - pay the bill out of the joint checking account. If you're planning on buying a house that becomes your home together, what will you do then? He pays the water bill, I pay the telephone bill, he pays half the mortgage, I pay the other half? No, no, no, no.......every bill gets paid out of the joint checking account where all of the net pay goes in. To do otherwise will create BIG problems down the road, plus be a "pia" when having to pay bills.
I've seen this "he pays this, she pays that" scenario play out before with relatives, it's never pretty, inevitably it leads to arguments because of things like this 1) she takes money out the ATM and doesn't tell me, then the checks start bouncing because I thought we had our budget all worked out, turns out we didn't and now we are in hot water with our creditors, 2) he spends money with reckless abandon, blow money for us was supposed to be $50 a week, until he arbitrarily decided to give himself a raise without telling me - he's been taking out a $100 a week spending it on god knows what, and now we have a huge hole in the budget. Those are just a few examples of what has created marital difficulties due to poor communication and listening skills that revolve around household finances.
My spouse and I keep one checkbook, we both know where it is, we know what are expenses are per month, we both have an ATM card linked to it, funds go in and funds go out. We sit down for a few minutes a month and go over finances. There are "no" secrets.
Good Luck! You still have time to "fix" it before it gets out of control.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Marriage and splitting expenses
That's a good lesson in and of itself. Teach the 4 y.o. to save, not be reliant on credit and seek an occupation that permits one to pay the bills and hopefully a few extras in life.tphp99 wrote:Love that.bengal22 wrote:We have a rule that solves the splitting expenses issues: "What is mine is hers and what is hers is hers."
My wife likes to pay with cash, I hate standing in line to pay for anything and never carry cash. So... she pays for everything whenever we go out. And she gives the kids cash to spend on little trinkets. My 4 y.o. thinks I'm broke. It's hilarious.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Marriage and splitting expenses
It's not about asking permission. It's about courtesy and showing respect to your spouse. Marriage is more than two people sharing the same bed with a piece of paper to make it legal and each one doing his own thing the rest of the time.DualIncomeNoDebt wrote:.... We both do basically whatever we want. None of this "checking in" nonsense. I cringe when I see these "I need to check with my spouse" posts; who the heck wants to live like that? ....
The surest way to know the future is when it becomes the past.
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Re: Marriage and splitting expenses
My partner and I do a combination of 1 and 2a. We used to split everything 50/50, but then her income increased and we had a child (adding the cost of daycare to our expenses), so now we split the mortgage and daycare 60/40, and everything else is 50/50. We have one joint checking account for paying bills, and one joint credit card to use for most of our joint expenses. Everything else is separate.thedele wrote: 1. Each person contributes proportionally to their income.
2. We contribute 50-50 ...
Re: Marriage and splitting expenses
I'm going to chime in to say the only "best way" is what the two of you agree on. I know people who have used the suggested options and made it work, and people who failed using them.
I know what works for us- everything is shared, no separate accounts, and we discuss purchases over $100) and others think it's crazy, and vice versa. The "purchases over $100" discussions end up 99.8% of the time as "Sure, that's OK" in under 2 minutes. It is about communication and working together, and very little about approval. That said, neither of us really want purchased gifts from each other so the need to buy them secretly doesn't factor in.
But I do strongly suggest that you start discussing this now as a couple, the sooner the better.
I know what works for us- everything is shared, no separate accounts, and we discuss purchases over $100) and others think it's crazy, and vice versa. The "purchases over $100" discussions end up 99.8% of the time as "Sure, that's OK" in under 2 minutes. It is about communication and working together, and very little about approval. That said, neither of us really want purchased gifts from each other so the need to buy them secretly doesn't factor in.
But I do strongly suggest that you start discussing this now as a couple, the sooner the better.
