Newlyweds and joint accounts for household expenses

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
icedtea
Posts: 788
Joined: Tue May 12, 2009 9:12 pm

Newlyweds and joint accounts for household expenses

Post by icedtea » Sun Feb 10, 2019 9:21 am

I posted a thread earlier about becoming newlyweds and perhaps consolidating medical insurance. I have another topic I'd like to bring on the board: establishing a joint account for household/common expenses.

Our plan generally speaking is to maintain our separate bank accounts but we are talking about establishing joint accounts (checking/debit and credit card) for common expenses such as groceries, dinners out together, household items, etc. We haven't quite defined the full list of what would be considered joint expenses but this is the idea. Whereas one of us buying ourselves lunch on a weekday or that random cup of coffee would be handled from our separate accounts.

We would fund the joint account from our separate accounts on a regular basis, either 50/50 or 60/40, to reflect my slightly higher income.

I'd like to get some input on this approach. Have any of you established similar joint accounts for common things? How did you structure it?

Up until now we pay separately for common items and then I reconcile the expenses each month between the two of us so it's about 50/50. But it's a big headache and doesn't really reflect our move to become a marital unit.

Thanks,
Iced Tea

Jags4186
Posts: 3851
Joined: Wed Jun 18, 2014 7:12 pm

Re: Newlyweds and joint accounts for household expenses

Post by Jags4186 » Sun Feb 10, 2019 9:23 am

It’s just so much easier to open a new checking account and have all of your paychecks go into that one account going forward.

Flyer24
Moderator
Posts: 1144
Joined: Sun Apr 08, 2018 4:21 pm

Re: Newlyweds and joint accounts for household expenses

Post by Flyer24 » Sun Feb 10, 2019 9:25 am

We combined our accounts 100% from day 1 with a brand new account. It is great to get a fresh start for the marriage. Of course, we both started out broke. Ha.

User avatar
BL
Posts: 9137
Joined: Sun Mar 01, 2009 2:28 pm

Re: Newlyweds and joint accounts for household expenses

Post by BL » Sun Feb 10, 2019 9:30 am

Flyer24 wrote:
Sun Feb 10, 2019 9:25 am
We combined our accounts 100% from day 1 with a brand new account. It is great to get a fresh start for the marriage. Of course, we both started out broke. Ha.
+1
Ditto!
Much later did 2 accounts, one for each, just for convenience.
Last edited by BL on Sun Feb 10, 2019 9:37 am, edited 1 time in total.

bayview
Posts: 1845
Joined: Thu Aug 02, 2012 7:05 pm
Location: WNC

Re: Newlyweds and joint accounts for household expenses

Post by bayview » Sun Feb 10, 2019 9:32 am

^^ We do this, and it works great.

You'll probably get a lot of responses in the vein of "why have separate accounts when you're married." In our case, it was a subsequent marriage for both of us, and we each have adult kids who we periodically help out a bit, travel to see, or just do the birthday/Christmas check thing. My husband is retired, and I was still working, so I funded it a bit higher after accounting for health insurance expenses and so forth. It can make just as much sense for younger people on their first marriage, especially when both work.

To me, this method and having only one joint account are equally valid approaches.

After 7+ years of marriage and now that I have mostly retired (working PT), we are putting more and more items into the joint category, and the lines are blurring among yours, mine, and ours.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

Aku09
Posts: 36
Joined: Wed Jan 09, 2019 11:29 am

Re: Newlyweds and joint accounts for household expenses

Post by Aku09 » Sun Feb 10, 2019 9:49 am

My wife and I opted for separate accounts when we were first married. We looked at what each other was making (college kids) and divided the bills that way. I think she paid the mortgage and I paid for the rest. Worked well and we each had our own money. There was no fighting over finances. Over the years we have grown to one joint account with all of the money going in there. My wife has been a stay a home mom for the past several years (just went back to work in August) so it made sense. I do see that we bicker a bit more about finances (I’m more thrifty than her) but income is considerably higher than when we first married.

GmanJeff
Posts: 499
Joined: Sun Jun 11, 2017 7:12 am

Re: Newlyweds and joint accounts for household expenses

Post by GmanJeff » Sun Feb 10, 2019 10:00 am

We found it easier to have a single account. It provides simple visibility into funds flowing in and out. Multiple accounts just make it more difficult to quickly understand overall household cash flow and balances at any given time.

From a non-financial perspective, using a single account also promotes accountability and communication - each easily sees what money is coming in, what is going out, and what expenditures are for.

Less integration is also a valid approach, if both partners are content with maintaining more separation in that regard.
Last edited by GmanJeff on Sun Feb 10, 2019 10:01 am, edited 1 time in total.

Trism
Posts: 580
Joined: Mon Jul 18, 2016 6:34 pm

Re: Newlyweds and joint accounts for household expenses

Post by Trism » Sun Feb 10, 2019 10:01 am

We each have personal accounts to which we have direct-deposited $X per month.

The rest of our respective employment incomes that isn't automatically saved/invested goes into a joint household account for housing, groceries, etc.

The idea behind this was designing an environment where we never argue over which discretionary expenses are silly and which are not.

It didn't take long before we realized that we trust each other 100%, so the definition of "household expense" has expanded to include "everything either of us needs or wants."

