Marriage [How should finances be handled?]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
TOJ
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Re: Marriage [How should finances be handled?]

Post by TOJ » Tue Aug 14, 2018 9:03 pm

Combine it all, no hiding anything, no lying, no allowances. Need communication on expectations. Need compromise. If she wants to splurge this month, you dial back. And vice versa. If she has radically different financial goals and habits than you, don’t get married. Tightwads and spendthrifts don’t change all that much.

mouses
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Re: Marriage

Post by mouses » Tue Aug 14, 2018 9:10 pm

willthrill81 wrote:
Mon Aug 13, 2018 5:48 pm

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.
It's because they did that and then the other person walked out the door. Having one's own savings is security.

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willthrill81
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Re: Marriage

Post by willthrill81 » Tue Aug 14, 2018 9:25 pm

mouses wrote:
Tue Aug 14, 2018 9:10 pm
willthrill81 wrote:
Mon Aug 13, 2018 5:48 pm

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.
It's because they did that and then the other person walked out the door. Having one's own savings is security.
In divorce court, separate savings accounts are no security at all.

And if you've got your eye on the exit door, you're more likely to go through it.
“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

shell921
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Re: Marriage [How should finances be handled?]

Post by shell921 » Tue Aug 14, 2018 9:35 pm

My late husband and I married when we were 27 & 36 and were married for 39 years before he died suddenly in 2014.
We did not have children and we both worked and we also inherited some $$ when we were middle aged. We always
lived beneath our means and we had a comfortable life.

What worked for us was having 3 checking accounts- his, mine and "ours". Both our names were on all 3 accounts.
We each had automatic savings deducted from our paychecks into separate savings accounts but both names were on both these accounts as well. He always made more $$ that I did so he contributed a higher % into the joint checking account than I did. We paid household bills and groceries with that joint account.

If he wanted to buy a new musical instrument or I wanted a new purse or coat we both had our own disposable income and did not feel we need ask one another about this type of purchase. Also, if I wanted to buy a gift for my mother or a friend I did not need to run it by my husband first. Same went for him.

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

Post by ChowYunPhat » Tue Aug 14, 2018 9:49 pm

Congrats on the upcoming marriage.

It sounds like you're already making good decisions by attacking the student loans and investing. Once you're married, this may open up additional opportunities especially if both of you are working.
-Fully fund Roths (or backdoor Roths if you're so lucky)
-Take advantage of 401k / tax protected space at your employer. If both of you have 401Ks you can contribute at least $18K+/each account and potentially more if after tax money is allowable. Contribute at least enough to get the match with your employers.
-Begin saving for house purchase if it makes sense for your situation
-Finish paying off your loans

The precise order is probably some combination of personal preference and interest rate optimization, but you probably have a good idea of how to approach this.

Good luck to you both.
A wise man and his money are friends forever...

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Doom&Gloom
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Re: Marriage [How should finances be handled?]

Post by Doom&Gloom » Tue Aug 14, 2018 10:05 pm

Esq123 wrote:
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.
One size does not fit all. Do whatever you both feel comfortable with and that you both expect to work best for you.

Just be sure to pay careful attention to advice about not co-mingling certain assets. Beyond that, you are limited only by your imagination.
Good luck!

indexonlyplease
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Re: Marriage

Post by indexonlyplease » Wed Aug 15, 2018 7:19 am

stan1 wrote:
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.
You are correct. Just let me know the amount of the check I need to pay you for the bills this month. That like when someone shares a place with their friends. So, yes with seperate account you are already trying to hide what you have from your spouse. If not you would just put everything together. So if you seperate the accounts what is next living in seperate houses?

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

Post by Nowizard » Wed Aug 15, 2018 7:56 am

A major influence affecting the handling of finances that often appeared in my work with couples occurred when one member had significantly more assets entering the marriage than the other. This often occurred in couples wanting to combine assets but with some initial concern by the one with greater assets. In such cases a decision was often made to continue separately, as before marriage, for a short period of time after marriage and re-evaluate. Generally, experience strongly suggests combining assets is best emotionally for the marriage with any changes being based on what occurs over a period of time, including expected tweaks. Though changes are commonly related to one being an over-spender, secretive about undisclosed funds, etc., problems can also be related to over control of finances, usually by the higher earner. Though other issues are more commonly cited as important, there are few issues that better predict a strong marriage than financial agreement within the couple. That agreement can also occur when the choice is to keep finances separate for positive reasons.

Tim

GT99
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Re: Marriage [How should finances be handled?]

Post by GT99 » Wed Aug 15, 2018 8:51 am

Nissanzx1 wrote:
Mon Aug 13, 2018 6:17 pm
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.
You seem to know a lot more about your friends' finances than most people do! 8-)

I don't think the decision to combine or not is important as long as the communication is there. That is, regular communication about finances + separate finances >>> no communication + combined finances.

