Structuring Newlywed Finances for Fairness and Less Arguments

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Independent2
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Structuring Newlywed Finances for Fairness and Less Arguments

Post by Independent2 » Sun Apr 08, 2018 10:36 am

Hi all- recently married. Wife and I need to sit down and figure out how to structure our shared finances now as a combined unit.

Open to ideas from everyone's experience here. Wife and I are in the same line of work but I work more/longer to manage rental properties that I've had before we got married. So I make around $200k/year and she makes around $110k. So around $310k combined in a MCOL city, and we already own a home together that we purchased after we got engaged. No debt other than the mortgage (no car payments, student loans, etc.).

My initial thoughts are send all income into a shared bank account, and then have two separate accounts (one for each of us) that is our own discretionary spending amount for each year. The rest will be saved/invested (We're good from this standpoint). We're each smart spenders, but naturally there are things that we may not agree with each other on with regards to spending (as any couple would), so thinking this would be a better solution than just ad-hoc spending without a budget. She tends to spend her money on smaller non-essential purchases (clothing, etc.) whereas I tend to save that money towards a larger discretionary/non-essential purchase (electronics, car-related items).

Would this be a good setup/structure? If we each get $10k/year discretionary spending, would that be too much, too little? From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?

anil686
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by anil686 » Sun Apr 08, 2018 11:14 am

JMO from somebody married a long time and never spends much money (wear clothes for years/shoes for years/cars for years) versus a spouse that is relatively frugal compared to most but not as frugal as me.

Work together to get a budget and see what she wants to do. In my house, I work more than my spouse and make significantly more but she does everything running the house, making it go and managing the family stuff. Frankly, what ever she needs to spend, I don't question it. Sometimes I feel like ugh - why do we need to spend - but when it is done - I realize why she needed to do what she did. You probably will realize as time marches on that work and income are important but so is a happy family life. Setting up more complicated spending rules up front rather than discussing purchases, spending and financial issues up front may lead to more conflict later as well as you walking back what you feel as you may have a family in the future and spending becomes more about the children and less about you two.

Just for clarification - we have always had joint banking accounts, joint brokerage accounts and have not always been on the same page with small purchases or large purchases. Over time, we have worked it out - sometimes what I want - sometimes what she wants. We both see the value in what each other brings - she appreciates my frugalness when it comes to cars, etc. I appreciate her frugalness when it comes to clothes and groceries. She appreciates my non-frugalness when it comes to appliances and high quality items I research and I appreciate her non-frugalness when it comes to house design and organization.

Hope it works it and good luck!

TwstdSista
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by TwstdSista » Sun Apr 08, 2018 11:22 am

When the husband and I got married we were saving for a house. Our monthly allowance was $25 each and we both made similar incomes. That's now increased to $100 each. But now I make 90% of the money. We still keep things equal. (although he's less of a spender than I am).

I am a big fan of an "allowance" of sort for each spouse. I am not a fan of an uneven split. I would feel resentment if I got less, regardless of income levels.

delamer
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by delamer » Sun Apr 08, 2018 11:30 am

I was with you until you talked about getting to spend more because you work longer hours.

First, any system that values contributions to the family based on how many dollars you bring in is flawed. You are either in it together or you aren’t. Choices about how you spend your time need to be family decision, especially when you are talking about work outside your main job. Maybe your wife would rather have you around more than the extra income.

Plus it is highly likely that your wife does more to keep your household functioning if you are working longer hours — groceries, cooking, cleaning, maintenance, bills, etc.

Combine your incomes, put money in savings, pay the joint bills, and then split what is left between you with an understanding on what items will come out of joint versus split.

Jack FFR1846
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Jack FFR1846 » Sun Apr 08, 2018 11:37 am

Talk about big purchases before hand. If you want to buy a new chain saw for $600 and it's something you'll get your money's worth out of, make your case and ask for her input. When she wants to buy a new coat for $600 that replaces a ripped, old coat and the new one will serve as a good first impression piece if (I'm making this up) she's in sales or some other customer facing job, then that's where you put in your input......and don't make the comment to buy a spool of thread and needle and fix the old coat after buying your chain saw.

My wife and I have done this for years. Heck....if I want to buy a CB radio for my Jeep for $50, I'll ask. It's not a "need" so she's a good sounding board to keep me from wasting money where I don't need to.

How the accounts are set up is a big "don't care" in my mind. If you've got agreement on how to spend, where the money comes from doesn't matter.

In regards to the land lording gig........if you insist on keeping the money from this, it's time to sell all your rentals and just stop it. That's completely unreasonable. I make 10 times what my wife does. We're a team and a family. We never, ever divide anything by what we bring into the family.
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blueman457
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by blueman457 » Sun Apr 08, 2018 12:23 pm

My wife and I do the allowance method. Our paychecks go into a shared account and we have our own personal accounts for discretionary spending. While my take home income is 5x hers, we get the same allowance. She does a lot of unpaid work (aka primary care giver). How you split things up to you is a discussion.

10k a year is fine as long as you meet you savings goals and agree what is personal spending vs joint spending.