We've decided to not to discontinue funding our personal accounts, but when either of us needs a car we'll just pool the money needed and write a check.

dekecarver
Posts: 395
Joined: Mon Feb 22, 2010 10:24 am

Re: Newlyweds and joint accounts for household expenses

Post by dekecarver » Sun Feb 10, 2019 10:07 am

Joint account for all household expenses including trips etc... where each puts in agreed upon percentage of take home pay has worked for us. After all what difference does it make where the rest goes as long as the joint obligations are met; I really don't care to know how much the shoes and purses ...cost just like she probably doesn't care to know about hunting and fishing expenses :shock:

BanquetBeer
Posts: 357
Joined: Thu Jul 13, 2017 5:57 pm

Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Sun Feb 10, 2019 10:18 am

Decide if you want x% of pay contribution or $x. How are you going to budget?

Joint account is best option, open a new one. Depending on budget set up split your direct deposit or deposit to your personal bank and set up auto deposit to joint.

We haven’t had any issues - 5 years in and very happy with the setup. We have different values/priorities with money. This setup allows us to spend agreed upon joint money on joint expenses (housing, kids, groceries) but also allows us to spend money individually on items we want outside the budget.

We also do cars individually because it isn’t a burden financially. SO’s car is worth about 150% mine but there is a component to that cost being the main kids transportation vs distance commuter.

dbr
Posts: 30557
Joined: Sun Mar 04, 2007 9:50 am

Re: Newlyweds and joint accounts for household expenses

Post by dbr » Sun Feb 10, 2019 10:25 am

For almost 40 years it has made sense to us to hold a single joint account to deposit income and pay bills or take cash. We have never had an attitude of paying much attention to what the other one of us might spend. Actually most of our spending is by credit card so one of us goes in and pays off the card(s) when they are due every month. I can't think of a reason to keep separate accounts in this department. A marriage that starts to get into "mine" and "yours" would seem strange to me. The exceptions can be things such as previous assets, inheritances, trusts, and the like, but this thread is about day to day money management.

User avatar
Chief_Engineer
Posts: 48
Joined: Wed Jan 15, 2014 9:32 pm

Re: Newlyweds and joint accounts for household expenses

Post by Chief_Engineer » Sun Feb 10, 2019 10:37 am

My wife and I have one joint account where all income goes and all spending comes from. It works for us, and especially makes sense since I earn about 4x more than she does.

I don't think there's anything inherently wrong with having separate accounts for discretionary spending as long as you still act "as one." The one downside I've seen come up, either here or at r/personalfinance on reddit, is with debt or one spouse losing their job. If one spouse has a lot of student debt, it makes no sense to pay it slowly with one income when both incomes could be put to work. All debt is "our" debt.

The other instance is job loss. I've seen posts on reddit where one spouse loses their job and therefore has absolutely no discretionary spending. Whereas the other spouse (obviously paying 100% of household spending) still has funds to dine out or spend otherwise. It creates an imbalance which does not make sense. You are married, you are not roommates.

In the end, whatever works for you and results in the most harmony is what you need to do. Here's what I like to suggest if you still want personal accounts.

1. Talk with each other and establish your mutual goals. (retirement, house, vacation, debt payoff)
2. Have all income direct deposit into a joint account.
3. All family savings and spending should come from the joint account.
4. What ever is left after budgeted items, split it 50/50 into personal accounts for discretionary spending.

BanquetBeer
Posts: 357
Joined: Thu Jul 13, 2017 5:57 pm

Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Sun Feb 10, 2019 10:51 am

Everyone dislikes separate finances when married. I suppose if you are struggling it might be best to buckle down together - my assumption is bogleheads should be doing decently well and should plan/account for prudent finances.

I’ll say as dual income when I got laid off, I paid my regular joint contribution thorough emergency fund and unemployment until I found a new job. There is decent income disparity between us but we discussed it upfront and we’re both aware/ok with the situation.

Topic Author
icedtea
Posts: 788
Joined: Tue May 12, 2009 9:12 pm

Re: Newlyweds and joint accounts for household expenses

Post by icedtea » Sun Feb 10, 2019 11:17 am

OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?

User avatar
Watty
Posts: 17379
Joined: Wed Oct 10, 2007 3:55 pm

Re: Newlyweds and joint accounts for household expenses

Post by Watty » Sun Feb 10, 2019 11:34 am

You didn't say what you are trying to accomplish.

If the goal is to keep your finances separate in case you end up getting divorced them I am skeptical that it will achieve that goal unless you also have a detailed prenuptial agreement that is based on your state laws.

The problem is if you get divorced in ten years then anything that was acquired after you were married may just be added up and split up according to your states laws. There will be special rules for things like an inheritance but if you really want to keep your finances separate you should talk to a lawyer that knows your state laws. Even in a state with favorable laws keeping your money separate may not be easy.

There is no way to have a joint 401k or IRA so in a divorce whose name is actually on the account may not be all that significant in a divorce.

Realistically if you get divorced then your checking accounts probably will not make a lot of difference anyway. The reason is that most people only keep a few thousand dollars in a checking account. The significant money is typically in things like home equity, retirement accounts, and debt like mortgages, car loans, and credit cards. If you only have $5,000 in one checking account, or three checking accounts, how that is split in a divorce will be the least of your problems.

