Newlyweds and joint accounts for household expenses

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changingtimes
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Re: Newlyweds and joint accounts for household expenses

Post by changingtimes » Mon Feb 11, 2019 12:54 pm

FlyEaglesFly2000 wrote:
Mon Feb 11, 2019 11:08 am
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?
We used the joint account for eating out (which we did a lot). There was a credit card designated as the joint expenses card. No kids, though, but a Disney trip would come out of the shared account. Putting a set amount into the account every month after we looked at our spending over the previous year helped.

As for the $15 for movies, I think that's where anyone would need to be careful about "scorekeeping." Geez, it's $15. It all evens out in the end.

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Darth Xanadu
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Re: Newlyweds and joint accounts for household expenses

Post by Darth Xanadu » Mon Feb 11, 2019 1:01 pm

Like others here, we use a joint account plus separate accounts. Our paychecks go to joint account, and we each get a fixed $ amount each month for personal/discretionary spend that we transfer to personal accounts.

We may move to one account down the road, for simplicity, now that we have kids.

As it is, these walls have begun to break down anyway (spouse funded 2018 Roth IRA in December out of savings; if I get a bonus next month I'll probably "reimburse" spouse for the $5,500 ... as another poster mentioned upthread, the mechanics don't really matter too much at the end of the day).
"A courageous teacher, failure is."

Jags4186
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Re: Newlyweds and joint accounts for household expenses

Post by Jags4186 » Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:

Our system is pretty simple. When we got married we opened all new accounts: each opened a new Roth IRA and we opened a new joint taxable account. We don't touch our taxable accounts or Roth IRAs from prior to our marriage except for rebalancing. We didn't do this because we don't trust each other, just so that we each had a little something that we know was "ours" at some point.

We each get paid every alternating week. So we have a paycheck 52 weeks a year.

We make a yearly budget based on what we assume our income for the year is going to be
We both max out our 401ks
I max the HSA
Every Friday we deposit $115.38 into each of our Roth IRAs
The last day of the month we make a predetermined deposit into our joint taxable account
All of this is automated. There's never *that* much money in the checking account.
All expenses go on credit cards which get paid off at the end of the month

The checking account just fluctuates between about $1000-$10000 depending on where we are in the year.

As far as I'm concerned, things just need to be fair, they don't need to be even. Fair is whatever the two of you agree is fair. If I had season tickets to my favorite sports team (I don't) that cost $5000/yr that doesn't mean my wife gets to have a $5000 hobby. She just needs to be okay with it. Just like if my wife had a $500/mo hair, toes, nails, and tanning hobby (she doesn't) I don't get to go spend $500/mo on whatever frivolous thing I want. If someone stops working because of children or because they lose their job, fair isn't putting that person on an allowance. Fair is "we have this much money and this is how we've jointly decided how to deploy it." Hopefully you work through all of this stuff BEFORE the marriage.

Of course, if you are some sort of heir or if a 3rd party relies on your assets not to be diluted in case of a split or death a prenup is likely prudent, but for most people with normal amounts of assets I think a prenup or operating as some sort of parternship vs as a single unit is harmful. Now of course some people do operate separately for many reasons and it works out just fine. I just think that is unnecessarily complicated. Just my 2 cents.

pennywise
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Re: Newlyweds and joint accounts for household expenses

Post by pennywise » Mon Feb 11, 2019 1:17 pm

FlyEaglesFly2000 wrote:
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.

That is exactly why having one's own pot of no-explanation-needed money is very nice. If you and your wife each have a fun fund, she can buy purses and you can spend whatever it is people spend on fantasy football and neither of you would be annoyed. Not sure what exactly you are asking because you're sorta kinda advocating for the way many of us multiple account folks operate :happy

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?

When we go out to eat, the bill comes, I pull out our joint account credit card and pay for dinner. Or my husband pulls out the credit card if he's taking his mom to lunch for her weekly outing from assisted living. Or I pull out the credit card at Target, or he does at the gas station. End of the month, CC charges are paid from the house account; what is complicated about that?

Same with kids' expenses-we usually keep some amount of cash on hand that is (all together now) drawn from the house account. Kid needs movie money, get cash and give to kid. Family vacation, house account pays. Again, simple enough.

Other examples-I pay for my Pilates classes and weight training from the house account; we both agree health is a good mutual goal. Husband pays for scuba gear maintenance and equipment form the house account; we both agree his much loved hobby keeps him healthy and engaged and that's a good mutual goal.


Trust does not equal putting every penny into one account, it just doesn't. Trust for most couples also doesn't equal asking each other to square up if one put an extra quarter in a parking meter or arguing about how much each owes if one had an app and the other didn't at dinner out last night. His/hers/theirs is just another way of managing money, if a couple has trust and respect it works. If they don't, it doesn't. I would guess that it's just as common for people to fight bitterly about money when they share one account as two, perhaps more so. As the saying goes, it's not about the money.

Managing finances is just another tool in the box of a successful partnership and how it's managed is less important than whether it is part of a mutually supportive team effort. It's that simple and that complex.

nick evets
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Re: Newlyweds and joint accounts for household expenses

Post by nick evets » Mon Feb 11, 2019 1:24 pm

FlyEaglesFly2000 wrote:
Mon Feb 11, 2019 11:08 am
... I'm just genuinely curious how the separate finances crowd handles these type of situations.
Well, most of those situations are budgeted, at least in my case. For example, we each have an assumed spend of $XXX dollars each month for dining-out, groceries, etc...And then we 'roughly' take turns, if that makes sense. It's nothing formally tracked, but we try to have a general sense of equity, and adapt as needed (eg, typically my wife would pay, if she wants to pick up the tab for dinner out with my in-laws, even if the two of us went out to dinner on her dime earlier in the week).

We don't have children, but I'd assume it would work similarly. Say you figure out you spend $100/mo. outside of allowance for incidentals -- you could either split the amount in some proportional fashion (say $60/$40), and send the child to the other parent, if you feel you've been completely withdrawn for the month. :) Or it's a small enough sum, one parent might just own the expense, and pull $100 out in fives, each month, and keep the cash in a drawer.

In your Disneyland vacation scenario, yes, that would come from mutual savings -- at least the big ticket items like air fare, hotel, rental car, park tickets....And then we'd probably treat the incidental dining, souvenirs, extra costs out of our personal accounts.

IMO, the key is the upfront work of budgeting/understanding spending, first. Then, divide recurring costs in an equitable fashion, figure out what's a reasonable figure for discretionary spending and the rest goes to a mutual account. I truly don't see how this doesn't involve MORE trust than claimed by the single bucket group, because I trust my partner to handle her side of things, and vice versa.

delamer
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Re: Newlyweds and joint accounts for household expenses

Post by delamer » Mon Feb 11, 2019 1:36 pm

All Star wrote:
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.
So what happens if you get run over by a bus tomorrow? How does your wife manage her finances?