Some of this (and this applies to a lot in marriage) depends on where you are in life when you marry. The later you marry (if it's your first marriage or you've otherwise been single most of you adult life), the more challenging you'll find it to adjust overall to a combined life (I was 36 and it was a harder adjustment than I would have expected). DW and I have kept mostly separate accounts, but we have access to most of each others accounts, and we have a single aggregated view of all our combined accounts in Mint, so we can make sure we're both on track with goals etc. Not saying this is the perfect approach, but it works for us and we haven't had a compelling reason to combine accounts.

barberakb
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Re: Marriage

Post by barberakb » Fri Aug 24, 2018 2:02 pm

indexonlyplease wrote:
Wed Aug 15, 2018 7:19 am
stan1 wrote:
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.
You are correct. Just let me know the amount of the check I need to pay you for the bills this month. That like when someone shares a place with their friends. So, yes with seperate account you are already trying to hide what you have from your spouse. If not you would just put everything together. So if you seperate the accounts what is next living in seperate houses?
This is not necessarily true at all. I don't hide anything at all from my wife. She asks to see all of my accounts about once a year.
We have a joint credit card but separate bank accounts. Our vanguard accounts are together.

The separate bank accounts are for different reasons for us. We both work, but I am lets say cheap. So I would rather not see it if she spends $400
on a purse. Because I think that's stupid... And I might comment on that if I saw it, so I don't want to see it. Because I know we can afford it and really, my wife deserves to buy whatever she wants. But it would still bother me so I would rather not know.

My wife on the other hand wants her own account because she says she would feel guilty about buying that purse if it was coming from our
joint account. So she has 1 credit card that is her own that she puts purchases like this on and pays herself.

Been married 13 years and never had any money issues or even arguments really about money. It works for us but everybody is different.

Talk about it and do what's best for you.

THY4373
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Re: Marriage

Post by THY4373 » Fri Aug 24, 2018 4:04 pm

barberakb wrote:
Fri Aug 24, 2018 2:02 pm

Talk about it and do what's best for you.
This is exactly the right answer in my opinion. Unless somebody has some statistics to back up some the claims made in this thread I think as long as the two of you come up with a system that works for you it will be fine.

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

Post by drawpoker » Fri Aug 24, 2018 4:20 pm

Esq123 wrote:
Tue Aug 14, 2018 3:08 pm
Also, any general advise (not investment related) regarding marriage is welcome too.
Terrific.

How is it this comment, soliciting posts that are against the rules of the forum, goes unchallenged by the moderators?

Yet, another thread, which was 95% focused on how should finances be handled between a man and a woman contemplating co-habitation, goes under lockdown. And this one is allowed to keep going strong for nearly two weeks.

Huh?

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

Post by DanMahowny » Fri Aug 24, 2018 4:23 pm

Me and wifey are a team. There's no such thing as "my money" or "her money". It's all OUR money.

Of course, some accounts are in my name, and some in her name, but doesn't matter. We're a team.

Married for 24 years. Not a single money argument, ever.

Good luck man.
Funding secured

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

Post by randomguy » Fri Aug 24, 2018 9:34 pm

DanMahowny wrote:
Fri Aug 24, 2018 4:23 pm
Me and wifey are a team. There's no such thing as "my money" or "her money". It's all OUR money.

Of course, some accounts are in my name, and some in her name, but doesn't matter. We're a team.

Married for 24 years. Not a single money argument, ever.

Good luck man.
I agree with you. Doesnt change the fact that plenty of couple keep things separate and also stay married. There is no one size fits all for this or most things in marriage.

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

Post by camillus » Sat Aug 25, 2018 12:51 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
Congrats! :sharebeer

It sounds like you two are already doing awesome. One thing you could do is instead of working on individual financial goals, treat each asset and liability as owned by the two of you and select a goal as a couple to work on. For example, paying down the student loan with the highest rate - no matter whose it is. Or, maxing out the 401k with the best fund selection. Or, maxing out the 401(k) of the spouse who is about to switch jobs in order to roll over that money to a Traditional IRA.

Married finances aren't any more complicated than finances for singles. If anything, I enjoy it much more because I have a teammate.

The most important thing to do though is to communicate regularly. When we were first married we had monthly financial meetings.

I suppose another thing is that you don't need two people to "do the money" / reconcile transactions etc. You'll have to come up with a system you both agree on. For what it's worth, my wife and I use YNAB, which is cloud based and on both of our phones and computers. This helps us keep track of where we are with the monthly budget and savings goals.

We also have Personal Capital, which is where we keep track of all investment accounts. Both are cloud based and can be checked by either spouse on any platform.

