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How Do You Calculate Net Worth For Couples?

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I haven’t calculated a Net Worth value in several months now, mostly to hide the fact that I bought an engagement ring, but now I have a dilemma. Since my fiancée and I have begun using a joint checking account and direct depositing all of our money into it, I have no idea (or concept) of my net worth, only our net worth. So, I wanted to ask every engaged/married couple out there… when you calculate net worth (haha, I wouldn’t calculate it if I wasn’t writing a blog, to be entirely honest) do you just add all the assets together?

The dilemma I have now with calculating the net worth for both of us as one is that my goals, in the upper right, were originally set for me, personally and not for me + 1. With me + 1, should I revise my goals? I’m hinting towards yes.

Another issue now is that I don’t really want to be harassing my fiancée every month to see her retirement account statements, though I know she’s happily show me, it’s just a pain in the butt. So, I think I’m going to give Quicken or MS Money or some other software a whirl now where the numbers can be pulled in automagically. I want it as easy to maintain as possible… anyone have any good recommendations?

So, two questions:

  1. Should I begin calculating my net worth as our net worth?
  2. Should I restate my goals?
  3. What personal finance tracking software should I use?

Thanks!

{ 25 comments, please add your thoughts now! }

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25 Responses to “How Do You Calculate Net Worth For Couples?”

  1. samerwriter says:

    I add all our assets together. Of course a combined number will be different than your current number, will grow (hopefully?) at a different rate, and needs to be larger than your current goals to support you both in retirement.

    So in my opinion, it makes sense to change your goals.

    In my case, I got married back when we both had negative net worth. We weren’t calculating net worth back then, but if we had been it would have been depressing to see our net worth double — in the wrong direction.

  2. Randy says:

    Unless you have a pre-nuptial agreement stating otherwise, a good rule of thumb is that your personal net worth will be exactly half of what your total net worth is together. So you may as well track it together.
    I personally do not use Quicken or any other “money management” software. Excel is my tool of choice. Check out this website for how to download current market data into Excel to constantly update:

    http://www.gummy-stuff.org/Yahoo-data.htm

    Also, most retirement plans have on online login to check statements so you don’t need to bug her about statements. Of course, until you are actually married, I suggest she does not give you access to that website. No offense, but things get legally very yucky if any accidents happen. So I guess you will have to bug her until after the big day.

    By the way, what’s up with expensive engagement rings? I personally believe it is one of the biggest personal finance mistakes a young person can make when they should be saving as many pennies as possible. Is it really worth the apparent positive emotional or spiritual effect? For us it wasn’t, but I guess for others it is.

  3. prlinkbiz says:

    That was three questions… lol (wink)

  4. Isaac says:

    When I got married a bout a year ago, we set up the joint checking account in her account because it didn’t have direct deposit requirements like mine and it is the same bank any way. Additionally, we had separate ING Savings accounts, and kept those but used some of the funds to set up a joint account. I create a Net Worth based on all of our accounts combined. This includes my students loans, IRA and 401k. Combining it all is important because unless you have a prenup, it is all community property. Definitely use Quicken, it adds everything up and posts it in the column in the left.

  5. Savvy Samurai says:

    You should sit down with your fiancee and decide who will be in charge of bills/money/investment/etc. If she’s okay with you making the decisions you could ask her if you can login to her accounts. Or something a little easier would be to add all her accounts to your Yodlee account. Then you can see all the information in one place and you don’t have to bug her every month. In my situation, my fiancee is letting me take care of all money matters.

    Btw, why did you choose to create a joint account? I’m more in the camp of keeping things separate because of these reasons: Link

  6. Leroy Brown says:

    I could not imagine being married and having separate accounts, or separate financial goals. Ever since I asked my wife of 4.5 years to marry me, we had joint accounts, credit cards, everything. There isn’t a single thing now that isn’t in both of ours names.
    It’s always been my thinking that if you can’t trust your significant other with your finances 100%, then you shouldn’t be getting married. If theres’ the slightest doubt that you’ll be married until one of you dies, then you shouldn’t get married. JMHO.

    • Sadie says:

      While you may prefer “joint accounts”, what happens when you both write a check that same day without consulting the other?

      Lesson well learned 48 yrs ago and why separate accounts worked best for us.

      Plus as your net worth increases you may find it necessary to identify specifically who owns what for tax purposes. Whose SS number does the account actually belong to plays an important role also. Important that both of you have separate credit histories else one may be left without a credit history & too late to obtain if not employed.

  7. 2 million says:

    Im in the same boat although we just have a joint savings account so far where the vacation and wedding funds are being put. For now I am just calculating my net worth ignoring that account.

