How to combine finances with your spouse? Recently married/early30s

[DualMotors]

My husband and I are recently married, and we are both in our early 30s.
Before we got married we started sharing rent/some bills, but now we are seriously considering combining our finances.

-- Status before marriage --
(we currently live outside of US but i'll translate everything we own into USD)
* Income: He makes about 35k/yr, I make about 53k/yr;
* Savings: I have a nest egg of 85k, which we agreed NOT to combine as our mutual savings.
* Loan: He has student loan (total balance 55k), I have no loan other than credit card bill which I pay in full every month.
* Expenses: monthly expenses incl. rent is about 2.8k/month, so about 34k/yr.

-- What we agreed on so far --
What we made/saved before we got married stay separate, such as my nest egg and his student loan.
What we make and save after we got married is ours.
Anything beyond that we haven't quite figured out yet, we keep a rough budget (34k/yr) and try to stick to it. That's it.
Any advice on how we actually do it would be much appreciated!

-- Our Goal --
I think our first primary goal should be to pay off his student loan, am I right?
Some of his loans have interest rate as high as 6.8%, my current savings are invested in various index fund/ fixed income financial products, and this year (2019) it roughly contributes to 6% of my total income.
I'm willing to "lend" him my savings to help him pay off student loan as long as he pays me back with 0% interest rate over the years.

Basiclally before we got married I had a pretty good idea on what to do with my money, and I always knew he made less than I do and have a student loan but I never really looked into it until now. We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go).

Help please

-- Update on 14 Nov --
Wow, one day after the original post, I'm already getting so many replies and comments. I am super grateful for all your advice. Instead of replying to each and every one of you I feel it might be easier just to edit the original post here.

* "We are happily married for decades and we put all our money in one pot."-- Congrats, I hope one day my partner and I will be able to say that. But we've only been married for a couple of month at this point and as I said we just started to try and work things out...

* "Why do you need separated money? What are you gonna do with your money without your partner?" -- I don't know, like the games he plays that I'm not interested in, or a car that only one of us drives? Or what if I want to stop working for a year or two before we achieve FI and pursue a degree instead? We'd just like some fun money that we can spend without having to get permission from the other person, and we want to be financially responsible while we do that.

* "It sounds like you are not fully committed to the marriage and you are just testing water." -- Hmmmm why do I feel I'm getting judged here...I'm sure I'm not the only person here who doesn't fully combine finances with their partner, or isn't taking full responsibility of their partner's debts prior to the marriage? I agree paying off your partner's loan is romantic and shows commitment, but my husband and I see marriage more like a partnership bound by law, it's possible to fail, and we still want to give it a try. We are not afraid to communicate our fears and concerns, that sounds pretty romantic to me.

A minor detail, we live in a country where there's NO joint accounts, so when/if we combine finances one person is putting all their money into the other person's account.

Tbh 10 years from now if we are still happily married and there are kids and house etc etc. involved, at that point what we are talking about today will all seem very trivial. But we want a plan that works for us now, and we'll adjust it along the way.

[anonsdca]

"We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go)."

Well, perhaps this is the new way to approach marriage and finances, I am much older than you and we just combined and moved on. All in, all or nothing.

To me being "comfortable" with something doesnt really matter here. If paying off his student loan is the best thing for you financially as a couple to move forward financially (emotions out of it) then you do it, no ifs, ands, or buts. The reason you cant see what is best for you both financially is because of the way you are separating yourselves. My opinion only.

[SixAlpha]

Congratulations!!

I think you’re on the right track. Based on your post, I assume you’re the one who will be handling the family’s money? Communicate, communicate, communicate... there’s really not a “wrong” way to merge your family finances, so long as they are an open book that both of you can talk about.

I love the idea of tackling the student loans first as a shared financial project. My wife and I were in a similar situation when we were first married, and working together to pay off the loans (even though they were “hers”, which she was also uncomfortable with at first) was probably one of the best decisions we ever made.

Personally, I don’t like the idea of “lending” him your savings to pay off “his” loans. Creating a “you owe me” situation is not healthy, for your finances or your marriage. If you’re not comfortable with gifting him the money, then I’d just leave the savings out of it for now.

I am a little curious as to why you decided to keep your savings separated. What would you anticipate doing with 85k that doesn’t involve your spouse?

[RickBoglehead]

I concur.

If it makes you feel better, sign a loan agreement that he "pays you back" over however many years it will take.

[Lou354]

If the student loan debt is his and money you both earn during the marriage is jointly owned, how will ‘he’ ever get funds that are ‘his’ with which to repay ‘you’? It seems inescapable that either the repayment will come from both of you, which would make the student loan debt both of yours. Or you’ll have to come up with some formula that divides money earned during the marriage between the two of you, which he will then use to repay you.

[CyclingDuo]

My husband and I are recently married, and we are both in our early 30s.
Before we got married we started sharing rent/some bills, but now we are seriously considering combining our finances.

-- Status before marriage --
(we currently live outside of US but i'll translate everything we own into USD)
* Income: He makes about 35k/yr, I make about 53k/yr;
* Savings: I have a nest egg of 85k, which we agreed NOT to combine as our mutual savings.
* Loan: He has student loan (total balance 55k), I have no loan other than credit card bill which I pay in full every month.
* Expenses: monthly expenses incl. rent is about 2.8k/month, so about 34k/yr.