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Re: Marriage and splitting expenses
My wife always said I could buy any kitchen equipment I needed without asking her. I could always buy a new vacuum cleaner, a new iron or even a new washer and dryer without checking. She bought any computer she wanted.cheese_breath wrote:It's not about asking permission. It's about courtesy and showing respect to your spouse. Marriage is more than two people sharing the same bed with a piece of paper to make it legal and each one doing his own thing the rest of the time.DualIncomeNoDebt wrote:.... We both do basically whatever we want. None of this "checking in" nonsense. I cringe when I see these "I need to check with my spouse" posts; who the heck wants to live like that? ....
Worked for us
Re: Marriage and splitting expenses
Obviously there are many ways to arrange the finances of a couple, and I agree that the most important thing is that the plan is openly discussed and agreed to by both people.
With that said, we are and have always been (23 years married) in the "one big pot" camp and I can't imagine it any other way. There has never been a "mine vs. yours" discussion - just ours. I would be worried that seperating could create stress or resentment or guilt or whatever, especially if there is a large income disparity, or one decides to stay home with children. I think handling of money reveals much about the person and their priorities.
With that said, we are and have always been (23 years married) in the "one big pot" camp and I can't imagine it any other way. There has never been a "mine vs. yours" discussion - just ours. I would be worried that seperating could create stress or resentment or guilt or whatever, especially if there is a large income disparity, or one decides to stay home with children. I think handling of money reveals much about the person and their priorities.
Re: Marriage and splitting expenses
My views are largely those of cheese_breath, but I sense the OP's initial comment is being overlooked--e.g., "I've been with my spouse for some time, but we've never lived together."
I've never been involved in a commuter marriage, but it's not difficult for me to see that if folks have been living separately for a majority of the time they have not been married in a "conventional" sense.
My suggestion is that as you live together let things take shape and see if you can develop and sustain a full marital relationship--a sense of "our," as has been suggested. And if you can't work things out, it's not likely your marriage will last.
Lev
I've never been involved in a commuter marriage, but it's not difficult for me to see that if folks have been living separately for a majority of the time they have not been married in a "conventional" sense.
My suggestion is that as you live together let things take shape and see if you can develop and sustain a full marital relationship--a sense of "our," as has been suggested. And if you can't work things out, it's not likely your marriage will last.
Lev
Re: Marriage and splitting expenses
+1 to Levett's comment.
Re: Marriage and splitting expenses
You can fund the special accounts with cash. You are looking for simplicity and efficiency. You are loosing all those benefits when you have separate accounts. It is more expensive to have multiple accounts. Why don't you use the same logic for splitting household chores and even eating? Take the percentage of your weight as a couple and you are only allowed to eat that percentage of food and only have to do that percent of household chores? Trust each other fully and your marriage and finances will grow exponentially.thedele wrote:Maybe privacy was the wrong word to use -- it's not secrecy. Just in the same way that having separate e-mail accounts, or having separate hobbies are healthy, I think it's important to have some financial freedom of our own. I'd like to be able to buy gifts for my spouse without them seeing it appear on the bill, for example.
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Re: Marriage and splitting expenses
Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
Re: Marriage and splitting expenses
JoinToday wrote:Seems like expenses are well below income here.
How about:
1. both contribute the maximum to 401k, IRA, etc
2. combine the remaining assets (after taxes, etc)
3. Spend what needs to be spent
4. Save what isn't spent.
What does your spouse want?
+1
Not a fan of the "his" money and "her" money approach.
Re: Marriage and splitting expenses
This is a non sequitur, unless I am missing something here! What does standing in the line to pay have to do with paying with cash or not?tphp99 wrote:[...]My wife likes to pay with cash, I hate standing in line to pay for anything and never carry cash. So... she pays for everything whenever we go out.[...]
Re: Marriage and splitting expenses
I suspect that those who "wallow" have a lower divorce rate than those that don't.dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
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Re: Marriage and splitting expenses
[OT comment removed by admin LadyGeek]dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
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Re: Marriage and splitting expenses
Although *now* I can't fathom a "my money" and "your money" kind of thing (it's not necessarily 2 different sexes anymore, and never was for those co-habiting), it wasn't always quite this way.Levett wrote:My views are largely those of cheese_breath, but I sense the OP's initial comment is being overlooked--e.g., "I've been with my spouse for some time, but we've never lived together."
