Marriage [How should finances be handled?]

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Esq123
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Marriage [How should finances be handled?]

Post by Esq123 » Mon Aug 13, 2018 3:36 pm

Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer

barnaclebob
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Re: Marriage

Post by barnaclebob » Mon Aug 13, 2018 3:45 pm

Its really up to you. Responses in the past have ranged from "we keep every penny separate and put money into a joint account for shared expenses with a ratio of hours worked factored by relative salaries blah blah blah" to just combine it all and agree on what you do with your money. If you were both saving a little and paying down the debt too then continue with whats been working.

My feeling is that everything should be combined unless prior children or very different debt levels are involved. But once the debt is taken care of you should probably be on the road to combined finances.

Taxes should be easy to figure out, just do a test run in turbotax.
Last edited by barnaclebob on Mon Aug 13, 2018 4:20 pm, edited 2 times in total.

sapper1371
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Re: Marriage

Post by sapper1371 » Mon Aug 13, 2018 3:59 pm

My advice is that if you are comfortable marrying someone you should be comfortable combining your finances unless there is some underlying issue. Marriage is the ultimate relationship and there will be highs and lows for you both along the way. Keeping everything separate might lead to a lot of hard feelings along the way especially if one person feels they made more sacrifices than the other.

I’m sure there are people who have made it work, I’m just speaking from experience. All of the people I know who keep things separate are either divorced or miserable...YMMV

Broken Man 1999
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Re: Marriage

Post by Broken Man 1999 » Mon Aug 13, 2018 4:32 pm

When wife and I were both employed, and had a mortgage, or car loan, we put our respective share of expenses into a joint checking account.

We each had a checking account of our own for our personal spending.

We split the bills by allocating the share pretty much according to the income of each. Though, truthfully I willingly paid more of the bills as it allowed my wife to contribute more to her 401k plans.

Our joint checking account was closed a short time ago, as our credit union was adding fees on accounts. Members could only have one free checking account unless willing to jump through many hoops. Since we didn't have any large bills that needed both of us to pay, and seldom used the account over the last few years anyway, we just pulled the plug.

Today we share the bills like this: She pays for groceries, our cellphones, and vehicle gas bill. I pay everything else. It works for us. I have no earthly idea, nor do I care, what the breakdown of expenses are nowadays. There is always gas in the van, food on the table, my cell phone works, and I keep the lights on.

If our respective bills are paid, whatever is left is up to each of us to save, spend, gift.

Today we aren't worried about what the other was spending. When we were first married, 47 years ago this November, things were much different than today. I don't miss those days at all.

OP, in marriage all bills are joint. The goal is to eliminate debt TOGETHER, and build wealth TOGETHER. It could, and does sometimes require more from one partner than the other. So think of all debt as "ours", not "hers" or "yours." If you see debt as a couple, one member won't have to see the other's financial position get tremendously better while the other is still digging their way out. That could be awkward, and certainly dispiriting. I don't believe everyone thinks that way, but I do.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

Grt2bOutdoors
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Re: Marriage

Post by Grt2bOutdoors » Mon Aug 13, 2018 4:49 pm

A marriage is a legal contract, the joining of two parties - usually for love, companionship and to pool resources as two if handled strategically can improve their outcomes. If you both are rowing in sync, you’ll find the boat will glide across the water towards your destination in due time. If one party wants to do their thing and the other does something differently you will find yourself floundering and drifting aimlessly.
I vote for opening a joint savings and checking account, a joint brokerage/mutual fund account. Put both your paychecks in the checking account, pay your bills out of it, pay yourself out of it and log it in your checkbook as you do so, that way you can keep track of what’s coming in and what’s going out (both of you). Give yourselves a set amount each month to do as you please, outside of normal household expenses. Obviously, some accounts can not be joint - 401k, IRAs.

If you have assets from prior to getting married, keep them separate if you wish. Do not commingle them with marital assets.

This is what has worked for us, I don’t understand the “he pays this, she pays that routine”. What happens if one of the two or both of them become unemployed, what are you going to do then, let the electric bill go unpaid? Or if one is paid more than the other? Seems like too much, keep it simple. Leave the complexities to the other parts of life.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Marriage

Post by Grt2bOutdoors » Mon Aug 13, 2018 4:53 pm

sapper1371 wrote:
Mon Aug 13, 2018 3:59 pm
My advice is that if you are comfortable marrying someone you should be comfortable combining your finance.

I’m sure there are people who have made it work, I’m just speaking from experience. All of the people I know who keep things separate are either divorced or miserable...YMMV
+1. Agree 100% on your last paragraph.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: Marriage [How should finances be handled?]

