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Your Take: Joint or Separate Coupled Finances?

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Next Monday, JD and I will be discussing the topic of coupled finances on the Personal Finance Hour. We briefly touched on the topic a few weeks ago when we learned that JD and his wife Kris keep their finances separate whereas my wife and I keep around combined. We know it’s a hot topic with both sides having very strong opinions but when we learned that we each approached it different, we thought it would make for a fantastic topic.

Here’s where I need your help. Do you have any questions you want answered by either one of us? If you want to know something about how JD handles their separate finances or how I handle combined finances, please ask it in the comments below or call in when the show is live.

I’d also like to hear how you handle coupled finances or would handle coupled finances (for the non-couples out there). Nothing is off limits and please feel free to debate one another, the goal here is to learn (but please be civil!).

Thanks in advance!

(benstephenson)

{ 88 comments, please add your thoughts now! }

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88 Responses to “Your Take: Joint or Separate Coupled Finances?”

  1. Deby says:

    For the household expenses, BF and I are on the same page. But individually our spending habits are different. So, BF and I have separate accounts, plus one combined for household expenses into which we each put a set amount. This works best for us, otherwise I would go nuts with his $5-$10 daily lunch habit, and he would be aggraveted by my hoarding money. This way we don’t have to be accountable to each other for our little idiosyncrasies, but the house expenses are taken care of.

  2. Sprockets says:

    My wife and I sort our accounts into three pots: hers, his, and ours. Ours is money we each put in for household bills and shared expenses. The other accounts are our own, and we manage them independently. We’ve been handling it this way for many years.

    We are both independent people, and having control of our own money allows each of us a great deal of freedom to do as we please.

    Of course, this kind of arrangement only works if two people talk about money and make the necessary plans, such as setting up our own emergency funds for unexpected events (like layoffs – a very real risk), and adding to the ours pot for upcoming expenses.

    Ultimately, I think that hers/his/ours works for us because we trust each other to be careful with money.

    For example, my wife earns more than I do and can therefore buy more (and she does; I’m pretty frugal), but I also know that she is a conscious consumer. I’d guess that many couples have a tough time with money because they have very different views on handling it.

    For us, keeping most of our money separate seems to prevent the stress that managing money jointly could introduce.

  3. Cameron says:

    As an attorney, I’m thrilled you’ll be tackling this issue. I’ve heard the view expressed many times (including some in the comments here) that separate finances are in some way un-romantic (as are, presumably, pre- and post-nuptual agreements).

    In my view, having a prenuptual agreement doesn’t mean you’re planning on getting divorced, any more than carrying auto-insurance means you’re planning on wrecking your car. There are many benefits to separate finances, as well as many benefits to clear marital agreements for property. Separate accounts can be useful for budgeting purposes, for tax purposes, and a host of other reasons.

    Anyway, kudos for the topic! :)

    • Jackson says:

      > … having a prenuptual agreement doesn’t mean
      > you’re planning on getting divorced, any more
      > than carrying auto-insurance means you’re
      > planning on wrecking your car.

      I don’t think this is a good comparison though.

      Most car accidents happen by, well, accident. They are unintentional.

      But no one unintentionally divorces.

      • saladdin says:

        I think it’s a perfect comparison.

        saladdin

      • Cameron says:

        I don’t think the distinction you’re drawing works–comparatively few people marry with the intent to later divorce (excluding citizenship fraud, “gold digging,” etc.). In the relevant sense, most divorces are unintentional.

        • Jackson says:

          Well divorces don’t happen for no reason.

          There’s usually a change in the relationship where one person starts becoming more and more unhappy.

          In most cases prior to divorce one or both people will be unhappy for years before a breaking point. And with appropriate care, attention, or marriage counseling, the relationship can be saved.

          So divorce isn’t something that happens all of a sudden when everything is going fine. Unlike car accidents which can happen for no reason at all.

          As for whether the other partner is aware of the unhappiness, that’s another matter.

          Now I’m not saying pre-nups have no merit, because I do think they’re beneficial in certain cases. But, what’s really messing up the divorce rate is people who are getting married that shouldn’t since pre-marriage counseling has shown to reduce the divorce rate.

  4. turki says:

    Although we are not married, my SO and I have been together for 7 years, known eachother for 12. Own a home together. We keep separate accounts. We are both good w/finances and have very similar outlooks on money. He takes care of all household/car bills, including groceries. I pay the real estate taxes. I give him a check for a set amount every month. We have literally never fought about money. Trust, respect, sharing and autonomy are the cornerstones of our relationship and he is the best thing ever!