I've never been involved in a commuter marriage, but it's not difficult for me to see that if folks have been living separately for a majority of the time they have not been married in a "conventional" sense.
My suggestion is that as you live together let things take shape and see if you can develop and sustain a full marital relationship--a sense of "our," as has been suggested. And if you can't work things out, it's not likely your marriage will last.
Lev
We married later in life, so we each *definitely* had our own way of doing things, and not just in terms of money.
Did I mention *definitely*?
(We didn't officially share a single residence until about 3 years before marrying. So the "privacy" thing, by the time one is approaching mid-life stages, well... yes... VERY different from my first marriage, approx college age, where we were sort of "starting life together".)
But over the years, we've gone to one combined personal checking account and one business account, both where either of us can sign.
We've got linked sub-accounts to receive things like Social Security, so we don't give out the main account number.
And I think I've still got one charge card that isn't shared ('shared" meaning each of us has a copy with our own name, whether or not the number is different), but DH pays them all. I double check occasionally to be sure there's no fraud, or he'll ask, "Did you buy something from Pluto?")
The ONE thing I don't like is... it is so difficult to arrange surprises!
Sometimes, with the "Pluto" question, I'll just say, "Yes, but don't ask"
But too often the name of the vendor isn't "Pluto", and is a dead giveaway.
For those with "my money" and "your money", what will you do when one of you retires first?
Assuming the remaining income is enough for current living expenses (no longer saving, etc.), will that one person need to live in reduced circumstances in terms of spending money?
I suspect in most cases, there will be adjustments and changes as life circumstances change, perhaps children arrive (and maybe time off from outside work for one parent?), or goals and needs change.
What really matters is that BOTH spouses/partners truly agree on the arrangement, and that either can speak up if it's not quite working once set in place (or life changes).
What probably is *not* okay is "secrets" (other than temporarily for surprises!), unless the couple is going the "Ashley Madison method" of marriage (or cohabiting).
And that's totally different in many ways.
RM
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Re: Marriage and splitting expenses
Now that's a stretch....I wouldn't say that with certainty. They can last, but the quality of it or the "happiness" factor may be rather low. There are plenty of married folks who stay together according to the vows taken, but not all of them are or were happy in it. Don't be deceived by the passage of time, a smiling picture, etc. You don't know what goes on behind closed doors. Marriage isn't a bowl of cherries, it can be, but not 100% of the time. It's not a fairytale in the land of perfection. Some have zero financial issues, but have children - thinking it will "improve" their situation, usually it just creates more issues and now involves a person who didn't ask to be included in their mess. Then, they stay in it for the "sake of the children", feelings of insecurity, helplessness, financially dependent on spouse, etc. The use of divorce should not be considered a trait of failure, sometimes you never know who it is you're with and people do change (not always for the better either). But you'd have to be in one of those relationships to know what I'm saying here.Levett wrote:My views are largely those of cheese_breath, but I sense the OP's initial comment is being overlooked--e.g., "I've been with my spouse for some time, but we've never lived together."
I've never been involved in a commuter marriage, but it's not difficult for me to see that if folks have been living separately for a majority of the time they have not been married in a "conventional" sense.
My suggestion is that as you live together let things take shape and see if you can develop and sustain a full marital relationship--a sense of "our," as has been suggested. And if you can't work things out, it's not likely your marriage will last.
Lev
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Re: Marriage and splitting expenses
74 year old wallower here with a 68 year old wallowing wife. We've always wallowed together from the day we got married 39 years ago. Apparently we're still not old enough or learned enough to wallow separately.dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
The surest way to know the future is when it becomes the past.
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Re: Marriage and splitting expenses
We can choose to disagree with each other, but let's not take it to the degree of personal attacks.aaaaaaabbbbbbbbbb wrote:The only one here with an offensive comment is you.dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
The surest way to know the future is when it becomes the past.