It was a different situation but when we were starting out and money was tighter we tried having just one joint checking account and quickly gave up on that after we bounced a check or two with we both wrote checks at the same time. For a long time we had three accounts that we would freely transfer money between. Now we write so few checks that we are back to just one checking account and money is not so tight so it rarely gets below $2,000 so there is no chance of us bouncing a check.

bayview
Posts: 1845
Joined: Thu Aug 02, 2012 7:05 pm
Location: WNC

Re: Newlyweds and joint accounts for household expenses

Post by bayview » Sun Feb 10, 2019 11:37 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
We had income (earned income for me, SS and contracting income for him) go to our individual accounts and would then transfer over to the joint account, monthly for him and biweekly for me. I can't see that it matters. Six of one, half a dozen of the other.

If something came up, we'd both contribute to cover it.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

User avatar
Chief_Engineer
Posts: 48
Joined: Wed Jan 15, 2014 9:32 pm

Re: Newlyweds and joint accounts for household expenses

Post by Chief_Engineer » Sun Feb 10, 2019 11:38 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
I think it's mostly a philosophical difference. To me, having the income go to the joint account makes it "household" income. It helps reinforce being a team. Once the money is mixed you can't look at any individual dollar and tell whether it is from yours our your spouse's income. As is often repeated on here, money is fungible.

The opposite arrangement feels more like being roommates to me. You split the bills 50/50 and that's all the financial interaction you really have. But again, that's just how it feels to me. I wish I could articulate it better.

What ever you decide, good luck to you!

Rus In Urbe
Posts: 515
Joined: Sat Dec 09, 2017 2:12 pm

Re: Newlyweds and joint accounts for household expenses

Post by Rus In Urbe » Sun Feb 10, 2019 11:40 am

My experience is somewhat different----based on two marriages with opposite financial models!

In my first marriage, we were young and I had my own business. We kept separate accounts and a joint account for household expenses, to which we gave a percentage of our incomes. We divorced amicably, and the separate finances made that easy to unzip. However, in retrospect, I came to realize that we had never really established long-term goals together; while the separate accounts had allowed us to never fight about money, it also allowed us to avoid important and even difficult conversations about our shared future. Having joint finances would not have saved that marriage, but it would have forced better communications about goals. Who knows, merging our finances might have brought our differences to light more quickly and resulted in an earlier divorce, or perhaps helped enforce resolution of other issues (money was not the reason for the divorce). But we were young, and probably having control over our own money still represented an important freedom for each of us individually.

In my second marriage, in middle age, my SO and I immediately merged our finances. All in. We had joint goals and a big mountain we wanted to climb together. The trust we have with each other is total. While we are both frugal, my SO has never second-guessed me (or vice versa) on personal spending or occasional splurges. Though I'm more in charge of our investments, we make decisions about large purchases together. It is a completely different experience in terms of communication, and for me, these merged finances (and of course this marriage :D :D ) have worked out so much better! Our financial life is streamlined and efficient. And we are a total team---there is something so gratifying about doing it together. We made great progress and, in two decades, reached and surpassed our goals.

Whether separate or merged, whichever way you go with your accounts, communication is key. Good luck to you!
Last edited by Rus In Urbe on Sun Feb 10, 2019 11:42 am, edited 1 time in total.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

User avatar
Sandtrap
Posts: 8401
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii No Ka Oi , N. Arizona

Re: Newlyweds and joint accounts for household expenses

Post by Sandtrap » Sun Feb 10, 2019 11:40 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
Has worked for DW and I for many many decades and into retirement.
Perhaps because we both had our own businesses. Not sure.
Except that now, in retirement, AFAIK, I'm the only one that sustains the joint account balances :shock:

Congratulations newlyweds!
Journey Ahead >>>>>
:sharebeer
Last edited by Sandtrap on Sun Feb 10, 2019 11:41 am, edited 1 time in total.
Wiki Bogleheads Wiki: Everything You Need to Know

dbr
Posts: 30557
Joined: Sun Mar 04, 2007 9:50 am

Re: Newlyweds and joint accounts for household expenses

Post by dbr » Sun Feb 10, 2019 11:41 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
Some plans are overthought and not worth the trouble. Unless you are configuring something for a good legal reason you just don't need to go to all this effort.

bayview
Posts: 1845
Joined: Thu Aug 02, 2012 7:05 pm
Location: WNC

Re: Newlyweds and joint accounts for household expenses

Post by bayview » Sun Feb 10, 2019 11:43 am

Rus In Urbe wrote:
Sun Feb 10, 2019 11:40 am
...In my second marriage, in middle age, my SO and I immediately merged our finances. We had joint goals and a big mountain we wanted to climb together. The trust we have with each other is total. While we are both frugal, my SO has never second-guessed me (or vice versa) on personal spending or occasional splurges. Though I'm more in charge of our investments, we make decisions about large purchases together. It is a completely different experience in terms of communication, and for me, these merged finances (and of course this marriage :D :D ) have worked out so much better! Our financial life is streamlined and efficient. And we are a total team---there is something so gratifying about doing it together. We made great progress and, in two decades, reached and surpassed our goals...
That's great! I will say though that in our second marriage, we plan and communicate about financial goals endlessly, despite the separate accounts. I can see how the single account might have kept the two of you on the same page, but I don't think that this is automatic.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

Rainmaker41
Posts: 499
Joined: Tue Apr 26, 2016 11:34 am

Re: Newlyweds and joint accounts for household expenses

Post by Rainmaker41 » Sun Feb 10, 2019 11:49 am

I think it is important to ask what you are trying to achieve with whatever setup you use. This or that formal financial system is ultimately less important than the underlying household dynamics and communication.