  5. velvet jones says:

    My parents were married for 34 years before my father passed away recently. For their entire marriage they had separate bank accounts. Amazingly enough, somehow that didn’t seem to make them love and care for each other any less than people with joint accounts. I plan to keep my finances separate should I choose to cohabitate or marry someone. I also plan to use a domestic/cohabitation agreement or pre-nup. It’s as much to protect my partner as much as me. If for some reason our relationship doesn’t work, I’d prefer to have something in place so that we can walk away without being financially devastated. In my mind, that sounds ridiculously civilized and thoughtful.

  6. Modder says:

    We have combined accounts. However, I also have a separate account (which the wife has access to but never bothers to check) which I use to manage my work related travel expenses (~$200k over past 2-3 years).I pay all such bills and receive reimbursements thru that account – if the account balance trends downwards I know I am not getting reimbursed properly and need to crack heads in accounting.

    While we both earn great salaries, we don’t get to spend money willy nilly. We don’t really discuss “need” purchases such as food, work clothes etc unless they are big ticket items. We do however discuss “want” purchases (me: electronics, her: handbags) if they are north of $50 or so. We can veto each other’s “want” purchases but give ourselves a $500 a year “veto override” budget where we are allowed to ignore the veto and buy the stuff anyway.

    This works great for us. We have never had a money related fight (what netflix to rent, different story), and neither of us feels deprived.

    • BrewCrewFan says:

      We use the same approach. Setting up a separate account for work expenses was a huge help. Separating work from personal finances helped me track my work expenses while eliminating the big swings in balances that occur between the time incurring and getting reimbursed for work-related expenses. My wife also has access to the work account, but does not check the balance.

      For personal expenses, the most important step for us is to agree on a joint household budget that allows us to meet our financial goals. Both of our paychecks go into a joint checking account. If one of us wants to purchase something that exceeds the budget category, we talk it over and make a joint decision. We’re both on our second marriages and have learned from the mistakes of the past.

      • Yana says:

        Even though my husband and I hold everything jointly, I like the idea of multiple accounts. My income is direct deposited into one account, and his in another. Separating funds is something I started when I was unmarried in college, when I opened a second account for college expenses.

        Every so often, I change which account to use for living expenses. We actually haven’t used “his” account for at least 1 1/2 years, as that account has served as savings and car maintenance – which has been a very small expense since we bought a new car. We now use “my” account for rent only, and another account for the rest of daily living expenses. Doing things this way seems to help us save money much more easily. When we acquire “too much” money in my or his account, which means $10,000 or so for a checking account, I transfer half to another savings/interest earning account. And there it sits. I think of it as a way to build a money machine.

  7. Anna says:

    Right now I am a college student living with my boyfriend (also a college student). I work part time and he gets the GI bill. We both have savings and are totally okay with living simply. He writes a check for a set amount and I take care of all joint expenses (rent, internet, groceries, gas, car insurance). We split things like movies and eating out but we switch off instead of actually splitting the check.

    I really can’t imagine having truly joint finances because I really enjoy my autonomy. This really works for me. When the finances are taken care of you can focus on the more fun aspects of being in a relationship instead of bickering over who bought what.

  8. Karen says:

    My husband and I have always used a joint account for the bulk of our spending, but we initially tried to keep “personal” accounts with a small amount of money (under $200). The idea was that this would be our “own” money to do with what you wanted. However, we recently decided that the personal account were causing too much confusion (my husband actually used the wrong debit card to pay for $400 in tires and almost overdrew his personal account). We realized that the personal accounts weren’t really necessary, because we didn’t really use them. So we’ve decided to move the money into our joint account. It’s just easier to track all of our spending from one place.

  9. TStrump says:

    I think there should be a joint account for house expenses, but I think each spouse should still keep their own accounts.
    I think it’s important to keep one’s identity and it forces each person to keep an active role in their finances.

  10. Christa says:

    My husband and I have been married since 1995 and as our earnings and assets have increased our strategies have evolved. We have a hybrid approach, we both have an individual checking accounts. Also, we have 2 combined accounts: one of which is for recurring expenses the other is our remodelling fund. For the combined recurring expenses we deposit 1/12 of our average annual costs for medical/dental, car, vacation, clothes, presents and insurance premiums, then these items are paid out of this account as they come up. (It makes it easier for us to budget.) Bonuses and a monthly amount go into our remodelling account and when we have enough to do a project, then we move forward. Monthly groceries and some bills get put on a credit card that gets paid in full each month and the balance of the bills come out of my account.