22twain
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Re: Newlyweds and joint accounts for household expenses

Post by 22twain » Mon Feb 11, 2019 2:02 pm

FlyEaglesFly2000 wrote:
Mon Feb 11, 2019 11:08 am
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?

We've never had a "household budget". As I noted before, we don't replenish the joint account monthly with a pre-budgeted amount. We simply put in a largish lump of money whenever it runs low, which has usually turned out to be about three times a year.

If one or both of us had ever had problems keeping up with replenishing the joint account, we would have talked about it and done something to cut back. But neither of us has ever had trouble with putting enough money into our retirement accounts or with personal expenses, so that's never come up.
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?
The last option, of course. More precisely, all such items except for the smallest ones go onto the joint credit card that eventually gets paid out of the joint checking account. LIkewise when we travel together: hotels, gasoline, food, sightseeing. Small stuff that isn't worth putting on the card, we don't sweat. Whoever has some cash, pays for it.

We don't have kids, so those expenses never came up.
My investing princiPLEs do not include absolutely preserving princiPAL.

robphoto
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Re: Newlyweds and joint accounts for household expenses

Post by robphoto » Mon Feb 11, 2019 2:25 pm

Combined accounts here:

We came back from our honeymoon, closed on our modest house that day, had about 500. left between us and opened a joint account. We have separate businesses, and put the profits and salaries into the joint account. Has worked since '86.

I definitely see that this wouldn't work if the couple has one big spender and one saver; the saver would feel like the rug is always getting pulled out from under them, the spender that they were always being involuntarily restrained or unnecessarily guilt-tripped. Mercifully, we're both reasonably frugal.

BanquetBeer
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Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Mon Feb 11, 2019 2:39 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.
Coffee = $0 * 365 /0.65 = $0
Food = ($10 eating out - $4 home made) * (52 week - 6 weeks vacation - 8 travel and/or vendor lunches) * (9 days/2 weeks) / 0.65 = $1,579

$0 + $1,579 = $1,579

So if you make > $158k per year? Sounds pretty reasonable if you use real data vs try to make a scenario to prove your point. Last time I looked at cost of food at home, was closer to $6/meal (much better quality ingredients but too much of same cooking style)

Glad my wife doesn’t track my pennies.

Edit: actually looking at your calculation it looks like 35% tax rate for everything. Think our average rate was about 2/3 of that. So 1% of annual spending of >$102k/yr (or 8500/mo). I think about 35% goes to kids, 20% housing, and 45% everything else. Would be much easier to reduce kids spend or housing.
Last edited by BanquetBeer on Mon Feb 11, 2019 3:49 pm, edited 3 times in total.

BanquetBeer
Posts: 358
Joined: Thu Jul 13, 2017 5:57 pm

Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Mon Feb 11, 2019 2:47 pm

FlyEaglesFly2000 wrote:
Mon Feb 11, 2019 11:08 am
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?


I set the $limit for budget and SO directs how the budget is split up. If we go over one month we discuss and both agree to reduce next month. If we have surprise bills or expenses we can’t handle (auto/property tax/income tax hit at the same time) we both kick in matching funds to cover the balance.

Our budget is an (aggressive) target and where we want to be, and we hit it about 90% of the time. Typical budget busters are housing and kids, we are fine with spending on both.
Last edited by BanquetBeer on Mon Feb 11, 2019 3:42 pm, edited 1 time in total.

david
Posts: 186
Joined: Thu Jan 03, 2013 12:39 am

Re: Newlyweds and joint accounts for household expenses

Post by david » Mon Feb 11, 2019 3:15 pm

Jags4186 wrote:
Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:

Our system is pretty simple. When we got married we opened all new accounts: each opened a new Roth IRA and we opened a new joint taxable account. We don't touch our taxable accounts or Roth IRAs from prior to our marriage except for rebalancing. We didn't do this because we don't trust each other, just so that we each had a little something that we know was "ours" at some point.

We each get paid every alternating week. So we have a paycheck 52 weeks a year.

We make a yearly budget based on what we assume our income for the year is going to be
We both max out our 401ks
I max the HSA
Every Friday we deposit $115.38 into each of our Roth IRAs
The last day of the month we make a predetermined deposit into our joint taxable account
All of this is automated. There's never *that* much money in the checking account.
All expenses go on credit cards which get paid off at the end of the month

The checking account just fluctuates between about $1000-$10000 depending on where we are in the year.

As far as I'm concerned, things just need to be fair, they don't need to be even. Fair is whatever the two of you agree is fair. If I had season tickets to my favorite sports team (I don't) that cost $5000/yr that doesn't mean my wife gets to have a $5000 hobby. She just needs to be okay with it. Just like if my wife had a $500/mo hair, toes, nails, and tanning hobby (she doesn't) I don't get to go spend $500/mo on whatever frivolous thing I want. If someone stops working because of children or because they lose their job, fair isn't putting that person on an allowance. Fair is "we have this much money and this is how we've jointly decided how to deploy it." Hopefully you work through all of this stuff BEFORE the marriage.

Of course, if you are some sort of heir or if a 3rd party relies on your assets not to be diluted in case of a split or death a prenup is likely prudent, but for most people with normal amounts of assets I think a prenup or operating as some sort of parternship vs as a single unit is harmful. Now of course some people do operate separately for many reasons and it works out just fine. I just think that is unnecessarily complicated. Just my 2 cents.
My wife and I do something like this but we got a prenup. She entered the narrative with a lot of educational debt. I came in with a bunch of gifted assets. She is not working and instead takes care of our son and cooks/cleans the household.

The prenup was useful to lay out what we had previously discussed. And it provided a structured way to list and discuss our premarital assets. She has a few separate accounts from before marriage. I have some too.

All current expenses cone out of the joint account. We're typically on the same page with expenses and don't need things to be perfectly even.

We are paying her school debt from community funds. However, she will owe that back to the community in the event of a divorce.

I really do see my salary as "ours" so it doesn't make sense to contribute to a shared expenses account and keep the rest separate. On large purchases, of which there have been relatively few, we do discuss things. Even for relatively small purchases we talk about them to keep each of us on the same page.

I only write this to say that you can operate similarly but have a prenup.

Seattler123
Posts: 32
Joined: Mon Jun 19, 2017 6:53 pm

Re: Newlyweds and joint accounts for household expenses

Post by Seattler123 » Mon Feb 11, 2019 3:24 pm

We created a new checking account for common expenses. Took advantage one of the sign-up bonus offers :).
Part of the paycheck gets directly deposited into this account. This is mainly for day-to-day expenses. Our salaries are similar, but amount coming into this account from both differs as ESPP/After-tax/HSA are employer dependent and not both of us are offered the same for these.
Doing this gives an easy estimate of our monthly spending and savings.