One fancy trick is with reward checking accounts. A credit union has an account that earns 3% up to $15k. But, since there are two of us and two direct deposits, we get two joint accounts for 3% on $30k 8-)

WanderingDoc
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Re: Marriage

Post by WanderingDoc » Sat Aug 25, 2018 2:22 am

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 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
The way you describe combining finances with someone sounds like a recipe for disaster (not to mention complicating your life if something were to go wrong).
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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

Post by WanderingDoc » Sat Aug 25, 2018 2:27 am

mountain-lion wrote:
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.
If you want to be free (most humans do), having to ask for clearance or permission is a surefire way to fail.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

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

Post by camillus » Sat Aug 25, 2018 4:25 am

WanderingDoc wrote:
Sat Aug 25, 2018 2:27 am
If you want to be free (most humans do), having to ask for clearance or permission is a surefire way to fail.
No, a surefire way to fail is me coming home with $$$$ worth of power tools because "there was a big sale."

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

Post by mrc » Sat Aug 25, 2018 5:32 am

We used a yours, mine, and ours method: Separate checking accounts one for each of us so one of us didn't clean out the joint account. No "permission" to buy shoes or a sale tool. We discuss major purchases beforehand. All monthly EFTs for utils and CC bills come out of my account, and regular transfers from spouse account into mine to take care of household expenses.

We have similar ideas of money management and spending. I would call it frugal—save first—and LBYM. We didn't spend money we didn't have, and we did use credit and loans when appropriate. Bonuses paid down school loans and the mortgage. Spouse was a poor grad student for long time, and that made a lifelong impression on her to avoid some spending even when necessary.

Married 34 years this fall.

It's a lot easier to not fight about money when there's enough of it.

edited typo
Last edited by mrc on Sun Aug 26, 2018 5:52 am, edited 1 time in total.
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pondering
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Re: Marriage [How should finances be handled?]

Post by pondering » Sat Aug 25, 2018 10:39 pm

This is definitely a thread where I miss the like button that is on other discussion boards.

There is a ton of good advise here.

Money is complicated. Money wasn't as much a problem in my first marriage. Money is harder this time around.

My favorite rule is to set a dollar amount above which you need to ask the other person for approval for something that is discretionary.
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SQRT
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Re: Marriage [How should finances be handled?]

Post by SQRT » Sun Aug 26, 2018 8:15 am

Agree that it’s a relationship issue. My first wife was awful with money and this was a real point of antagonism for me. Second wife is great with money. We got married about 25 years ago and generally work it this way: We kept assets separate as in the beginning we didn’t want there to be any “confusion” as to matronial assets. Also, in Canada, taxes are only filed individually and income attribution is critical. At this point all our accounts are joint but separate. Each has total acces to all accounts, although I handle all the investment decisions. I don’t look at her accounts but she looks at “my” accounts because they are treated as “both” our accounts and about an order of magnitude higher than hers.

So basically, I pay all our joint expenses, she reviews CC’s every day and allocates the expenses. She has her own income(pension, dividends and interest) that is used to fund her personal expenses(she is very well dressed). My personal expenses are minimal. I think the advantage in our system is that she feels she has control over her personal expenses and doesn’t need to clear things with me. I really don’t care how much that purse cost!! Also, she can buy me nice gifts without me knowing. :happy

Do whatever works for you.

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

Post by tibbitts » Sun Aug 26, 2018 9:41 am

DanMahowny wrote:
Fri Aug 24, 2018 4:23 pm
Me and wifey are a team. There's no such thing as "my money" or "her money". It's all OUR money.

Of course, some accounts are in my name, and some in her name, but doesn't matter. We're a team.

Married for 24 years. Not a single money argument, ever.

Good luck man.
That worked for my parents too. There was only one money argument, early in the marriage, and I read about it in their letters. Not a pleasant exchange. My mother had made a decision while my father was in France during WWII. After that there were no arguments because my father made every expenditure and other financial decision. And my mother was okay with that. So, while it truly was all "our" money, that arrangement probably wouldn't work for everybody.

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

Post by Esq123 » Tue Aug 28, 2018 2:56 pm

Thanks for the replies all.

Now I just need to get through this wedding :shock: :P

sapper1371
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Re: Marriage

Post by sapper1371 » Thu Sep 06, 2018 12:22 pm

WanderingDoc wrote:
Sat Aug 25, 2018 2:22 am
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 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
The way you describe combining finances with someone sounds like a recipe for disaster (not to mention complicating your life if something were to go wrong).
Actually I think it’s the recipe for a healthy relationship of equal partners. In my opinion if you are not comfortable with this then you shouldn’t be getting married in the first place...

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2pedals
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Re: Marriage [How should finances be handled?]

Post by 2pedals » Thu Sep 06, 2018 1:34 pm

For me this is about love and respect. If I want something, I am as considerate as possible and I do what DW says is okay. Our account just happens to be joint and that seems to work the best for us.

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