-- What we agreed on so far --
What we made/saved before we got married stay separate, such as my nest egg and his student loan.
What we make and save after we got married is ours.
Anything beyond that we haven't quite figured out yet, we keep a rough budget (34k/yr) and try to stick to it. That's it.
Any advice on how we actually do it would be much appreciated!

-- Our Goal --
I think our first primary goal should be to pay off his student loan, am I right?
Some of his loans have interest rate as high as 6.8%, my current savings are invested in various index fund/ fixed income financial products, and this year (2019) it roughly contributes to 6% of my total income.
I'm willing to "lend" him my savings to help him pay off student loan as long as he pays me back with 0% interest rate over the years.

Basiclally before we got married I had a pretty good idea on what to do with my money, and I always knew he made less than I do and have a student loan but I never really looked into it until now. We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go).

Help please

When you married him, his debt became your debt. Pay it off.

[BullHouse_BearMarket]

My wife and I have a somewhat similar situation, i.e. early 30s and I have student loans and she doesn't. Here is what we do:

We have a joint checking account that we each contribute 70% of our income into. That account is used for bills, mortgage, travel, kids, etc.

We have a joint savings account that gets contributions from the joint checking when it hits a certain level.

We each have our own savings and checking accounts that we use for Roth IRAs, personal expenses, gifts, etc.

For my loans, I pay half from my personal accounts and half comes from the joint checking. Basically, my personal account covers the monthly payment and the joint account pays more on top. This allows me to pay more than the monthly payment and pay down the loans faster. We also never hesitate to use our personal accounts to cover joint expenses if needed. While the personal accounts are the individuals, we still see them as "our" money when needed. As an example, when we purchased our home, much of the money used for the down payment came from her money she had before we got married. I had spent the majority of my savings to cover law school expenses so as to reduce the amount of loans needed.

We have found this method prevents fights about money if 1 of us wants to spend money on something like golfing, spa day, whatever expense benefits one but not the other. Having your own money relieves a lot of stress.

*Note this works for us because we are both financially frugal and there isn't a situation where 1 of us spends all of our personal money then needs to take money from joint accounts.

I think if you use this method, you can help your husband pay down his loans by using half joint money and half his money (or whatever percentage makes sense for you).

I hope this helps.

[ANKLEDEEP]

If you aren’t willing to give every dollar to the other person you shouldn’t get married... [comment removed by moderator oldcomputerguy]

It sounds like your protecting your savings while you test out the waters? If your not comfortable putting his name on the account to, don’t get married.

[Silk McCue]

If you want to pay off the student loan using your savings that should be replenished on a scheduled (monthly) basis with joint funds paying an interest matching what the existing funds are receiving. Your pre marital savings are preserved but are paid off by joint income.

Cheers

[Silk McCue]

It sounds like your protecting your savings while you test out the waters? If your not comfortable putting his name on the account to, don’t get married.

Couples today often approach marriage in a much different way. High divorce rates can make this a reasonable approach if both agree. Not how we did it but that doesn't mean that others have to do it the same way.

Cheers

[deltaneutral83]

I may not be understanding both morally or legally. If OP ever gets a mortgage together with spouse or co mingle any assets of any kind with the small amount of net worth OP has individually and obviously the lower combined net worth once debt is factored in, is it not legally all the same pot? Morally (and also mathematically), if spouse of OP is to pay off his student loan how is he going to do that on $35k while splitting the monthly bills with OP?

Anyhow, loans accruing 6.8% interest should be a top priority, no matter how you sort out the money buckets.

[dbr]

Basiclally before we got married I had a pretty good idea on what to do with my money, and I always knew he made less than I do and have a student loan but I never really looked into it until now. We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go).

Help please

Here you have a relationship problem and not a financial problem. As someone else commented, couples arrive at all sorts of arrangements depending on the way they relate financially, what their situation is, and what they want. Only the two of you can decide those things.

I will say, however, that it would seem from the situation that you pretty much are going to have to share in responsibility for his student debt to proceed as a couple, but it does not seem like over time that amounts to much in the big picture.

[RubyTuesday]

Several thoughts...

The points you’ve already agreed to don’t quite make sense. Pay off “his” debt with “our” money implicitly makes it “our” debt. And how does he pay you back if you loan “him” “my” savings? Everything he will get in the future will not be “his” but “ours”.

So that said, I think eventually all of this becomes “ours”. Understandably you (or he) feel uncomfortable just combining completely. Whether it’s pride, fairness (you came into marriage much better off), or hesitance in face of high divorce rates.

So how to get there...
How about a hybrid approach:
1. Do what’s best for your family first (probably pay off student debt with your savings quickly). This may mean paying it off immediately if you have emergency funds and it otherwise fits into overall financial plans. If he has concerns over this, make it clear that you see this as your investment in your family’s financial future. It’s what’s best for your family to retire this expensive debt.
2. Every month, contribute preferentially to your prior savings until it’s replenished. This would be from your family income.
3. Once that’s finished, go forth and prosper...

