Ask HN: How do you structure your shared finances with your spouse/partner My fiancé and I are getting married next year and have started to think about how we’ll structure our finances together. How do you structure your day to day spending? Do you have a joint checking/savings/credit card setup, keep things separate or a hybrid approach? We’re based in the US and want optimize for simplicity. |
She manages the house. I try and make the allowance bigger year after year.
You want to know what is going to work for you.
What conversations have you had with your future spouse about finances? What do you value (e.g. what is worth parting with you money for)? How do make decisions about day to day spending, big expenses, savings rate, long-term planning, investing, retirement?
Are you on the same page on all of those things? Do you disagree on how much to save and invest?
Is "simplicity" the only thing you really prioritize?
We did most of our stuff in separate accounts that my wife managed for most of our marriage. Eventually we moved to more joint accounts as time moved on.
She has since passed away. I think if I did it again I would envision keeping things more separate, but with more explicit estate planning, as life is a little more complex financially as you age.
This is how we do it:
We have a joint checking account, a joint savings account, and two individual checking accounts. There is a shared credit card, and both of our individual checking accounts have a card attached.
* Both our paychecks go directly into the joint checking account
* On the 14th and 28th, an automatic transfer moves an equal amount to both our individual checking accounts
* On the same cadence, an automatic transfer moves money from joint checking to our joint savings account
I used to keep track of everything in a spreadsheet that had all expected paycheck deposits and bill expenses plotted out for the year. It was great being able to see at a glance if the checking account was in danger of going in the red. Ultimately I moved to a double-entry system using hledger. It's a little less convenient for seeing future balances, but a whole lot more flexible.
Bills are paid from the joint checking (and the joint credit card). The money that trickles in to our individual checking accounts are ours to do with as we please (although we've agreed to maintain a minimum $1000 balance for emergencies and to avoid bank fees).
This works out great because we get autonomy over personal purchases, but also responsibility: If I want to buy a new laptop, I can do so without feeling guilty, but I also have to save for it -- just like when I was a kid. We can also fudge it using shared money when we want to, but we have to communicate and agree on it. And of course, any large shared purchases we talk about first.
Another reason we arrived at this arrangement was for security against identity theft and fraud. Early in our marriage, we did everything out of a single joint checking account that had a debit card attached. Inevitably, the card became compromised. We caught the issue quickly and alerted the bank, but there was about a week where our account was frozen and we couldn't touch our own money. Lesson learned: NEVER use a debit card with your main checking account.
In the current arrangement, our joint checking has no debit card attached. Our inididual accounts do have debit cards, but I made sure to tell the bank not to give those cards any access to the joint checking or savings accounts. If a card gets compromised, there's a limited amount of damage they can do, and it won't affect our paychecks coming in or bills going out.
Overall, I feel like we arrived at an elegant solution for our situation (no kids, neither of us are contractors). It doesn't matter who makes more, we both get the same allowance based on our combined efforts. Whatever arrangement you end up with, however, communication should be a key element.
As for how to split expenses, that's according to your personal preference.
The day after we legally married, I added her as a beneficiary to all my investment and retirement accounts.
In Europe, we keep Euros in one WISE account for which we both have a card.
Culturally, in Taiwan, there isn’t a joint checking account. However, she has the banking password and can transfer money. Banks also let her do whatever she wants with my account as long as she bring my bank stamp.
Also culturally, its important for women to have their own stash of money (私房錢 si fang qian) that’s a psychological safety net. She has that in her own account, it basically just sits there. It’s less then 3% of our net worth and makes her feel safe so I don’t mind.
Every week I take a look at what we spend and make sure we’re on track budget wise in YNAB. We pick our big savings goal together and pool the rest of our money together.
I highly recommend pooling everything together. It makes life a lot more convenient and keeps you both accountable to the goals you’ve set together. If one partner really needs some money saved on the side, that can work (works for us) but all paychecks going forward being pooled makes life simple.
I have terrible finances compared to her. I make more money on an hourly basis, but I'm not working full time right now, and I've always been quite financially irresponsible. She makes a little less per hour but has been super consistent with her job for decades and is very good at controlling her spending. She's the very epitome of "slow and steady wins the race", while I have spurts of high income followed by months of poverty.
How we split it all:
To protect her from my poor management, we have separate finances (accounts), but we split the rent and household bills evenly. I end up prepaying for most of it upfront, we use a spreadsheet to calculate what she owes, and she Venmos me her half at the start of every month.
For fun spending money, we both deposit the same amount into a joint account every month (we use Zeta, a virtual bank, which replaces what Simple used to offer). We both have a debit card that can charge to it directly, and we use it for joint outings, dinners, and other fun stuff. Sometimes I eat a bit more, sometimes she does, whatever, neither of us are worried about that.
And for less predictable shared expenses (groceries, pet vet visits, etc.), we have a separate credit card for that purpose only. We pay it off in full every month.