Blue man

Sandi_k
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Sandi_k » Sun Apr 08, 2018 12:29 pm

delamer wrote:
Sun Apr 08, 2018 11:30 am
I was with you until you talked about getting to spend more because you work longer hours.

First, any system that values contributions to the family based on how many dollars you bring in is flawed. You are either in it together or you aren’t.
I agree completely. And IMO, it's worth an edit to say "getting to spend more because you work longer hours OUTSIDE THE HOME."

I can almost guarantee that the effort from either of you will be unequal at different parts of your marriage going forward. Who does the household chores? Who pays the bills and thinks about investments? Who does tax prep? Who takes care of the cars? Who does the landscape maintenance? Who plans meals? Who does the grocery shopping? If/when you have kids, who will be spending more time on feeding and care for the baby?

Starting out with an idea that work outside the home is valued is a bad idea. Does this mean that if you have kids, your wife on maternity leave would have NO spending money? Or that you'll decide what's all right for her to spend on, based on YOU bringing home that particular slice of bacon?!

What we do is to contribute to the joint account from our paychecks - having already done medical premiums and pre-tax savings as agreed - and then we each have our own money to spend. In general, if it's a household decision, it comes from our joint account. If it's personal (lunch with a friend, a mani/pedi for me) it comes from our own personal account.

This allows us to prioritize savings over spending (up front, automatic) and it also allows us to have activities that don't require "permission." I strongly encourage something similar.

dbr
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by dbr » Sun Apr 08, 2018 12:39 pm

Our experience in 39 years of marriage is that we never, ever attempted to "budget" each other's spending and we always had only one checking account/array of credit cards into which went all income and out of which came all spending. This was possible for two reasons:

1. We are sufficiently compatible regarding our standards for what we are willing to spend and on what that the issue of one person needing to put a limit on the other or there needing to be a negotiation does not arise. Individually we had enough sense to know what was right. In the case of large mutual expenditures, such as buying a car or contracting some remodeling or taking an expensive vacation, we do it together. Sometimes we discuss if it is a good idea to spend money on one thing or another if advice seems needed.

2. Our relationship includes the idea that each of us lets the other be who they are and we have the trust required to make that work.

The idea of our "own" money does not exist including those assets that by definition are individual such as retirement accounts, but we don't think of them separately. A single exception was some inheritance that was kept separate to be used for something particular to one of the families.

I think if these conditions can't be met I don't know how people can be married, so I guess I have nothing to suggest.

wrongfunds
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by wrongfunds » Sun Apr 08, 2018 12:48 pm

If you are making $310K this year, seriously, there is no need to set up anything formally. It would be highly unlikely that there will be friction in your marriage because of the finance. At that income level, $10K discretionary spending should be noise.

Ask well-to-do BHs who are married over 25+ years and still on their first and only marriage, "how many money fights they had over the 25 years"

dbr
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by dbr » Sun Apr 08, 2018 12:52 pm

wrongfunds wrote:
Sun Apr 08, 2018 12:48 pm

Ask well-to-do BHs who are married over 25+ years and still on their first and only marriage, "how many money fights they had over the 25 years"
I don't know if we are well-to-do, but we are not struggling. The number of money fights we have had is zero. Well, there was one. I had to do a lot of convincing to get her to buy a really good piano when we were married. She has told me a hundred times how glad she is I stuck to my guns on that one.

L8rboys
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by L8rboys » Sun Apr 08, 2018 1:15 pm

We have been married 37 years and agree with nearly everything posted here. Due to the nature of our chosen professions, I have had a significantly higher income (more than double) than DH over the years and work significantly more hours. However, our money has always been joint and no decision are based on our respective incomes. It does help that we have very similar views on most things including spending.

I do have one question for you all. We are planning retirement in two years and plans look good for a comfortable retirement. DH would like to work two days a week for a few years in retirement to have extra spending money for things he would like to do (think Vegas, fishing and scuba diving trips).
While I can understand that we have a retirement budget and this would be “extra” money, my thoughts are that I would get half of whatever the take home is for extras I would enjoy (think renting a beach house with our kids/grandchildren or taking them to Disney). This seems fair to me since I have never once in 37 years said, this is my income, my bonus, or even in retirement, my pension as he has none.

Am I out of line in my thinking?

Independent
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Independent » Sun Apr 08, 2018 1:29 pm

There have been years where my wife earned more and years when I earned more. Neither of us ever suggested that the difference in earnings should translate into a difference in spending.

Our wedding vows included "for better and for worse, for richer and for poorer". We thought that meant we agreed we were in this together.

Regarding the three account (yours, mine, and ours) method, that does avoid some discussions you may feel are just a distraction.
Notice, however, that you will still disagree sometimes on what should be charged to "ours" vs. "yours or mine". ie what expenses are truly joint expenses?

getthatmarshmallow
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by getthatmarshmallow » Sun Apr 08, 2018 1:34 pm

What's worked for us (10 years): pay retirement/savings first; budget for bigger expenses (e.g., redoing the kitchen); pay the bills; talk once a month about cashflow; don't worry about it otherwise. We're pretty smart spenders, and don't carry credit card debt, and tend to talk about purchases, so this works for us. I'd approach this by figuring out your main targets and benchmarks -- then it doesn't matter if you buy that computer equipment and then nothing or she buys clothes every week but never makes big purchases. We deposit everything into one account and pay everything out of it.