For investments/savings, we have individual accounts. Even though we try to look at our net worth and allocation on the whole by combining our accounts, we do have our investments separated in accounts in each of our names.

runner540
Posts: 1077
Joined: Sun Feb 26, 2017 5:43 pm

Re: Newlyweds and joint accounts for household expenses

Post by runner540 » Mon Feb 11, 2019 3:32 pm

david wrote:
Mon Feb 11, 2019 3:15 pm
Jags4186 wrote:
Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:

Our system is pretty simple. When we got married we opened all new accounts: each opened a new Roth IRA and we opened a new joint taxable account. We don't touch our taxable accounts or Roth IRAs from prior to our marriage except for rebalancing. We didn't do this because we don't trust each other, just so that we each had a little something that we know was "ours" at some point.

We each get paid every alternating week. So we have a paycheck 52 weeks a year.

We make a yearly budget based on what we assume our income for the year is going to be
We both max out our 401ks
I max the HSA
Every Friday we deposit $115.38 into each of our Roth IRAs
The last day of the month we make a predetermined deposit into our joint taxable account
All of this is automated. There's never *that* much money in the checking account.
All expenses go on credit cards which get paid off at the end of the month

The checking account just fluctuates between about $1000-$10000 depending on where we are in the year.

As far as I'm concerned, things just need to be fair, they don't need to be even. Fair is whatever the two of you agree is fair. If I had season tickets to my favorite sports team (I don't) that cost $5000/yr that doesn't mean my wife gets to have a $5000 hobby. She just needs to be okay with it. Just like if my wife had a $500/mo hair, toes, nails, and tanning hobby (she doesn't) I don't get to go spend $500/mo on whatever frivolous thing I want. If someone stops working because of children or because they lose their job, fair isn't putting that person on an allowance. Fair is "we have this much money and this is how we've jointly decided how to deploy it." Hopefully you work through all of this stuff BEFORE the marriage.

Of course, if you are some sort of heir or if a 3rd party relies on your assets not to be diluted in case of a split or death a prenup is likely prudent, but for most people with normal amounts of assets I think a prenup or operating as some sort of parternship vs as a single unit is harmful. Now of course some people do operate separately for many reasons and it works out just fine. I just think that is unnecessarily complicated. Just my 2 cents.
My wife and I do something like this but we got a prenup. She entered the narrative with a lot of educational debt. I came in with a bunch of gifted assets. She is not working and instead takes care of our son and cooks/cleans the household.

The prenup was useful to lay out what we had previously discussed. And it provided a structured way to list and discuss our premarital assets. She has a few separate accounts from before marriage. I have some too.

All current expenses cone out of the joint account. We're typically on the same page with expenses and don't need things to be perfectly even.

We are paying her school debt from community funds. However, she will owe that back to the community in the event of a divorce.

I really do see my salary as "ours" so it doesn't make sense to contribute to a shared expenses account and keep the rest separate. On large purchases, of which there have been relatively few, we do discuss things. Even for relatively small purchases we talk about them to keep each of us on the same page.

I only write this to say that you can operate similarly but have a prenup.
She is forgoing an income to take care of your home and child, and presumably that benefits you as well, but if you split up she has a balloon payment on her debt? Does it sunset or are her household services goven any credit over time? Interesting approach...this example is why the scorekeepimg approach is hard for me to understand.

bayview
Posts: 1847
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Location: WNC

Re: Newlyweds and joint accounts for household expenses

Post by bayview » Mon Feb 11, 2019 3:43 pm

FlyEaglesFly2000 wrote:
Mon Feb 11, 2019 11:08 am

...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?
The occasional nice dinner is in the budget. Vacations are in the budget. Our elderly cat’s vet is in the budget. Car repairs, gas, furnace service call, etc. The very rare times that an out of nowhere expense pops up, we both chip in.

We each have kids from previous marriages, none from our marriage, and we generally take care of anything involving just our own kids individually. When we do something with the whole crowd, it’s from the joint account. If we had kids together (which would be a medical miracle), their expenses would come out of joint, of course.

We also run most expenses through credit cards that we both use (not joint accounts, but authorized users.) If one of us uses one of these cards individually (for rewards, etc), we move money to cover that charge into the joint account.

I have no problem with couples who use one account. My parents did this - Daddy put in his paycheck and Mother did all the bill paying, etc. Just sort of wish that the joint account crowd would regard the rest of us with the same understanding.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

david
Posts: 186
Joined: Thu Jan 03, 2013 12:39 am

Re: Newlyweds and joint accounts for household expenses

Post by david » Mon Feb 11, 2019 3:50 pm

runner540 wrote:
Mon Feb 11, 2019 3:32 pm
david wrote:
Mon Feb 11, 2019 3:15 pm
Jags4186 wrote:
Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:

Our system is pretty simple. When we got married we opened all new accounts: each opened a new Roth IRA and we opened a new joint taxable account. We don't touch our taxable accounts or Roth IRAs from prior to our marriage except for rebalancing. We didn't do this because we don't trust each other, just so that we each had a little something that we know was "ours" at some point.

We each get paid every alternating week. So we have a paycheck 52 weeks a year.

We make a yearly budget based on what we assume our income for the year is going to be
We both max out our 401ks
I max the HSA
Every Friday we deposit $115.38 into each of our Roth IRAs
The last day of the month we make a predetermined deposit into our joint taxable account
All of this is automated. There's never *that* much money in the checking account.
All expenses go on credit cards which get paid off at the end of the month

The checking account just fluctuates between about $1000-$10000 depending on where we are in the year.

As far as I'm concerned, things just need to be fair, they don't need to be even. Fair is whatever the two of you agree is fair. If I had season tickets to my favorite sports team (I don't) that cost $5000/yr that doesn't mean my wife gets to have a $5000 hobby. She just needs to be okay with it. Just like if my wife had a $500/mo hair, toes, nails, and tanning hobby (she doesn't) I don't get to go spend $500/mo on whatever frivolous thing I want. If someone stops working because of children or because they lose their job, fair isn't putting that person on an allowance. Fair is "we have this much money and this is how we've jointly decided how to deploy it." Hopefully you work through all of this stuff BEFORE the marriage.

Of course, if you are some sort of heir or if a 3rd party relies on your assets not to be diluted in case of a split or death a prenup is likely prudent, but for most people with normal amounts of assets I think a prenup or operating as some sort of parternship vs as a single unit is harmful. Now of course some people do operate separately for many reasons and it works out just fine. I just think that is unnecessarily complicated. Just my 2 cents.
My wife and I do something like this but we got a prenup. She entered the narrative with a lot of educational debt. I came in with a bunch of gifted assets. She is not working and instead takes care of our son and cooks/cleans the household.

The prenup was useful to lay out what we had previously discussed. And it provided a structured way to list and discuss our premarital assets. She has a few separate accounts from before marriage. I have some too.

All current expenses cone out of the joint account. We're typically on the same page with expenses and don't need things to be perfectly even.

We are paying her school debt from community funds. However, she will owe that back to the community in the event of a divorce.

I really do see my salary as "ours" so it doesn't make sense to contribute to a shared expenses account and keep the rest separate. On large purchases, of which there have been relatively few, we do discuss things. Even for relatively small purchases we talk about them to keep each of us on the same page.