Post by LadyGeek » Mon Aug 13, 2018 5:00 pm

This thread is now in the Personal Finance (Not Investing) forum (finances).

Congrats! :beer First things first. Do not change any paperwork until after the marriage.

Investments are one part of Financial planning.

Are one or both of you both working? Marriage is a qualifying event when it comes to employee benefits. You'll need to change your medical / dental insurance plans to cover both. If both are working, decide who has the best plan and drop one of them (or keep both if it's cheaper to do so).

FYI - Retirement plans, such as a 401(k) or Traditional IRA, belong to the person - regardless of marital status. They cannot be combined.

If you are married this year, you can claim as "Married Filing Jointly" for the entire year. The IRS Withholding Calculator is your best source to figure out how to adjust your W-4 tax withholding.

IMHO... As for checking and savings accounts, there is no need to combine anything simply because you are married. Consider a joint account for common expenses, if that seems appropriate.
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getthatmarshmallow
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Re: Marriage [How should finances be handled?]

Post by getthatmarshmallow » Mon Aug 13, 2018 5:21 pm

We combined finances, and budget everything out of our total income rather than paying for expenses as roommates might. (Personal preference: it felt weird to think of bills as one person's problem rather than belonging to both of us!) I manage all the investments and money but keep spouse in the loop. It works for us -- although neither of us has significant assets or debt prior to the marriage.

JBTX
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Re: Marriage [How should finances be handled?]

Post by JBTX » Mon Aug 13, 2018 5:29 pm

While we each have a separate bank account and a separate credit card our finances are otherwise combined, and there is no hiding of our separate bank accounts (which are ultimately joint accounts)

The few people I know who insisted on having separate "secret" accounts used them to hide wasteful spending from the other spouse.

Also update beneficiaries on your financial accounts and consider a will.

bling
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Re: Marriage [How should finances be handled?]

Post by bling » Mon Aug 13, 2018 5:36 pm

One downside to joint finances is that it's really difficult to surprise your SO with a gift, so it's a good idea to agree to some sort of discretionary spending a month, e.g. each can take $X out a month in cash.

UpperNwGuy
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Re: Marriage [How should finances be handled?]

Post by UpperNwGuy » Mon Aug 13, 2018 5:40 pm

Three word solution: his, hers, and ours. Reach agreement on what falls into each of those three buckets.

drawpoker
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Re: Marriage [How should finances be handled?]

Post by drawpoker » Mon Aug 13, 2018 5:43 pm

Interesting here how nearly everyone (except a mod) has jumped in with opinions re: combining finances

Interesting as the OP did not ask anything at all on that, rather he asked specifically about investing/saving/ paying off student loans and taxes.

Looks like this one has derailed almost immediately after leaving the station. :shock:

Tribonian
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Re: Marriage

Post by Tribonian » Mon Aug 13, 2018 5:47 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month.
Congratulations! Marriage is my favorite institution, bar none.

As with every other aspect of marriage, communication is key. Be candid, flexible and selfless with each other. Almost any arrangement can work if both of you agree.

We took on preexisting liabilities as a team and commingled all accounts. They weren’t equal or equitable, but marriage can be greater than the sum of its parts when you’re both committed. We’ve always had veto power over major expenses with no explanations required and no hard feelings. Neither of us has exercised it in over a decade but it was helpful when finances were more precarious.

To that end, I’d regard all debts as communal debts and prioritize the ones with the highest interest rates regardless of who brought them to the relationship.

May you enjoy all the blessings of wedded bliss.

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willthrill81
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Re: Marriage

Post by willthrill81 » Mon Aug 13, 2018 5:48 pm

Grt2bOutdoors wrote:
Mon Aug 13, 2018 4:49 pm
A marriage is a legal contract, the joining of two parties - usually for love, companionship and to pool resources as two if handled strategically can improve their outcomes. If you both are rowing in sync, you’ll find the boat will glide across the water towards your destination in due time. If one party wants to do their thing and the other does something differently you will find yourself floundering and drifting aimlessly.
I vote for opening a joint savings and checking account, a joint brokerage/mutual fund account. Put both your paychecks in the checking account, pay your bills out of it, pay yourself out of it and log it in your checkbook as you do so, that way you can keep track of what’s coming in and what’s going out (both of you). Give yourselves a set amount each month to do as you please, outside of normal household expenses. Obviously, some accounts can not be joint - 401k, IRAs.

If you have assets from prior to getting married, keep them separate if you wish. Do not commingle them with marital assets.

