My husband wanted to do separate accounts and keep the majority of assets separate, with a joint account for day-to-day expenses. He argues that you don't have to have joint finances to be a family. He would prefer a structure where we both contribute to expenses pro-rata and then build savings individually. Because he is a very high-earning entrepreneur, he would have about 5-10x in assets what I would under this structure.
Today, we have a structure that's somewhere in between (most assets in joint accounts but still some separate) and it's still a point of friction for us.
I'm really trying to understand better his point of view and see how separate finances could potentially work. But this model just doesn't make sense to me. So my question is, how do couples with separate accounts build a team mentality?
Some examples of situations that puzzle me:
Decisions that's good for one person's career but bad for the other's: Last year I quit my high-earning job to move our family to a new city for the sake of his business. My career prospects are severely limited here compared to where we lived before. His business, meanwhile, is thriving. Net-net we are making more money as a couple, which is great for us under the condition that we have joint finances. But if we had separate finances like he wanted, I never would've agreed to this move.
In general, there are times in life when one spouse has an opportunity to do something that's good for their career (move to a new city, take the risk of starting a business, go to grad school, etc.) but that requires sacrifice on the part of the other spouse. If you're a married couple with separate finances, why would you make those sacrifices?
Decisions to stay home with kids: You can't possibly have separate finances if you decide for one parent to stay home with the kids, right? Or what do you do — the working spouse pays the at-home spouse a salary for taking care of the kids?
Unfortunate circumstances: If one spouse loses their job or they get sick, what do you do? Does the other person just pay for them, or give them a loan?
Different amounts of savings: Let's say one spouse earns more and/or is more frugal than the other, and so builds up a large nest egg faster. At age 50, that spouse has the funds to retire early while the other spouse still needs to keep working. What do you do? Does the spouse with more money go off to enjoy his or her retirement while leaving the other spouse behind? Does the spouse with more money pay for the other person to retire early as well (in which case you don't really have separate finances anymore)?
It seems to me that separate finances as a married couple only work if you have no kids, no opportunities come up that would help one person's career at the cost of the other's, and you're earning and saving roughly at the same amount. For everyone else, how does it work?
P.S. I also want to add that I can totally see the value of separate accounts if the $ in the separate pots is small relative to the joint accounts. For example, if 10% of each paycheck goes into separate accounts and the rest into joint. What I'm talking about is setups where the majority of money goes into separate accounts.
Editing original post to add some more information based on answering other poster's questions:
bluejello wrote: ↑Fri Apr 05, 2019 11:37 amMy understanding is that there's two main reasons why he wants separate finances:Elbowman wrote: ↑Fri Apr 05, 2019 11:27 amIt is hard to respond without knowing WHY he wants this. If you can, I'd prefer you explain rather than me make ungenerous assumptions.
1) Philosophical ideas of fairness and ownership. He feels that after taking care of family expenses, the person who earns the money should get to keep it and control how it's spent / saved / invested. He has said that the idea of one spouse claiming ownership of the other's earnings just because they are married is a form of "entitlement". He has also stressed that if I were the higher earner, he would feel no entitlement to "my" money.
2) The way his parents fought over money. His father was also an entrepreneur (very successfully, but of course the road to success was not always smooth) and growing up he saw many fights between his parents when his father wanted to invest in growing the business and his mother thought it was too risky. I believe this created a mentality in him of not wanting to be "controlled". In our relationship, there has also been friction about this. Before his current successful venture there were many failed ventures that lost money, and I'm naturally more risk-averse than he is, so we fought about what I perceive as his "irresponsible risk appetite" and what he perceived as "me holding him back".
bluejello wrote: ↑Fri Apr 05, 2019 11:49 amNo, I didn't mean to paint a picture of a monster. He's very good about taking care of the family. Currently most assets outside of the business are in joint accounts, and he pays himself a salary which goes into a joint checking account and which pays for our living expenses. But almost all asset accumulation is happening in the business.
bluejello wrote: ↑Fri Apr 05, 2019 11:52 amThis is also a point of contention. When he was working on these ventures, my paycheck was being deposited into our joint checking account and expenses were being paid out of that account. I consider this as "me paying the bills and supporting him while he was working on his business(es)."
He hotly contests that I ever supported him, because we already had a large pile of savings (in joint accounts) which mostly came from his previous earnings. His point of view is that without me, he still could've tapped into his savings and been more than fine while he took entrepreneurial risks, so I didn't support him during this time.