I only write this to say that you can operate similarly but have a prenup.
She is forgoing an income to take care of your home and child, and presumably that benefits you as well, but if you split up she has a balloon payment on her debt? Does it sunset or are her household services goven any credit over time? Interesting approach...this example is why the scorekeepimg approach is hard for me to understand.
No sunset or credit is given. In case of divorce, it would come out of the shared community assets (e.g. if the community is worth 300k, plus she owes 200k to the community, I get 250, and she would get 50). This would be the same as if she were making any amount of money because the money she makes contributes not to satisfy her personal debt but instead goes to the community which then loans her (interest free) the money. If she were making a million a year, that wouldn't be 'hers' to pay her debt with, it would be ours. Just like my salary is ours.

She would also be entitled to alimony for a period of time. (Or I would, if she starts making that million.)

The accounting isn't too bad because I keep the books on those loans anyway. About 6 months into our marriage, family members of mine refinanced her and so I have been managing payments and all of that. She has very favorable terms

So, the services she provides the family are counted in the same way mine are--the benefit of both is all ours. If things were to go south and we separate, the fruits of the contributions would be split evenly as well, and any debts owed to the community would then be satisfied from the community. I don't discount the valuable work she does.

yeahman
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Re: Newlyweds and joint accounts for household expenses

Post by yeahman » Mon Feb 11, 2019 3:57 pm

A joint account solely for joint expenses is an unnecessarily complication. There's Venmo and Zelle for that. A joint account for joint expenses and savings makes more sense. Deposit everything into the joint, transfer out your predetermined individual allowance. All credit cards are paid from the joint but individual spending is credited from the individual accounts back to the joint.

One benefit of separate accounts is that it forces you to examine every expense because you have to determine whether it was a joint or individual expense. Takes us about 15 minutes a month with the aid of Mint and Excel. That forced habit alone makes the practice worth the hassle IMO.

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Doom&Gloom
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Re: Newlyweds and joint accounts for household expenses

Post by Doom&Gloom » Mon Feb 11, 2019 4:02 pm

There are so many of these threads that there should probably be a sub-forum for them. Here is a response I made in a thread a couple of months ago:

We pay shared bills equally now--in the past, they were paid in different proportions when our incomes were more disparate.

I pay monthly bills from my personal account; we each have our own CCs and charge on those--any common expenses (groceries, liquor, Walmart, Amazon, etc) are settled monthly. We do have a joint checking account, but its primary function is to transfer money back and forth--not to pay bills. But it is nice to have as a very small emergency fund for an unexpected expense (plumber etc) when individual accounts may be near the point where a service fee would pop, etc.

Common expenses: groceries, home & health insurance, health care, kid's college expenses, all recurring home related expenses and major purchases, cell phones, vacations, etc.

Individual expenses: vehicle purchase, maintenance, & insurance; alcohol (I pay for wine; DS pays for hard liquor; beer is shared); dining out (we alternate and try to keep it even when we dine out together); travel primarily for only one person's wishes (ie, visit my friends is mine; visit her relatives is hers) even if we both travel, retirement planning (this was an early sore spot as I had established tax-deferred accounts before we met and she has relied on a pension for her future but we finally both became comfortable, but not ecstatic, about the other's approach).

We arrived at this division after discussion & agreement, and we modified it when it seemed to be unfair. Nothing has been set in stone. The key for separate accounts is for both parties to agree and be comfortable with it. If either is unhappy with something and the other person is intractible, there will be major problems.

alamo
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Re: Newlyweds and joint accounts for household expenses

Post by alamo » Mon Feb 11, 2019 4:08 pm

Tried multiple ways and this is what works the best for us.

Joint account that both parent's paychecks get deposited into automatically. Large difference in paychecks but all income is "ours". All income goes into this account. All fixed monthly bills are paid out of this account (home, car, medical, savings)

We each have our own accounts for discretionary spending (entertainment, clothing, anything not home, car, medical) with a set equal amount auto transferred weekly into each account. Our two kids (teens) also have their own accounts with a set amount (allowance) auto transferred weekly into each account.

No debate over who pays what as all fixed bills come out of Joint account with Bill pay. No questioning who spends what out of own accounts. Can save it or set it on fire, dont care. :D

This has made personal finance software much easier since we dont need to track personal spending accounts. The money is considered gone as soon as its transferred.

529's for each kid with amount for their college expenses. Kid 1 drawing down 529 now and we are contributing to 529 for kid 2 still.

dacalo
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Re: Newlyweds and joint accounts for household expenses

Post by dacalo » Mon Feb 11, 2019 4:29 pm

We keep it simple and we just have multiple joint accounts, all considered "household" income. Wife and I both grew up with parents with joint accounts so it's natural for us.

BanquetBeer
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Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Mon Feb 11, 2019 4:40 pm

yeahman wrote:
Mon Feb 11, 2019 3:57 pm
One benefit of separate accounts is that it forces you to examine every expense because you have to determine whether it was a joint or individual expense. Takes us about 15 minutes a month with the aid of Mint and Excel. That forced habit alone makes the practice worth the hassle IMO.
We don’t examine expenses. Last individual expense I had was my car 6 years ago. (I am pretty boring spending wise and much more frugal of the two)
I encourage my SO to put more on the joint but they don’t. They make more and what we decided setting it up is do what you think is right. We don’t audit or nit-pick.

We agreed to each put in a set $ amount but higher income also covers insurance/fsa. They still can spend/save much more. Maybe if either felt restricted on spending it would be an issue. I’d rather spend less (not to save more, but mostly to have less “Junk” - an offensive word around our house as they should be referred to as “valuable possessions that get left around and not used frequently”)

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Re: Newlyweds and joint accounts for household expenses

Post by azianbob » Mon Feb 11, 2019 6:45 pm

Too many accounts can be too confusing to track and manage. It also becomes an issue when you tell your spouse "to pay up for their portion" can cause bad feelings.

My wife likes to buy things. She also hates being bothered. So she has one credit card. She has one checking account. She maxes out her 401k, Roth IRA, and then keeps $1000 from her monthly pay (her spending allowance) and the rest gets transfered to our joint online savings account each month (whichever has a higher interest rate between Ally and CIT). She only buys on her credit card and pays for it from her checking, if she gets low she knows its time to save up again. She has to ration that money between her clothes, my clothes, eating out.

All of our bills (rent utilities, phone, insurance, etc) come autopay out of my checking account. I also pay for vacations, groceries, gas. I max out my 401k, Roth IRA, family HSA. I have a rolling stable of credit cards based on whatever bonuses are out. Any money I have left over after all bills are paid gets sent to our joint online savings. Each month any amount over $50k in our online savings (our emergency fund amount) gets sent to our joint taxable brokerage account and I use it to purchase VTI.