This three-way system has worked very well for us for 3+ years. The essentials are always taken care of first (via my automatic payments and her paying me half). We have a set entertainment budget every month. Then the joint credit card is only for our unexpected/unpredictable spending on top of that, which isn't very much (few hundred dollars a month).
IANAL.
We do keep everything shared. Both of us strive to stick to our budget and have each other's best interest at heart, so this makes it easier to manage the finances
We have independent checking accounts (normally at the same bank), and credit cards. And then we have 10 or so joint savings or roboadvisor investment accounts – each one for a single purpose, buying a new car, family vacations, new furniture, major house repairs: the roofs need repainting. It is trivial for each of us to see what our progress is on any particular upcoming expense and adjust our donations to that account.
Day-to-day small expenses were divided amongst us fairly, based on income out to the start. But our incomes have changed a fair bit and they’ve been re-jigged a few times. Additionally, it became obvious that my wife was not great at paying bills that required checks in the mail (I know it’s 2024) so now all of those get paid by me and she sends me monthly top up payments when she gets to it.
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This structure allows for us to have very different spending patterns on personal stuff and have aligned goals for big stuff. Different amounts can go to different goals, based both on income and interest in the goals, and progress is clear.
It has also allowed for us to deal with income changes - We each have three jobs currently and one of mine only pays out one in five years, and none of mine pay a salary. Lumpy income can be hard to plan for, and the private accounts allow us to smooth some of this out.
Also for a while, she was a student and had negligible income, then we had similar incomes and now she makes more than I do, the joint accounts and small expense division help level this out over time.
Also, we can have either savings accounts or these days just ad hoc payments that allow for one person to do the chore (shopping, car repairs, writing checks) and another to pay for it.
All of your income that's not invested for retirement goes to a joint account, every 1st of the month. From that joint account, you then move the money to many different accounts and/or prepaid credit cards: - Day to day expenses, like groceries. - "Irregularities": municipal taxes, school taxes, things that don't happen every month, like car inspection, veterinary, vacation expenses. You add everything in a spreadsheet that you keep, and divide by 12. Add some padding. - Home improvements, aka "IKEA" account. Fixed amount every month. If it's a good that you buy to add you our home (coffee machine, chair, curtain, etc.), that's the account. If it's a consumable (gas for the car), use "day to day expenses". - Individual accounts: each one of you have an account that you decide what to do with. Buying clothes, hobby, etc. aka "I'm an adult, I do what I want". - Kids: There's always something to buy. Clothes, etc. - Automatic payments are taken from the main joint account, but you could also have another account if it makes it easier.
This method can get confusing and you may need to move money from one account to another one when the wrong card was used. But the main advantage is that it automatically budgets for you. You see the amount remaining for the month for everything. Otherwise, you may think that you still have plenty of money to spend on the grocery, so you buy a nice coffee machine, and then the mortgage and car payments happen and you're left with nothing for the rest of the month to do the grocery.
The main goals we had when using this method were to never use a credit card (and lose track of how much money we have), and also accommodate for the discrepancy in our revenues at the time.
We have "calibrated" the direct deposit amounts to minimize the need to move money across the accounts. If money "backs up" in one or the other, we move it into investments, but month-to-month, practically everything is on autopilot.
I think that's about as operationally simple as it gets, which was also a huge priority for us.
Savings and investments are all consolidated and jointly-owned wherever possible and I maintain a periodic (slightly more than quarterly) update of that manually by looking at the Vanguard, Etrade, Fidelity, etc accounts.
* The third credit card account is a Chase Amazon account for the better cash back on that card. It's only used for Amazon, so it's easier to spot anything unusual.
If a heavy saver marries a heavy spender, I'm not sure that there exists an arrangement of accounts that will solve the problem, but separation of accounting may reduce likelihood or delay the inevitability...
Second marriage, complete opposite situation, I'm the high-earner, she's a housewife (working on building her business, but let's just say the income disparity is real). Finances are more complicated now since I'm a business owner and the bulk of our pre-marital assets are in my (or my companies) name, but at the end of the day, the card I use to buy things comes out of the same account as her caried rds. I do have more control over the flow from my firm to our joint bank account, but from a "who's money is it" PoV - it's our money, it was all earned since we were together (even though we hadn't married yet); The joint account has enough to cover our next years expenses if something were to happen to me and she needed access to funds before whatever estate settlement happened.
There's no one-size-fits-all approach I can tell you to use. What I can recommend though is that you jointly track all your accounts in some tracking app, and sit down once a quarter to discuss whether you are both on target w/r/t savings, retirement, whatever it is you're earning for. As long as you both are on the same page, then you're fighting together, not with each other. Money becomes tense when people feel entitled to it, or don't understand your situation -- having both of your situations on the same page can help make sure your new toy or their new habit doesn't become grounds for divorce.