I suspect sometime during the time before item 2 is finished you’ll abandon this process and combine. Or maybe you’ll replenish it and use it as your fun money...

If your marriage blows up before item 2 is complete, you’ll experience more regret than he will. C'est la vie

[Frugalbear]

It sounds like he has a lot more to gain out of this than you do. Yes, I understand where you are coming from, I am also in my early 30's and my wife has 23k in student loans.

If I were you, I would work it out to where he was paying more on his principal balance and you are assuming more of the household costs. That nest egg is yours...loans between people you love are too messy in my opinion. Good luck!

[daheld]

This is only my opinion, but I don't believe there's a healthy, realistic way to sort of combined finances. His debt is now your debt, and your nest egg is now his nest egg. Combine it all, work on financial goals together, and share in failures and successes. That's marriage.

[dbr]

This is only my opinion, but I don't believe there's a healthy, realistic way to sort of combined finances. His debt is now your debt, and your nest egg is now his nest egg. Combine it all, work on financial goals together, and share in failures and successes. That's marriage.

I agree 100%. The cases where people need to separate out financial resources don't apply here.

[Nowizard]

When we married, there was a discrepancy between our net assets, though neither greatly substantial. I would consider yours similar in the long run. We agreed to keep the greater assets separate until there were normal adjustments involving finances and other issues relating to a new marriage. Though it would have been fine to keep the initially assets/debt separate forever, comfort led to combining them within less than a year. Combining was simple, as we opened joint accounts and deposited funds in them. Due to employment differences, there were individual retirement accounts, but each of us wrote checks or made charges to joint credit card accounts as needed. We remain that way many years later with all accounts held in a Revocable Trust identifying us as Trustees and our children as joint, Successor Trustees. We believe that the two factors of importance in combining funds are trust and comfort levels. In our case the trust issue has never wavered and incomes have been moderate but roughly comparable.

Tim

[Stinky]

This is only my opinion, but I don't believe there's a healthy, realistic way to sort of combined finances. His debt is now your debt, and your nest egg is now his nest egg. Combine it all, work on financial goals together, and share in failures and successes. That's marriage.

I absolutely agree. Combine your finances, move forward. Everything is now "ours", not "yours" and "mine".

[chw]

"We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go)."

Well, perhaps this is the new way to approach marriage and finances, I am much older than you and we just combined and moved on. All in, all or nothing.

To me being "comfortable" with something doesnt really matter here. If paying off his student loan is the best thing for you financially as a couple to move forward financially (emotions out of it) then you do it, no ifs, ands, or buts. The reason you cant see what is best for you both financially is because of the way you are separating yourselves. My opinion only.

+1. Happily married over 30 years. As long as you or have this “untouchable” account, you potentially risk these accounts becoming a source of conflict- especially if your budget gets strained in some way during your marriage.

[Jags4186]

Doesn’t sound like you have much to keep separate.

Not sure where you live or what the laws are, but in the US generally everything you earn once your married is both of yours regardless of which account it goes into. If I were you, once you’re married, open a new joint checking account and joint savings account and just start using those.

In fact, this is what my wife and I did. We simply put our savings into a joint savings account (which when we got married wasn’t that much), left all of our investment accounts as they were, opened new joint ones and just went from there. We still have separate credit cards but that’s mostly because we open cards for bonuses. All bills are paid out of the joint checking account which both our paychecks go into. Investing goes into a jointly held taxable account, and individually owned IRAs which again. All the contributions come out of the joint checking account.

[flyninjasquirrel]

Agree with the others. Now that you are married you have to get the concept of "my" money and "his" money/debt out of your head, it's just going to cause problems in the future. IMO, it shouldn't be I make 'x' and he makes 'y' and I should pay this percentage and he should pay that percentage (or I get to buy this much stuff and he gets to buy that much stuff), it should be WE make 'x' and WE have to pay for things. You both work hard, erase the income differences from your mind. Your retirement savings now becomes our retirement savings.

If your spouse likes to spend more money on what's considered optional items or entertainment, one way to handle this is set aside a certain amount of money for each person every month as "fun money". Each person gets the same amount so it doesn't lead to issues. If you want to buy an expensive item then you have to save up your fun money for several months. We did not consider large items that were necessary like appliances to be fun money items. We did it this way at the beginning to be fair and no longer have to be because we both know what's reasonable to be spent based on our budget and clear it with the other person before we buy.

[Wiggums]

I had 250k more than my wife and we just combined accounts. I will likely get an inheritance and she will get pennies. My assets are hers and vice versa. It all goes into a joint account. From a money standpoint, my wife got the better deal. From a relationship standpoint, she is 100% an equal partner in life with me. Equal partner means equal in every way!

When you got married, you agreed to be legally in this together. If he causes a traffic fatality, you won’t be able to say take the settlement only from “his money”. It doesn’t work that way.

You need to have shared goals. I would encourage you to address this financial issue now.

This is my opinion and wish you and your family Good luck.

[Mullins]

Anything beyond that we haven't quite figured out yet, we keep a rough budget (34k/yr) and try to stick to it. That's it.
Any advice on how we actually do it would be much appreciated!