    I am not sure how all is going to work out. Here are my thoughts so far:
    1) I started learning about my fiancees finances (there were some things she kept from me – e.g. retirement accts)
    2) I started having her calculate her net worth. Ok I am actually calculating her net worth, but still trying to get her to measure where she is at.
    3) Setting our Financial Goals. We have only done it at a high level so far, but I forced us to revisit all those things we talked about so long ago about a wedding, starting a family, buying our main home, buying replacement cars, retiring etc.
    4) Come up with a plan to start saving for all these big things – wedding, home, family
    5) Start merging our net worths together
    6) Presto – one happy couple, hopefully on the same page!

  8. Nick says:

    Nothing is worth anything to me without my wife, so while our net worth is $X, my worth alone is $0.

  9. I’m in the same boat with you and 2million. I’ve been engaged for about a year now. I’ve been doing my networth alone, because we haven’t sat down and merged everything. We are both independent people though, and we my never fully merge our assets. Leroy Brown’s right in theory, but it would be ignorant to ignore that half of all marriages end in divorce.

    I like 2million’s plan and it’s very close to what I was going to do. I may have trouble getting her to do it monthly, but once I show her how I can get it 98% accurate in 15 minutes, it might not be that bad. For accounting purposes, I’d still like to have them separate. Legally they will combined and all that, but much like tracking stocks, I want to be able to make sure I’m earning and spending as I should be. If I have her data all combined it may be difficult to split that out.

    Technically, I was thinking of using something called FolderShare (FolderShare.com) so that we can each manage one spreadsheet on different computers and have it updated on both. I’ll have one tab, she’ll have another tab, and I’ll have a third tab which will be automated to add the first two tabs together. I just got a geeky chill.

  10. I’d lump them all together and come up with new goals. It’s now your goals and finances as a couple. Even though most of our retirement accounts are in my name I never thought to exclude anything that is in her name.

    Plus your individual goals really don’t matter now that you are/will be married. You are a team now and your financial success depends on the progress both of you make, not just one of you. Plus if treating some money as your money and some money as her money can tend to lead to problems, IMHO it’s best to lump and treat everything as your families money.

    YMMV

    Best of luck

    MFJ

  11. Mike says:

    1. Should I begin calculating my net worth as our net worth?

    Yes. Unless you get divorced, you’re considered one unit from most financial perspectives–taxes, debts, major purchases, budgeting, etc. are most likely going to be joint decisions and responsibilities, and your retirement is going to pay for both of your expenses, right?

    2. Should I restate my goals?

    Personally I think even your upwardly revised 1.5 million net worth goal for retirement is low, but I don’t have any detailed knowledge of your expected budget during retirement so I could be wrong. If I were retired, even at age 45, I’d want enough put away so that I could have it invested in very safe investments so that I could pretty much count on the returns not fluctuating too much (and not having the asset value decrease significantly). To me that means probably a 50/50 mix of stocks and fixed income, so probably a rate of return of 8% overall, and I’d want that 8% to cover both my income needs and enough asset appreciation to cover inflation–if you’re retiring at age 45, you’ve probably got 40 years to pay for, so I wouldn’t want much risk of having the money run out before the end.

    Being married does change the numbers. It also brings up the question of kids, which if you’re even entertaining the possibility, throw your numbers out the window and start over.

    3. What personal finance tracking software should I use?

    I like Quicken, and would generally recommend that type of software to anyone who wants to track their finances in detail. I would add that my wife has made fun of me for tracking every dime in Quicken, but what I like about it is how it makes that level of tracking so much easier to do, and that as long as I keep it up to date I can look at all the reports and graphs I might want whenever I feel like it. I can’t imagine having to balance checkbooks by hand, and I like being able to reconcile credit card, mortgage, and other accounts to my own records without a ton of work. I haven’t used MS Money, but I imagine it’s similar enough that it won’t matter which one you choose.

  12. Sun says:

    Our net worth is our assets minus our liabilities. All our salaries are directly deposit into a joint checking account and when ever I think I need to open a brokerage or mutual fund account, I simply open a joint account with both of us as owners. I have been married for nearly ten years and never had a problem with how things work.

    I think at the begining, you may want your fiancee to do her part of the calculation of her investment/retirement and talk with her about your common goals (short term, long term), then once you two have an agreement on goals, you can combine your assets and liabilities and work out a plan on how to achieve them.

    I also use Quicken to track almost everything.

  13. NetWorth says:

    I was in the same situation just a few years ago — and had to decide which route I wanted to take. In my mind, I could:

    (1) simply add together our funds and keep my prior financial goals the same

    or

    (2) add together our funds and CHANGE my prior financial goals

    I opted for option number two because it gave my fiance and I the chance to sit down and find out “what” our goals really were. I had my own ideas when it came to future financial goals and my fiance, although having similar goals, had a few that I did not expect.