We have very little money but it's my sacred duty to always think of how I can care for the family as best as possible, and we've been very comfortable (even when we had basically no money). I've found that when I surrender to God's power, things always turn out for the best. Even in times where it seemed to be a terrible idea, he always had something planned.
Whereas when I stubbornly insist on myself, everything se fracasa bien feo. So I guess my financial strategy is to dissipate my ego and melt into Christ's mind. God is so cool.
Good luck OP, I hope your country's election goes well for you guys!
Also if you have final authority over financial matters, how does it work out if only your wife have a bank account?
I hope it doesn't sound judgemental, it is by no means meant that way, I am just incredibly curious.
That seemed clear enough, from what he said.
Were you asking the details on that? If so, I'd be mildly interested as well.
We are both completely aware of each other's incomes and expenses (we maintain a common expense manager).
When we got married, there was an immense difference in our incomes (I earned 10x more than her), so we decided that I would bear all the expenses and she could save her income for her future business plans.
Since I left my job to focus full-time on my startup last year, our incomes have been almost equal. Now, I pay the rent and the bills, and she handles all other expenses (groceries, appliances, travel plans, gifting and other purchases).
We transfer money to each other's accounts whenever there is a need (it's mostly from her to mine). Transparency is the key to happiness here.
We went with totally separate. I owned a house so no rent or mortgage, so I just paid the bills and she bought the food. I got paid more so it worked fine.
Mind you, I don't really care about money other than having enough to do stuff so it might depend on your attitude.
We did split but it had nothing to do with money.
A spreadsheet that tracks periodic expenses - which produce an average monthly bill that we round up and split, each of us has an automated monthly deposit into the checking account, and the credit card automatically pays itself off from the same account. As many utilities as possible are auto paid by the credit card, the rest auto debit from the checking account. We keep about the checking balance at $1000 minimum to get a higher tier interest rate.
Additionally, we both drop $100 from each pay check into the savings account - so when we want to get or do something fun together, we have some extra sitting around.
At the end of every month, I sit down and draw up a little spending report for where our money has gone - and we either pat ourselves on the back, or grimace and resolve to be a little thriftier next month.
The remaining amount in the daily account is used for bills, groceries, and such. We also have a budget in here for various social things like dinners out and such as we do a lot of these together.
We then have an individual checking account which we both take an equal monthly allowance for discretionary spending. This is also how we buy gifts for each other for birthdays and Christmas.
The amount we keep back for ourselves is laughably small as we view our money as our joint money as we are building our life together. We don’t (and never have) earned the same amount, at times wildly different in fact.
We’ve done it like this for over 15 years and works for us.
If I die then I don't know, I think she'd move back to her parents and sell our apartment and she could live for a few years. She's a lawyer but currently isn't very active. But I know she misses it...
The other 10% goes into our personal checking accounts to spend on whatever we want.
I recommend just opening a shared account and putting a bit above the bare minimum into it. Keep some "you" cash so you can always buy yourself stuff, and you know, if you're ever buying surprise presents, she doesn't need to know. ;) Other people just join it all, and call it a day.
I only join whatever is a dual-expense, otherwise, its either on her, or on me solely.
We also have our own accounts and credit cards. We got married late in life (close to 40) and our professional priorities differed greatly. She came to the marriage with 6 figures of school debt and not many assets, where I had 500k in assets already and just 50k in mortgage debt (no other debts).
Our agreement was: I handle paying for our housing while she pays down her debt. After that, we will revisit our financial setup.
Works great for us!
We have occasionally talked about having more joint finances, but we've been doing like this for 20 years now, and for us it is by far the simplest solution.
Joint checking, savings, investments, home ownership, cars, everything. I do most of the account management and planning because she hates doing it.
We have no concept of fairness in spending. If she wants something truly expensive we talk about it and how it fits in our budget. I do likewise, but in general we both kinda know what the boundaries are, and there’s zero score keeping. She probably spends 3x on herself compared to me, and I’m fine with it. I know she has the best interests of the family at heart.
Large purchases like cars are the result of weeks of research, discussion, planning, budgeting, etc.
Plenty of people are "fine with it" until the court awards spousal support on the basis of lifestyle acclimation rather than needs.
50% divorce rate, 75% of which is initiated by the wife, and don't require you to have done anything wrong. Effectively, you're playing roulette and you've staked your entire financial future on Red. I really hope it works out for you.
We both put the same percentage of our individual monthly income into the joint account each month to cover the bills. As we're not paid the same though, this means one of us covers more of the bills than the other.
We have a fixed direct debit set up to transfer this into the joint account at the end of each month.
For non-regular big purchases, holidays etc. we usually split costs the same way, based on the ratio of our incomes. Simple but fair!
What could be the reasons to have separate accounts expect some external technical/legal constraints? If the simplicity is the priority.
Honestly don't really care if she spends on cosmetics and little indulgences here and there.
The answers to those questions will change the advice. Having kids or having disparate levels of income point toward a joint account, whereas different spend patterns point toward separate. There's no easy formula though.