I'd recommend not playing the "I work longer hours so I get more play money" card (leads to resentment) or "spouse blew $x so I get to blow $x, too" (leads to being broke.)

TwstdSista
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by TwstdSista » Sun Apr 08, 2018 1:40 pm

L8rboys wrote:
Sun Apr 08, 2018 1:15 pm
We have been married 37 years and agree with nearly everything posted here. Due to the nature of our chosen professions, I have had a significantly higher income (more than double) than DH over the years and work significantly more hours. However, our money has always been joint and no decision are based on our respective incomes. It does help that we have very similar views on most things including spending.

I do have one question for you all. We are planning retirement in two years and plans look good for a comfortable retirement. DH would like to work two days a week for a few years in retirement to have extra spending money for things he would like to do (think Vegas, fishing and scuba diving trips).
While I can understand that we have a retirement budget and this would be “extra” money, my thoughts are that I would get half of whatever the take home is for extras I would enjoy (think renting a beach house with our kids/grandchildren or taking them to Disney). This seems fair to me since I have never once in 37 years said, this is my income, my bonus, or even in retirement, my pension as he has none.

Am I out of line in my thinking?
I can see both sides of this, and it doesn't sit right with me either way. If I was the one working, I wouldn't mind the split. But that's actually our plan. I asked the husband and he says no. You're both retired, the goal is to be retired. He is solely working extra for extra things he wants to do without digging into your "retirement" funds. (so basically, if he was the one working for a specific fun thing for himself, he would not want to split it). For the record, I make 90% of our income.

It's a tough one -- you and your husband should certainly come to an agreement before he commits to working part-time in retirement. If he knows he's splitting it with you 50-50, then he might make a different choice.

dbr
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by dbr » Sun Apr 08, 2018 1:40 pm

L8rboys wrote:
Sun Apr 08, 2018 1:15 pm

Am I out of line in my thinking?
Yes, you are out of line. Also, if his intent is to start owning part of the income, then he is out of line too. Why would you both start down a path like that now? Nothing is changed. The total income is the total income and you each do what you want, including the beach house, etc. If the total spending exceeds what you can jointly budget, then you are going to have to agree on what to do. You did that for 37 years. Why change?

L8rboys
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by L8rboys » Sun Apr 08, 2018 2:10 pm

Dbr and TwstdSista, thank you for your responses. And, Independent2 – sorry if I highjacked your question!

Like TwstdSista, I can see both sides of this which is why I am asking. However, I agree completely with dbr. We should look at this together as part of our joint budget. We will work it out – we always do. This is often to my favor - as DH advised our son-in-law when our DD got married “The husband should make all the big decisions in a marriage and the wife, the little ones - although it's funny how there have not been any big decisions in 37 years!”

denovo
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by denovo » Sun Apr 08, 2018 2:15 pm

Do you have a prenup?
"Don't trust everything you read on the Internet"- Abraham Lincoln

downshiftme
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by downshiftme » Sun Apr 08, 2018 2:41 pm

I am a big fan of the one-big-pot methods of finances for married couples. All income from either spouse goes into a common pot and mutual agreement (a budget) determines where it gets spent. For practical purposes (small gifts, favorite personal care product, occasional lunch not otherwise budgeted) then having an allowance account for each spouse to do as they wish without needing to consult the other is helpful. Ours was never more than $100/mo, but with your high income maybe more is appropriate. Same fixed dollar amount for each. No percentages, no separate savings. Make appropriate allowances in the budget for appropriate costs such as women's hair care typically costs more than men's. That's a budget item, not a personal allowance item. You don't need to go overboard with record keeping to have a budget. Just mutual agreement on what you want to use your money for is enough.


This seems fair to me since I have never once in 37 years said, this is my income, my bonus, or even in retirement, my pension as he has none.

Am I out of line in my thinking?
In keeping with the one-big-pot idea of mutual finances, I would suggest even in retirement work for income means the income goes into the mutual pot. If there's a big reason for one spouse working in retirement, such as that spouse wanting a new bass boat, then mutual agreement (the budget) could reflect that. It's still joint money, so coming to an agreement between you is still a necessary step.

I don't think you are out of line in expecting the same treatment for income as has been the way you worked in the rest of your marriage. If this is how you manage personal finances, then income from either spouse goes into the common pool. Joint agreement can spend the money however you both agree and the working spouse does not get extra veto power or extra say in spending "their income" since all income is joint.

travelingteacher
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by travelingteacher » Sun Apr 08, 2018 3:35 pm

I believe also believe in having a one-big-pot method for married couples. When my husband and I got married in 2009, I was the major bread-winner, but never considered it might right to spend more money because it was I earned more. I'm stuck with a salary job, my husband gets paid hourly. After several years, our roles reversed and he became the main bread-winner. The money we earn separately is our money to spend, share, and save as a couple. We've paid off debts (his from college and a truck) once we got married, the majority of it came out of savings I put away when I was single. We're partners 100%. While setting up a budget for discretionary expenses is a good idea, I don't like the idea of you getting more because of the extra rental work you do. If you have kids and your wife has to stay at home to watch kids while you work at your rental properties - how will you divide your earned money to pay your wife for taking over kid-duty? I'm not saying you're not entitled to a make an expensive buy now and again, but having open and honest communication about your finances will help you avoid any resentment your wife may feel about not being able to earn as much as you.