This is what has worked for us, I don’t understand the “he pays this, she pays that routine”. What happens if one of the two or both of them become unemployed, what are you going to do then, let the electric bill go unpaid? Or if one is paid more than the other? Seems like too much, keep it simple. Leave the complexities to the other parts of life.
:thumbsup

I don't understand how some married people can share everything but their money. It's as though money is some special sacred cow that even matrimony can't touch.

Research has consistently shown that married couples who pool their resources do better financially in virtually every possible way. And this makes logical sense.

The only thing we separate in our finances is our 'allowances', which are about 1.5% of our net income. With everything else, we don't spend $5 without the other person knowing about it. That may seem extreme to some, but it has worked very well for us.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

mountain-lion
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Re: Marriage [How should finances be handled?]

Post by mountain-lion » Mon Aug 13, 2018 5:51 pm

Two financial things that have helped my marriage:

1. Each of you has at least some of your own money, to do whatever you like with, no questions asked. How much depends on your situation, but if I want to light my money on fire, I can light it on fire and my spouse isn't allowed to complain. If I want to save it for a rainy-day, I can do that too. But it is mine, no questions asked. When we started out, it was just $10, but now it is many times that. It's been a good thing.

and, almost conversely:

2. Settle on a rough amount where if you are spend more than $X, you get clearance from your spouse, or at least tell them. If you all don't agree on this number--roughly, anyway--then there can be some big surprises. And if it is too low, you all will spend too much hassle communicating.

mortfree
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Re: Marriage [How should finances be handled?]

Post by mortfree » Mon Aug 13, 2018 5:53 pm

You need to take into consideration your combined income now.

Did either or both of you qualify for Roth IRA contributions as single?
If so and someone did contribute you will need to make sure that you are still eligible with the newly combined income.
If not then you’ll need to remove that contribution from the Roth.

On the flip side, if neither of you qualified for a Roth because of single income, maybe your combine income and filing MFJ will allow you to contribute to a Roth.

All of the Roth talk is keeping it simple. If the income doesn’t meet the requirement you could always Backdoor Roth.

If you will be married by year end of 2018 then you might want to update your W-4. If you currently do Single, 0 then I believe you have the most taken out already.

Combine or separate your finances as needed. My wife and I keep separate accounts.

dknightd
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Re: Marriage [How should finances be handled?]

Post by dknightd » Mon Aug 13, 2018 5:59 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
finances are just a part of being married

Nissanzx1
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Re: Marriage [How should finances be handled?]

Post by Nissanzx1 » Mon Aug 13, 2018 6:17 pm

Congrats to you! What an adventure it will be.

One thing that I have found among my married friends whom do NOT combine finances, is that they are behind my fiends who do combine. My separate account friends have more debts (in general) and have trouble accomplishing common goals without obtaining costly financing. It promotes more selfish behavior by both parties to NOT combine.

Make sure your future wife is on board with the speed at which you will be paying off debts, and how you feel about debt in general. To some it's no big deal to borrow, but to others it's not even an option. Lots of potential for confusion and pre-marriage classes are woefully inadequate regarding financials.

Golf maniac
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Re: Marriage [How should finances be handled?]

Post by Golf maniac » Mon Aug 13, 2018 6:27 pm

My best advice is to set up a budget and stick to it. Save as much as you can for emergencies, retirement, a home, and cars. Saving instead of consuming your entire income will pay off greatly in 30 years. We went with one joint account and made major sacrifices to allow DW to stay home with kids. If we didn’t plan and make sure we stuck to a budget it would have been really easy to spend both of our incomes on going out, vacations, cars, big houses, etc. Also, when I received a raise half went to savings and half to the budget, that way we never saw the money hit the paycheck but gave a good balance to enjoy life.

It really is a hard balance, to save for important things but have some money for fun and vacations. We found a great balance but it took a while. Also, each person should have some personal money in the budget that is theirs to spend and not have to explain their purchases.

Finally, if you have not already, you need to talk to your future spouse about their beliefs on money and saving. Having long term goals is important, but it won’t work if the two of you can’t come up with some concrete goals financially.

Best of luck and enjoy this time in your life!

delamer
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Re: Marriage [How should finances be handled?]

Post by delamer » Mon Aug 13, 2018 6:36 pm

As far as investing for retirement is concerned, come up with an allocation that you both agree on and then choose the best of your joint accounts to hold each asset in.

For example, if your wife has a low cost S&P 500 fund in her 401(k) and you do not, then use her account to hold your large cap allocation.

Overall, agreeing on your common goals and having no financial secrets from each other is more important than whether you have joint accounts.

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Re: Marriage [How should finances be handled?]