So we have 4 total accounts between us and it works. KISS

My checking
Her checking
Joint online savings
Joint Taxable brokerage ME account

pennywise
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Re: Newlyweds and joint accounts for household expenses

Post by pennywise » Mon Feb 11, 2019 8:46 pm

Seattler123 wrote:
Mon Feb 11, 2019 3:24 pm
We created a new checking account for common expenses. Took advantage one of the sign-up bonus offers :).
For investments/savings, we have individual accounts. Even though we try to look at our net worth and allocation on the whole by combining our accounts, we do have our investments separated in accounts in each of our names.
That reminds me, for couples in which both are employed there will always be separate accounts. No such thing as a joint 401K or 403b or TSP account, there is no joint Social Security account, there is no joint pension account--at least as far as who the account is earned/assigned to.

So regardless of whether or not paychecks get deposited into one joint account, double income folks are gonna be dealing with how to manage individual streams of money one way or another.

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Re: Newlyweds and joint accounts for household expenses

Post by david » Mon Feb 11, 2019 8:54 pm

pennywise wrote:
Mon Feb 11, 2019 8:46 pm
Seattler123 wrote:
Mon Feb 11, 2019 3:24 pm
We created a new checking account for common expenses. Took advantage one of the sign-up bonus offers :).
For investments/savings, we have individual accounts. Even though we try to look at our net worth and allocation on the whole by combining our accounts, we do have our investments separated in accounts in each of our names.
That reminds me, for couples in which both are employed there will always be separate accounts. No such thing as a joint 401K or 403b or TSP account, there is no joint Social Security account, there is no joint pension account--at least as far as who the account is earned/assigned to.

So regardless of whether or not paychecks get deposited into one joint account, double income folks are gonna be dealing with how to manage individual streams of money one way or another.
This is true for single income couples as well (e.g. spousal IRAs, HSAs). That said, those won't have expenses until retirement and you could basically treat it as one account vs each spouse having separate control. So in effect it would be no different from having multiple joint bank/investment accounts.

pennywise
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Re: Newlyweds and joint accounts for household expenses

Post by pennywise » Tue Feb 12, 2019 7:13 am

david wrote:
Mon Feb 11, 2019 8:54 pm
pennywise wrote:
Mon Feb 11, 2019 8:46 pm


That reminds me, for couples in which both are employed there will always be separate accounts. No such thing as a joint 401K or 403b or TSP account, there is no joint Social Security account, there is no joint pension account--at least as far as who the account is earned/assigned to.

So regardless of whether or not paychecks get deposited into one joint account, double income folks are gonna be dealing with how to manage individual streams of money one way or another.
This is true for single income couples as well (e.g. spousal IRAs, HSAs). That said, those won't have expenses until retirement and you could basically treat it as one account vs each spouse having separate control. So in effect it would be no different from having multiple joint bank/investment accounts.
Right, they are SEPARATE accounts that couples can choose how to manage. So regardless of whether a couple has a single bank account, if both are employed there will be separate accounts that eventually have to be dealt with, although I'm here to say dealing with those multiple accounts simply isn't the byzantine accounting nightmare some of the only-one-account folks seem to think is inevitable.

As a data point from the front, both my husband and I have our own pensions, 403b accounts, and eventually social security benefits. I manage our finances with those pots of funds being allocated just as we always have, proportionally divided with whatever remains going to our individual accounts. By this point that is basically a spillover fund since the majority of our money ends up in the house account.

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Re: Newlyweds and joint accounts for household expenses

Post by BanquetBeer » Tue Feb 12, 2019 7:44 am

With previous jobs, pensions, stock options, etc we have 10 different accounts.

We even have 2 different “joint” accounts (never finalized joint paperwork on one) for local bank and travel banking. All bills come out of one account. It’s not difficult to check once a month that nothing fishy occurred - it’s all automated.

Nissanzx1
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Re: Newlyweds and joint accounts for household expenses

Post by Nissanzx1 » Tue Feb 12, 2019 7:56 am

The preacher says 2 become one.

I realize either philosophy can work. In my own circle of friends and acquaintances, those with joint accounts are in better overall financial health, as working on goals together gets traction and more quickly. Our friends with mine and yours are not funding retirement at the same level, continuing to leverage consumer purchases, and have anemic savings (IE they are normal) and even seem to have outbursts and childish friction more often.

I’d love to see some scientific research on this someday. I’d guess my observation isn’t unique.

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Re: Newlyweds and joint accounts for household expenses

Post by veindoc » Tue Feb 12, 2019 8:32 am

My husband makes twice as much as I do and I pay for everything out of my individual account. We have never spent time calculating what percentage of expenses either of us is responsible for. We have a joint account where we funnel extra money at the end of the month and it ultimately makes its way into our taxable. For him it is represents probably 90% of his income and for me 0-10%. We both contribute the max to our tax advantaged account.

It seems to me that breaking expenses down based on percentage of income contributed to the household is just an extra layer of complexity that it is unnecessary. What are you doing with the money leftover? Doesn’t it still belong to both of you?

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Re: Newlyweds and joint accounts for household expenses

Post by stan1 » Tue Feb 12, 2019 8:34 am

FlyEaglesFly2000 wrote:
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?
For us the key is not to worry about tracking every last dollar. My spouse pays for most groceries and I pay for most meals out. We don't worry about equalizing that each week, month, or year. We would either split the costs of the trip or pay it out of a joint account, depending upon what the balances are at the time. Key for us to making this work is that we are both low spenders. If one or both of us was spent a lot we'd need to work something else out to achieve our objectives.

Do what works for you and your spouse. There's no right answer except the one that works. Trust and responsibility can be achieved in many ways.

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Re: Newlyweds and joint accounts for household expenses

Post by All Star » Tue Feb 12, 2019 8:36 am

delamer wrote:
Mon Feb 11, 2019 1:36 pm
All Star wrote:
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.
So what happens if you get run over by a bus tomorrow? How does your wife manage her finances?
Valid point. That’s definitely an issue.

At least she gets a $924,000 life insurance check out of it.

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Re: Newlyweds and joint accounts for household expenses

Post by RickBoglehead » Tue Feb 12, 2019 8:44 am

pennywise wrote:
Mon Feb 11, 2019 8:46 pm
Seattler123 wrote:
Mon Feb 11, 2019 3:24 pm
We created a new checking account for common expenses. Took advantage one of the sign-up bonus offers :).
For investments/savings, we have individual accounts. Even though we try to look at our net worth and allocation on the whole by combining our accounts, we do have our investments separated in accounts in each of our names.
That reminds me, for couples in which both are employed there will always be separate accounts. No such thing as a joint 401K or 403b or TSP account, there is no joint Social Security account, there is no joint pension account--at least as far as who the account is earned/assigned to.

