How do you and your SO split your finances?

[Aloros]

FI and I keep a joint account for bill paying, the mortgage, and our rainy-day fund. Neither of us makes large purchases without talking it over. We consider the money we have (even in our separate accounts) as "our" money.

I find having separate checking accounts to be nice for buying gifts and such. We''re really set on saving up a good rainy-day fund, so we don''t have that much in our separate accounts.

FI does have a separate savings account. That''s our "buy-a-scooter" fund. We''re excited about that.

Overall, FI and I make a similar amount of $, and we have the same spending habits, so it works out well.

 

[steph72276]

Just curious for those with separate accounts, do you guys check the other''s account just to see what''s going on in there? I trust my hubby and love him lots, but the way a person spends his/her money tells a lot about them and I think it is important to communicate purchases made even with your "own fun money". I was driving about 45 mins away today to a furniture store and while sitting a red light to my left was an "upscale gentelman''s club". It was lunchtime and I saw several middle-aged professional looking men going in. My first thought was hmmm, they must have separate accounts and their wives don''t know they are there. I might be totally wrong here, but I would think it would be must to at least have access to the others account and just review purchases from time to time....am I nuts for thinking this way?

 

[Aloros]

FI and I share what our amounts are from time to time, but I never check his account. He checks it in front of me sometimes, but I don''t really CHECK it. FI spends money the same way I do, and we''re around one another a lot, so I see where it goes. We''re very transparent with our spending habits since we have a lot of common financial goals. Looking back, we really do talk about all purchases except gifts to one another. The idea of him going to a "gentleman''s club" is laughable to me. It''s something we joke about when we''re in the city and going through the bad parts of town. I know he''d consider it a colossal waste of $$.

 

[steph72276]

Well, that was just hypothetical about the "gentleman''s club", but you see where I''m going that there could be "secrets" unless everything is transparent and all parties have access to all accounts....

 

[Tacori E-ring]

steph, I never have but honestly I think someone can keep secrets even with a joint account. There are other ways to hide money.

 

[steph72276]

Date: 12/31/2008 5:24:02 PM
Author: Tacori E-ring
steph, I never have but honestly I think someone can keep secrets even with a joint account. There are other ways to hide money.

That''s true. It''s all about honesty and communication. I guess it comes down to what works best for each couple. It just really hits home with me because I have a good friend who has separate accounts with her husband and they have always had "his money" and "her money" until she found out he was having an affair and charging different gifts etc to his credit card. I just think both people should be aware of what''s coming in and what''s going out and be on the same page reguardless of how things are set up.

 

[NewEnglandLady]

I''ve never checked D''s account, eiither. I don''t have an urge to because a.) he''s a cheapskate b.) he''s completely trustworthy. If that changes down the road, maybe I''d have an urge, but until then I''m content to stay focused on my own account

 

[Tacori E-ring]

Steph you are right. All of us expect happily ever after but sometimes things don''t work out that way. Communication and honesty are vital to a good marriage (and every relationship).

 

[Pandora II]

I''ve never checked DH''s bank accounts, mobile phone, email or anything - and I''ve never felt the inclination. We spend 99% of our free time together and we always tell each other what we have bought.

I think he finds it easy because I don''t do shoes or handbags which he wouldn''t understand (neither do I for that matter

) - all my fun money goes on books, antique silver and gemstones (all of which he approves of). He spends his on photography equipment.

 

[Rhea]

We have joint accounts and personal accounts. Right now our pay goes into our joint account. An allowance goes into our personal accounts, which is the same amount per person. We use this money only for gifts and have chosen not to have much allowance right now so we can save for a house. We both have personal checking account, savings accounts, and credit cards, but there just isn''t much in there.

I earn twice what DH does. His monthly salary might cover the rent. It didn''t seem fair to us for him to pay half and have nothing left over for personal spending.

Almost all of our left-over money goes into savings for a down payment or any other larger household items.

I think that when we both earn more money we''ll rethink it. I''d like to have more personal money, but I also don''t want either of us to feel bad about what we earn.

 

[Rhea]

I haven''t ever checked DH''s savings or checking account, but I do look at the credit card bills if he leaves them around. DH pays his credit card late about 2-3 times a year at a cost of about 20 in late fees each time plus interest. He only uses the account about 2-3 times a year to buy gifts, so that''s a fairly bad average.

Before we got married we''d both only made one or two late payments ever, but since being married he can''t seem to keep up with finances. I''m the one who makes sure the money is in the accounts and organizes all the paying of bills. I do wish DH was more involved and we argue about it sometimes. I honestly don''t care what he spends his money on, we are both savers and have very little personal money, but it angers me when he (and by default, me) pays money in late fees and interest because he forgot to pay a bill on time.