Post by NJ-Irish » Mon Aug 13, 2018 7:08 pm

I’m in the “combine the whole damn thing” camp.

The key to making that arrangement work is respecting your wife’s space when it comes to the things that matter to her. And vice versa. Don’t put a dollar limit on it, but but to understand the reason she wants whatever.

If you can set shared goals on housing, debt priorities, retirement, kids, health, the rest is just noise. More important then obsessing about spending is buying into these shared goals.

I tell my wife all the time. Let’s not let the small things get in the way of big goals.

We use budgeting software and go through bills, expenses, etc. about twice a month. The first 3 months were hard. It’s easy now. I handle the daily expenses. She probably handles 90% of our shared shopping/spending. That balance of responsibilities works for us.

ThriftyPhD
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Re: Marriage [How should finances be handled?]

Post by ThriftyPhD » Mon Aug 13, 2018 7:43 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
"Do we continue investing/saving/ paying down our student loans in the same way as before marriage?"

No. Before, you were investing/saving/paying down loans for yourself and your own goals. Now you're a couple and you'll have combined goals, so your investing/saving/paying strategy should reflect your new goals. The way you invest, the amount you save, and the amount you pay towards loans might change. You'll still want to do these things, but your strategy will likely be different than before.

"Is there anything we should take into consideration as we move forward?"

Make sure you discuss your goals with your fiancée, and then discuss your plan for how to invest and save to reach those goals. As you can see by previous comments, how each couple handles this can be quite different. Find out what works for the both of you. Communication is critical, and you'll need to come up with a plan that you both understand and agree on. You'll have difficulties if one of you is saving for early retirement while the other refuses to save at that level. Or if one of you wants new furniture as the next big purchase, while the other thinks a new car is next. The more you communicate, the smoother the transition will be.

There are also things you might not have had a need for before. This is a good time to consider life insurance and disability insurance. Update beneficiaries on your accounts? Do you each have your own medical/dental/vision insurance, or does one of you have better insurance the other can join? Combine rent/auto/home insurance? Do you plan to buy a home, have kids?

fanmail
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Re: Marriage [How should finances be handled?]

Post by fanmail » Mon Aug 13, 2018 7:50 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
Congratulations. Sounds like you are already on the right financial trajectory. The most important part of shared finances is being on the same page as your spouse.

As a point of reference, my wife and I consolidated accounts to 1 joint checking, 1 savings, 1 taxable brokerage account. Filing jointly was tax beneficial to us, but you’ll have to compare the tax tables to see if it will be for you. We have a number for purchases that requires a sign off or at least mention to the other person of $500.

This works for us but you’ll have to figure out what makes sense to you. Keep an honest and open dialogue going and you will likely do fine.

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Watty
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Re: Marriage [How should finances be handled?]

Post by Watty » Mon Aug 13, 2018 9:56 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
How will taxes effect us?
You can use tax software to do a dummy tax return to see what your taxes will be. I would highly suggest doing this so that you make sure that there are not any surprizes when you file your first joint tax return next next April 15th. Be sure to also look at your state taxes.
Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Is there anything we should take into consideration as we move forward?
If you have very unequal assets or debts be sure to talk over how you will handle that if you split up after a short marriage.

You should also talk over how your expectations about what will happen with any inheritances. State laws vary greatly both for how finances are handled in a divorce and how inherited assets are handled in a divorce.

TheDDC
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Re: Marriage [How should finances be handled?]

Post by TheDDC » Mon Aug 13, 2018 10:33 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
My wife kept a checking account in her name which was a good "strategic" brick and mortar bank paying high % interest if we ever needed teller service, though the closest branches are near her home town over an hour away. She added me as a joint account holder. That account holds the majority of cash. We have a joint account at a credit union that is used for bill payment service, free paper/cashier's checks (in the rare case we need them), direct mortgage payment, and direct deposit.

I take care of the day to day banking and investing across bank accounts, credit cards, brokerages, etc. We have joint accounts/credit cards for everything. My wife does the grocery shopping and I do the bill paying. No secrets. We run spending/receipts past each other, including my business write offs, mostly so I can record them to keep track of cash flow. I use Google Sheets. Best thing to do is communicate before a big purchase, not to "keep tabs" on each other but to find the best price/deal collectively. I find that works the best. When I go full blown CFO hardass on my wife it usually does not end well. :mrgreen:

Best of luck in your many years of matrimony!

-TheDDC
Refreshingly, a double barrel shotgun blast of truth... | Rules to wealth building: 100% VTSAX piled high and deep, 0% given away to banks, minimize amount given to health care industrial complex

MikeG62
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Re: Marriage [How should finances be handled?]