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bottlecap
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by bottlecap » Sun Apr 08, 2018 3:45 pm

My wife and I combine everything that we make. I probably spend more, butonly because I do more by way of activities. It’s rare when we buy something discretionary for more than $50, but generally tell each other when we are thinking about making such purchases. We never keep score and both pretend like the other is the "big spender" jokingly.

If you need an allowance, go for it, but make it the same. Who works harder and thus deserves more is a recipe for disaster and resentment. A marriage won’t work that way.

Good luck,

JT

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by sport » Sun Apr 08, 2018 3:48 pm

Since I earned enough for the standard of living we wanted, we saved and invested all of DWs earnings. So, everything went into the joint checking account and we paid the bills from that account. By saving DWs earnings, we have a very comfortable retirement. I also saved in 401k plans offered by employers. So, when DW stopped working to raise our children, there was no change in our standard of living. She worked part time when the children were in school and went back to work full time to pay for their college expenses. Our children graduated with no student loans, we retired comfortably, and neither of us earned a big salary.

GCD
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by GCD » Sun Apr 08, 2018 3:50 pm

Independent2 wrote:
Sun Apr 08, 2018 10:36 am

My initial thoughts are send all income into a shared bank account, and then have two separate accounts (one for each of us) that is our own discretionary spending amount for each year. The rest will be saved/invested (We're good from this standpoint). We're each smart spenders, but naturally there are things that we may not agree with each other on with regards to spending (as any couple would), so thinking this would be a better solution than just ad-hoc spending without a budget. She tends to spend her money on smaller non-essential purchases (clothing, etc.) whereas I tend to save that money towards a larger discretionary/non-essential purchase (electronics, car-related items).
You are smart to talk it out and agree on a plan. From what I read, financial infidelity is a bigger problem than sexual infidelity when it comes to divorce. You are likely to have your plan evolve as you settle into marriage and get comfortable with the whole thing. The transition from single to married makes everybody a little nervous about keeping their independence.

My wife and I started out with a similar plan. Each kept our own bank accounts and we had a joint that we contributed equally to and paid all the joint bills from. This evolved to all our money going into a joint account and no individual accounts.

She was always good about keeping her personal spending to a minimum. Neither of us blows money. I had a hard time spending "our" money on "frivolous" things (hobby type stuff) so I collected an "allowance" of $100 a week and what I didn't spend on lunch/coffee I could save up in a coffee can to buy fun, non-essential things purely for myself. It was psychological on my part. It helped me feel comfortable spending on non-essentials from what had become a joint pot of "our" money. My wife just spent, it wasn't a hang-up of hers.

I eventually got over it, largely driven by the credit card rewards of making all my purchases with a CC.

So now we both buy whatever we want and don't worry about it. Anything over about $10,000 we would probably discuss first.

You'll probably see things evolve naturally as you get used to the whole "our" thing. The critical thing is just to be honest about it and keep talking it through.

Edit to add: Per a post above, I don't know if I am well to do by BH standards, but I am on my only marriage and we never fight about anything let alone money. In fact we rarely disagree at all about money. Not to preach, but financial compatibility is very important to a successful marriage.

drake19
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by drake19 » Sun Apr 08, 2018 4:06 pm

I've been married 18 years, and we've always just had joint accounts. Your income is high. I presume you eat out, take trips, etc. How will you pay for those, out of joint or individual? I don't think the idea of having an "allowance" is bad, but it just seems complicated to have separate accounts for discretionary spending.

Sandi_k
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Sandi_k » Sun Apr 08, 2018 5:49 pm

Independent wrote:
Sun Apr 08, 2018 1:29 pm

Regarding the three account (yours, mine, and ours) method, that does avoid some discussions you may feel are just a distraction.
Notice, however, that you will still disagree sometimes on what should be charged to "ours" vs. "yours or mine". ie what expenses are truly joint expenses?
For us, this was a simple conversation. As circumstances have changed, we revisit the topic, but we're in pretty close agreement.