Yes we are planning to have a family at some point. We make similar levels of income and are both pretty thrifty. I would say we’re very aligned on our goals and habits in this regard but we’re figuring out the best way to structure things.
Both have a personal account and a shared account for common and family things. Mortgage was shared and so was every other family expense like food and travel.
I made twice what she did so I put 66% of the money in the joint account. So long as we had enough money in there for our budget we could do with our leftover money as we pleased.
My late wife and I each had our own accounts, plus a third account for mortgage, utilities, groceries, etc. We'd each deposit into the third account, and kept the rest of our finances separate. I made more money, so I'd usually pay when we went out to eat or whatever, but it wasn't an obligation.
It worked pretty well -- unlike most of my married friends, I don't recall us ever having an argument about money.
You probably don’t want simplicity.
You can roughly divide up the bills (either 50/50 or a split based on income) and have each person pay some of them so that the monthly spend is equitable.
If you actually want simplicity and one of you is a relatively high earner, that person just pays for everything.
Money is shuttled back and forth between separate bank accounts as needed.
Bigger purchases (car, new heating system) we discuss individually based on our savings and income at the time.
One account for me, one account for them, and one shared account from which "shared" bills come from - be it rent or mortgage, electricity, food, etc.
Sometimes a person will say "I drove you to the countryside will you give me money?" or I'll say "I bought us tickets for a gig, you wanna pay me back, or you wanna buy me beer all night?" So sometimes there is some play back and forth about expenses/costs, but typically we transfer just enough to the shared account to cover the expected outgoings each month.
I used combinations of checks, cash, and PayPal to give them money when they needed it. Eventually I admitted I didn't want a partner who never had any income of their own.
If you can really help it, don't marry anyone.
I don't know how to say this without it sounding critical, have you ever considered thst you might be suffering from narcissistic personality disorder?
Close relationships are very hard for me. I can count on one finger the number of close friendships I've had that were not romantic relationships. I can count on two fingers the number of romantic relationships I've had. I'm 35 so I'm not old but not young. It's probably a combo of gifted-kid BS and autism and general being an engineer, plus having a sudden glow-up a few years ago and feeling unlovable and ugly before that.
We then both have an individual account for our monthly allowance. Monthly allowance is funded from combined account, and is same amount for us both. Our allowance funds personal items and hobbies.
We figure if divorce was a concern, we should make it awkward to separate assets we've made over past 20 years together.
It helps that neither of us are bad with money or debt, but we probably wouldn't have married someone like that to begin with.
Then you can focus just on the love, just like what people without a plan always ask their wealthier suitor to do.
Beneficiary of each other, everywhere.
Trust.
Monthly allowance, currently $500/mo, for purely spending on each other. Necessities such as clothes etc are not part of that, this is when she wants a new Chanel handbag and I want a new bike.
Bills / savings/ investments / daily living expenses come from that (via credit card or checking account).
We also pay each other some pocket money to spend on our own hobbies and other stuff.
percentage goes to joint savings and living expenses go to joint checking.
rest is to do what we want.
The vast majority of the spending is out of that joint account. The allowances are mostly a hold-over from when she had no job (moved to the US on a visa, had to wait for the work permit and then to find a job, almost a year) and felt the need to ask me for permission to spend money. I was getting annoyed, she was getting resentful, we made the allowances so there'd be no questions. We both got the same, we could spend it without asking, spending for ourselves out of the joint account was allowed but always with discussion (mostly, "Can I?" and then "Yes").
I assume full trust to someone I marry without any artificial constraints in advance
The motivation is that I'm no longer yelled at by the person I love the most, who I'm supporting financially and emotionally. They were right about some things, my depression got to them, I probably should have left sooner, I probably should not have escalated as far as I did, and I am just kinda having a mid-life crisis and trying to make up for my 20s being boring.
Do you think I did it all for no reason? Do you think people regularly get married despite having no love at all, then divorce for no reason? Maybe it's fair to say I only had a crush, not real love. We should teach kids the difference. Nobody told me.
This is what I was wondering, and why I suggested there might be some kind of emotional disorder involved. From your most recent post you sound completely normal, the marriage wasn't working out and you felt like it was hostile. This sounds like a pretty typical failed marriage.
From your original post, you simply said "Eventually I admitted I didn't want a partner who never had any income of their own." as the only motivation for why you divorced, and in your initial response you didn't seem to be surprised by my interpretation at all.
Thank you for tolerating my curiosity!
In my second marriage we kept separate accounts, at my insistence, having learned an incomplete lesson from the first. We divided shared expenses in proportion to our respective incomes, otherwise managing our own affairs. This was simple in that we rarely had to talk about money, but as my income grew, while her career (and mental health) deteriorated, it became awkwardly lopsided; resentments accumulated. Again, being unable to resolve our conflicts peacefully, the marriage failed.