Figure out the budget for covering both your monthly living expenses (housing, utilities, cable, groceries, etc.) and that goes into a joint account from which bills are paid. Take care of mutual savings for emergencies or mutual investments in this manner as well.

One way to fund joint accounts is proportionately. So since you're making 60% of the household income and he's making 40%, you contribute 60% of the budget, he contributes 40%.

Do keep individual accounts not co-mingled going forward and that's the individual's money for whatever they care to do with it. I never thought it reasonable that everything one person earns, they're required to get permission first before they can buy something. So maybe you want to put a limit on purchase amounts, say, nothing more than $500 can be spent without a spousal consultation first. More so if someone is prone to being a spender.

I also think anyone coming into a relationship with debt pays their own debt. Falling in love and making a life commitment to the other person doesn't mean you should be saddled with their debt. It's not a romantic notion, I know. But then, someone giving their life partner the gift of paying their debt isn't so romantic either. Give him the gift of being responsible for his decisions and his debt.

[Thegame14]

I think this varies by generation, the Boomers are mostly in the one pot method. I am a late Gen X early Y.

When my wife and I got married we kept almost all accounts separate. We started a joint account checking account for a "wedding fund", we started putting part of each paycheck into it to save for our wedding, then all the money we got from the wedding went back into that account and became out joint household account

Then we came up with an estimate of monthly spending for joint bills, mortgage, taxes, insurance, gas, electric, cell phones, TV and Internet, etc etc., and let's say that amount is $2,200. So now you know each month you need to put into that account AT LEAST $2,200 but ideally $2,500 for pop up expenses. So then look at your after tax earnings each, let's say yours is $35K and his is $23K, accounting for taxes and 401K and health insurance deductions, but just an illustration, so then you bring home $58K a year, that is $4,833 a month. so then you each need to put in $2,500/$4,833 of your take homepay check or 52% of your take home pay into the joint account and the rest goes into each person's personal checking/savings, then individual bills, like a car, or student loans or gym membership or whatever individual expenses are, you each pay from your own account.

This ensures all bills and retirement savings are accounted for, but each person has some flexibility to spend "their own" money and not have to be questioned about every little purchase. Of course all major purchases should be discussed with each other, you can come up with an amount.

[frugalmama]

"We are trying to come up with a plan to combine our money as "ours" in a way that both of us are comfortable with (for example he wouldn't feel comfortable if I paid off all of his student loan in one go)."

Well, perhaps this is the new way to approach marriage and finances, I am much older than you and we just combined and moved on. All in, all or nothing.

To me being "comfortable" with something doesnt really matter here. If paying off his student loan is the best thing for you financially as a couple to move forward financially (emotions out of it) then you do it, no ifs, ands, or buts. The reason you cant see what is best for you both financially is because of the way you are separating yourselves. My opinion only.

We came up with a smiliar agreement as the OP originally, but within 5 years realized it wasn't in the best interest for us as a couple as it was going to keep us from buying a house etc. and would have cost us more in the long run. I was the one with the assets but felt they weren't assets if I couldn't use them in the way I wanted. Now 20 years later I feel like everything I came in with is his and his is mine. I have no regrets, but we have a rock solid marriage. I would maybe feel different about it if it wasn't rock solid. Combining everything can be a risk, especially if couples aren't on the same page and don't have good communication skills, so I can see it both ways. I do think this is somewhat generational, although I'm a Gen Xer.

[wilked]

My spouse and I got married. I paid off her debt (now our debt) within a month from my savings (now our savings). I'll admit that it felt a little odd / tough, but I never doubted it to be the right thing to do

She made more than me at that point. Now I make more than her. It really doesn't matter. We have since doubled our net worth in less than 10 years and there is no concept of 'yours and mine' in the marriage with finances.

My recommendation is to transfer the 'nest egg' to your joint checking, cut a check for the student loan, and start making some financial goals (house? Milestone for net worth?) together

[wilked]

Another way to look at it -

What is your 'nest egg' for, if not for the both of you? I am thinking it can't be used for:
-house, as that is a shared item
-Vacations (unless only for a solo vacation?)
-Emergency expense, unless it is only your emergency? Maybe a medvac from a solo vacation?
-Retirement, to be used after your spouse dies?

If your wish to keep it separate is to protect it from divorce, you should have had a prenup done by a lawyer instead

[oldfatguy]

There are many different ways to arrange your finances. As long as it is mutually agreeable between you and your spouse, do what works best for you and ignore all the naysayers who claim there is only one right way to do things.

When I got married (in my early 20s), neither one of us had any assets (nor any debt), so it was very easy to just have joint finances. Of course, that didn't work out so well for me later on, when she left and emptied the bank account. Live and learn.

[ponyboy]

Why do you have to combine finances? Ive been married 10 years and we still havent combined finances, no joint checking/saving stuff. We havent had a single issue. We do have joint credit cards. We each pay for certain things...she writes the checks or does online bill pay, I then use zelle to instant send her money for my share. Not difficult. Then again, we have no debt besides $100k mortgage left on home, $1mil+ net worth excluding house, and we're mid 30's. Most people cant handle the fact that we still do not have joint accounts, minus cc. Now, do I get a cookie?