Lunch out at work vs. lunch out on the weekend together (Personal vs. Joint)
Haircuts? Basic living expense, even though mine cost more.
Costco (most of which is beer or other drinkables - mainly him). We pay for this jointly, as we don't want to micromanage who eats what.
Pets or Vet? Joint.
Club membership for DH's aviation hobby? His personal expense.
Amazon Kindle purchases? My personal expense.
Doctor visits or prescriptions? Joint (in sickness and in health)
Car insurance? Joint, regardless of car and who drives it (although now that DH is up to 3 vs. my 1, I'm giving him a gimlet eye!) ;)
Clothing? Tends to come from our personal accounts, since we frequently are shopping with friends, not each other.
Vacations: Joint if they're together, personal spend if they're on our own (i.e., family obligation trips where only one can go due to work).
Gasoline: Personal for our regular commuting; joint when we take a road trip together.

runner540
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by runner540 » Sun Apr 08, 2018 6:10 pm

If you're not going to have joint finances, equal spending money amounts seem fair, and $10k/year with your income doesn't seem out of line. But then you have to figure out what goes in that category, and what is a joint budget item...If your job requires expensive gear (say, special work boots or nursing shoes), does that come out of personal or joint finances?

As seen in the frequent threads about married finances, many people have worked out different solutions. But the idea of "I work more/harder/longer" outside the home resulting in "I should get more play money" doesn't work well: it would require detailed scorekeeping, and incentivize decisions that might not be in the best interest of the whole household. You would have to assign a dollar value to every task/minute to make it "fair".

If you move to a home closer to one person's job so they spend less time commuting, does that result in lower allowance since they "have" to spend less time commuting? If one person gets laid off, what happens? If she picks up your dry cleaning, to help you look sharp at work and earn more, does that "earn" her any extra dollars? This seems ridiculous, but it's the direction you're headed, and constant score keeping is not typically associated with relationship success. Whose "fault" is it that you're in a higher tax bracket married? What if one person has to work more for the same pay? Do they now get more spending money even though household income hasn't gone up? What if you are more efficient and get more money for fewer hours - does that mean you get less spending money?

pennywise
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by pennywise » Sun Apr 08, 2018 6:46 pm

I think the mechanics of how money is managed (joint accounts, separate, his-hers-ours) actually are a very minor aspect of this issue. What's truly important is that you COMMUNICATE about what is important to each of you. You have to be open with each other about how you see this aspect of your partnership and about what each of you needs, likes, finds irritating and can't abide in terms of how your financial life together should run. And never forget how we manage our money is about power and control and fear and hope and security and worry. It's also infused with memories and lessons based on how each partner was raised. And then two people with all that baggage have to figure out how to run a financial life together-whew!

My other takeaway message as someone in a 30+ year marriage (our first and hopefully only one) is that communication isn't a one shot one conversation process. As a couple you will hopefully be talking about how you manage your funds for the rest of your life together. In sickness and health, for richer or poorer...money is always there and it's always something that can make or break a marriage. Seasons in life come and go, circumstances change and the only constant should be that you keep listening to each other and trying to do the best you can by and for each other.

Obligatory personal experience section: unlike most of the responses here we started out with a proportional joint account ie we agreed on what we needed to spend to run our household and put in that amount according to our salaries. Each of us kept the remainder in separate individual accounts. It worked well. Can't say we didn't have some major issues about spending but then again we also kept working on getting in tune. Now it's all in one pot and that works too.

So start talking, try to listen with an open heart, be flexible and never stop talking!

letsgobobby
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by letsgobobby » Sun Apr 08, 2018 6:53 pm

From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?
This is a dangerous attitude and likely to sow a lot of discord in the future. As a married couple, in general, you are now a team. Get used to thinking that way.

HornedToad
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by HornedToad » Sun Apr 08, 2018 7:48 pm

Independent2 wrote:
Sun Apr 08, 2018 10:36 am

If we each get $10k/year discretionary spending, would that be too much, too little? From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?
The part above would be a horrible attitude IMO. The motivation would be that both of you would have more money from working better at your job. Or does someone get extra for doing the dishes, mowing the yard, buying groceries... don't nickle and dime your spouse.

We do a his/hers/ours accounts. We put $200/mo in the individual accounts and rest go in the joint account. The individual is more for splurges or buying each other gifts. So I can't critique her purses or shoes and she can't complain about books/electronics. Even then sometimes we periodically just transfer to joint since alot of things are just paid from joint and we don't worry about it.

$10k/year is pretty substantial for personal, so you'd probably need clear definitions on it and see if it makes sense to do that vs. just consider some things joint expenses.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Dottie57 » Sun Apr 08, 2018 8:35 pm

A small note from someone unmarried.

My parents were married for 62 years. Mom was SAHM and dad a veterinarian/small business man. He had long hours and mom took care of the household.

Dad never treated mom as less than a full fledged partner. Mom took care of the household and dad the long term planning. They talked about finances, bills, buying the practice at the dinner table. No acrimony. No one set the rules. They were a team.

OP, think of yourselves as a team which pulls together to build your family life. Good luck.

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celia
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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by celia » Sun Apr 08, 2018 11:48 pm

Independent2 wrote:
Sun Apr 08, 2018 10:36 am
From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?
What if your wife takes a few years off work to stay home with young kids? Will that mean she gets $0 in spending money? (Note, she will be doing the bulk of the child care, diapers, feeding, laundry, activities with kids, . . .)

What if you have surgery and can't go to work for several months. Will that mean you get $0 in spending money to buy things online?