So regardless of whether or not paychecks get deposited into one joint account, double income folks are gonna be dealing with how to manage individual streams of money one way or another.
True. But those streams should be managed together, with agreement. What's the best distribution process for the couple of each in retirement? When should each take Social Security to maximize the total benefit to the couple? Those that practice the "I don't know what she's doing and she doesn't know what I'm doing" approach may make decisions that aren't beneficial. Same goes for contributions - maximizing a spouse's ability to contribute to a retirement vehicle that benefits both if that spouse has insufficient cashflow to maximize.

Example -

After FICA, state tax, and medical insurance, my DW's entire paycheck goes to her 403b. Her net pay is zero. Then I contribute the max to her ROTH IRA. And I pay all expenses.
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.

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Re: Newlyweds and joint accounts for household expenses

Post by 8foot7 » Tue Feb 12, 2019 8:52 am

I think if you and spouse have high enough incomes to have money left over after your expenses, then separate accounts work well. I know it does for my wife and me. We have enough taken out of our paychecks to fully fund 401k contributions and IRAs for each of us, and that takes care of our combined savings goals (when added to some existing investments we've already made). We then split bills equally throughout the month, not in a nickel-and-dime way but we just collect receipts and then twice a month, sit down and spend 10 minutes adding them up. (I generally pay for everything at the time of purchase.) She writes me a check for half of whatever we spent and whatever the bills are and we continue. Frankly as long as we're saving $50,000 a year combined, the big rocks are in the jar. I don't really care where her money goes and she certainly doesn't care where my money goes either.

For those with stay at home spouses, obviously the calculus changes.

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Re: Newlyweds and joint accounts for household expenses

Post by veindoc » Tue Feb 12, 2019 9:40 am

8foot7 wrote:
Tue Feb 12, 2019 8:52 am
I think if you and spouse have high enough incomes to have money left over after your expenses, then separate accounts work well. I know it does for my wife and me. We have enough taken out of our paychecks to fully fund 401k contributions and IRAs for each of us, and that takes care of our combined savings goals (when added to some existing investments we've already made). We then split bills equally throughout the month, not in a nickel-and-dime way but we just collect receipts and then twice a month, sit down and spend 10 minutes adding them up. (I generally pay for everything at the time of purchase.) She writes me a check for half of whatever we spent and whatever the bills are and we continue. Frankly as long as we're saving $50,000 a year combined, the big rocks are in the jar. I don't really care where her money goes and she certainly doesn't care where my money goes either.

For those with stay at home spouses, obviously the calculus changes.
What I don’t understand is why she is cutting you a check at the end of the month? Is it so no one is left with more in their checking account than the other and if it does happen so what? If my kid needs a pair of shoes and my husband is free he buys them. If we need a new microwave I just buy it. We never do any kind of accounting at the end of the month. Because in the end the entire pot wherever and however it is split up in various accounts is ours.

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Re: Newlyweds and joint accounts for household expenses

Post by 8foot7 » Tue Feb 12, 2019 9:54 am

veindoc wrote:
Tue Feb 12, 2019 9:40 am
8foot7 wrote:
Tue Feb 12, 2019 8:52 am
I think if you and spouse have high enough incomes to have money left over after your expenses, then separate accounts work well. I know it does for my wife and me. We have enough taken out of our paychecks to fully fund 401k contributions and IRAs for each of us, and that takes care of our combined savings goals (when added to some existing investments we've already made). We then split bills equally throughout the month, not in a nickel-and-dime way but we just collect receipts and then twice a month, sit down and spend 10 minutes adding them up. (I generally pay for everything at the time of purchase.) She writes me a check for half of whatever we spent and whatever the bills are and we continue. Frankly as long as we're saving $50,000 a year combined, the big rocks are in the jar. I don't really care where her money goes and she certainly doesn't care where my money goes either.

For those with stay at home spouses, obviously the calculus changes.
What I don’t understand is why she is cutting you a check at the end of the month? Is it so no one is left with more in their checking account than the other and if it does happen so what? If my kid needs a pair of shoes and my husband is free he buys them. If we need a new microwave I just buy it. We never do any kind of accounting at the end of the month. Because in the end the entire pot wherever and however it is split up in various accounts is ours.
I generally pay for everything at the time of purchase -- bills, eating out, groceries, kids' expenses, daycare, everything. So she's reimbursing me for her half of the bills and expenses. We agreed at the start of our relationship we were 50/50 in everything we decide to spend as a couple, be it house, car, dishes, vacation,whatever, and we've lived up to that; what's left over after our 50/50s are taken care of is each of ours to spend as we wish. I do not consider what is left over after she pays for half of all of our expenses to be my money, and she does not consider what is left over after I pay half of everything her money. I'm certainly not saying it's best for everyone, but it works really well for us.

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Re: Newlyweds and joint accounts for household expenses

Post by bluebolt » Tue Feb 12, 2019 10:18 am

8foot7 wrote:
Tue Feb 12, 2019 9:54 am
veindoc wrote:
Tue Feb 12, 2019 9:40 am
What I don’t understand is why she is cutting you a check at the end of the month? Is it so no one is left with more in their checking account than the other and if it does happen so what? If my kid needs a pair of shoes and my husband is free he buys them. If we need a new microwave I just buy it. We never do any kind of accounting at the end of the month. Because in the end the entire pot wherever and however it is split up in various accounts is ours.
I generally pay for everything at the time of purchase -- bills, eating out, groceries, kids' expenses, daycare, everything. So she's reimbursing me for her half of the bills and expenses. We agreed at the start of our relationship we were 50/50 in everything we decide to spend as a couple, be it house, car, dishes, vacation,whatever, and we've lived up to that; what's left over after our 50/50s are taken care of is each of ours to spend as we wish. I do not consider what is left over after she pays for half of all of our expenses to be my money, and she does not consider what is left over after I pay half of everything her money. I'm certainly not saying it's best for everyone, but it works really well for us.
Why don't you just have her automatically transfer an amount that's average or covers half the major expenses?

Same idea, but you don't have to worry about doing the accounting each month? And if everything's 50/50, it doesn't matter if you're over or under any given month.

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Re: Newlyweds and joint accounts for household expenses

Post by 8foot7 » Tue Feb 12, 2019 10:24 am

bluebolt wrote:
Tue Feb 12, 2019 10:18 am
8foot7 wrote:
Tue Feb 12, 2019 9:54 am
veindoc wrote:
Tue Feb 12, 2019 9:40 am
What I don’t understand is why she is cutting you a check at the end of the month? Is it so no one is left with more in their checking account than the other and if it does happen so what? If my kid needs a pair of shoes and my husband is free he buys them. If we need a new microwave I just buy it. We never do any kind of accounting at the end of the month. Because in the end the entire pot wherever and however it is split up in various accounts is ours.
I generally pay for everything at the time of purchase -- bills, eating out, groceries, kids' expenses, daycare, everything. So she's reimbursing me for her half of the bills and expenses. We agreed at the start of our relationship we were 50/50 in everything we decide to spend as a couple, be it house, car, dishes, vacation,whatever, and we've lived up to that; what's left over after our 50/50s are taken care of is each of ours to spend as we wish. I do not consider what is left over after she pays for half of all of our expenses to be my money, and she does not consider what is left over after I pay half of everything her money. I'm certainly not saying it's best for everyone, but it works really well for us.
Why don't you just have her automatically transfer an amount that's average or covers half the major expenses?