We have three seperate files in the room. His, mine, and ours. If either of us really wanted we could just pull the other person''s file and check out their spending. I''ve never done that and don''t think he has either. I don''t file for him and don''t open his post. Once the post comes in he''ll leave it laying around the house for weeks sometimes before taking care of it. It drives me insane!

 

[Pandora II]

Addy, can''t he get a direct debit on his credit card?

I have one with my bank where my cc is paid off in full every month straight from my current account. That way you never end up with charges or interest payments - and you don''t have to remember to do it.

 

[Mrs Mitchell]

Steph, of course you aren''t nuts for thinking that way - that''s the way you feel, so you have to be comfortable with your arrangements. Mine suit me, yours need to suit you. There is absolutely NO right or wrong way to do it. Every couple will be different. From reading all the responses here, the main thing I see is that both people in the relationship need to be on the same page as each other. Then, whatever the approach is, it will work for them. It looks like the trouble might start when people have a radically different view to the one their SO has!

Would I check DH''s account? Never, ever. Would I expect him to check mine? No way. I would see that as a violation of trust. Actually I''m not 100% sure who he banks with.

If I had even a tiny inkling that I couldn''t trust him, then I think we''d have joint finances. For me, a personal account is by nature private and works because we trust each other without any doubt. Any checking would defeat the purpose. Like Addy said, both of us keep our bank statements in a file that the other could easily look through if we wished, so there is no mystery, but generally I don''t read his private papers and he doesn''t read mine. I''m totally cool with whatever he spends money on, so long as our bills are paid, our savings saved and no credit is ever used. He buys weird things

We both feel that way. If one of us felt differently it wouldn''t work (and that would be a deal breaker for me).

Tacori''s point is very true - if someone is going to cheat or go to clubs or buy something that their spouse is idealogically opposed to, then they will find a way of doing it if that''s what they really want, joint account or no.

Jen

 

[neatfreak]

Date: 12/31/2008 4:11:34 PM
Author: steph72276
Just curious for those with separate accounts, do you guys check the other''s account just to see what''s going on in there? I trust my hubby and love him lots, but the way a person spends his/her money tells a lot about them and I think it is important to communicate purchases made even with your ''own fun money''. I was driving about 45 mins away today to a furniture store and while sitting a red light to my left was an ''upscale gentelman''s club''. It was lunchtime and I saw several middle-aged professional looking men going in. My first thought was hmmm, they must have separate accounts and their wives don''t know they are there. I might be totally wrong here, but I would think it would be must to at least have access to the others account and just review purchases from time to time....am I nuts for thinking this way?

Not nuts...but because I trust my husband 100% I have no desire to know or care about how he spends his personal money. If I didn''t trust him it would be a different story. As it is now though, he checks his account in front of me occasionally, and I do the same. And I also see much of where his money goes because he buys things, goes out to lunch, etc. There are a lot of ways to hide money if one wants to, totally joint accounts doesn''t fix that IMO.

 

[Rhea]

Date: 1/1/2009 11:09:03 PM
Author: Pandora II
Addy, can''t he get a direct debit on his credit card?


I have one with my bank where my cc is paid off in full every month straight from my current account. That way you never end up with charges or interest payments - and you don''t have to remember to do it.

He can. He just hasn''t. I''m working on it. I often remind him of things, but try not to nag. I don''t think I have the balance down yet.

Everything is automatic on our joint accounts. All set up by me!

 

[steph72276]

It's true...whatever works for each couple. I didn't mean to imply I didn't trust my hubby 100%. I think I'm just a bit of a nerd who should have gone into accounting. I check our online account everyday and enter everything into a money management system, do a monthly budget, pie charts to see where are money is going and how much we're saving, how our retirement accounts are doing, etc. so I like to have everything in front of me to know exactly where our money is going. Dh hardly ever buys anything for himself including lunches because most of the time they are catered in through his business or his company pays for them, so I guess there is no need for a separate account. I guess for me, it just gives me a peace of mind in knowing where everything is going...I just don't think it is ever a good idea for someone to be totally out of it when it comes to finances and it sounds like those with joint accounts COULD have access they just choose not too.