I think you should focus on long term plans and shared goals. The detailed mechanics of how to get there matter less in the long run, and may have to be reevaluated anyway.

We pooled everything. We started out with his and hers discretionary budgets, but fairly quickly we realized that most of the time discretionary spending ended up being for joint activities anyway, or for things which don't matter much (occasional lunch at work if we forget to bring from home). Now, everything is part of a joint household financial plan. Simplicity is useful.
Last edited by Rainmaker41 on Sun Feb 10, 2019 12:00 pm, edited 1 time in total.

MikeG62
Posts: 2208
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Newlyweds and joint accounts for household expenses

Post by MikeG62 » Sun Feb 10, 2019 11:51 am

DW and I have been married for 30 years. We went the joint account route from day 1 and never encountered any issues. Frankly I made considerably more money than she did (so perhaps she wasn’t going to complain about joint accounts) and i viewed our money as one pot anyway. Once we had kids she became a SAHM until I retired three years ago. So don’t know how that would have worked out if we had separate accounts when we made the decision she would be a SAHM.

Having said this, my last boss was also married a long while and yet her and her husband did separate accounts. That seemed to work fine for them. They never had kids, although that may have had no bearing on things. They both spent freely (he on his hobbies and she on hers - mostly shopping). She once told me it worked better for them as their were no arguments about who was spending how much on what things.

So I think it’s a to each his/her own kind of thing. Do what works best for the both of you. No right or wrong answer here.
Real Knowledge Comes Only From Experience

pdavi21
Posts: 1203
Joined: Sat Jan 30, 2016 4:04 pm

Re: Newlyweds and joint accounts for household expenses

Post by pdavi21 » Sun Feb 10, 2019 11:53 am

Open everything in your name only if she hasn't changed her name yet. After that, add her to all the accounts. This would be especially important for Vanguard, they require an act of Congress to change a woman's name.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

Dandy
Posts: 5969
Joined: Sun Apr 25, 2010 7:42 pm

Re: Newlyweds and joint accounts for household expenses

Post by Dandy » Sun Feb 10, 2019 12:24 pm

We always had joint accounts. I can see that there may be some reasons not to. I think there is a compromise option.

Each establishes a Savings account and keeps a modest balance in it. Have paycheck sent to each savings account. 2X a month each automatically transfers the net pay to a joint checking account to pay bills. Advantages:

1. each has an account in their own name and a balance and interest for some personal expenditures (like gifts).
2. The full net pay is in the joint checking account each month automatically
3. If the joint checking account bank imposes unwanted fees or balances open a new joint checking account at a bank with a better deal. Easy to redirect the transfer rather than deal with changing payroll disposition.
4. Each partner retains control of their pay.

runner540
Posts: 1065
Joined: Sun Feb 26, 2017 5:43 pm

Re: Newlyweds and joint accounts for household expenses

Post by runner540 » Sun Feb 10, 2019 2:05 pm

icedtea wrote:
Sun Feb 10, 2019 9:21 am
I posted a thread earlier about becoming newlyweds ....
But it's a big headache and doesn't really reflect our move to become a marital unit.

Thanks,
Iced Tea

Just based on the statement that the separate pots don't reflect your move to be a married unit, then don't do it!

We do one pot of money, everything is paid out of that. One budget. Personal items and discretionary spending is all in the household budget. We adjust as needed throughout the year and are a true team. When one of us gets a raise or bonus, it's a win for the family.

retired_tom
Posts: 43
Joined: Tue Feb 05, 2019 8:51 am

Re: Newlyweds and joint accounts for household expenses

Post by retired_tom » Sun Feb 10, 2019 2:46 pm

First, congratulations!
28 years for me and the SO. When we first got together we figured separate finances would work best. 6 accounts in total. His checking/savings, Her checking/savings, Joint checking/savings. We were both probably within a few thousand of dollars apart in our incomes so we just decided 50/50 was a good split. I transfer my 50% on the first of the month to the joint account, she transfers her 50% on the 15th. Keeps the cash flow smooth in the joint account.
Everything pretty much comes out of the joint account with the exception of my car, her car, our individual auto insurances, gas, etc. Any discretionary spending is out of your own account. All I can say is that we have NEVER had an argument over money. About every 3 months or so, we'll take a look at the joint checking, and see how much extra is in there, and move it into joint savings. The joint savings then is available for house maintenance, repairs, or if we need to buy something that is for "us", (new tv, furniture, golf cart). I'd say separate accounts is the way to go.

User avatar
RickBoglehead
Posts: 4492
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Newlyweds and joint accounts for household expenses

Post by RickBoglehead » Sun Feb 10, 2019 3:01 pm

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
Before we got married, our approach was to pay all expenses JOINTLY, on a pro-rated basis. In other words, I made 2x what my partner made. She contributed 1/3rd of the expenses, I contributed 2/3 of the expenses. The remainder stayed in the individual accounts.

When we got married, that ended. After nearly 40 year so marriage, I'd suggest you consider approaching your finances openly and jointly. No secrets, no hiding purchases. If you don't share the same mindset, you need to discuss that. If one spouse brown bags it and brings coffee from home, and the other goes out for lunch everyday and buys Starbucks, then you have different value systems and need to discuss that.

