OT Joint checking accounts for living expenses

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
mesaverde
Posts: 442
Joined: Wed May 02, 2007 4:14 pm

OT Joint checking accounts for living expenses

Post by mesaverde » Thu Sep 27, 2007 5:18 pm

Hi diehards,
Suze Orman strongly suggests that couples hold a joint checking account to pay for daily living expenses such as rent/mortgage, utilities, groceries, etc. She says that each person should contribute according to their salary, NOT 50/50.

For example, if monthly living expenses are $1500 (the total amount contributed to the joint account each month) and the wife makes $100,000 and husband $50,000, the wife would contribute $1,000 each month and the husband $500.

She also goes on to say that if either a husband or wife does not agree on such a scenario as outlined in the example above, then the relationship is very questionable. So my question is, how do diehards contribute to their joint checking accounts?

sport
Posts: 8547
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Post by sport » Thu Sep 27, 2007 5:49 pm

Before I retired, I made all the contributions to the joint checking account and we invested all of my wife's earnings. After doing that for many years, we are prepared for a comfortable retirement.

Our philosophy is that all of the money is ours, not yours and mine. Therefore, it really does not make any difference who contributes to the account. This has worked for us for 35 years. Every couple has to figure out how they want to manage joint finances. Different situations call for different methods.

Best wishes,
Jeff

User avatar
dm200
Posts: 22365
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

While Suze Orman might

Post by dm200 » Thu Sep 27, 2007 5:58 pm

She also goes on to say that if either a husband or wife does not agree on such a scenario as outlined in the example above, then the relationship is very questionable.
know some things (I think she was a stockbroker at one time), I have heard, read or seen NOTHING that indicates she knows anything about what makes or does not make a successful marriage.

I would look to long and successfully married folks for their experience and advice.

My wife and I have mainly all joint accounts for just about everything. I have been the primary income all these years, and we have complete trust in all matters financial - and it has been that way for about 30 or so years.

dan

livesoft
Posts: 68628
Joined: Thu Mar 01, 2007 8:00 pm

Post by livesoft » Thu Sep 27, 2007 6:07 pm

I put ALL my income into the joint account. My spouse puts ALL her income into the joint account. We don't have a budget, but we pay all expenses out of the joint account.

downshiftme
Posts: 1089
Joined: Sun Mar 11, 2007 6:11 pm

Post by downshiftme » Thu Sep 27, 2007 6:13 pm

Before my wife and I were married, but as soon as we started living together, we used 100% contributions from both of us to the joint checking account. If either of us wanted something we couldn't agree on, we each had a small side fund allocated from the joint checking for our own use. Tried to be equal and fair, but it was never an issue. Not based on income or allocated responsibilities.

After my wife and I were married we used exactly the same system with 100% contributions from both of us to the joint checking account. If eiither of us wanted something we couldn't agree on, we each had a small side fund allocated from the joint checking for our own use.

After my wife (now ex-wife) and I were divorced we keep completely separate accounts.

I have friends who maintain separate accounts as a married couple, but that seems unusual to me. The contributions based on income sound more like a plan for cohabiting than a marriage. But each couple must find what works for them.

User avatar
Opponent Process
Posts: 5157
Joined: Tue Sep 18, 2007 9:19 pm

Post by Opponent Process » Thu Sep 27, 2007 6:20 pm

probably a bit different for each couple. our money goes in together, I pay all bills, make all investments (including her Roth), and she gets to spend what's left over.

I guess couples who fight over money are fighting over discretionary spending (?). I guess I would just avoid high-maintenance spouses.

unfortunately, Suzy can't get married & test her theory :(

User avatar
nisiprius
Advisory Board
Posts: 39464
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Post by nisiprius » Thu Sep 27, 2007 6:24 pm

mesaverde wrote:She also goes on to say that if either a husband or wife does not agree on such a scenario as outlined in the example above, then the relationship is very questionable.
1) Suze Orman should mind her own business.

