My Story: Marriage and Money
New Marriage, New Budget
Couples and Money
I recently married for the second time. Both of us have children and have been on our own. We don't know what to do about combining finances. We have different spending styles, and different comfort levels with regard to savings accounts, yet don't want to split our finances down the middle or by "subject" with totally separate checking accounts. We don't think this would contribute to marital cohesiveness. What do you suggest?
Katie in Jerome, Idaho
Simple, have three checkbooks. Have a personal one for each of you and one for "family" expenses, such as housing, utilities, food, etc. You could decide how you want to split the money between the 3 accts. Each get $25-$50 a paycheck and the rest goes in the joint acct, each get 25% of their paycheck and the other 75% goes in the joint acct, or whatever other division sounds fair to both of you. You get to decide individually what to do with the money in your individual accounts and decide together about the money in the joint account. I would suggest keeping your current accounts as your individual accounts and opening up a separate one together.
I've been married for 17 years and have watched many of our friends bicker about money and who pays for what. My hubby and I have never had a fight about money. We have a joint checking/savings and both of our pay goes into this account. This is the account that pays all the bills, spending money for the week. Out of that comes savings that goes into another savings account (also joints). For a time, I had a small home-based business and an account for that was in my name only with my hubby as beneficiary.
As for investments, they are held individually by us both. Both are aware of each other's investments and are beneficiary on each one. In other words, there are no surprises and no arguments. We keep a monthly budget and a WISH list. When funds are available the item at the top of the wish list is purchased. We discuss any purchases over $100. It might not be for everyone but we have friends that are in the middle of a separation and the big issue for them was control of the money (or lack of!).
Even though you may have different ideas about spending and saving, I suggest that you combine your finances. To do it any other way could potentially drive a "wedge" in your relationship, and would definitely not contribute to the marital cohesiveness that you referred to. Everything would be "yours" and "mine," instead of "ours." It may not be easy at first, but at some point you need to reach a compromise that you can both live with as to saving and spending. I believe you will have a much happier marriage for having done this.
Randy G. of Jefferson City, MO
Establish a joint checking account while keeping your existing (separate) accounts. Deposit your paychecks and any other income into the separate accounts. Then, once a month, transfer a percentage of that month's income to the joint account. (My husband and I started with 50%, then later 2/3.) The joint account is used for shared expenses such as utilities, mortgage, furniture, vacations, etc. Use your separate accounts for expenses that are obviously personal: clothing, work lunches, car maintenance, gifts to each other and to your kids, IRA, etc. This system allows the spouse who makes more money to fairly contribute more to household upkeep. Plus, there can be no complaints when new golf clubs or designer clothes are purchased with personal cash.
I, too, am married for the second time, and my husband and I have different spending styles. We tried several different plans, but the one that works best for us is this. First, figure out the basic expenses for maintaining the house each month, such as rent or mortgage, utilities, groceries, taxes and insurance. Divide the total in a ratio you are comfortable with - if salaries are equal or close, 50/50, if way different, 40/60, etc. Both partners put their share in the checking account that is used for those bills. The remainder of each partners' money is their own to do whatever they wish. Since the writer states they each have children, they might choose to take child expenses out of their "own" money, or include the basics in with the household bills and take the extra expenses out of their own money. We put just a bit extra in the household account each month so we will have a head start on any major household purchase or emergency items.
I have counseled couples on getting a handle on finances. You are wise to not want to completely separate everything. In a marriage, at least some of the finances must be shared. Even though you may have many differences, you do have some things in common like fixed expenses. List these, and decide who will contribute what. Do you have shared goals, such as a particular vacation, saving for a down payment, etc.? What will you contribute to these? Then you may want to look at the long-term. What you will need for retirement, etc.? Such expenditures are good candidates for joint accounts, but people differ on this. What will work for you? After you look at all of this, then you can look at expenses and goals that involve your individual circumstances that you bring into the marriage like kids, etc. Of this, what do you need to commit and what do you need to keep separate?
Then you can look at the individual differences in spending/savings styles and give one another permission to indulge once you have gotten the above worked out. Keep track of your expenses, be totally honest with one another, and be accepting of your differences. You may have to spend a lot of time experimenting, revising, and recommitting, but this will be time well spent (it probably won't seem like it at the time) and will save you many headaches down the road (and counseling fees).
I, too, am married for the second time after having "my own money" and "my own system." At first, it was very hard to combine the two and not fight about finances. My best advice is to tread lightly until you have worked out the details. At first, we tried each of us paying certain bills and then the remainder from our paychecks was ours to do with as we pleased. This worked ok until about a year ago when "the family budget" was low and I went to my stash to add to the family money. Hubby is a spender for the most part, and I am a saver. This is when it hit him just how much money I had. He got upset and said I was keeping money from him. This was not the case. I just had not spent mine. As you can imagine, a big fight resulted. He said that I was hoarding money, (true enough - that is my nature), and I said that he was getting mad at me for saving while I could not say a word about him spending. I felt like I was the bad guy for not blowing my money. Well, a lot came out of that experience. We now have joint everything, including purchase decision-making. This way, neither of us is kept in the dark about money and each knows what the other is spending money on. I feel you really do have to combine it all in order to really be a couple. It is hard at first, but in the long run, it is much better. Hope this helps.
I know just how you feel. I married my husband two years ago. I'd been on my own since high school and this was his second marriage. Here's how we solved the "money" dilemma. I kept my old savings account in my name only. He kept his old savings account in his name only. Any money that was in our individual savings accounts prior to the marriage stayed. We closed our individual checking accounts and opened up a joint checking account. We sat down and made a list of our monthly expenses and agreed on "budgeted accounts" for stuff like car maintenance, Christmas, vacation fund, etc. We also agreed on a weekly "allowance" that each of us would have for pocket money to use as we wish. Since I am a penny pincher and my husband is an impulse buyer, we decided that any purchase over $50 would be discussed and agreed upon by both of us prior to actually making the purchase. The only exception is anniversary, birthday and Christmas gifts. For those purchase, we agree ahead of time on an amount we are allowed to spend on each other based on our budget. Also, any overtime or bonuses that either of us receives is "our" money to do with what we wish. Of course, I usually put mine in my savings account and my husband usually impulse buys, but we're both happy! Remember that a kiss a day (from your better half) keeps the doctor away!
My husband and I also have different spending habits. We each have our own checking account, and we have a third combined account. All household needs are paid out of our combined account. This leaves us both managing our own funds but taking care of the basics together. We also tell each other what we would like to purchase in the future and add funds to the combined account until the amount needed is ready to spend. This works really well for us. Hilda
In response to combining finances with marriage #2, don't do it! I suggest having a household funds account to pay for bills that both parties can contribute to, but keep your savings separate.
My husband and I do split the bills. The rest is ours to do as we please. It has made our marriage more cohesive. At first, I was reluctant for the reason you mentioned. There used to be arguments about how much was spent on what was over and above the every day bills. Now, there are no more arguments. It's worked out surprisingly well. One of us makes more than the other, but that hasn't been a problem.
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