[LiterallyIronic]

It sounds like your protecting your savings while you test out the waters? If your not comfortable putting his name on the account to, don’t get married.

Couples today often approach marriage in a much different way. High divorce rates can make this a reasonable approach if both agree. Not how we did it but that doesn't mean that others have to do it the same way.

Cheers

For the record, divorce rates are way down since the 80s: https://www.washingtonpost.com/news/won ... one-chart/. Just like crime is way down since the same time period. But it's a common thought that they are both higher now.

That's not to say that OP needs to combine or separate their finances based on this information. Everyone is free to handle their finances their own way. Personally, I've never understood the benefit(s) to a plan more complicated than "put it all in the same pot," but to each their own.

[ponyboy]

Agree with the others. Now that you are married you have to get the concept of "my" money and "his" money/debt out of your head, it's just going to cause problems in the future.

The concept of "her" money or "his" money exists for a reason. Do you have a retirement account? What name is it in? My wife has a TSP, I have a 401k...The money I earn from the employer I work for doesnt go into "her" account. There's a reason for that.

What issues will that cause in the future? We've been married for 10 years. Married at 26/25...never combined finances, never had an issue. We are both on the same page of saving/investing/spending...and we never had any debt. Different strokes for different folks. I realize we're a unicorn, very rare in this day and age to be a millennial and be really good with finances. Women should feel empowered to have full responsibility for their finances. I will never discourage my wife from spending the money she works for. Matter of fact, I wish she would spend more for herself! Then again, she makes more than double what I do. Gasp!!

[Triple digit golfer]

Every time I read posts about married couples attempting to separate finances, my head spins. Such unnecessary complications. Are you a team or not? If you are, then work together to create the best possible situation for the TEAM.

I couldn't imagine my own wife owing me money, or vice versa.

If you have separate finances and suddenly your husband loses his job and can't pay you back for his loan, not only will you not get your money back, you'll be fully supporting him. So then does he have to pay you back the money you used to support him while he was unemployed?

It just seems so ridiculous to me. I realize that there are other opinions, but judging by the amount of posts similar to this, my inclination is that more often than not, separating finances doesn't work well and there are too many gray areas.

At the end of the day, you are a team and sink or swim together, regardless of how you want to mentally divvy things up. If you get divorced, do you think it will matter who's name is on what?

[stoptothink]

It sounds like your protecting your savings while you test out the waters? If your not comfortable putting his name on the account to, don’t get married.

Couples today often approach marriage in a much different way. High divorce rates can make this a reasonable approach if both agree. Not how we did it but that doesn't mean that others have to do it the same way.

Cheers

For the record, divorce rates are way down since the 80s: https://www.washingtonpost.com/news/won ... one-chart/. Just like crime is way down since the same time period. But it's a common thought that they are both higher now.

"Divorce rates" isn't a cut-and-dry metric, there are a million factors that aren't accounted for in that basic graph and that are not discussed in the article either. People are getting married older nowadays, and many more are choosing not to get married at all. Marriage is a much different paradigm to younger generations (I'm 38). As I look out of my office down the first row of my employee's cubicles: me (2nd marriage - money was the issue in 1st marriage), currently separated (28), divorced (29), single (25yr), married (26), divorced (38), divorced (24), married (30), married (23), divorced (25), single (28). Just one data point.

[DualMotors]

Anything beyond that we haven't quite figured out yet, we keep a rough budget (34k/yr) and try to stick to it. That's it.
Any advice on how we actually do it would be much appreciated!

Figure out the budget for covering both your monthly living expenses (housing, utilities, cable, groceries, etc.) and that goes into a joint account from which bills are paid. Take care of mutual savings for emergencies or mutual investments in this manner as well.

One way to fund joint accounts is proportionately. So since you're making 60% of the household income and he's making 40%, you contribute 60% of the budget, he contributes 40%.

Do keep individual accounts not co-mingled going forward and that's the individual's money for whatever they care to do with it. I never thought it reasonable that everything one person earns, they're required to get permission first before they can buy something. So maybe you want to put a limit on purchase amounts, say, nothing more than $500 can be spent without a spousal consultation first. More so if someone is prone to being a spender.

I also think anyone coming into a relationship with debt pays their own debt. Falling in love and making a life commitment to the other person doesn't mean you should be saddled with their debt. It's not a romantic notion, I know. But then, someone giving their life partner the gift of paying their debt isn't so romantic either. Give him the gift of being responsible for his decisions and his debt.

Thanks, this is close to our current arrangement. What we are trying to do is to have:
1. a joint spending account (for mutual expenses, rent, bills, groceries etc.);
2. a joint savings account;
3. each person has an individual fun money account (things we buy the partner doesn't really have anything to do with, such as my clothes, his games, stuff like that, or if we wanna get each other gifts, the money comes out of this account)

However, with his student loan it doesn't quite work. If he puts less money in the joint accounts in order to pay his loan, I'd be responsible more for our daily expenses (which I'm ok with), and I'll be the only one who puts money in the savings account, that's no difference than me paying off his student loans with my nest egg and we move on.

[LilyFleur]

Several thoughts...