    I cannot share my main account with my husband, because he prefer to keep a check register in his head, rather than writing it down. (For our joint accounts we have duplicate checks to compensate for this tendency.)

    I am an accountant and I keep careful records of my account and our joint accounts. My husband’s account is his business to balance or not.

    We do each get an allowance every month, our 19 year old daughter finds this most amusing. Allowance for us means you can spend it absoltuely any way you like, no reconciling to a budget, no questions asked.

    While this works well for us, each couple needs to find their own strategy.

  11. Diane says:

    My boyfriend & I have each been married to & divorced from spouses with significantly different financial styles.

    We live together in ‘my’ house and share expenses, but keep our accounts separate. I have less income, but no debt. He is self-employed and has debt related to his divorce & business.

    I pay certain expenses & he pays others, each from our own accounts. I don’t know that I could ever totally combine finances, or whether he could for that matter, even if we were to marry someday.

    It is not a matter of trusting HIM, rather not trusting the law to protect me. Living in a community property state and having been stuck with my ex-husband’s debt, I will always be cautious about handling my own finances.

    What we are doing works for us at this point, and when it doesn’t we can make a change, if needed.

  12. Jonathan says:

    My wife & I came from different situations. Her parents have separate accounts, whereas my parents have a joint account. We’ve been using a joint account and it works out well with a planned budget and monthly reviews. We looked at going to a separate system once or twice, but it just isn’t practical.

  13. Slinky says:

    I seem to be in the minority here with separate finances. The first thing I want to point out is that it doesn’t mean we don’t work as a team. We both know the others situation, the amount of debt, savings, investments, etc. If he needed help, I’d be right there backing him up, and vice versa. We’re still in this together.

    For us, it’s more a matter of ‘you track your spending and I’ll track mine’. That way neither of us has to figure out what that $7.56 charge from walmart was for. We each have our own budget with vastly different methods. Most of the time, we work on our budgets at the same time and discuss progress, goals, etc. while we work. Just like a joint couple, we work to mesh out joint and individual goals.

    Another point is that separate doesn’t mean you don’t trust the other person. It means you trust them in a different way. Joint means you need trust the other to not spend or steal all the money, to stick to a budget together, and to work with you to get things done. Separate means you trust them to be open with you, to manage their money smartly, to be self sufficient, and also to work together to get things done.

    I think most people assume that separate means you’re each on your own, but that’s not true. It can, but it shouldn’t. Separate finances can be a symptom of relationship problems, but it’s not the cause. In a solid, healthy relationship, you should be able to use either joint or separate finances without any problems.

  14. Rob O. says:

    I’m kinda late to this discussion, but my take is pretty simple: if you can’t (or just don’t) trust your spouse with your money, why on God’s green Earth would you trust him/her with your life? Money is fleeting – the other stuff lasts forever.

  15. rosemarie says:

    What’s the best way to handle finances and to budget expenses. Who should handle finances? It is more recommended to handle it separately if both have strong opinions about money?

  16. daemondust says:

    My fiancée and I both have individual bank accounts, and we have joint. It seems like a pretty good mix so far, and probably won’t change much when we get married. There’s enough of an age and choice of profession difference that I’m done with school (for now) and she still has another 10 years ahead of her. We’ll mostly be living off my income for the foreseeable future, so I’m paying the bills and making the budgets.

  17. Cristina says:

    My husband and i just got married, before marriage our finances is seperate, now that we are married, our finances is still married, he pays for most of the bills and i handle most of the bills seperately too.
    it bothers me that he wants to keep the finances seperate, to some degree i feel hurt due to the fact that he may have trust issues. i am considering talking for counceling over this because i do not know what to do, i have approaced him about his but he doesnt seem to do anything about it hence he wants to keep the finances seperate. for the most part i dont feel we are in partnership, whats his is his and whats mine is mine, most of the time when he talks he says mine, not ours. it hurts but what can i do. any suggestions?

    • T. says:

      What matters isn’t who pays what bills, what matters is your feelings about it. We had separate accounts for years and it was fine. Now we have combined accounts and it’s fine. Both ways, we were always a team.

      One thing that might help is putting it all together on a spreadsheet just to be able to see it all as one big picture. Then you can talk to him about specifics (like “we’re paying more in bank fees by keeping everything separate” or “if we combine these 2 CDs, we can get a higher interest rate”), rather than “we’re not in partnership, you have trust issues”, which he may be hearing as an accusation, not a desire to move toward something else.

      Just a thought.


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