In my third marriage we have both individual and shared accounts, for administrative convenience, though we tend to think of everything we are doing as a joint effort. We have structured our flows of income and expense differently at different times, depending on our circumstances, and we check in every couple of months to make adjustments as needed. This works - and I believe it will continue to work - because we consistently keep each other's interests at heart and resolve our conflicts in a way which draws us closer together.
In summary, I believe that the details of your financial structure are less important than the process of communication and accommodation you establish around it. There's no single right answer, and the right-now answer might not work so well next year. What matters is that you include a periodic check-in about financial state as part of your ongoing expression of care for your partner's well-being, that you maintain flexibility and willingness to adapt as your life changes, and - most of all - that you resolve your differences in a way which leaves you feeling like a team.
Congrats, that's marriage. My wife and I have mostly separate finances and she still ends up with most of the money because she doesn't contribute appropriately to the bills.
Seems like spending and priorities can be a problem whether the finances are combined or separate. At the end of the day, someone has to pay for housing and save for retirement. Even if the accounts are separate, it's still "our" money, but many people don't get that.
" I believe that the details of your financial structure are less important than the process of communication and accommodation you establish around it."
This is what it comes down to.
If you have joint finances, then you're both paying for those things whether you both work or not. If you frame it as "I work and pay bills and she spends money," you don't actually have a joint finance mindset.
We are always each other's beneficiary.
I make enough that we don't have to think about small-medium purchases too much.
We are frugal in the big areas (e.g. 16yo Honda Civic).
But we do periodic spending temperature checks and as we have gotten older, we have become more mindful of that. Leisure spending over like a hundred or so we always tell each other about it beforehand and try to sleep on it.
I have a spreadsheet where I track weekly account balances + all activity on the main checking account (we rarely pay directly from it, so it's mostly bulk payments for credit cards or bills. Useful for predicting future balances so we can know how much to safely transfer to savings/investments.) On the activity sheet, I annotate each credit card statement with anything "exceptional" or above $250 or so.
We split bills though. I take large expenses, like rent and insurance and they take smaller expenses like groceries and dining out. At the start of the year we do a budget of what we project expenses to be based on the prior year (usually takes an hour or so because we both keep good financial records). We then divide that down into a monthly payment such that we're each contributing 50% of our living expenses and they transfer money to me monthly since I'm paying the larger share of the bills. At the end of the year when we budget for the next year we reconcile any differences between budget and reality so that we do in-fact each pay 50% of the living expenses (sometimes this means I give them money, sometimes they give me money). For really large one-off expenses we nominate a partner to take on that expense and the other transfers their share of the money for that expense to the partner taking on the expense. Same story for vacations or trips except we settle that after the fact not before.
It's basically made money a non-issue in our relationship. Their money is theirs and my money is mine, what we chose to do with it is up to us so long as we're contributing our fair share of the living expenses.
Edit: since others are saying this, our relationship is very close and we consider ourselves to be a team but we very explicitly decided when forming our relationship to not have combined finances even though we cohabitate because we had observed that to be a deep point of contention in relationships around us.
We each have our own bank account(s) and credit cards and our own budget in YNAB. I manage both budgets but only do hers when she’s present.
We agreed on what constitutes a shared expense ahead of time (mortgage, utilities, etc) and split them based on what percentage of last month’s household income (post-tax) each of us earned. This is variable since we both do some contracting/consulting outside of our day jobs.
For going out, vacations, shared groceries, etc., we just split things as we go. We have a joint savings account that we put the same amount of money in each month and use for travel etc.
A friend and his girlfriend have a joint credit card that they put all shared expenses on and split at the end of each month, but managing that in YNAB is not the smoothest so we haven’t done that yet. Might write some software to make it easier.
There’s an acronym for that.
DINK’s == Double Income No Kids
Net contributors to the economy.
For large items we’ll transfer back and forth as needed and one person makes the payment.
My partner and I have very different spending habits, and seeing that line-by-line would cause daily friction.
Having them separated gives us both discretion and autonomy.
As far as all joint accounts vs having individual accounts, I think if has to do with how you view marriage. Is it a single whole, or is it a joined pair of individuals.
For me personally, I view my wife and I as single team. Everything is joint (outside of a few super old accounts like other have mentioned). My income is our income. Her income is our income. The fact that I make more is irrelevant to our spending habits.
To me, having separate individual accounts, feels like you aren't committing fully to marriage and are keeping your money yours "just in case." If you are already feeling like you need a "just in case," why are you get married to begin with. I feel like separate accounts based on the income disparity would most likely lead to feelings of imbalance and resentment down the line.
I am sure there are a huge number of my biases implicit here, and there are plenty of reasonable conversations to have either way. People obviously make it work in all types of ways, so like I (and many others here have) mentioned getting on the same page is really the core of it.
Different things work for different people. I've known other couples who put most of their income into a joint account, but each person is given a monthly "allowance" that's auto-transferred to individual accounts. That lets each person have some discretionary money that's just theirs, and it can be saved or spent as they see fit.