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Re: Marriage and splitting expenses
31 years of wallowing here Maybe one day we will learn better...cheese_breath wrote:74 year old wallower here with a 68 year old wallowing wife. We've always wallowed together from the day we got married 39 years ago. Apparently we're still not old enough or learned enough to wallow separately.dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
Re: Marriage and splitting expenses
Ummm... one wallow did not make (me) an ummer, but three didCrimsontide wrote:31 years of wallowing here Maybe one day we will learn better...cheese_breath wrote:74 year old wallower here with a 68 year old wallowing wife. We've always wallowed together from the day we got married 39 years ago. Apparently we're still not old enough or learned enough to wallow separately.dolphinsaremammals wrote:Trying not to be offended by the comments that if people don't wallow in the same bank account they are headed for divorce court. I suspect the wallowers are young, or got married young. Those of us who prefer some independence, I suspect, have seen more, learned some.
Re: Marriage and splitting expenses
There is an adjustment period..... so start with split accts and have a pool for household expenses (cut it up however you like). Over time you might find split accts annoying - we did quickly but then neither of us had much $$ when we got married and split pools of nothing were worse than a combine pool of next to nothing Moving from long distance to cohabitation will take some adjustment, so details about bank accounts are down the list IMO.
More of an issue is the name on electric, phone etc. The number of times I would call to change something about say phone and they refuse to talk to me since it was in her name or visa versa. We went through an effort of making crap like that joint so either could deal with them.
As for investments - treat it as one pool regardless and make sure both are getting as close to the max contributions as possible. My accounts look crazy in isolation as would hers - My 401K website is always suggesting stuff because it can only see a small part of the picture.
More of an issue is the name on electric, phone etc. The number of times I would call to change something about say phone and they refuse to talk to me since it was in her name or visa versa. We went through an effort of making crap like that joint so either could deal with them.
As for investments - treat it as one pool regardless and make sure both are getting as close to the max contributions as possible. My accounts look crazy in isolation as would hers - My 401K website is always suggesting stuff because it can only see a small part of the picture.
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Rob |
Its a dangerous business going out your front door. - J.R.R.Tolkien
Re: Marriage and splitting expenses
What my wife and I have done is as follows:
a) joint checking account for both paychecks and all household expenses
b) separate credit cards so we both have an independent credit history
c) separate retirement accounts (IRA, 401k) from our jobs
d) separate accounts for inheritances we have received
The separate credit cards give us a short window of secrecy if we buy gifts for each other. Nothing else is secret. My wife knows a little more about what I spend that I know about what she spends, just because she ended up with the task of running Quicken.
We have an informal agreement to discuss any major or recurring expense beforehand, but there is no set threshold on that - we both just know. Although our retirement accounts are legally separate we consider them together for planning purposes.
I've only been married for 37 years, so I'm not sure whether our method will work out in the long run.
a) joint checking account for both paychecks and all household expenses
b) separate credit cards so we both have an independent credit history
c) separate retirement accounts (IRA, 401k) from our jobs
d) separate accounts for inheritances we have received
The separate credit cards give us a short window of secrecy if we buy gifts for each other. Nothing else is secret. My wife knows a little more about what I spend that I know about what she spends, just because she ended up with the task of running Quicken.
We have an informal agreement to discuss any major or recurring expense beforehand, but there is no set threshold on that - we both just know. Although our retirement accounts are legally separate we consider them together for planning purposes.
I've only been married for 37 years, so I'm not sure whether our method will work out in the long run.
Re: Marriage and splitting expenses
I don't know if you live in a community property state or not but perhaps their rules can be a guide:
income while you are married is basically pooled so you pay bills out of "our" income ; assets you bring into the marriage or are gifted/inherited are separate.
Perhaps you can devise some phased "vesting" system so that eventually (perhaps decades even) the separate assets are "ours" too.
income while you are married is basically pooled so you pay bills out of "our" income ; assets you bring into the marriage or are gifted/inherited are separate.
Perhaps you can devise some phased "vesting" system so that eventually (perhaps decades even) the separate assets are "ours" too.