Luckily, my wife and I share common values. I'm tight with a buck, and she is almost as tight, although I work at it harder. The other day she bought something inexpensive, and paid 33% more than it costs on Amazon. She doesn't care if I take it back and buy it on Amazon, as long as that item is on the shelf when she wants it. She's just not going to search ten places for it.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

ladycat
Posts: 231
Joined: Fri Sep 28, 2018 5:02 pm

Re: Newlyweds and joint accounts for household expenses

Post by ladycat » Sun Feb 10, 2019 3:46 pm

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
DH and I do what you are planning. Paychecks are deposited into our personal accounts, and we contribute monthly to a joint account. I pay all the household bills from the joint account. After the contribution to the joint account, we are free to do whatever we want with our personal money. Personal expenses include things like clothing, hobby interests. We review the plan every 4-6 months and adjust for things like increased joint car insurance costs or an upcoming personal expense.

After many years of doing this, we did run into a negative. Our "joint" savings was large enough that we wanted it in an online high interest savings account. That meant either using a separate account, or piggy-backing on one of my accounts and mentally accounting for the "joint" money. Since we already have many accounts (3 local checking & savings -- his/hers/joint, 3 online savings - his/hers/hers we piggy-backed on one of my online accounts. It became a chore to track, so I told hubby to take his half of the joint savings and manage it himself. I trust that he won't blow it on his hobbies, so this works for us.

I like having separate accounts. I really do not want to know about every $20 he spends, and I'm sure he feels the same way. It also allows us to purchase gifts for each other without it showing up on a joint credit card statement. And for us, the joint portion of our money is most of our income. Maybe this wouldn't work if we earned vastly different amounts. It's the joint savings where we had to revise our original method.

All Star
Posts: 8
Joined: Fri Feb 08, 2019 7:34 pm

Re: Newlyweds and joint accounts for household expenses

Post by All Star » Sun Feb 10, 2019 3:57 pm

This is a way too personal question and completely depends on the couple. I never made my checking account joint with my wife that I pay all the bills out of. However, she doesn't care to know anything about finances....she doesn't know who Dow Jones is. :D She kept her bank account that she has a monthly allottment for personal spending out of, and I handle everything else. We have one joint checking account with Ally that always holds $0 just so I can transfer cash to her if needed.

BanquetBeer
Posts: 357
Joined: Thu Jul 13, 2017 5:57 pm

Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Sun Feb 10, 2019 4:08 pm

RickBoglehead wrote:
Sun Feb 10, 2019 3:01 pm
If one spouse brown bags it and brings coffee from home, and the other goes out for lunch everyday and buys Starbucks, then you have different value systems and need to discuss that.

Luckily, my wife and I share common values. I'm tight with a buck, and she is almost as tight, although I work at it harder.
I don’t know if I would take it that far. I eat out every day at work, I believe the cost works out to around 1% of our spend. I’m sure I could save about 0.5% if I brought food from home.... not worth it.

Common goals are important in any relationship but you don’t have to have the same path to accomplish them. I could be a janitor earning $50k/yr and spending only $10k so I can save the rest. SO could be a doctor earning $500k/yr and spending $100k of that.

You don’t have to retire at the same time, you just have to be ok with what the other person wants to do (live frugally and retire early or buy luxuries and retire later) so long as your plans work together. This strategy works for separate accounts as you can clearly earmark I have accumulated enough to cover joint and individual costs and can quit VS resenting your SO for spending what you save.

You have the be much more aligned to have everything joint but in my opinion, you don’t need to be so aligned to have a good marriage.

Legally seaparate accounts may not mean anything if you get divorced; up to you to judge if you will split amicably enough to divide finances like you planned. To me, easier if you are both in a strong financial position and your end goals are for the kids not for yourselves.

22twain
Posts: 2081
Joined: Thu May 10, 2012 5:42 pm

Re: Newlyweds and joint accounts for household expenses

Post by 22twain » Sun Feb 10, 2019 4:09 pm

icedtea wrote:
Sun Feb 10, 2019 11:17 am
What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly.
We have his, hers and joint accounts, with paychecks going into the personal accounts, and with equal contributions to the joint account because our incomes have always been nearly equal. We also have a joint credit card that gets paid from the joint checking account, in addition to personal credit cards that we pay out of our own accounts. It's worked OK for us for thirty years.

However, we don't make contributions as frequently as you envision. We make them in larger lumps, usually about three times per year. Sometimes we make then simultaneously, sometimes we take turns. Sometimes one of us pays for a large one-time expense directly because he/she happens to have the cash on hand (e.g. for a new car), then the other one takes care of refilling the joint account as needed until we become even again. We don't track these things to the last penny, but just aim to get it to come out "reasonably close".

This leads to fairly large checking account balances, usually in the $5K-$10K range, which is OK with us. We don't obsess over having every penny "working for us."
My investing princiPLEs do not include absolutely preserving princiPAL.

User avatar
RickBoglehead
Posts: 4492
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Newlyweds and joint accounts for household expenses

Post by RickBoglehead » Sun Feb 10, 2019 5:39 pm

BanquetBeer wrote:
Sun Feb 10, 2019 4:08 pm
RickBoglehead wrote:
Sun Feb 10, 2019 3:01 pm
If one spouse brown bags it and brings coffee from home, and the other goes out for lunch everyday and buys Starbucks, then you have different value systems and need to discuss that.

Luckily, my wife and I share common values. I'm tight with a buck, and she is almost as tight, although I work at it harder.
I don’t know if I would take it that far. I eat out every day at work, I believe the cost works out to around 1% of our spend. I’m sure I could save about 0.5% if I brought food from home.... not worth it.