Post by MikeG62 » Tue Aug 14, 2018 6:29 am

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

Do we continue investing/saving/ paying down our student loans in the same way as before marriage?

How will taxes effect us?


Thank you :beer
Yes to your first question. Why would you stop any of these things.

Income taxes should go down as you now will file jointly (with more favorable rates versus single income tax rates).
Real Knowledge Comes Only From Experience

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Top99%
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Re: Marriage [How should finances be handled?]

Post by Top99% » Tue Aug 14, 2018 7:22 am

First of all congratulations! To cover a topic others haven't covered yet, the first question I would ask is do your wife value money the same way?
On top of paying for bare necessities money can be used for:
1) Buying stuff (fancy cars, clothing, big houses etc.)
2) Buying experiences (vacations, meals out, concerts, giving gifts etc.)
3) Buying freedom: Investing so you can retire early, go part time, switch from a job that pays the bills to one that you love etc.

If you and your finacee have different priorities for 1-3 (this is common) you need to talk though a plan to deal with that. In that case it might make sense to split your spending into "our priorities", "his priorities" and "her priorities". Then just agree how to apportion the spending and then allow each other to spend their buckets however they please. Of course if you are well aligned on all 3 above you are golden. :sharebeer
Adapt or perish

Jags4186
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Re: Marriage [How should finances be handled?]

Post by Jags4186 » Tue Aug 14, 2018 7:29 am

Combine. It just makes life less complicated. For a first marriage if you’re not willing to combine I don’t know why you’re getting married.

indexonlyplease
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Re: Marriage

Post by indexonlyplease » Tue Aug 14, 2018 7:34 am

Grt2bOutdoors wrote:
Mon Aug 13, 2018 4:53 pm
sapper1371 wrote:
Mon Aug 13, 2018 3:59 pm
My advice is that if you are comfortable marrying someone you should be comfortable combining your finance.

I’m sure there are people who have made it work, I’m just speaking from experience. All of the people I know who keep things separate are either divorced or miserable...YMMV
+1. Agree 100% on your last paragraph.
very good point and true. +1

stan1
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Re: Marriage

Post by stan1 » Tue Aug 14, 2018 7:50 am

indexonlyplease wrote:
Tue Aug 14, 2018 7:34 am
Grt2bOutdoors wrote:
Mon Aug 13, 2018 4:53 pm
sapper1371 wrote:
Mon Aug 13, 2018 3:59 pm
My advice is that if you are comfortable marrying someone you should be comfortable combining your finance.

I’m sure there are people who have made it work, I’m just speaking from experience. All of the people I know who keep things separate are either divorced or miserable...YMMV
+1. Agree 100% on your last paragraph.
very good point and true. +1
Well absolutely not true in my experience. People who separate and are miserable have poor communication, don't trust each other, and disagree on many other parts of being in a relationship. Having a joint and separate accounts does not mean there is poor communication or lack of trust. Siphoning off money into a separate account without spouse's knowledge is deceitful but that's a completely different scenario than agreeing to have joint and separate accounts. I also don't think a single joint account is very effective at inhibiting infidelity. If someone wants to be unfaithful they will easily figure out how to be deceitful about financing their indiscretions as well.

Admiral
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Re: Marriage [How should finances be handled?]

Post by Admiral » Tue Aug 14, 2018 9:52 am

Combine everything. Your spouse will get it all when you die anyway!

In all seriousness, the way it works in most households is there is one "bill payer" or "finance person" and one who is not. That is why it is critical--CRITICAL--to have a budget, even if it is aspirational. (This is what we WANT to do, this is our goal.)

Before the budget is made, sit down together and make a list of your priorities beyond the basics of food and shelter. What is important to you? What do you want to spend money on? Order the list from most to least. Eventually you will hopefully come to an agreement on what things should be funded first (and hopefully that will be debt reduction and retirement).

As long as you generally agree on what is important, and keep to your general budget, combining your finances is fine and should make your life easier. Transparency, good communication, no resentment.

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Re: Marriage [How should finances be handled?]

Post by Jack FFR1846 » Tue Aug 14, 2018 9:56 am

Two words.....

Avalanche method

You're welcome
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Re: Marriage [How should finances be handled?]

Post by bikechuck » Tue Aug 14, 2018 10:17 am

My spousal unit and I will have been married 40 years this Sept. We combined finances from day one and shared a single checking and savings account, joint credit cards, car loans etc.

She had a significant amount of student loans that her father advised her to default on. I paid them off from my salary as she became a stay at home mom in our second year of marriage. I cannot imagine a couple that starts a family not looking at family assets as one pool for everyone to share.