2) For what it's worth: we have some joint account, some in my name, and some in my wife's name.

My wife pays all of her salary into our joint checking account. But she siphons off some for some of our bigger charitable donations, contributions to a grandkid's UGMA account, and so forth. Her employer offers no 401(k).

About 10% of our total assets are in non-joint-accounts with her name. There's a small 401(k) from a previous job of hers. There's a traditional IRA from the days when contributions were deductible, which was IIRC funded entirely with money from my salary. There's a Roth in her name which was funded entirely from my salary.

My paycheck goes about 3/5 into our joint account, about 2/5 in an account of mine. And of course a slice of it goes into my 401(k). The money in my account goes, mostly, into my Roth, her Roth (sssshhhh... don't tell the IRS), savings to buy a new car every ten years. I pay the premiums on our long-term-care insurance from my account.

I pay one of our big charitable donations out of my account. Why? Not because it's "my" donation. It's more like, the first year we made that donation at the particular moment we decided to make it there was enough in my account and not enough in the joint account, so we made it from my account and went on making it from my account.

All the other bills she pays out of our joint account. That includes the credit-card payments. At the moment we're both on the same credit card account.

There's no rhyme or reason behind most of this. It just happened. We've never worked out who pays what or why or whose share is whose. No formal or informal contracts. I used to pay the property taxes out of my account. About five years ago, she said "I think we can handle this out of our checking account" and now she pays them out of the joint account.

She does the bills. I do the taxes.

Our wills are what our lawyer calls "I-love-you-honey" wills. They spell out in great detail almost exactly what would happen anyway if we didn't have wills.

We've been married over 35 years. We've known each other longer than we've not known each other. I never take anything for granted, but I think we're married for keeps.

To the people who imply that you're not really a couple unless your finances are joined like Siamese twins, I'd say, well then what the heck do you do about the 401(k)s? No way for those to be joint, is there? And I don't believe you can roll them over into a joint IRA, either... if there is such a thing as a joint IRA, which I don't believe there is.
Last edited by nisiprius on Thu Sep 27, 2007 6:28 pm, edited 1 time in total.

User avatar
astroturf
Posts: 548
Joined: Sun Aug 26, 2007 9:40 pm
Location: Greater NYC Area

Post by astroturf » Thu Sep 27, 2007 6:26 pm

A clash of personal values regarding money is what you should be worried about first. Then work out the mechanics.

User avatar
Ruprecht
Posts: 538
Joined: Fri Aug 17, 2007 10:34 pm
Location: a very nice cardboard box
Contact:

Post by Ruprecht » Thu Sep 27, 2007 6:33 pm

I think it depends on your stage in life when you get married. If you get married in your early 20's, it's easy to consider everything as shared. Even your pursuit of your respective careers will be a joint venture, as you'll (hopefully) assist each other in achieving your goals. On the other hand, if you get married after you've already gone through college and grad school and already worked for a while, then whatever skills and assets you've earned are not mutual achievements. I've never thought badly of a spouse who shares a sense of pride for their partner's achievements when those achievements have come along after marriage. But I've always been amazed at the spouses who seem to take personal pride in accomplishments that their spouse already had before they even met.

This can be even more important if either or both spouses already have significant financial responsibilities to their own families or children from prior marriages. In that situation, the idea that "we're all in this together" isn't really true. I think the best way to avoid problems in that situation is to keep everything very transparent. It's easier to be charitable when the charity is recognized as such. That's where I think having separate accounts and a joint account for expenses can be very helpful.

I dunno. I just have the opinion that transparency is always the best approach.