Same idea, but you don't have to worry about doing the accounting each month? And if everything's 50/50, it doesn't matter if you're over or under any given month.
Because no two months are the same. Between vacations, kid expenses, furniture purchases, birthdays, Christmas, tax refunds/balances due, etc., I'm not sure we've honestly ever had two back-to-back months that were similar.

There is "accounting" each month, yes, but it literally takes ten minutes -- there are maybe 10-15 receipts to deal with. Enter amounts into spreadsheet, divide by two, tell her the total. It's also a nice touch point for us to discuss finances, as in, "wow, honey, we spent a lot eating out this past couple of weeks; let's tighten that up" or "hey, don't forget that our 6 month car insurance premium is coming up in April."

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Re: Newlyweds and joint accounts for household expenses

Post by delamer » Tue Feb 12, 2019 11:28 am

8foot7 wrote:
Tue Feb 12, 2019 8:52 am
I think if you and spouse have high enough incomes to have money left over after your expenses, then separate accounts work well. I know it does for my wife and me. We have enough taken out of our paychecks to fully fund 401k contributions and IRAs for each of us, and that takes care of our combined savings goals (when added to some existing investments we've already made). We then split bills equally throughout the month, not in a nickel-and-dime way but we just collect receipts and then twice a month, sit down and spend 10 minutes adding them up. (I generally pay for everything at the time of purchase.) She writes me a check for half of whatever we spent and whatever the bills are and we continue. Frankly as long as we're saving $50,000 a year combined, the big rocks are in the jar. I don't really care where her money goes and she certainly doesn't care where my money goes either.

For those with stay at home spouses, obviously the calculus changes.
The mechanics of your system seem simple is enough. And I understand the desire to have some money for which you aren’t accountable.

What I don’t get is that unless you have identical incomes, one of you gets more personal spending money than the other since you are splitting joint expenses 50/50.

As the lower-earning spouse for most of our marriage, I wouldn’t agree to such a setup.

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Re: Newlyweds and joint accounts for household expenses

Post by 8foot7 » Tue Feb 12, 2019 11:34 am

delamer wrote:
Tue Feb 12, 2019 11:28 am
8foot7 wrote:
Tue Feb 12, 2019 8:52 am
I think if you and spouse have high enough incomes to have money left over after your expenses, then separate accounts work well. I know it does for my wife and me. We have enough taken out of our paychecks to fully fund 401k contributions and IRAs for each of us, and that takes care of our combined savings goals (when added to some existing investments we've already made). We then split bills equally throughout the month, not in a nickel-and-dime way but we just collect receipts and then twice a month, sit down and spend 10 minutes adding them up. (I generally pay for everything at the time of purchase.) She writes me a check for half of whatever we spent and whatever the bills are and we continue. Frankly as long as we're saving $50,000 a year combined, the big rocks are in the jar. I don't really care where her money goes and she certainly doesn't care where my money goes either.

For those with stay at home spouses, obviously the calculus changes.
The mechanics of your system seem simple is enough. And I understand the desire to have some money for which you aren’t accountable.

What I don’t get is that unless you have identical incomes, one of you gets more personal spending money than the other since you are splitting joint expenses 50/50.

As the lower-earning spouse for most of our marriage, I wouldn’t agree to such a setup.
Currently my wife has a higher income and I am not bothered by it--she works for her money and deserves the benefit. I purposely chose my current job based on work/life balance, so I don't make as much as her, but I still make plenty for me. If I wanted more spending money, I'd do a side hustle or find a different job--leave the cave, kill something, drag it home, eat it.

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Re: Newlyweds and joint accounts for household expenses

Post by alpenglow » Tue Feb 12, 2019 11:37 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

10 years later our only separate accounts are IRAs. :D

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Re: Newlyweds and joint accounts for household expenses

Post by ruralavalon » Tue Feb 12, 2019 12:29 pm

We have always had just a joint checking account, we felt no need for anything more complicated than that.

We discuss major purchases, and neither of us has an allowance or limit for "personal" expenses. We are both fairly frugal.
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yeahman
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Re: Newlyweds and joint accounts for household expenses

Post by yeahman » Tue Feb 12, 2019 1:00 pm

How does joint + individual work in practice? We have Fidelity. Is it 2 login accounts, 1 brokerage account each (the individual account), 1 IRA each, 1 joint brokerage, 1 joint CMA, 1 family HSA, and both users being authorized to transfer funds between accounts as needed?

delamer
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Re: Newlyweds and joint accounts for household expenses

Post by delamer » Tue Feb 12, 2019 1:07 pm

yeahman wrote:
Tue Feb 12, 2019 1:00 pm
How does joint + individual work in practice? We have Fidelity. Is it 2 login accounts, 1 brokerage account each (the individual account), 1 IRA each, 1 joint brokerage, 1 joint CMA, 1 family HSA, and both users being authorized to transfer funds between accounts as needed?
I have an individual taxable brokerage account that is linked to my husband’s and my joint checking account. I originate all transactions between the two accounts via the brokerage account. I don’t know if I tried to “pull” money from the brokerage using the joint checking if I could do so. We only have one login (ID/password) to the joint checking.

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MortgageOnBlack
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Re: Newlyweds and joint accounts for household expenses

Post by MortgageOnBlack » Tue Feb 12, 2019 4:43 pm

Fiancee and I already own a house (50/50) together. Our paychecks go into our separate individual checking accounts and we both transfer in $1100 each on the same day each month into our joint account for shared expenses (housing, house maintenance/repairs, utilities (Xcel, water, netflix, Internet), groceries (non-eating out), and our pet (Dog Insurance, Dog Food, etc...). As long as the $2200 goes into the account each month, we don't mind what the other person does with their money. I tend to splurge on Entertainment/eating out and hoarding what's left in my personal savings/retirement; she has a car payment and enjoys clothes. As long as the shared expenses are clearly defined, there is never any confusion.