That said people are different and what works for one couple does not work as well for others. My two daughters are married and I believe that one or both of them might be keeping finances more separate that we did. So good luck and I'll bet that if you both work at it you can make pretty much any arrangement work.

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Meg77
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Re: Marriage

Post by Meg77 » Tue Aug 14, 2018 10:27 am

Grt2bOutdoors wrote:
Mon Aug 13, 2018 4:49 pm
A marriage is a legal contract, the joining of two parties - usually for love, companionship and to pool resources as two if handled strategically can improve their outcomes. If you both are rowing in sync, you’ll find the boat will glide across the water towards your destination in due time. If one party wants to do their thing and the other does something differently you will find yourself floundering and drifting aimlessly.
I vote for opening a joint savings and checking account, a joint brokerage/mutual fund account. Put both your paychecks in the checking account, pay your bills out of it, pay yourself out of it and log it in your checkbook as you do so, that way you can keep track of what’s coming in and what’s going out (both of you). Give yourselves a set amount each month to do as you please, outside of normal household expenses. Obviously, some accounts can not be joint - 401k, IRAs.

If you have assets from prior to getting married, keep them separate if you wish. Do not commingle them with marital assets.

This is what has worked for us, I don’t understand the “he pays this, she pays that routine”. What happens if one of the two or both of them become unemployed, what are you going to do then, let the electric bill go unpaid? Or if one is paid more than the other? Seems like too much, keep it simple. Leave the complexities to the other parts of life.
+1

We found that having joint and separate checking accounts was too much of a hassle, so we only have one joint checking account now. We do personal spending on our individual credit cards, but those cards and all bills are paid from the joint checking. This gives us each some autonomy without having to have lots of accounts to manage and transfer between. We manage our asset allocation across all accounts and are therefore able to pick from the best of the funds in his 401k, my 401k, his deferred comp plan, both our IRAs, and the joint brokerage (which is technically still only in his name as it's his Vanguard account we use for that; but we consider it joint, as does the law since we've accumulated it entirely after getting married).
"An investment in knowledge pays the best interest." - Benjamin Franklin

3funder
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Re: Marriage

Post by 3funder » Tue Aug 14, 2018 10:36 am

barnaclebob wrote:
Mon Aug 13, 2018 3:45 pm
Its really up to you. Responses in the past have ranged from "we keep every penny separate and put money into a joint account for shared expenses with a ratio of hours worked factored by relative salaries blah blah blah" to just combine it all and agree on what you do with your money. If you were both saving a little and paying down the debt too then continue with whats been working.

My feeling is that everything should be combined unless prior children or very different debt levels are involved. But once the debt is taken care of you should probably be on the road to combined finances.

Taxes should be easy to figure out, just do a test run in turbotax.
+1.

themesrob
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Re: Marriage [How should finances be handled?]

Post by themesrob » Tue Aug 14, 2018 10:54 am

My wife and I share a joint checking account and joint online savings, and have a couple joint credit cards. We each have our own personal checking accounts, into which our paychecks get deposited, as well as an personal credit card. We then have monthly autotransfers set up for x amount (most but not all of the paycheck) into the joint account for paying the mortgage and bills, and subsequent investing. That way, if we want to buy a gift for the other or something, we have a way of doing it without sharing the cost.

I like this way of handling it. The only discussions relate to how much to set the transfers at each year (which, correspondingly, involves telling each other what our salary is for the upcoming year -- I'd suggest that people who can't have that discussion shouldn't get married), and then what to do with the excess after bills are paid. My wife is quite frugal but has very little interest in the investing aspect of things -- however, I still keep her apprised of what's going on periodically, just so she knows. (When she realized that we were well-positioned financially to buy our house a few months ago, her appreciation for the periodic investment discussions increased quite a bit.)

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augryphon
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Re: Marriage [How should finances be handled?]

Post by augryphon » Tue Aug 14, 2018 11:04 am

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
Money is always the first test of the marriage. I can't tell you exactly what to do, but I can tell you the process that worked for us. 1. always respect your spouse’s opinion, even if you feel differently. We all have deep seated reasons that we feel the way do and those aren't easily changed. 2. talk, talk, talk. 3. Share financial records with each other, you both need to know everything. 4. discuss any purchases over $XX prior to purchase. The amount isn't important, the communication is. 5. Pay yourself first, then give some away. How much or who to give to is not as important as being willing to share. Find a need close to your heart or your home, and help them. 5a. Make all you can, save all you can, give all you can. 6. I've seen so many marriages break up over money, even though money wasn't the real problem. Don’t be a statistic, love him/her, talk it out, wait patiently, this won't be quick. 7. Marriage is about commitment to each other, not money. Don't lose sight of that or let money be your focus. P.S My wife thought of most of this, I'm a slow learner in this area :oops:

Jayhawk11
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Re: Marriage [How should finances be handled?]