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Captain kangaroo » Mon Apr 09, 2018 12:46 am

This is my biggest fear when it comes to marriage. My girlfriend loves buying clothes, she isn't over the top about it, but she likes to buy a new outfit pretty regularly. I don't spend any money. I feel like friction would be created if we suddenly combined incomes, she started buying more stuff, while I buy nothing still.

If I ever get married, I feel the best way to do it would be have a joint account for bills that you both deposit money into, then have your own separate accounts where your paychecks/investment income/etc is mainly deposited to..then you just transfer it to the joint account.

Essentially the reverse of having a joint account where you each get an "allowance", you have your own separate accounts, but you each deposit money per month into the joint for bills

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Tribonian » Mon Apr 09, 2018 12:50 am

Marriage has the potential to be greater than the sum of its parts when all is going well. When you discuss anything, listen to your spouse so that you can address concerns together as a team.

In the early years of our marriage when we were still finding our way, we found it helpful to both have veto power over large expenses, no questions asked. You shouldn’t run into too many insurmountable disagreements with your income.

Congratulations on your marriage- may it exceed both your expectations.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Tamarind » Mon Apr 09, 2018 6:32 am

Also recently married. We are in the process of combining liquid accounts (we both welcome the chance to have fewer accounts, and due to salary discrepancy it makes more sense to combine paychecks in a single account) and adjusting investments to our shared AA.

Your plan generally seems good. Hopefully you set the groundwork for this or discussed how you would want to do it while you were engaged.

Discuss, adjust, bend for each other, discuss some more, I think, is the trick.

The key attitude of mind for you is likely to be recognizing that all your discretionary purchases are equally pointless. Judging what someone else spends money on, as long as the amount they are spending is reasonable and works in the budget, is a losing proposition.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Shallowpockets » Mon Apr 09, 2018 7:16 am

We are a couple of 32 years together. We have always done mine, hers, ours. All earned money went to our seperate savings accounts. In fact, I never even knew exactly what her salary was. We share a checking account, but this is pass through for paying bills.
We notify each other of what we owe on each other's seperate CC bills according to what was bought. All CC are paid off monthly. These expenses that we spilt include groceries, restaurants, travel. Our personal spending is done on our own money. If she wants something from Kohls, she buys it. If I want new bike tires, I buy them. This spending is seperate.
We both have our own investments and thankfully are in the two comma club, each.
Why this way? Because when I met her she was established and paid well. Me, I was starting. I did not want to sponge off any of her money. Keep it fair.
To be fair, we are both on the same page with spending.
We discuss big purchases. New driveway, redo bathroom. Doesn't always have to be a huge purchase. Most things shared we discuss. If something is an 'US' purchase we talk about it. Could be buying new flowers in the spring for the garden. Could be a new TV.
However, if I want a new golf club, I but it and pay it myself. We both bought our own computers. We buy our own clothes.
It has always been this way for us and works well.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by djpeteski » Mon Apr 09, 2018 7:57 am

My wife and I are survivors of divorces and we have done things very differently than our previous relationships. Given that most divorces end with money fights or money problems it is an important problem to address. Nipping these problems in the bud is a great investment in time and resources. You are wise to ask for advice.

To me the amount of discretionary spending is not as important at the process for arriving at that figure. Also, in that case, that there is no judgement on how that money is spent. In our case, I receive less money than my spouse and sometimes I put some of my money into our investment accounts. However, there is no resentment by either party as we mutually agreed on the budget, and I am free to do with the money as I wish. So is she.

Arriving at, and agreeing upon a workable budget is an important skill. To develop this skill I would highly recommend getting taking Dave Ramsey's Financial Peace University. While not all the subject matter might be applicable to you guys, I would think that the information and advice on going through the budget process will be invaluable.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Pajamas » Mon Apr 09, 2018 8:07 am

Independent2 wrote:
Sun Apr 08, 2018 10:36 am
From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?
If motivation for the extra work of managing rental properties is a problem, then sell them, especially if the necessary motivation is increased discretionary spending for you alone.

When similar issues of handling marital finances have been discussed before, I have noticed a lot of variation in what works for different couples. The most important thing is that whatever you both decide together works for both of you. What does your wife think about it?

It might be helpful to you both to approach the personal spending issue from "How much do each of us need?" rather than "How much do each of us deserve?" or "How much is each of us entitled to?"

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by dbr » Mon Apr 09, 2018 8:09 am

Pajamas wrote:
Mon Apr 09, 2018 8:07 am

It might be helpful to you both to approach the personal spending issue from "How much do each of us need?" rather than "How much do each of us deserve?" or "How much is each of us entitled to?"
That is just a hugely wise piece of advice.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Chuck5781 » Mon Apr 09, 2018 9:39 am

All assets are joint assets, all liabilities are joint as well, once a marriage has begun. This has been our philosophy and has served us well, and from the majority of the comments here, also for many readers of this forum.

Having said that, we do believe it’s not terrible to have a few dollars tucked away in your wallet, to handle a personal item that benefits only you. It’s likley also a good discipline to save up for a larger purchase that fits this description, without it affecting the regular cash flow planning of the family.