Common goals are important in any relationship but you don’t have to have the same path to accomplish them. I could be a janitor earning $50k/yr and spending only $10k so I can save the rest. SO could be a doctor earning $500k/yr and spending $100k of that.

You don’t have to retire at the same time, you just have to be ok with what the other person wants to do (live frugally and retire early or buy luxuries and retire later) so long as your plans work together. This strategy works for separate accounts as you can clearly earmark I have accumulated enough to cover joint and individual costs and can quit VS resenting your SO for spending what you save.

You have the be much more aligned to have everything joint but in my opinion, you don’t need to be so aligned to have a good marriage.

Legally seaparate accounts may not mean anything if you get divorced; up to you to judge if you will split amicably enough to divide finances like you planned. To me, easier if you are both in a strong financial position and your end goals are for the kids not for yourselves.
Coffee $3.50 x 250 = $875. At a 35% combined tax bracket, that's $1,346 a year.

Lunch at $8 x 250 = $2,000 / .65 = $3,077

3,077 + $1,346 = $4,423.

I never spent $442k per year.

I fundamentally disagree with your perspective on almost every point you made.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

Sandi_k
Posts: 1097
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Newlyweds and joint accounts for household expenses

Post by Sandi_k » Sun Feb 10, 2019 7:21 pm

RickBoglehead wrote:
Sun Feb 10, 2019 5:39 pm

Coffee $3.50 x 250 = $875. At a 35% combined tax bracket, that's $1,346 a year.

Lunch at $8 x 250 = $2,000 / .65 = $3,077

3,077 + $1,346 = $4,423.

I never spent $442k per year.

I fundamentally disagree with your perspective on almost every point you made.
And this is why DH and I have separate spending accounts. I may spend more on an occasional item like a massage or a new purse, but he owns a plane. I can guarantee that he spends more on AvGas every month than I do on lunches at work.

And the beautiful thing is...I don't know for sure! :D

We save a large portion of our income, we optimize for retirement savings, we drive cars until they have 200k miles on them, we don't shop recreationally...

But the fact that our spending on "luxuries" is each up to our singular preference is a great thing. As long as all of the maximally-agreed-upon spending and savings is done...who cares?!

User avatar
RickBoglehead
Posts: 4492
Joined: Wed Feb 14, 2018 9:10 am
Location: In a house

Re: Newlyweds and joint accounts for household expenses

Post by RickBoglehead » Sun Feb 10, 2019 7:57 pm

Sandi_k wrote:
Sun Feb 10, 2019 7:21 pm
RickBoglehead wrote:
Sun Feb 10, 2019 5:39 pm

Coffee $3.50 x 250 = $875. At a 35% combined tax bracket, that's $1,346 a year.

Lunch at $8 x 250 = $2,000 / .65 = $3,077

3,077 + $1,346 = $4,423.

I never spent $442k per year.

I fundamentally disagree with your perspective on almost every point you made.
And this is why DH and I have separate spending accounts. I may spend more on an occasional item like a massage or a new purse, but he owns a plane. I can guarantee that he spends more on AvGas every month than I do on lunches at work.

And the beautiful thing is...I don't know for sure! :D

We save a large portion of our income, we optimize for retirement savings, we drive cars until they have 200k miles on them, we don't shop recreationally...

But the fact that our spending on "luxuries" is each up to our singular preference is a great thing. As long as all of the maximally-agreed-upon spending and savings is done...who cares?!
To each their own. I see nothing beautiful about lack of openness and knowledge.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

stan1
Posts: 7558
Joined: Mon Oct 08, 2007 4:35 pm

Re: Newlyweds and joint accounts for household expenses

Post by stan1 » Sun Feb 10, 2019 8:16 pm

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
We have transferred a set amount of money from each of our individual checking accounts to a joint account twice a month for over 20 years. It works fine for us. We adjust the amount up or down as needed but to be honest we've only done that 3 or 4 times in 20 years as our fixed expenses are, well, pretty fixed. Our relationship is no way weakened by this. Disputes over money are a common factor in divorce. Figure out what works. Be flexible. Talk and listen. I'd also add don't be greedy. We are saving over 40% of our income and live in a paid off house. If I buy a $3 coffee or my spouse has 50 pairs of shoes we have it worked out so neither of us cares. Those are common values.

I'll caveat that we do not have kids. If can see that with kids it would be easier to pay more expenses out of a joint account.

UpperNwGuy
Posts: 2522
Joined: Sun Oct 08, 2017 7:16 pm

Re: Newlyweds and joint accounts for household expenses

Post by UpperNwGuy » Sun Feb 10, 2019 8:28 pm

Having been married and divorced, I have reached the conclusion that a successful marriage has three buckets of money: his, hers, and theirs. The specifics are unimportant as long as the basic concept is maintained.

bluebolt
Posts: 965
Joined: Sat Jan 14, 2017 9:01 am

Re: Newlyweds and joint accounts for household expenses

Post by bluebolt » Sun Feb 10, 2019 8:37 pm

There are a few different and related issues at play here:

1) Joint planning and goals
2) Trust
3) Account structure

If you are in a agreement about (1) and trust each other, the details around (3) are whatever you're comfortable with and won't impact (1) or (2).