Post by Jayhawk11 » Tue Aug 14, 2018 11:18 am

We keep finances separate, I pay the "family expenses" (rent, grocery, tv, gas, plus savings) and "bill" my wife every month for her portion (we split by our incomes). I've got an excel for all the calculations. I hold onto our savings and investments (minus my wife's 401k).

Works well for us, two extremely independent, type-A people who don't like supervision. Plus I'm super boglehead and my wife is the opposite, so seeing her spend 7 bucks at the coffee shop every day would cause unnneeded friction. But as long as she is meeting the savings requirements we've agreed upon, it's really not for me to say how she takes her coffee.

We have a strong marriage. Just talk about your comfort level and figure it out.

mrb09
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Re: Marriage [How should finances be handled?]

Post by mrb09 » Tue Aug 14, 2018 11:52 am

We have a joint account, separate individual accounts for personal expenses, and separate credit cards.

The joint account pays all joint monthly expenses. That's in Ally bank, we have separate logins but a joint account.

The individual accounts get funded monthly with the same amounts, not by proportion to salary. We just found separate accounts are easier for discretional purchases that require saving (new unwarranted but desired bicycle for instance). My personal account is in Ally bank too, which I think makes things more convenient, but my wife uses a local credit union that she likes and that seems to work.

We have separate credit cards due to fraud alert handling. When we had shared cards and received a fraud alert with a "did you purchase a ..." question, it was difficult sometimes to know the answer. If there's anything big in the credit cards that we consider "joint", like new furniture, we put it on one of the cards and pay that amount from the joint account.

BuckyBadger
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Re: Marriage [How should finances be handled?]

Post by BuckyBadger » Tue Aug 14, 2018 11:57 am

We have one savings account and one checking account. All our money goes in. We share joint credit cards. Around Christmas and birthdays we just don't look at bills. We can buy anything we want for each other or for ourselves. If it's more than a couple hundred dollars we will discuss.

This works because we're both on the same page and have all of our savings automatically deducted before anything hits our account, or right after. Since we don't "budget," we just have to be reasonable and smart about cash flow. It's not that hard.

Combining finances makes everything easier for investing and debt repayment, too. For example, my husband carries almost all our bonds in his 401k because he had the best fund. My 403b has three funds, with just enough in bonds so that we can rebalance using only that account. Same thing goes for debt repayment. When approaching as a team you can double up on high interest debt first and save the most in interest fees. Much more efficient that splitting everything up.

Also, since taxes are joint, we don't have to worry about getting each of our paychecks absolutely proportionally correct. For example, we started owing like $5k, so the easiest way to deal with this was to take an additional $420 per month out of my paycheck. His payroll didn't have that as an easy option, so we would have had to mess around with exemptions and whatnot. This wouldn't work if we were somehow diving things by the ratios of our paychecks.

This works for us and has for 11+ years. I'm in charge of our money (and make more than my husband) and our investing. He's happy to not deal with it and I give him updates when we reach milestones or he expresses an interest.

barberakb
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Re: Marriage [How should finances be handled?]

Post by barberakb » Tue Aug 14, 2018 12:16 pm

Yes, continue investing/saving/ paying down your student loans.

If you weren't living together before and will be, then your expenses should go way down.

Which will help you pay down debt and invest even more.

Bottom line, do what works best for you. Everyone is different

Miguelito
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Re: Marriage [How should finances be handled?]

Post by Miguelito » Tue Aug 14, 2018 12:30 pm

I say all in. This is particularly true if you are both young and in similar financial shape.

If you can't see you sharing your financial life together why are you getting married? My $0.02.

If you are older and have had established adult lives before each other and/or come from vastly different financial situations, that may be different.

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Esq123
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Re: Marriage [How should finances be handled?]

Post by Esq123 » Tue Aug 14, 2018 3:08 pm

Thanks for the replies all.

I see all of your points about joining all finances. I will give this some thought. However, I do want to give her some privacy as well. Also, I am worried that if we see all that money in a joint account we will spend more than we should. She does make a good income and as far as I can tell she is very responsible.

Also, any general advise (not investment related) regarding marriage is welcome too.

Thank you.
Last edited by Esq123 on Tue Aug 14, 2018 3:31 pm, edited 2 times in total.

HornedToad
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Re: Marriage [How should finances be handled?]