My example would be a new golf club - saving a few bucks every month - and finally accumulating enough to splurge on that new driver - is an accomplishment and a reward for being a saver, rather than spending a few dollars every day on say, coffee. Obviously everyone’s spendy vices are different, and what you might be willing to sacrifice daily will also be different, but the practice of deferring consumption remains in my view a positive exercise.

There’s also the practical aspect of all this conversation - the partner responsible for cash flow planning,shouldn’t be always looking over their shoulder for unexpected discretionary purchases, that throw the plan off. There are enough unexpected things that come up, without being blindsided by that new putter I decided I couldn’t live without (I speak from experience on this subject btw)
The richest man is not he who has the most, but he who needs the least.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by alpenglow » Mon Apr 09, 2018 10:33 am

I haven't read the whole thread, but my advice would be to keep it simple. We've been married 10 years and we spend as needed from a common account. Done.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by jehovasfitness » Mon Apr 09, 2018 10:43 am

TwstdSista wrote:
Sun Apr 08, 2018 11:22 am
When the husband and I got married we were saving for a house. Our monthly allowance was $25 each and we both made similar incomes. That's now increased to $100 each. But now I make 90% of the money. We still keep things equal. (although he's less of a spender than I am).

I am a big fan of an "allowance" of sort for each spouse. I am not a fan of an uneven split. I would feel resentment if I got less, regardless of income levels.
Agreed, that said, my wife makes more than me and we give her more "allowance" because she has a more stressful job along with a terrible commute.

To me, that's "fair" on several fronts and I'm ok with that.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by aristotelian » Mon Apr 09, 2018 10:47 am

My wife and I have zero discretionary spending in the sense of money that we can spend without talking to each other. We are in the "everything is joint" crowd.

I would not pull the "I work twice as hard and make twice as much" card. Once you guys have kids, you are both working just as hard even if only one of you is getting paid. Even if you don't have kids, it is debatable whether level of work is the only factor contributing to income. If that is really what it's about, maybe you can bring her into the real estate business.

I also think the ideal system would depend greatly on the personalities involved and the types of arguments you are seeking to mitigate. Are you saying that she is more frugal then you and you are looking for a way to justify your spending?

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by binvesting » Mon Apr 09, 2018 1:04 pm

Pajamas wrote:
Mon Apr 09, 2018 8:07 am
Independent2 wrote:
Sun Apr 08, 2018 10:36 am
From a fairness standpoint though, I put in longer hours between the job and additional work from managing rental properties, so should I be getting more discretionary spending (if not, less motivation for me to do be doing all this extra work)?
It might be helpful to you both to approach the personal spending issue from "How much do each of us need?" rather than "How much do each of us deserve?" or "How much is each of us entitled to?"
Wow, +1 for this, what a great suggestion.

Hi Op,
I am 34, married for 10yrs now, I am just sharing my story incase if it'll be helpful for you. First 2 years of marriage, i made very little money as a student and my wife was working full time. Then for 2 years we were DINK, both making the same money. The next 4years my wife was a stay at home mom. After that break, for the past 1.5 years she's been working, making 75% of what i make. Often we discuss that its her choice to work or not since out second son is only 2yrs old and goes to daycare. We are not wealthy but are in the accumulation phase.
So, (1) life can change in different ways so best approach would be not to be fixated on how much money one gets. say there is a recession one loses job, is it time to reduce all discretionary or argue that since the other makes all the money they should get all the right to spend more? (2) fair is very fluid and not easily measured at different stages of life, so i would rethink that being a parameter for how much one gets to spend. No matter how hard my job becomes or how much more i make, it won't make it up to how much my wife had given up for the family. So, if you start with saying 'i deserve more coz i spend longer hours', when for some reason if one of the two decides to stay at home by choice, that might make that person more eligible for more discretionary spending since they have sacrificed more, and then where does it end?

Each family will figure out a system that works for them. And you will too.

For ex, my salary, after maxing 401k and our roth iras, fully goes to our household expenses(we live hcol and with two kids and mortgage its expensive here). All our needs and wants goes through one credit card account* that we both share that I pay off and my checking account funds our mortgage auto payment. As long as she works, we plan to send my wife's salary to our savings(for us and kids' education)

This is a very simple system that has worked for us** since (1) we both get to save(irrespective of amount saved) so there is no insecurity (2) only one account that we use for spending so no leaks(mortgage is fixed payment) (3) we can reliably say how much we save and spend***

* - we dont have any other joint account except for this credit card. We both dont monitor this. I just pay off the card once a month and we have a rough number that we have as upper limit as monthly family spending. Only when it crosses it, we quickly pore over the statement to see why. No questioning or analyzing each other

** As another poster said, we both dont buy anything without informing the other. not as a permission but to bounce off ideas to see if it can wait or not.

*** this system is a similar one used by my parents. both worked but were middle class in non-USA country. my father managed household expenses while my mom paid mortgage(indirect saving in my country of birth) and saved. my father called it 'one hand spends but the other hand saves, only then we'll be okay' to describe the collaboration.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Walkure » Mon Apr 09, 2018 2:55 pm

Captain kangaroo wrote:
Mon Apr 09, 2018 12:46 am

If I ever get married, I feel the best way to do it would be have a joint account for bills that you both deposit money into, then have your own separate accounts where your paychecks/investment income/etc is mainly deposited to..then you just transfer it to the joint account.