I would not trade my current situation for anything; my brother and his ex-wife had a single checking account that all paychecks were deposited into. She controlled all of the finances and chewed him out for buying a hamburger for lunch once... not my cup of tea
Last edited by MortgageOnBlack on Tue Feb 12, 2019 4:47 pm, edited 2 times in total.

cdu7
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Re: Newlyweds and joint accounts for household expenses

Post by cdu7 » Tue Feb 12, 2019 4:44 pm

Definitely have a joint account, how you structure it is up to you.

westie
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Re: Newlyweds and joint accounts for household expenses

Post by westie » Tue Feb 12, 2019 8:45 pm

I'd never marry anyone I didn't trust. Separate personal accounts usually result from a lack of trust.

bayview
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Re: Newlyweds and joint accounts for household expenses

Post by bayview » Tue Feb 12, 2019 9:08 pm

westie wrote:
Tue Feb 12, 2019 8:45 pm
I'd never marry anyone I didn't trust. Separate personal accounts usually result from a lack of trust.
Can you provide any citations for that, please? Because that is not our experience at all.
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dcabler
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Re: Newlyweds and joint accounts for household expenses

Post by dcabler » Wed Feb 13, 2019 1:50 am

Jags4186 wrote:
Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:
I think you just proved my point. With full trust in each other there is no need to create a separation of funds in the first place by creating separate checking accounts for each of us. It all goes into a single pool and we trust each other not to do anything stupid without discussing with the other.

retired_tom
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Re: Newlyweds and joint accounts for household expenses

Post by retired_tom » Wed Feb 13, 2019 6:57 am

dcabler wrote:
Wed Feb 13, 2019 1:50 am
Jags4186 wrote:
Mon Feb 11, 2019 1:12 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...
TBH, I don't even get the "HUGE amount of mutual trust" idea. If you're getting married you should have HUGE amounts of mutual trust. Otherwise why get married? If you have a plan for your money, then it shouldn't matter which checking account the paychecks go in:
I think you just proved my point. With full trust in each other there is no need to create a separation of funds in the first place by creating separate checking accounts for each of us. It all goes into a single pool and we trust each other not to do anything stupid without discussing with the other.
I think the bolded portion above, is the whole crux of the matter in this discussion. Do I really want/need to ask if I can purchase new golf clubs, or does she need to ask if she can purchase a new dress? We trust each other implicitly, but it's so much easier to just go out an buy what I want with my money and she can do the same with hers. As long as all the bills are paid with the money in the joint account, having individual accounts is a non-issue.
In my first marriage, we held everything in one account. And we'd constantly have to ask if we could buy something. Well, that snowballed into, you bought X for Y, and now I can spend the same amount on something I want. Eventually, the money in the account started diminishing quickly, and before you know it, we were arguing about money issues all the time. It didn't take long for the divorce to come along.

Jags4186
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Re: Newlyweds and joint accounts for household expenses

Post by Jags4186 » Wed Feb 13, 2019 8:41 am

retired_tom wrote:
Wed Feb 13, 2019 6:57 am
I think the bolded portion above, is the whole crux of the matter in this discussion. Do I really want/need to ask if I can purchase new golf clubs, or does she need to ask if she can purchase a new dress? We trust each other implicitly, but it's so much easier to just go out an buy what I want with my money and she can do the same with hers. As long as all the bills are paid with the money in the joint account, having individual accounts is a non-issue.
In my first marriage, we held everything in one account. And we'd constantly have to ask if we could buy something. Well, that snowballed into, you bought X for Y, and now I can spend the same amount on something I want. Eventually, the money in the account started diminishing quickly, and before you know it, we were arguing about money issues all the time. It didn't take long for the divorce to come along.
I think this comes with the shared values part of the relationship. I’m not being critical of your first marriage, but I certainly would expect to ask my wife if I could go out an buy a set of golf clubs. A circa $1000 purchase is a big purchase to us relative to our monthly income. I wouldn’t ask my wife if I could buy a new pair of $50 sneakers. But my wife also knows that I wouldn’t go out and buy a $250 pair of Air Jordans. Just like I don’t really care if she goes shopping for clothes, I trust she isn’t going to buy a $900 designer dress and a new $3000 purse. I guess things can change though as time goes on. That’s why being aware of the “little things”, even from a 30,000ft view, is important.

The othe problem with the separate accounts, again for me not for everyone, is the idea of “saving up” for something big. Let’s say I got $500/mo of Jags4186 money and decided not to spend any of it for 20 months and then on my own go out and buy a $10,000 watch/motorcycle/whatever. That wouldn’t be okay. We don’t make $10,000 purchases in my family without discussing it, regardless of where the money came from.

dbr
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Re: Newlyweds and joint accounts for household expenses

Post by dbr » Wed Feb 13, 2019 9:21 am

Jags4186 wrote:
Wed Feb 13, 2019 8:41 am
retired_tom wrote:
Wed Feb 13, 2019 6:57 am
I think the bolded portion above, is the whole crux of the matter in this discussion. Do I really want/need to ask if I can purchase new golf clubs, or does she need to ask if she can purchase a new dress? We trust each other implicitly, but it's so much easier to just go out an buy what I want with my money and she can do the same with hers. As long as all the bills are paid with the money in the joint account, having individual accounts is a non-issue.
In my first marriage, we held everything in one account. And we'd constantly have to ask if we could buy something. Well, that snowballed into, you bought X for Y, and now I can spend the same amount on something I want. Eventually, the money in the account started diminishing quickly, and before you know it, we were arguing about money issues all the time. It didn't take long for the divorce to come along.
I think this comes with the shared values part of the relationship. I’m not being critical of your first marriage, but I certainly would expect to ask my wife if I could go out an buy a set of golf clubs. A circa $1000 purchase is a big purchase to us relative to our monthly income. I wouldn’t ask my wife if I could buy a new pair of $50 sneakers. But my wife also knows that I wouldn’t go out and buy a $250 pair of Air Jordans. Just like I don’t really care if she goes shopping for clothes, I trust she isn’t going to buy a $900 designer dress and a new $3000 purse. I guess things can change though as time goes on. That’s why being aware of the “little things”, even from a 30,000ft view, is important.

The othe problem with the separate accounts, again for me not for everyone, is the idea of “saving up” for something big. Let’s say I got $500/mo of Jags4186 money and decided not to spend any of it for 20 months and then on my own go out and buy a $10,000 watch/motorcycle/whatever. That wouldn’t be okay. We don’t make $10,000 purchases in my family without discussing it, regardless of where the money came from.
This is it. People communicate without having investigations and notarized auditors reports filed in triplicate. After that there is nothing more to apply than common sense.

nick evets
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Re: Newlyweds and joint accounts for household expenses

Post by nick evets » Wed Feb 13, 2019 9:47 am

Jags4186 wrote:
Wed Feb 13, 2019 8:41 am
The othe problem with the separate accounts, again for me not for everyone, is the idea of “saving up” for something big. Let’s say I got $500/mo of Jags4186 money and decided not to spend any of it for 20 months and then on my own go out and buy a $10,000 watch/motorcycle/whatever. That wouldn’t be okay. We don’t make $10,000 purchases in my family without discussing it, regardless of where the money came from.
Why not? Granted the 'surprise' factor of a new motorcycle in the driveway might not be welcome, so a reasonable conversation might be: "Honey, as you know, I think if I don't play golf for the next two years, and save most of my discretionary money, I think I can afford that used Ducati..." A combination of separate and joint accounts doesn't preclude discussion.

Where there might be friction is if your savings creeps into other areas, that are budgeted and expected, and affect mutual lifestyle. Suddenly you start passing on a vacation, or going out to eat, or put off house maintenance, etc.

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