Post by HornedToad » Tue Aug 14, 2018 3:20 pm

Yours, Mine and Ours accounts,

Put a small amount each month in the Yours and mine accounts and the vast majority in the ours. This allows you to buy gifts for each other from personal money instead of it just being joint funds, prevents gifts being spoiled because someone updated the quicken before the anniversary, spend money on things that matter to you and the other spouse think would be silly (purses, massages, books, computer games, whatever it might be), and generally having a small pool of money you can do with as you want. Over time you might use it less often and just transfer excess cash to the joint account but it can be very helpful IMO.

My wife and I do $200/mo in our personal account and the rest joint, but the right number will vary as well as defining what expenses are joint and what are personal. My wife wanted a new purse from a promotion but it was super expensive, so half of the cost was from joint funds and half was from her personal account. Having yours,mine and ours allows scenarios like that to happen. (It also probably causes you to spend more since you have your personal account to use that is not in the joint saving)

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Elsebet
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Re: Marriage [How should finances be handled?]

Post by Elsebet » Tue Aug 14, 2018 3:42 pm

We have a joint checking and savings account, both our paychecks are direct deposited into it and that's where our EF stays. I added him as an authorized user on my credit card when we got married and we use it for all possible expenses, it gets paid out of the joint checking account in full automatically each month. I get emails when anything is charged on the credit card. We closed our old checking accounts from when we were single, I use my Fidelity account as my personal account now.

We both have completely separate Fidelity accounts for our taxable, Roth, and Rollover IRAs. Personally anything more complex than this would annoy me.
"...the man who adapts himself to his slender means and makes himself wealthy on a little sum, is the truly rich man..." ~Seneca

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dumbbunny
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Re: Marriage [How should finances be handled?]

Post by dumbbunny » Tue Aug 14, 2018 4:04 pm

My wife wanted separate accounts. It was her second marriage and my first. Twenty six years later both systems (finances and marriage) are working. Good luck
“It’s the curse of old men to realize that in the end we control nothing." "Homeland" episode, "Gerontion"

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Sandtrap
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Re: Marriage [How should finances be handled?]

Post by Sandtrap » Tue Aug 14, 2018 4:16 pm

Esq123 wrote:
Mon Aug 13, 2018 3:36 pm
Hi all,

I will be getting married next month. Me and the fiancée are both investing and paying down student loans in accordance with the boglehead way. Now I am here for guidance as to what actions should be taken financially after marriage. Do we continue investing/saving/ paying down our student loans in the same way as before marriage? How will taxes effect us? Is there anything we should take into consideration as we move forward?

Thank you :beer
For many, it depends on how much each person earns, how much each person is in debt, and how much total assets each brings to the table. More so if earnings are substantial and individual assets or liabilities are substantial. And, how large the gap between the two.
For example:
Couple 1.
Mr. 1 mil/year annual earnings. 5 mil in assets.
Ms. unemployed. No assets.
And so forth.

So, actionably, something between:
1. All existing accounts separate. Joint accounts created after marriage for different purposes.
2. All existing accounts closed and new joint accounts created after marriage.
3. Each existing assets intact and separate after marriage. New earnings joint.
4. And so forth.

There are an infinite number of ways that folks handle this. There's no right or wrong.
All the more reason to discuss it at the beginning and during a marriage so minimize conflicts.
j
Wiki Bogleheads Wiki: Everything You Need to Know

reggiesimpson
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Re: Marriage [How should finances be handled?]

Post by reggiesimpson » Tue Aug 14, 2018 6:42 pm

With the very high divorce rate you would both be foolish (and immature) to not consider the ramifications of such an event and take appropriate action. Talk to an attorney.

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Re: Marriage [How should finances be handled?]

Post by Grt2bOutdoors » Tue Aug 14, 2018 6:48 pm

Esq123 wrote:
Tue Aug 14, 2018 3:08 pm
Thanks for the replies all.



Also, any general advise (not investment related) regarding marriage is welcome too.

Thank you.
It was said before but I’ll repeat it - Communicating is key in all relationships, but super important in marriage. You can’t read minds (even if you think so). Be kind to each other. Enjoy your life together.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

golfCaddy
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Re: Marriage [How should finances be handled?]

Post by golfCaddy » Tue Aug 14, 2018 7:15 pm

This is a relationship issue, more than a financial issue. Some people like the fiction of having his money and her money. In a community property state, any assets or debt acquired during the marriage will be split 50/50 in a divorce no matter whose name is on the bank account. Equitable distribution states are more complicated, but the equitable division still won't turn on whose name is on which accounts. The exceptions would be premarital assets, premarital debt, and inheritances.

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