We set it up this way because I take home more than her, and I was tired of arguing with my wife that she should feel free to spend some of 'my' money, or that 'me' buying her something with 'my money' was not a gift per se, but an acknowledgement of the futility of her trying to maintain 'her half' of our lifestyle on her paycheck alone while also kicking in to the house. Abstracting all that into a shared fund we both draw on brought psychic peace. Money's fungible and all, but at the end of the day it does feel a lot better when it's not "I pay the mortgage, you buy the food, my savings grow, yours don't". Now the money doesn't feel like manna.
If your incomes are homogenous this is probably too much effort, but to be clear that effort was mostly just 3x as long at the bank once, to get the accounts set up.
I should add I only won that argument when we had a baby and our 'shared' expenses skyrocketed. Before that she was fully committed to separate finances and a constant, low-grade sense of shame & indigence.
We pay ourselves each an allowance that covers our personal spending. That's basically everything I spend money on by myself, so lunch out, treats, games whatever.
I think its a really good way if avoiding any worry about "wasteful" spending. What we each value is different. If we need to tighten our belts we just reduce the allowance, we don't need to fight over what specific spending is or isn't acceptable.
Finances are a common source of strife in marriages. Getting and staying on the same page is critical. Communicate about finances openly and often. Budget together. Review the budget together regularly. It sounds like you are already starting this. That is a good sign. Never stop.
As far as your specific question: I'd recommend joint for day to day and emergency fund. While its simpler, the main reason is mental: its not my money and your money, its our money. We do keep investments separate, but its still "ours".
That is just a recommendation though. Its more important that you both talk about and agree on your approach.
I appreciate the advice. I am a firm believer in structuring things to encourage the desired mental load.
I try to keep a balance of $50k in our checking account (it's a minimum that our bank sets to give us perks and a free safety deposit box). At the end of the month, if we over that, my partner knows that we can splurge on dining, vacations, or other stuff. If we are under that, we tighten our spending for a bit until we are back over it.
I tried all sorts of budgeting and tracking ideas, but most just weren't worth the effort.
For myself we have joint everything, and then purchases over a certain threshold we need each others permission.
State law is really important if the relationship fails and you need to split commingled assets. If that's something you're worried about you should speak to an attorney.
To directly answer your question, we both direct deposit into a joint checking account. We spend on cash back credit cards that are auto paid out of the joint checking account each month. Mortgage and car note are out of the joint account. We both maintain access to small spending personal accounts/cards on the side for gifts and misc. stuff we don't want to discuss.
When the checking account gets over our healthy buffer of ~2-3 months spending, we sweep the extra to a taxable brokerage account and invest it in index funds.
We "pay ourselves first" with prediscussed, significant, automatic contributions to retirement savings, college funds for kids, or any key milestones like down payments or big vacations. that way any money that stays in the checking account or misc accounts are relatively guilt free and discretionary.
Of all of the things that I mentioned, contributing to retirement and big milestones before we can "touch" the money has been the most important for our peace of mind. we don't fight over money because we've already aligned on the big stuff.
Paying the large, important items first is a great idea. I like the idea of having some discretionary money that can be spent guilt-free as the main things are covered.
- Our salary goes to our individual savings accounts.
- A shared checkings account gets topped up to $5000 every month, proportionally to both of our salaries, to optimize for equal purchasing power when buying shared stuff.
- We don't really budget anything because we save quite a bit, but we do classify all bank transactions into a few categories and look at a month-by-month matrix every few months.
- Both the topping up and generating the analytics are automated processes, so it's pretty headache-free.
I'm assuming this isn't automated, right? Asking because if your bank does somehow allow an automatic transfer based on a target amount in an account that'd be really cool.
It's a tedious process but now I don't have to care about this anymore. Although probably the total time required was higher than any time I'll save in the future.
Combining your finances completely is as simple as you get. Money goes in pot, money comes out of pot. No separation.
But anything that gets to be a significant amount becomes a discussion. Things are no longer simple.
A joint account for joint expenses and personal accounts for personal expenses is also "simple". But how much does each person contribute? Are the personal accounts unquestioned?
The thing here is that there is no "simple". You're dealing with people, people are inherently complex. You know you. You know your fiance. Make a plan that accounts for those two people and all of their peculiarities.
It could be that it would be best for you to have 10 accounts. A house account, a grocery account, a clothes account, etc. because you need to be aware of how much you spend on food and what not. I don't know. You're going to get a lot of answers here and some of them may help guide you, but make sure any plan you come up involves your fiance and they are completely on board.
We have one account, where salaries are deposited. This also doubles as a savings account, and the account from which all none-debit card payments are made. There is no debit cards associated with this account.