If you don't agree on (1) and don't have (2), it doesn't matter what your account structure is, it won't work.

miamivice
Posts: 2194
Joined: Tue Jun 11, 2013 11:46 am

Re: Newlyweds and joint accounts for household expenses

Post by miamivice » Sun Feb 10, 2019 9:03 pm

One checking account (aka one checkbook) is simplier all the way around.

With that said, I did see one couple on here that maintains two checkbooks for everything, including what they spend on their shared kid. For example, maybe the kid has to go to the doctor and they each write a check for half. Or the baby needs new shoes, and this time the mom buys the shoes and not the dad. Or maybe the kid wants to play league soccer and that expense is on the dad. Not an efficient way of handling household finances in my opinion.

Sandi_k
Posts: 1097
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Newlyweds and joint accounts for household expenses

Post by Sandi_k » Mon Feb 11, 2019 1:20 am

RickBoglehead wrote:
Sun Feb 10, 2019 7:57 pm
Sandi_k wrote:
Sun Feb 10, 2019 7:21 pm
RickBoglehead wrote:
Sun Feb 10, 2019 5:39 pm

Coffee $3.50 x 250 = $875. At a 35% combined tax bracket, that's $1,346 a year.

Lunch at $8 x 250 = $2,000 / .65 = $3,077

3,077 + $1,346 = $4,423.

I never spent $442k per year.

I fundamentally disagree with your perspective on almost every point you made.
And this is why DH and I have separate spending accounts. I may spend more on an occasional item like a massage or a new purse, but he owns a plane. I can guarantee that he spends more on AvGas every month than I do on lunches at work.

And the beautiful thing is...I don't know for sure! :D

We save a large portion of our income, we optimize for retirement savings, we drive cars until they have 200k miles on them, we don't shop recreationally...

But the fact that our spending on "luxuries" is each up to our singular preference is a great thing. As long as all of the maximally-agreed-upon spending and savings is done...who cares?!
To each their own. I see nothing beautiful about lack of openness and knowledge.
Legally, they're all joint accounts. But we don't need to know every detail and every sandwich purchased without "permission" for it to be workable and just as valid as your disapproval over purchased coffee. C'est la vie.

MathWizard
Posts: 3561
Joined: Tue Jul 26, 2011 1:35 pm

Re: Newlyweds and joint accounts for household expenses

Post by MathWizard » Mon Feb 11, 2019 1:34 am

We have always had a joint account, but had little money when first married, so we got a couple of overdrafts because
both people took money using separate checkbooks, and we didn't get the amounts in immediately.

I just used cash, and my wife used the checkbook. She was a bookkeeper, and very good about keeping the
checkbook balanced.

longleaf
Posts: 288
Joined: Sun Nov 26, 2017 4:13 pm

Re: Newlyweds and joint accounts for household expenses

Post by longleaf » Mon Feb 11, 2019 1:39 am

GmanJeff wrote:
Sun Feb 10, 2019 10:00 am
We found it easier to have a single account. It provides simple visibility into funds flowing in and out. Multiple accounts just make it more difficult to quickly understand overall household cash flow and balances at any given time.

From a non-financial perspective, using a single account also promotes accountability and communication - each easily sees what money is coming in, what is going out, and what expenditures are for.

Less integration is also a valid approach, if both partners are content with maintaining more separation in that regard.
I think this works when both partners are of similar financial ideology.

This is a case-by-case issue.
Frugality, indexing, time.

NoGambleNoFuture
Posts: 302
Joined: Tue Feb 02, 2016 8:17 pm

Re: Newlyweds and joint accounts for household expenses

Post by NoGambleNoFuture » Mon Feb 11, 2019 7:16 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
How you describe is exactly how my wife and I handle things. Our respective pay is sent to our individual accounts and then we have a “house account” that we each contribute to on a monthly basis (I contribute 2x what she does) and from there we pay mortgage, daycare, insurances, cars, and all bills. Set up in a way that we end up putting about $500/month extra in.

Has worked well for us.

pennywise
Posts: 681
Joined: Sat May 31, 2014 6:22 am

Re: Newlyweds and joint accounts for household expenses

Post by pennywise » Mon Feb 11, 2019 7:49 am

NoGambleNoFuture wrote:
Mon Feb 11, 2019 7:16 am
icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
How you describe is exactly how my wife and I handle things. Our respective pay is sent to our individual accounts and then we have a “house account” that we each contribute to on a monthly basis (I contribute 2x what she does) and from there we pay mortgage, daycare, insurances, cars, and all bills. Set up in a way that we end up putting about $500/month extra in.

Has worked well for us.
Honey, are you posting on Bogleheads as NoGambleNoFuture? :)

We do exactly the same, even down to the house account label, and we've been married for 33+ years. As is always the case in these discussions I agree with the 'do what works for you' contingent and I'm mystified as to why so many men seem to firmly be convinced of the formula: more than one account=bad marriage/no trust/extremely complicated financial lives.

Our experience has also been that after so many years together, the house account pays for pretty much everything and our individual accounts mostly are tapped very, very rarely for some unforeseen expense. As for logistics and complexity, what is simpler than going online every month and transferring money? Click click and done. We've always used the proportional model as well which has worked from the days when I was employed on a very part time basis to salary parity to me making slightly more to him contributing pension instead of paycheck. It's all been smooth and it works quite well for us.

