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How We Handle Our Coupled Finances

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In the past I asked whether married couples should combine their finances, knowing full well that my fiancee and I have had our finances combined for quite a while now, and I’ve also received emails as to how it is that we handle the whole coupled finances thing – who pays the bills, who balances the checkbook, who does whatever. Part of the fun of personal finance blogging is the fact that you can peek through someone’s financial keyhole and see what they do, so I’m going to show you.

Where The Income Goes:

We share a bank account (savings, checking) that has both of our names on it. That bank account is actively fueled by a direct deposit of my my income. My fiancée has her income direct deposited into another legacy bank account which she then transfers into our main bank account. The fact that she has another account isn’t a point of concern or anything, she just hadn’t gotten around to dealing with her HR to handle it yet (she actually has real work to do).

How We Pay Bills:

Our main bank account, fueled by our direct deposits, is what we use to pay all of our bills. The mortgage payment, including the escrow for all of the real estate related taxes, is direct debited each month. Each of our credit cards use that account as its main source of funding. We each have our own credit cards, individually named, and are responsible for paying them off in full each month using this account. The only card we share is a Discover Open Road card for buying gas because it has 5% cash back, that card is in her name but I’m using it (how’s that for security).

How We Save:

We siphon off savings from the main bank account into three separate accounts. Two of the accounts are high yield online savings accounts, one earmarked for business income taxes and one earmarked for general savings and the wedding next year; the third is a brokerage account. The online savings account we use is FNBO Direct because we have the existing bank links in place and 5.05% APY is pretty good. We use Vanguard as our brokerage and we put all of our funds into a Vanguard Target Retirement 2050 Fund.

There you have it, a peek into how we handle our coupled finances and another data point for you if you’re thinking about doing this yourself. There might be little specifics I might have left out so feel free to ask via email or comments below. Also, if you’re doing the coupled finances thing, certainly share how you do it as well – we’re always looking to improve the system and since we’re both pretty inexperienced it might not be hard to do.

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15 Responses to “How We Handle Our Coupled Finances”

  1. Sarah says:

    My boyfriend and I have individual checking/savings accounts as well as a joint checking/savings account with the same bank which are linked. We transfer money from our individual accounts for our joint expenses (rent, utilities, etc) and pay for our other expenses(credit card, lunches, etc) out of our individual accounts. It’s working tons better than writing separate checks for all our joint bills, and makes buying food a lot easier (we each put a set amount into our joint account every paycheck instead of switching off grocery trips and trying to make it even – which is never was).

  2. Adam says:

    My wife and I do something a little different. All income goes into our joint account. At the 1st of each month we give our selves an equal “allowance” into our individual checking accounts. That way (given that I make a good deal more money) we avoid two pain points: 1) trying to figure out what % of each person’s check needs to be donated to the joint account, and 2) one spouce ends up with more spending cash each month. Our marrage is 50/50, just because I make more doesn’t mean I should get more spending cash.

    But that’s just my opinion…I could be wrong.

    • bigbuddha says:

      My spouse and I also just give ourselves an equal amount of “guilt” free spending money at the beginning of each month.

      It saves on the “your spending to much” arguements and also maintains our sanity because we don’t have to keep thinking about if we should by those little things like a lunch every now and again.

  3. Grace says:

    Thanks for the post! It’s unfortunate money is a difficult topic in many relationships. We contribute equally (our monthly expenses divided by 2) to our joint account, with the remaining salary going to our individual accounts. The joint accounts pays all our expenses and credit cards. We both max out our 401(k) contributions and I’ve set up monthly automatic deposits into investment accounts as well. My thinking is, I can’t spend money I don’t see. It’s a good feeling to see our joint net worth grow over time.

    Good luck with wedding planning! We got married in OC 2 years ago and it’s amazing how expensive everything is.

  4. Cory says:

    My girlfriend and I have discussed how we would handle finances if we were married, and boy did we initially have different ideas! She favors keeping separate checking accounts and a much more complicated bill paying process than I envisioned, which is simply to combine both paychecks into one checking account in a manner similar to Blueprint.

  5. Sylvia says:

    I agree with Adam, but unfortuanlty my husband does not. He feels like we shoudl pay 50/50 and if he makes more he gets to keep all of his share of whats left. Even if I make signifigantly less. This was a shocker to me because I thought marriage was about sharing. But it is what it is…and sadly now I know why couples divorce. It does not work if you want to be selfish.

  6. dong says:

    I’m not married, but if I were I would still keep separate accounts. I think having your own money is important. That said i think whomever makes more need to contribute more. I make substantially more than my girlfriend (she works in a non-profit), and as result I pay for most things. However I like the fact that we both have our own accounts to spend as we see choose, and if we were married i would want to keep the same system. Obviously money would also be funneled to join expenses and savings, and I would help her out with her specific goals as well. As is as motivation for her to save, I match her Roth IRA contributions.