Then we have a personal account each. These get a fixed amount transferred to them each month, if that isn't enough we'll manually transfer whatever is needed from the joint account. We have a debit card each for our personal account, but not each others. This is mainly so we can get each other gifts without revealing what it might be. It also seems a little abusive to be able to keep taps on your partners spending.
We might need an actual savings plan in the future, but probably won't be needed until the house is renovated.
Once we moved in together everything financial became "ours". There is no point where one of us can be in financial troubles alone. It helps that we've always had more or less the same view on how finances should be managed.
> We keep our finances mostly separate. The primary reason is we both have enough that we don’t need the other’s money, and we both like having the freedom to buy whatever we want. I don’t want to ask when I’m buying pinball machines or random stuff for my next project, and she doesn’t want to ask me when she goes shopping or sends money to family members. We both invested enough money to cover house expenses and the interest goes into a joint account that pays the bills every month. Of course if she needed some of my money for some reason she’d be welcome to it, and vice versa, so it’s more like we have combined finances that we manage separately.
This has largely solved any money quips between us.
* Large purchases are always shared, planned, and discussed.
* Day to day expenses end up wherever. It doesn’t really matter as they’re largely consistent each month. This includes utilities, bills, groceries, basic clothes, vehicles, etc.
* Unpredictable expenses get discussed, but that’s about it.
* Discretionary is no questions asked. This is where our hobbies, individual activities, and personal spending preferences come in. I largely use it to fund hobbies and eat lunches out. My wife used it for hobby classes and splurges on clothes likes. No questions asked I. This category, so there’s no guilt and no second guessing each other.
I think this peace of mind keeps decisions about joint assets less contentious.
All of our fixed costs are shared in a way to promote an equal amount per month per person. For example, I pay my daughter school's tuition and my wife pays of my son's. I pay Netflix, she pays Prime Video, so on and so forth.
For market and groceries, we have a credit card account with two cards. This was a game changer for our home expenses management. I have the total spent per month on a spreadsheet and can see how things are going, especially in regards to inflation, currently at 19%/y where I live.
Everything else like going out with friends, small indulgencies, fuel etc. each one of us would cover his/her own expenses.
We both have two cards, one for the shared, one for the private.
If I buy a bunch of snacks, it goes on the private card. If I buy food, the shared.
In the end, I go to work to provide for my family and myself, and I want to be able to buy stupid shit without feeling guilty, I need this to feel things are fair, I'm going to work, I want to reap something from it. I want and need these fixed agreements so that I can save up (on my spending account) for something and buy it without feeling guilty, and know my wife can do the same. (no, decorative pillows are not a shared expense, just like the hifi is not, sure, I move the pillows to get to the couch, and she has to put up with the loud music, but those are not shared expenses, because it's both something the other person would be fine without).
If you live in a community property state, and you want to keep things legally separate, that takes a lot of specific effort. I've always lived in community property states, my spouse and I took relatively zero assets into the marriage, and we're on the same page with spending and frugality, so I was 100% on board with joint accounts and delegated authority on the primary checking account. Keeping one checking account for two people is a labor savings. We ended up with separately managed credit cards, so if we make a big purchase on the other's card, we communicate. And I manage the primary checking account, but she has custody of the checkbook; so if she one of her credit cards has a large payment or writes a big check, we communicate. If there's any big changes in our investments, we communicate.
If you're living close to your means, communication will be necessarily more frequent. If you're living well below your means, you don't need to talk frequently about money because a payment that needs pre-authorization isn't as big.
For cars, it would probably be most flexible to have ownership as X or Y, but all of our cars are under my name at the moment because it was less effort. The house is in both of our names.
However, my wife and I do not particularly struggle financially, in part because we do not yet have children. We both have careers and steady incomes, so our individual spending habits are not a major source of conflict. We expect to have a joint account when we become parents. This would be especially important if one of us stopped working.
And even if that's not true, keeping track of everything separately just seems so... exhausting. Like, you pay the electricity, I'll pay the water bill, you pay 75% of the mortgage, I'll pay 80% of our vacation, but we split meals 50/50... And then you have those cases where I can afford to go to Disney World, but my spouse only has enough for Six Flags because she makes less or hasn't been saving--now what? OMG that just sounds like so much work to manage, all for what?
We also have always had and still do have a significant disparity in salaries (I've basically more or less always earned twice what she does, even as our salaries have increased over time) and we've always managed to make it work very simply - I pay the bulk of the costs of joint things and she pays a contribution to me each month. We have some separate things (eg mobile phones, online subscriptions that only one of us uses etc) and we pay for those ourselves.
When we go out sometimes I pay, sometimes she pays, sometimes we jointly pay, it all works out in the end.
It's often said money and financial management is one of the most stressful part of a relationship... it's almost never been an issue for us and it works very well.