The points you’ve already agreed to don’t quite make sense. Pay off “his” debt with “our” money implicitly makes it “our” debt. And how does he pay you back if you loan “him” “my” savings? Everything he will get in the future will not be “his” but “ours”.

So that said, I think eventually all of this becomes “ours”. Understandably you (or he) feel uncomfortable just combining completely. Whether it’s pride, fairness (you came into marriage much better off), or hesitance in face of high divorce rates.

So how to get there...
How about a hybrid approach:
1. Do what’s best for your family first (probably pay off student debt with your savings quickly). This may mean paying it off immediately if you have emergency funds and it otherwise fits into overall financial plans. If he has concerns over this, make it clear that you see this as your investment in your family’s financial future. It’s what’s best for your family to retire this expensive debt.
2. Every month, contribute preferentially to your prior savings until it’s replenished. This would be from your family income.
3. Once that’s finished, go forth and prosper...

I suspect sometime during the time before item 2 is finished you’ll abandon this process and combine. Or maybe you’ll replenish it and use it as your fun money...

If your marriage blows up before item 2 is complete, you’ll experience more regret than he will. C'est la vie

I have helped several friends through divorces, including those who had separate assets they brought into the marriage. I think what OP is saying is that, if there is a divorce, after they split the assets, they will subtract his debt from his share and add her savings to her share. If they are serious about this, though, they ought to write it out in a prenup and get it notarized.

Many of us got married very early in life. Had nothing, built everything together.

Others, who marry later, are more independent and want to keep assets more separate.

And, of course, those who have been through a divorce may never want to remarry unless their assets are protected with an ironclad prenup and a trust so that each partner's children would inherit their own parent's assets.

Even later in life, some pensions can be taken away if a widower remarries. In that case, a new couple may never marry.

[RubyTuesday]

Several thoughts...

The points you’ve already agreed to don’t quite make sense. Pay off “his” debt with “our” money implicitly makes it “our” debt. And how does he pay you back if you loan “him” “my” savings? Everything he will get in the future will not be “his” but “ours”.

So that said, I think eventually all of this becomes “ours”. Understandably you (or he) feel uncomfortable just combining completely. Whether it’s pride, fairness (you came into marriage much better off), or hesitance in face of high divorce rates.

So how to get there...
How about a hybrid approach:
1. Do what’s best for your family first (probably pay off student debt with your savings quickly). This may mean paying it off immediately if you have emergency funds and it otherwise fits into overall financial plans. If he has concerns over this, make it clear that you see this as your investment in your family’s financial future. It’s what’s best for your family to retire this expensive debt.
2. Every month, contribute preferentially to your prior savings until it’s replenished. This would be from your family income.
3. Once that’s finished, go forth and prosper...

I suspect sometime during the time before item 2 is finished you’ll abandon this process and combine. Or maybe you’ll replenish it and use it as your fun money...

If your marriage blows up before item 2 is complete, you’ll experience more regret than he will. C'est la vie

I have helped several friends through divorces, including those who had separate assets they brought into the marriage. I think what OP is saying is that, if there is a divorce, after they split the assets, they will subtract his debt from his share and add her savings to her share. If they are serious about this, though, they ought to write it out in a prenup and get it notarized.

Many of us got married very early in life. Had nothing, built everything together.

Others, who marry later, are more independent and want to keep assets more separate.

And, of course, those who have been through a divorce may never want to remarry unless their assets are protected with an ironclad prenup and a trust so that each partner's children would inherit their own parent's assets.

Even later in life, some pensions can be taken away if a widower remarries. In that case, a new couple may never marry.

This seems like a very appropriate way to approach this. Basically, take into account the basis of each coming into relationship. So pay off the debt if that’s best for the family, but in the event there’s divorce, take into account initial basis when splitting marital assets.

ETA: basically combine finances now and forward and only separate and acknowledge original basis if they split...

[1789]

This is only my opinion, but I don't believe there's a healthy, realistic way to sort of combined finances. His debt is now your debt, and your nest egg is now his nest egg. Combine it all, work on financial goals together, and share in failures and successes. That's marriage.

I absolutely agree. Combine your finances, move forward. Everything is now "ours", not "yours" and "mine".

Agreed. As simple as that

[Tdubs]

Well, this thread went exactly as I expected.

My DW brought debt to our marriage, I brought savings. It never occurred to me that we should not combine our finances.

But I've seen some nasty divorces among friends with each one figuring out what valuables they brought into the marriage so they could fight over how to get them out. So, the OPs approach isn't what I did, but if it makes you both comfortable that is what matters.

Note of caution: I'd try to make sure your spouse is really on-board with this and not just agreeing to the arrangement you want. You might be planting seeds of resentment.

[MN-Investor]

The only right solution is the one which ends up working for you and your husband, so read all the suggestions and discuss the best ones, in your opinion, with your husband. And, just as importantly, re-visit this subject on a regular basis because things change.

When my husband and I got married 40+ years ago, we combined everything. It worked perfectly for us. But that was us and that's not you.

Some couples are happily married for decades and only combine income for paying household bills. But that's them.

There are many right answers, so experiment and discuss and you'll be fine.