User avatar
Downeastah
Posts: 395
Joined: Sun Aug 26, 2007 9:39 am

Post by Downeastah » Thu Sep 27, 2007 7:29 pm

livesoft wrote:I put ALL my income into the joint account. My spouse puts ALL her income into the joint account. We don't have a budget, but we pay all expenses out of the joint account.
ditto

User avatar
ChefJeff
Posts: 107
Joined: Mon Jul 30, 2007 10:48 am

Post by ChefJeff » Thu Sep 27, 2007 9:50 pm

My paycheck gets deposited into my Credit Union. My wife's paycheck gets deposited into her Credit Union. They are both joint accounts. There are bills we pay out of "her" account and bills we pay out of "mine", but we really consider it all "our" money.

Lucija
Posts: 92
Joined: Wed Feb 28, 2007 1:36 pm

Post by Lucija » Fri Sep 28, 2007 8:45 am

Suze Orman strongly suggests that couples hold a joint checking account to pay for daily living expenses such as rent/mortgage, utilities, groceries, etc. She says that each person should contribute according to their salary, NOT 50/50.
This premise is totally silly. There’s no such thing as “one size fits all” when it comes to marriage and finances. Why should a checking contribution matter? What if one spouse has the opportunity to fully defer all of his/hers compensation – they should not do that because they have to pitch in certain amount in checking account for living expenses?

Anyway, I think Suze is missing the point – once married, folks should agree on their priorities, lifestyle and financial goals (after all you’re in it together). Once those are in place, everything else is noise and boils down to logistics. For what is worth, we do not make distinction between our paychecks. Furthermore, we view our retirement accounts (although those have to be individual) as ours. Works for us, but who is to say it needs to work for you!

User avatar
jiclemens
Posts: 30
Joined: Sat Mar 03, 2007 1:52 pm
Location: North Augusta, SC

cherrypicking

Post by jiclemens » Fri Sep 28, 2007 9:33 am

I would suggest cutting the woman some slack. The advise is not bad when taken in the context that many young marriages fail due to poor communication over finances and lack of common sense support from us gray-haired curmudgeons.
Of course everyone's circumstances vary. When we started out, I was still in school, so, duh, I didn't contribute much financially, then through most of our careers we contributed to expenses in proportion to our ability. Seemed like the right thing to do. Now after 32 years, I contribute the most. As our finances got more and more complicated we had to maintain separate accounts for a multitude of things...IRA, 401K, etc. Plus we agreed early on never to be in a position to have to ask 'permission' for something we wanted for ourself. But we've always been fiscally conservative and never threatened by the other's spending habits. Some folks are compulsive shoppers and I can see why the partner would want to try to reign them in. Frankly, though, I agree with Suzy. I would be tempted to question a relationship where incomes are equal but one insists on playing the quaint role of "household dependent" anyway.

User avatar
watchnerd
Posts: 1539
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Post by watchnerd » Fri Sep 28, 2007 9:42 am

livesoft wrote:I put ALL my income into the joint account. My spouse puts ALL her income into the joint account. We don't have a budget, but we pay all expenses out of the joint account.
We do exactly the same thing.

Neither of us have separate accounts. It's all 'our' money. I think this sense of being in the same boat together, financially, is an important contributor to marital unity.
Tax Sheltered: 30% US Stock | 30% ex-US Stock | 40% TTM || Taxable: 20% US Stock | 20% ex-US Stock | 30% TTM | 30% Munis || RSU/ESPP

User avatar
BogleFan
Posts: 268
Joined: Wed Jun 06, 2007 10:09 am

Post by BogleFan » Fri Sep 28, 2007 9:44 am

I guess she does not know the difference between a business partnership and marriage.

beancounter
Posts: 2
Joined: Mon Apr 09, 2007 10:54 am

Post by beancounter » Fri Sep 28, 2007 9:54 am

My husband and I have always had a joint account and all of our money goes there and all bills are paid from it. This has worked for over 40 years for us.
Suzy is one to talk, she isn't even married! Possibly this could be a reason?

User avatar
watchnerd
Posts: 1539
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Post by watchnerd » Fri Sep 28, 2007 9:58 am

beancounter wrote:My husband and I have always had a joint account and all of our money goes there and all bills are paid from it. This has worked for over 40 years for us.
Suzy is one to talk, she isn't even married! Possibly this could be a reason?
Suze can't be married because current law does not allow her to marry her partner.

