One of my and my husband's financial goals after marriage is living on one income and saving the other. The first step to that is starting to combine our finances, and it's a headache!
I've been reading this blog post and seeing if I could get some insight on the best way to do this:
Should Married Couples Combine Finances?
I have friends who are married and still keep all their finances separate. Then again, combining everything is not a feasible option either bc I have so many different accounts and investments and property in my name.
I think for now the yours, mine and our approach would work best. We decided to start out with a joint household account to which we will both contribute. We will pay the mortgage, utilities and food out of it, and also contribute savings into the linked savings account.
We decided to go with ING Electric Orange and the linked Money Market for this. I was interested in this account since I've read about it a while back. I gladly trade the ability to write paper checks for earning even a small interest on my checking account balance.
I'm taking charge of the bill paying ofcourse, bc I'm a nerd like that. We do discuss what we're doing and what we're spending, and he is very thrifty like me, so that helps.
How do you manage money in your marriage, and does it work for you? Do you have any advice on for a young couple just starting out together?
October 23rd, 2008 at 08:35 pm 1224790515
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October 23rd, 2008 at 09:07 pm 1224792428
I think you're on the right track with his, hers, and ours. You will quickly find out if this arrangement works best for you, and it most likely will if you are both on the same page with everything.
October 23rd, 2008 at 09:11 pm 1224792706
But after we had a child, we combined everything except for some outlaying retirement accounts.
I have to say that combining everything has caused us to be more of a team, align are goals, and trust each other more. I would recommend all married couples combine accounts, agree on goals, and agree on a budget.
Some people talk about protecting yourself from that cheating husband or the wife that has a shopping addiction, or the gambling husband or the alcoholic wife. And that means keep your finances separate.
I would argue that by seeing all the accounts and reviewing them monthly, you would see these problems before they become an issue.
October 23rd, 2008 at 09:18 pm 1224793128
Though in fairness, we had so much coming and going that it was easier to split up the work and each do half. Now our bills are simplified so it won't be as difficult.
October 23rd, 2008 at 10:29 pm 1224797396
When we first married we did not combine anything. My income was just enough to cover the bills. I guess we like simplicity. So I paid all the bills and dh's accounts were 100% savings. Just made it easy. His paycheck went to savings; mine to bills. (Community property state, so the money was just as his/hers, even if it was not separated by name).
Anyway, regardless I do NOT recommend. If something happened to my husband it could have been really hard to get to the money (all of our savings), even if it was legally mine.
When we had kids we got around to putting each other's names on all of the accounts. At that point we felt it was pretty important to get all our affairs in order.
Eventually we closed our old accounts and opened all joint accounts. So today, everything is combined (as one) except our retirement accounts. But even those, I treat as "ours" and allocate the assets based on the combination of all of our accounts, etc.
The question has come up a lot lately and I think I have figured it out (after pondering the whole thing much). I would not feel comfortable marrying someone I did not trust 1000%. I can not fathom either of us running off with all the money if our marriage was in trouble. We're just too mature for that. So yeah, if I had to feel like I needed a separate account "just in case" well I Would question if I should be married to this person. That's just me, but it's exactly how my parents were, and their parents.
I think I see a trend - it took some time to migrate in that direction for a lot of people. Though we have always viewed our money as "one" we did have separate accounts for many years. Kids change things a lot.
October 23rd, 2008 at 10:37 pm 1224797847
In my job I see WAY too many people without wills or trusts who do go through probate. Something to avoid, for sure.
Even if you keep the assets separate, the trust would be very useful.
October 23rd, 2008 at 11:18 pm 1224800291
I definitely see this being a process, but I'd like to eventually, one day, merge accounts. The retirement accounts will probably be separate, but the basic checking and savings/MM accounts should probably be joint.
I guess we should think about drawing up wills too. It's morbid, but can't hurt, especially with the free software out there.
October 24th, 2008 at 12:20 am 1224804045
We have only been married a few months, but we are together because we trust each other.
I manage the month to month expenses,which I pay out of a checking account that is currently only in my name.
I plan on adding her for joint ownership purposes, but other than that, this account is specifically for expenses.
I keep a monthly budget of bill that will need to be paid with an estimated amount (based on previous months).
Since certain payment take a while, its imporatant that you keep the account balanced.
Our savings are in both our names.
There's not much movement there.
Marriage is for the long run.
Be careful, but don't be so negative either.
October 24th, 2008 at 08:04 pm 1224875081
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November 27th, 2008 at 12:20 am 1227745211
Do whats called an equity based shared account... If person 1 makes 2000 a month and person 2 makes 4000.
Then person 1 pays 30% of all bills and shared expenses and is automatically transfered in to that shared account. Vice versa person 2 pays 70%..
Do not combine assets maintain seperate ownership of all assetts if possible...
Life is not perfect and neither is love and neither is people.