[careytilden]

My wife and I are approaching the end of our 9th year of marriage. We have a kid and a home mortgage. We finally opened a joint checking account this year--but we're only using it to pay a few bills so far. I think this will expand over time, but we're in no rush.

We divided up the bills roughly and each pay some of them from our own accounts. She pays off her student loan debt (from before we got married) with the income she earns from her job. I didn't come in to the marriage with any debt, and I make more money besides, so I have more free cash for savings, vacations, nice dinners, etc. We're both benefiting from this extra free cash now, and will share the benefit of the savings during retirement. We share responsibility and are not usually worrying about "my money" and "her money", but we still have our own jobs and our own checking accounts. I never ask how much money she has in her own checking account, and vice versa.

Our financial arrangement is low stress and harmonious. We're saving and living life and not fighting over finances. I don't get the naysayers who seem to think this path leads to ruin.

[mike_in_ny]

I don't understand why folks are so critical of the poster. This is a young couple figuring it
out.

When Anna Nicole Smith married (and they say it wasn't for money!), I'm sure many of you
thought Marshall was a fool for not keeping "his" assets. How is this situation (with two
less commas) any different?

My sister in law has kept her own money through ten years of marriage with my brother.
They both pay bills, have a kid together, etc. She says its the best thing she ever did.
And watching him, I can see why.

[Tal-]

...

What we are trying to do is to have:
1. a joint spending account (for mutual expenses, rent, bills, groceries etc.);
2. a joint savings account;
3. each person has an individual fun money account (things we buy the partner doesn't really have anything to do with, such as my clothes, his games, stuff like that, or if we wanna get each other gifts, the money comes out of this account)

However, with his student loan it doesn't quite work. If he puts less money in the joint accounts in order to pay his loan, I'd be responsible more for our daily expenses (which I'm ok with), and I'll be the only one who puts money in the savings account, that's no difference than me paying off his student loans with my nest egg and we move on.

I've known several couples with separate finances that make it work.

One is similar to yours - where there are joint finances funded by each partner for things like housing, food, utilities, etc. I've typically seen these as 50/50, but making it proportional to your income makes some sense (and based on comments above, it seems like others have done it). Some split expenses 50/50 by having one person get mortgage and the other gets everything else - but it's the same basic idea. The rest of each one's income is kept separate for things like play/cars/etc. Personal debt almost always is the responsibility of the individual. Fun expenses like vacations, dinners out, etc. can be a joint or individual expense - I've seen both.

The second general approach is very different - and that's where each keeps their finances, and tackles each expense on a case by case basis. Personal expenses are individual, but questions like "who pays for dinner" or "who gets the mortgage this month" are managed ad hoc based on the finances of each individual. This is a crazy system, but I've seen it work (once).

A third option, that I rarely if ever see, is where finances are joint - but each gets an allowance to spend as he/she likes. This can be something like $200/month that each of you get to spend on whatever you like, without the oversight of the other. Honestly, I'm not sure how personal debt would work in a situation like this...

Note that all of the options work decently when things are going well, but they struggle when life happens. At some point, one of you will lose a job, or come into money, or have medical expenses, or, or, or. To account for these, the system needs to change throughout the years, which can in itself be difficult to manage.

The final point I would make it that any of these approaches only last as long as both people say that do. In the case of a divorce, my understanding is that the courts don't really care about your system. They will default to the law, which is likely to say your money, and his money, are joint property - and should be treated accordingly.

Just my two cents. I'm interested in where you land.

[msk]

Nobody goes into a marriage without 100% commitment, but half the marriages fail. The holier than thou sentiments I see expressed here (100% shared from Day 1) presumably come from the half of the marriages that have succeeded. I would not want my kids to be sharing my inheritances fully with their spouses except well after many years of marital harmony. How a couple splits and shares wealth (voluntarily rather than by government edict) very much depends on how unequal the incoming shares and earning capacities are. Easy to share my surplus $20k with my impoverished partner to clear her student loan, difficult (even immoral?) to justify sharing my DW's $200 million to clear my ill-advised multi-million $ business mess (is this different from gambling?) of my own creation... Each couple has to work out their own way as married life evolves. There is no morally superior ethic. Much of the human species lives under separation of wealth. Except what the couple deliberately and voluntarily shares. To the OP: does not matter much what you launch into today, what matters will be how that evolves in a decade or two. I believe that much marital disharmony is caused by money issues, even decades later.

[Starfish]

If you aren’t willing to give every dollar to the other person you shouldn’t get married... [comment removed by moderator oldcomputerguy]

It sounds like your protecting your savings while you test out the waters? If your not comfortable putting his name on the account to, don’t get married.

Bogleheads are a weird bunch.
There are countless discussions about very small risks. There is a lot of talk about diversification and asset allocation to decrease risk.
But somehow a marriage with 53% probability of failure is a good investment and you should put all your eggs in it.

[DualMotors]

I am a little curious as to why you decided to keep your savings separated. What would you anticipate doing with 85k that doesn’t involve your spouse?

Nothing in specific planned yet. Part of me is considering taking a year or two to pursue a degree, if I did decide to do that, the nest egg (my pre marriage saving) would go to that. Otherwise, we just both like the idea of having some individual money that we can spend without getting the other person's approval.