  7. Posco says:

    I’m married, an in-debt graduate student, and I have a kid. I shouldn’t even be reading this blog, since we have no net income to speak of. ;-)

    Seriously, though. Our finances are based on her part-time job and the erratic funding I get from school, as well as Stafford loans and family loans. @Sylvia: Marriage *is* about sharing, and I hope your husband sees the light sooner than later.

    My wife and I have yet to really talk about HOW we handle our finances. The ad hoc system is that our incomes go into one checking account (hers by cash and personal checks, mine by direct deposit). Short-term savings is PayPal (risky, I know). Long-term savings is through a brokerage account with a broker that my dad used. We have both separate credit cards and credit cards in which the other is an authorized cardholder. (We kept the credit lines that we each had since teenage years.) She handles grocery shopping and buying stuff and gifts for kid(s), relatives, and household needs. I pay the bills, including ALL of our credit cards, and I keep an eye on all the accounts and cash flow. When I go to the bank to deposit her checks, I ask her how much cash she needs.

    We pretty much see eye-to-eye on how we should be living and spending, so I we haven’t had too much occasion of “You bought WHAT for HOW MUCH???”. But this dialog will need to occur once I graduate and get a job.

  8. Rabbit says:

    I’ve just had a disagreement with my boyfriend..we’re looking to buy a house and I’m going to put in the bulk of the deposit from the sale of my flat. However, when I bought up the fact that he should pay more towards the mortgage as he earns more than I do, he said that we should pay 50/50 as he’s got his loans and cards to pay of for the next 4 years and that way we would have the same amount of money left to spend on what we want.
    But, I don’t have any debts, so why should I have to suffer.
    I feel hard done by….although he can’t see it like this and just want to know whether I’m being unreasonable.

    • elisa says:

      i am a producer for good morning america and we are doing a segment this thursday about couples and money. please email me if you have money questions, esp about joint checking accounts: elisa.roupenian@abc.com
      thank you!

  9. riggerjack says:

    My wife and I make very diffent amounts. We each keep separate accounts, and a joint account. The joint account gets approximatly 2 weeks’ base pay from each of us. This allows us each to spend as we see fit. For instance, she just bought a nice new laptop, which ain’t bad considering she’s making just over minimum wage. The biggest driver for this arrangement, to me, is watching so many couples fight about money. Yes, I think a laptop is a waste of money, but the point is that it’s HER money, to be spent as she likes. We both have our cars paid off, but if either decided to get another we’d pay individually. That way I can keep happily driving sports cars, and she can drive whatever she wants (currently a Kia Rio, she’s more practical than I). As we are both in fields with alot of OT, I think it’s only right that the extra work should be rewarded. BTW, she took a huge pay cut to get her foot in the door, soon she’ll be making what I do, and everything will be pretty much 50/50. Even then, she will have her money and me mine. There hasn’t been an arguement about money since we met! Of course, we’ve only been married 11 months.
    Sylvia, you need to get this worked out. Money issues are a constantly re-occuring stress point, if you don’t. I’m happy w/ the arrangement I’m in, and I think you might suggest it to your husband…
    Some people NEED to have money of his/her own. Don’t fight this basic need, work with it. The beauty of our system is we keep the incentive to make more, and equally share the load of the cost of living. To just feel your husband is greedy w/o working this out is a diservice to him and yourself.

  10. Alessia says:

    I’m getting married in 3 1/2 months, and we’ve discussed it. I’m a student, so he’s the one receiving income. I have no college debt, and have a scholarship, so I’m actually bringing a tiny bit of extra income. We’ll have a joint account, and we’ll each have a separate savings account where we’ll inject a fixed sum every month, and a seperate checking account with some “spending money”.
    Hopefully that will work for us.

  11. Scott says:

    My wife & I use a strategy similar to Adam’s comment. We have our paychecks direct-deposited to our joint-checking account. One person (me) pays bills for common expenses (utilities, rent, etc) from the joint-checking account. We each have personal-checking accounts that are linked to the joint account, all of which are with the same bank. Each month, my wife & I take an equal allowance from the joint account that we can spend on whatever we want. This has worked really well for us. It allows each of us to spend a small amount on things that are important to one of us without requiring permission from the other. Combining our income in the joint account simplifies saving and expenses because we don’t have to bother with figuring out the percentage that each person owes.

    I know couples who prefer to keep their finances separate, and it works for them, but I think it’s heavily influenced by their personalities and the dynamics of their relationship. In my case, my wife hates tracking expenses & finances, while I actually enjoy it. I think that finding the system that works for you and your significant other is the largest hurdle of all.

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