I suspect that most of the one-bucket crowd reflects older males, most with SAH partners, who follow a more traditional economic model of marriage. That would also be reflected in the myriad posts about wives who have not the faintest clue what goes on financially/won't possibly know how to find or manage a dime when husband dies/can't be bothered to learn anything about investing. C'est la vie and all that but let's not posit this as the gold standard of marital money management.

f a couple chooses to throw all their resources into one pot that's great too. However I do wish the judgmental attitudes from the 'other' side would ease up!

nick evets
Posts: 234
Joined: Wed Mar 01, 2017 5:40 pm

Re: Newlyweds and joint accounts for household expenses

Post by nick evets » Mon Feb 11, 2019 9:51 am

pennywise wrote:
Mon Feb 11, 2019 7:49 am
If a couple chooses to throw all their resources into one pot that's great too. However I do wish the judgmental attitudes from the 'other' side would ease up!
Well said. I think the 'trust' argument for a single and/or combined joint account is actually stronger when you have individual accounts, and reflects consideration, and privacy and a respect for a certain level of responsibility.

And, from a personal aspect, my wife has myriad expenses, and spends on things I have no problem with in the abstract, but it would annoy me if I continually saw line-by-line itemizing, and vice versa!

Anyway, as another data point, our system is similar to what the OP is asking about.

1) Divide the monthly, recurring bills in an equitable manner proportional to income.
2) Paychecks go into our personal accounts ( and we both subdivide to 'special savings,' or whatever)
3) Work out a budget, and after the aforementioned bills, and discretionary spending, an amount to be xferred monthly to a mutual account.
4) From the mutual account we pay for things like major house repairs/maintenance, vacations, etc.

User avatar
changingtimes
Posts: 210
Joined: Mon Jul 24, 2017 9:28 am

Re: Newlyweds and joint accounts for household expenses

Post by changingtimes » Mon Feb 11, 2019 10:24 am

icedtea wrote:
Sun Feb 10, 2019 11:17 am
OP here. I appreciate all the responses. I think having a mix of separate and joint accounts is the right fit for us.

What I had envisioned doing was we'd each still have our income direct deposited in our separate accounts and then biweekly or monthly we'd each contribute to the joint account accordingly. Some of what I've read mentioned the opposite - put all income in the joint account and then move some of it to separate accounts. I suppose either way can work depending on the couple?
This is how DH and I did it for 20+ years; paychecks into our separate accounts and then a monthly auto transfer of funds to cover household expenses (including travel, dining out, etc). Some months that account would be short and we'd agree to add a matching amount to it.

Maybe it also helped that our incomes were similar, and we were never close to being in debt.

Some people look at this sort of setup as a red alert of one or both not being "committed"--but the reverse is that it is a good way to keep two extremely independent people happy. We'd have both gone nuts if we had had to run purchases by the other. And, more to the point, we trusted each other and had the same approach to personal finance.
Last edited by changingtimes on Mon Feb 11, 2019 10:27 am, edited 1 time in total.

User avatar
changingtimes
Posts: 210
Joined: Mon Jul 24, 2017 9:28 am

Re: Newlyweds and joint accounts for household expenses

Post by changingtimes » Mon Feb 11, 2019 10:26 am

oops, double post.

dcabler
Posts: 1108
Joined: Wed Feb 19, 2014 11:30 am

Re: Newlyweds and joint accounts for household expenses

Post by dcabler » Mon Feb 11, 2019 10:56 am

Jags4186 wrote:
Sun Feb 10, 2019 9:23 am
It’s just so much easier to open a new checking account and have all of your paychecks go into that one account going forward.
+1 When we got married 30 years ago, we tried his, hers, and ours checking accounts. What a total pain in the butt! Lasted about 6 months before we stopped that. One checking account, two paychecks, and a HUGE amount of mutual trust...

FlyEaglesFly2000
Posts: 15
Joined: Mon Feb 11, 2019 10:39 am

Re: Newlyweds and joint accounts for household expenses

Post by FlyEaglesFly2000 » Mon Feb 11, 2019 11:08 am

Coming from someone married 12 years where we have always done the one pot of $$ thing, I have always been intrigued by the joint account for household and separate account for individual expenses. I would love to not stress about my wife spending more than I understand on a new purse or her to disagree with my fantasy football budget, so maybe we need to work on that. The examples below aren't meant to be critical, I'm just genuinely curious how the separate finances crowd handles these type of situations.

What I am curious about for those of you with separate accounts, how do you handle joint expenses that aren't in the household budget? If you go out for a nice dinner, do you split the check? Does one of you "treat" the other? Or are all shared experiences handled from the joint account?

Also, with kids is seems difficult. If your 12 year old wants $15 to go to the movies, do you each give her some $? If you take the kids to Disney, do you split up the cost of the trip evenly?

Afty
Posts: 1081
Joined: Sun Sep 07, 2014 5:31 pm

Re: Newlyweds and joint accounts for household expenses

Post by Afty » Mon Feb 11, 2019 12:11 pm

dcabler wrote:
Mon Feb 11, 2019 10:56 am
Jags4186 wrote:
Sun Feb 10, 2019 9:23 am
It’s just so much easier to open a new checking account and have all of your paychecks go into that one account going forward.
+1 When we got married 30 years ago, we tried his, hers, and ours checking accounts. What a total pain in the butt! Lasted about 6 months before we stopped that. One checking account, two paychecks, and a HUGE amount of mutual trust...
Same experience here, but 15 years ago for us. At one point we tried a related system where we had a joint account for most things and separate "play money" accounts, but we ended up never spending the play money. We closed those accounts and just merged everything, and it works well for us.

Post Reply