The benefit is that we can each use the different habits we have developed over the years, which suit our respective temperaments and preferences, without stepping on each other's toes. I like paper bills and manual payments, while my wife prefers email and automates everything; each of us thinks the other way sounds stressful. We employ debit cards and credit cards in different ways, we have different uses for savings accounts, we track our expenses differently, we have different levels of comfort with investments and cryptocurrencies, and we even use cash differently. Compromising on a single system would leave us both confused and unhappy; it feels much easier to divvy things up equitably, then each play our parts in the styles we prefer.
Sure, it can be exhausting to keep track of everything separately and constantly re-calculate shared bills each month. But it doesn't have to be split like that. Here's a few examples I've seen that seem to work well.
Example #1: (a married couple, with equivalent incomes)
Add up rough costs once (water bill, electric, cell phone, rent or mortgages, etc), just one time. Then both commit to automatically dump maybe 5% more than half of that every month after. (So if all monthly costs add up to say, $2800/month, each person puts $1500/month into that checking account). Bills auto-pay automatically, the balance should slowly grow, if it starts to go too low, recalc to make up the difference. (kind of like how escrow works on a mortgage)
Example #2: (a married couple, with wildly different incomes)
Have a discussion about shared goals and shared debt. (Is the poorer spouse still paying off student loans? Is the wealthier spouse paying off debt from a previous marriage). Figure out a number that feels 'fair', based on cost of living and divided by share of income. And then the poorer spouse contributes this 'fair' fixed figure per month automatically, and the wealthier spouse covers the bulk of everything else. For example, if Person A makes $110k/yr, and Person B makes $40k/yr, Person B might contribute a 'fair' 50% of their take-home salary (~$1300/month) and Person A might contribute a 'fair' 50% of their take-home salary (~$3300/month) and all shared CoL expenses come out of that combined monthly pot (Groceries, Utilities, Rent+Mortgage, Car Payments + Insurance, Cell Phones, etc)
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> And then you have those cases where I can afford to go to Disney World, but my spouse only has enough for Six Flags because she makes less or hasn't been saving--now what?
You just decide what it's worth and why, and make an agreement on how to save for it? I think your assuming the talk is exhausting because it feels like a constant fight or at least a negotiation and a math problem. But if set it up right, you only have them a couple of times a year, and if you are doing these conversations with someone you love (presumably, someone you love enough to commit to marrying them), they don't have to be that exhaustive, it's just fun banter, the way a couple might playfully banter about what to eat for dinner, or what movie to go see or such.
> OMG that just sounds like so much work to manage, all for what?
Some people have put their 110% effort into a marriage for many years (or even decades!) only for it to end in disaster anyway. You can fully commit to a marriage, and also think people can change over time. It's loving to help people feel safe and secure, even from someone who might be your own partner. Especially for folks who've gone through a divorce already, safety and security in any possible scenario (even the worst one) can feel very loving too.
It only takes one time of being "committed fully to marriage" and having it end in divorce anyway, before you realize it's crazy to pretend that's never a possibility.
Your point is a good one, and I agree with your overall thrust; but if you'll permit a deeply nerdy analogy, we can model this as a concurrency problem. Is it better for two threads of a single process to manage access to shared resources via mutexes and shared memory, or by message-passing between separate arenas? Naturally, we have to say that "it depends".
Because people change, and sometimes those changes lead to financial troubles. One spouse starts making risky investments, or spends joint money in an inequitable manner. Maybe separation happens and one spouse wants to move out, but if the money is gone, they're stuck.
We do the same, but I can see how late marriages might influence this decision
in china, the account that receives your salary must be at the same bank that the employer uses because payroll is usually done with a system provided by the banks (at least that was the case in my company) so a joint account would not have been possible.
we also had bank accounts by function. we created a separate bank account for our insurance where they could automatically withdraw the payments. i don't remember if there was a specific reason for that though.
and i created a separate account for online purchases that i deliberately kept at a low balance to reduce the risk of fraud when sharing banking information online.
and my wife has accumulated a few more bank accounts over time, i guess in part because of different employers, or i have no idea. i learned the pin for most of them.
so i don't think it matters. what matters is how you view the ownership of the money in the accounts. in our case we simply added up our combined account balances as the money we had available. and money was spent from any account as was convenient except the accounts for a specific purpose. we never argued over whose money it was, but only sometimes over the necessity of an expense.
Obviously join expenses like meals out would still need to be cut back too, but we're at least doing those together in the first place.
That's a full $1,000 a year of taxable income.
Anything less than five figures isn't worth a few hours of hassle.
$50k liquid is better than 3 days to clear bank money.
I am familiar with the perks for BoA and they are not worth losing out on high yield interest at this range. If the reason is for safe deposit though (as the OP said) it is very much not worth it. (I can't find on google Fidelity perks easily, mortgage is the only one that could plausibly make sense, but I am skeptical of that.)
So my high yield is liquid, I can do large purchases on credit card and pay it off with high yield. It did only take a few hours to create the account for what it is worth, so again IMO worth it over parking a large sum of money in a checking.
Which means - no your income/my income but our income. And no your spending/my spending but our spending.