Essentially the reverse of having a joint account where you each get an "allowance", you have your own separate accounts, but you each deposit money per month into the joint for bills
This is what we do, with pay direct deposited to our individual accounts, although it largely works because our salaries are almost exactly equal (so far). Each of us has a personal credit card from before marriage that is paid out of our individual accounts. A separate card is paid out of the joint account for what we deem joint expenses. Almost all household shopping is done together and agreed upon in the store. At the end of the month we sit down and decide how much to "assess" each of our accounts to pay into the joint checking. Right now the amount is dollar for dollar equal but that could be adjusted if income diverges.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by international001 » Mon Apr 09, 2018 3:07 pm

I am amazed of the general consensus about join accounts, whatever the choices/work/contribution of each partner.
But US is very conservative in regards marriage, and there is some expectation of men as provider and women as dependent.

In Europe, the normal thing is to have a joint account for the common expenses. Rest is for you. Women may even get offended if men wants to provide too much.

But whatever works in whichever culture. Don't pretend is just a neutral financial agreement

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Cobra Commander » Mon Apr 09, 2018 3:09 pm

Walkure wrote:
Mon Apr 09, 2018 2:55 pm
Captain kangaroo wrote:
Mon Apr 09, 2018 12:46 am

If I ever get married, I feel the best way to do it would be have a joint account for bills that you both deposit money into, then have your own separate accounts where your paychecks/investment income/etc is mainly deposited to..then you just transfer it to the joint account.

Essentially the reverse of having a joint account where you each get an "allowance", you have your own separate accounts, but you each deposit money per month into the joint for bills
This is what we do, with pay direct deposited to our individual accounts, although it largely works because our salaries are almost exactly equal (so far). Each of us has a personal credit card from before marriage that is paid out of our individual accounts. A separate card is paid out of the joint account for what we deem joint expenses. Almost all household shopping is done together and agreed upon in the store. At the end of the month we sit down and decide how much to "assess" each of our accounts to pay into the joint checking. Right now the amount is dollar for dollar equal but that could be adjusted if income diverges.
We have a similar system to this although we periodically dump large sums into the joint checking account so we don't have to monitor it very much. It seems to work very well as we are both very happy with it. DW was talking to one of her friends the other day who hasn't yet found the right path for managing finances and her friend thought our system sounded perfect. Lots of different want to make this work and I agree with what others have said that the most important thing is that you both agree on it.

I disagree with others regarding the real estate income. Until you have kids there is very little that you have to do around the house so provided you otherwise split the housework 50/50 I think it's fine for you to keep that money. Alternatively, she could work on the few household tasks that exist without kids while you do your real estate work. I think the equation changes with kids because there is so much work to do that while you're doing your real estate work she will probably be tending to the kids.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by Good Listener » Mon Apr 09, 2018 6:30 pm

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by RudyS » Tue Apr 10, 2018 10:36 am

alpenglow wrote:
Mon Apr 09, 2018 10:33 am
I haven't read the whole thread, but my advice would be to keep it simple. We've been married 10 years and we spend as needed from a common account. Done.
Same for us, except we have 53 years of our (one and only) happy marriage.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by mouses » Tue Apr 10, 2018 10:46 am

L8rboys wrote:
Sun Apr 08, 2018 2:10 pm
Dbr and TwstdSista, thank you for your responses. And, Independent2 – sorry if I highjacked your question!

Like TwstdSista, I can see both sides of this which is why I am asking. However, I agree completely with dbr. We should look at this together as part of our joint budget. We will work it out – we always do. This is often to my favor - as DH advised our son-in-law when our DD got married “The husband should make all the big decisions in a marriage and the wife, the little ones - although it's funny how there have not been any big decisions in 37 years!”
The way I heard this, the husband gets to make the big decisions like is the U.S. farm policy correct, and the wife gets to make the little decisions like do we buy a new car.

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by alpenglow » Tue Apr 10, 2018 10:57 am

RudyS wrote:
Tue Apr 10, 2018 10:36 am
alpenglow wrote:
Mon Apr 09, 2018 10:33 am
I haven't read the whole thread, but my advice would be to keep it simple. We've been married 10 years and we spend as needed from a common account. Done.
Same for us, except we have 53 years of our (one and only) happy marriage.
:beer

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Re: Structuring Newlywed Finances for Fairness and Less Arguments

Post by dsmil » Tue Apr 10, 2018 11:15 am

I think that you always want to communicate that you are on the same team financially, and try to make things as even as possible. While it might be "fair" to say that you work harder and should be able to spend more money, I would only do that if your wife is ok with this. Maybe you start at the same base spending amount, and then any extra money made from the rental properties is split, with more of it going to you. I just think that it's risky to have drastically different spending amounts, just because someone makes more money. I've always made more than my wife (she now stays home), and we've always either spent the same, or she's spent more. We've budgeted at amounts that are enough for us and it has nothing to do with how hard we work, or how much money we make.

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