[DualMotors]

It sounds like he has a lot more to gain out of this than you do. Yes, I understand where you are coming from, I am also in my early 30's and my wife has 23k in student loans.

If I were you, I would work it out to where he was paying more on his principal balance and you are assuming more of the household costs. That nest egg is yours...loans between people you love are too messy in my opinion. Good luck!

In the long run I don't think it'll matter that much, coz at some point life will happen, maybe i'll lose job, maybe he'll get a better paid job and make more than I do. We do want to support each other, but I don't want to feel I'm making a huge "sacrifice" when it's not absolutely necessary (for example if he was in a medical emergency and needed money I wouldn't hesitate to use my savings).

Sadly I feel most people on this forum don't share similar attitude towards marriage. Some replies make me feel I'm too inexperienced in this marriage thing and I'm just being naiive :/

[DualMotors]

My wife and I have a somewhat similar situation, i.e. early 30s and I have student loans and she doesn't. Here is what we do:

We have a joint checking account that we each contribute 70% of our income into. That account is used for bills, mortgage, travel, kids, etc.

We have a joint savings account that gets contributions from the joint checking when it hits a certain level.

We each have our own savings and checking accounts that we use for Roth IRAs, personal expenses, gifts, etc.

For my loans, I pay half from my personal accounts and half comes from the joint checking. Basically, my personal account covers the monthly payment and the joint account pays more on top. This allows me to pay more than the monthly payment and pay down the loans faster. We also never hesitate to use our personal accounts to cover joint expenses if needed. While the personal accounts are the individuals, we still see them as "our" money when needed. As an example, when we purchased our home, much of the money used for the down payment came from her money she had before we got married. I had spent the majority of my savings to cover law school expenses so as to reduce the amount of loans needed.

We have found this method prevents fights about money if 1 of us wants to spend money on something like golfing, spa day, whatever expense benefits one but not the other. Having your own money relieves a lot of stress.

*Note this works for us because we are both financially frugal and there isn't a situation where 1 of us spends all of our personal money then needs to take money from joint accounts.

I think if you use this method, you can help your husband pay down his loans by using half joint money and half his money (or whatever percentage makes sense for you).

I hope this helps.

Thank you, I think this is the closest to our philosophy so far. What we are trying to do (literally only started doing it this month) is:
1. Having a joint expenses account that we both pay into that takes care of our mutual expenses (rent, bills, pet care etc.)
2. Having a joint savings account for long term goals (haven't quite figured out how we plan to spend that money yet)
3. Each of us keep an individual account for "fun money", ie. money we can spend without the other person's approval, and the other person has no part in, such as my clothes and his games.

Because of his student loan situation, I think what we'll do is for him to pay less into the joint savings account, and have a lower fun money budget. Well he already pays less because I currently make more than he does, but the principle here is whoever makes more contributes more into the family mutual accounts. I'm also thinking maybe I should just help him pay off some of the loans with high interest rates.

[DualMotors]

Note of caution: I'd try to make sure your spouse is really on-board with this and not just agreeing to the arrangement you want. You might be planting seeds of resentment.

Thanks for the heads up, I'm pretty confident in our communication. Honestly if he is someone who'd resent me for not being financially responsible for a decision he made before we met, I'm not sure I'd want to be married to that person anyways. In my opinion, it's one thing that I want to help and I offered, it's another if the other person demands it.

[Rus In Urbe]

daheld
This is only my opinion, but I don't believe there's a healthy, realistic way to sort of combined finances. His debt is now your debt, and your nest egg is now his nest egg. Combine it all, work on financial goals together, and share in failures and successes. That's marriage

+1
Having had two marriages, I can compare them from a financial standpoint.

During the first one, we did not combine finances, but we went about it very rationally: yours, mine, ours. Upside: we never fought about money and it was easy to unzip when it came to divorce. Downside: we never really made long-term plans together, which take thinking (and yes occasionally disagreeing and then coming to agreement) about deploying resources. Of course, I can only see this clearly in 20/20 hindsight!

When I married the second time, we combined everything and set about planning together. Happy as clams. We are a team. It's been a great success by every measure.

I don't mean to imply that the separate finances don't work for some couples, or that financial structure either sank a relationship nor protects one now---there are more complex issues involved.

However, in my experience, the best plan for me has been to 1) marry the right person, and then 2) go "all in" in every way.

Good luck to you!

[PoundCake]

A minor detail, we live in a country where there's NO joint accounts, so when/if we combine finances one person is putting all their money into the other person's account.

I'm one of those "we put everything in one pot" people, but the information quoted above would be a deal-breaker for me. I'm very comfortable with the way I do things because I am a legally recognized owner of our shared accounts. I want that protection, but I would also want it for my spouse.

I also know that there would be, for me, a psychological effect to not having a recognized interest in our shared accounts. Shortly after my spouse and I married, we moved to a new state. He moved first and set things up, and I followed a few months later. That meant that I wasn't named on our new bank accounts. It was a gut punch for the first week or so -- until I got to the bank and got things squared away, etc. -- to use an ATM card with his name on it, accessing money that I had earned but that wasn't legally mine.