So, no, I don't think this is the reason she isn't married.
Tax Sheltered: 30% US Stock | 30% ex-US Stock | 40% TTM || Taxable: 20% US Stock | 20% ex-US Stock | 30% TTM | 30% Munis || RSU/ESPP

Gigihsu
Posts: 59
Joined: Tue Apr 03, 2007 4:35 pm

Post by Gigihsu » Fri Sep 28, 2007 10:18 am

I'll have to say, if a couple cannot agree on which account to pay for things and feel "fair", then something else is already wrong in the relationship.

User avatar
tdhg566
Posts: 860
Joined: Thu Mar 08, 2007 4:37 pm
Location: Spring, TX

Post by tdhg566 » Fri Sep 28, 2007 10:51 am

I carry the deposit slips. Wife carries the checkbook and credit cards. She swears it works better that way. I'm still doing the math...
As an Enrolled Agent I advise clients about taxes and investments. My work is retiree friendly, geographically portable, mentally stimulating, personally profitable and emotionally rewarding.

User avatar
watchnerd
Posts: 1539
Joined: Sat Mar 03, 2007 11:18 am
Location: Seattle, WA, USA

Post by watchnerd » Fri Sep 28, 2007 11:12 am

tdhg566 wrote:I carry the deposit slips. Wife carries the checkbook and credit cards. She swears it works better that way. I'm still doing the math...
Just out of curiousity, what does one use deposit slips for these days?

If I have to deposit a paper check, I just endorse the back, go to the ATM, and deposit it there. No slip needed. Do not all banks work this way?

I haven't filled out a deposit slip since the 20th century.
Tax Sheltered: 30% US Stock | 30% ex-US Stock | 40% TTM || Taxable: 20% US Stock | 20% ex-US Stock | 30% TTM | 30% Munis || RSU/ESPP

johndcraig

Post by johndcraig » Fri Sep 28, 2007 11:51 am

50-50 for us

I fund the joint account and she spends those funds.

User avatar
gunn_show
Posts: 1533
Joined: Wed Jun 06, 2007 3:02 pm

Post by gunn_show » Fri Sep 28, 2007 12:39 pm

johndcraig wrote:50-50 for us

I fund the joint account and she spends those funds.
bwahahaha

I am seeing this as a common theme ... no rush to get married for me :lol:
"The best life hack of all is to just put the work in and never give up." Bas Rutten

Topic Author
mesaverde
Posts: 442
Joined: Wed May 02, 2007 4:14 pm

Post by mesaverde » Fri Sep 28, 2007 2:55 pm

johndcraig wrote:50-50 for us

I fund the joint account and she spends those funds.
Personaly, I can't imagine being in such a situation. But I know there are many married couples out there who do it. I don't understand the concept.

harland
Posts: 292
Joined: Fri Feb 23, 2007 12:33 pm
Location: Virginia

Post by harland » Fri Sep 28, 2007 3:50 pm

johndcraig wrote:50-50 for us

I fund the joint account and she spends those funds.
:lol:

FWIW, the missus and I have separate accounts right now. I have to direct deposit my pay into my old credit union checking account in order to get a 0.5% reduction on the car loan. After that's paid off, we'll probably go all in on a joint account, mainly because keeping track of all these accounts is a pain in the butt.
The one thing that unites all human beings, regardless of age, gender, religion, economic status or ethnic background, is that, deep down inside, we ALL believe that we are above-average drivers.

TheEternalVortex
Posts: 2556
Joined: Tue Feb 27, 2007 9:17 pm
Location: San Jose, CA

Post by TheEternalVortex » Fri Sep 28, 2007 3:52 pm

I think her approach is a reasonable one. That said, there's nothing wrong with doing it differently. Whatever works is fine.

Post Reply