    There was a commercial I saw a few weeks back from Ameriprise Financial that talked about their “Dream Book.” Instead of calling it a “401K Book”, their company has been trying to shift the thinking of individuals to plan our their “Dreams” versus their “401K/Retirement Balances”. My fiance (now wife) really latched onto this idea and began coming up with her own “Dreams” that meet her vision of retirement. This also got me thinking about what I want my retirement to be and what types of things I want accomplish.

    The end-result was that both of us were able to agree on several goals — and therefore my prior financial goals were “updated” to include the goals that both of us have.

    -N.W.
    http://www.networthchallenge.com

  14. Steve says:

    Two becomes one… surely there must be a combining of assets.

    A note of interest, have you seen the bonuses Goldman Sachs is handing out to its Patnership Managing Directors. They have just announced 116 new ones, and they should expect to receive $9 Million each.

  15. Frank says:

    I’m in the same boat. Engaged in Jan 06, will be married in Sept 07.

    In fact, my situation is surprisingly similar to 2mil. It’s kind of fun to see that there are others going through the same things. I too am not so sure exactly how we will merge everything, but when I calculated my goals a while back I knew that I would probably get married at some point and have a couple of kids. As a result, our plans don’t really have to change all that much.
    To answer your questions, here’s what I’m doing now:
    1. calculating each one seperate. My wife-to-be likes knowing where she stands because my current net worth would skew the combined results. Plus she likes to know that we are both contributing to the end goal.
    2. I didn’t have to (yet), but I don’t she why you wouldn’t want to. We agreed that my plan was good for the time being and we would revisit it as major life changes occur.
    3. I use Excel, but have heard good things about MS Money

    On another note, saving for the wedding has been (so far) suprisingly easy. We both maintain seperate checking accounts. Then a predetemined amount is transferred into the joint checking for household bills. After that we each maintain a seperate savings account (both at HSBC) that a certian $ amount is transferred in weekly. I had to really push her to get this set up, but now she can see the importance of it.

  16. Geoff says:

    I agree with most in the idea that you now are two, and if you can’t trust the other person with your finances, then you might want to reevaluate. I also went through the same thing a few months ago, but since my fiance doesn’t want to deal with the money, I just take care of everything. Makes it simple.

    Some people are forgetting though that just because you’re married does not mean your finances are all tied together (even if you try to make them that way). If you have any loans, especially student loans, they most likely will stay under your name unless you decide to change that. I would suggest not doing that, because if something unfortunate happens, then one person can be stuck with all of the debt, rather than just their own.

    As for goals, I think it’s best to start anew with new ideas. Its a lot more complex now than it was before since now you have two incomes, but also more expenses, possibiliy of children, travel, etc.

  17. Jen says:

    Heh. I don’t equate maintaining separate accounts with not trusting my husband with my finances. I trust him with my email, but we don’t share an email account, either. He has passwords to all my accounts, I have passwords to all of his, and the data gets downloaded to the same MS Money file so we have a complete picture of our shared financial picture. As Gibran says in The Prophet, “let there be spaces in your togetherness”. Financial space is good.

    When we calculate our net worth, it’s both of our numbers together. IMO, it wouldn’t make much sense to calculate them separately because so much would be different if we were still entirely individual entities.

  18. UNC-WFU says:

    For my wife and I, it is our Net Worth. My wife and I have been married for 5 years (+3 years living together) and early on we had seperate accounts. It became old trying to reconcile two of everything, even with Quicken (which I used long before meeting my sig other and highly recommend). So we have had joint accts in nearly everything for 4 years, it has rarely been a source of contention for either one of us. As for reinstating your goals, I think it is a must, at the very least talk over your goals with your future spouse. Goals, individual or couple are accomplished much faster with a supportive and helpful wife or husband. I know it is not everyone’s idea but I believe that my money is our money and my spouse thinks the same way.

  19. Amy says:

    I calculated my sole net worth until I got married this year. Now I prepare a joint net worth statement monthly, and I do bug my husband to access his retirement accounts every month for my chart! I give him a copy so he can see how we are doing. I take care of the finances because I actually have fun doing it. Weird, yes.

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  21. Amanda says:

    I do both – calculate my own networth and ours as a couple. I don’t know why, but it just helps me gain a greater perspective.

    Our goals, however, are always joint.

  22. jengod says:

    I would definitely share password access to each others’ accounts and suck all the data into Quicken or MS Money or something, and then both of you can access that program (online or through just the software) to check how things are going.

  23. John Aitek says:

    Net worth is a measure of assets under your control. In a joint account you do have control of the money but if the wife interferes the control is diminished, so I believe you should reduce your net worth depending on how much influence you think your wife has over your assets.

    In the event of a divorce it’s 50/50 so maybe just divide it by 2.

  24. FlyFisher says:

    I am about to pop the big question soon and I have no doubt that we will pool our finances together and track them together. Seems so much easier and both of us feel great about that.


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