 

[Irishgrrrl]

Guys, I just wanted to comment on the issue of trust that has come up. As I mentioned in my previous post, DH and I have a system that works well for us. We have a joint checking account and a joint savings account. Both of our paychecks go into the joint checking account each week. I am the "bookkeeper" in our relationship, so I pay whatever bills need to be paid for the week out of our joint checking account, then I put a little into our joint savings account, and I withdraw the remainder in cash (which we then split 50/50 and that is our spending money for the week). We also have two credit cards, both of which are joint. The only non-joint accounts that we have are our retirement accounts, and those are only non-joint because they have to be.

We have handled our finances this way since we moved in together, which was before we were even engaged. At that time, I was hesitant to combine our finances, ONLY because I didn''t want DH to feel weird about me handling his money. But, he insisted that he trusted me 100% and that he wanted to do it this way. This system works great for us, because we''re both committed to it and because this is a topic that we discussed at length before setting up the system. We both agreed that this would be the easiest and most efficient way to handle our finances, and we both do our part to make it work.

Having said that, the financial system that I used with XH was basically identical. It DID NOT work. In fact, it failed miserably. The reason for this is because XH would routinely use his ATM card to pull money out of our checking account to support his drug habit, even though he knew that checks were already written on that money to pay our bills. It got to the point where I had to check our account online every day because I knew that he was probably pulling money out and lying to me about it. When I found that he had taken money out, I would then have to scramble to replace the money somehow to make sure none of the checks I had written would bounce. The last straw for me was this: XH''s brother asked XH if we could loan him money to buy a car. XH brought it up to me, laughing the whole time because he thought loaning money to his brother was "a terrible idea and there''s no way we should do this." (His brother had a history of borrowing money from family members and not paying it back.) I agreed with XH that we should NOT loan his brother this money, and that was the end of the issue (or so I thought). Imagine my surprise when I checked our account a few days later and saw a mysterious large withdrawal. I immediately assumed that the bank had made an error, but I called XH at work before calling the bank, just to let him know what was going on. He said that he knew what the withdrawal was, but "this isn''t the time to discuss it." HA! The hell it ain''t!!! So, he finally admitted to me that he had made the withdrawal and had loaned the money to his brother to buy the car . . . after we had already discussed it and decided against it. Basically, I told him that he had two choices at this point: (1) he could agree to go to marriage counseling with me, or (2) I was leaving him. He had made it very obvious to me that there was no way I could trust him.

So, having a joint account isn''t necessarily the answer to the trust issue. The trust has to be there regardless of how the money is handled. As Tacori mentioned earlier, if one partner wants to do something "shady" with the money, it''s going to happen regardless of whether the couple has joint or individual accounts.

 

[platinumrock]

I''ve had my own bank account since I was 15, and I like to have certain things to myself, including my own money. My husband and I are both teachers and we make about the same. We did, however, combine our checking accounts since we got married. It''s easier to keep track of our bills and expenses that way. But we both have our own savings accounts.

Separate bathrooms and separate savings accounts definitely helped for us! Good luck and congratulations on your new marriage

 

[Italiahaircolor]

Both my husband and I both make very good money. He, however, makes more than I do...but in our household, that means nothing...we''re equals.

Our money is directly depo''d into a joint account...from there we handle our obligations...a percentage gets plopped into our joint savings account...and the rest is ''fun'' money. If I want something, I buy it...and vice versa. We have a 200.00 cap...anything over and above the other person needs to be informed and considered. My husband rarely gives me a hard time...sometimes I do get the "eye" like "do you really need that???"...but, as long as I can afford it, it''s mine.

Since money is one of the main issues couples fight...we have a bi-weekly routine and it takes all the conversation, negoitation, and throught out of it...

You''re newly weds..its an adjustment...you''ll get into a pattern that works best for you and your DH.

 

[Haven]

Date: 1/2/2009 10:56:30 PM
Author: Italiahaircolor
Both my husband and I both make very good money. He, however, makes more than I do...but in our household, that means nothing...we''re equals.

I like what you said here, Italia--that it doesn''t matter that he makes more than you do, you''re equals. This is how it works with us. I make far less than my husband and always will (assuming I remain a HS teacher and he stays in his industry), but it never occurred to either one of us that we should split up our money based on our income. I actually read this thread aloud to DH the other day because I found the various views on finances to be so interesting. The one thing I did learn is that we are lucky that we both feel the same way about the finances, so our system works for us.

I suppose it helps that we are not big spenders, and we share the very large common goal of living as far below our means as possible. We both lived this way before we met, so it wasn''t as if one of us had to adjust to the other''s system. We set up our lifestyle so we can live off of my income alone, so that means we''re really comfortable financially.

As for the trust issue, I agree that an individual will find a way to be shady, joint account or not. I can say that I learned the power that money can have in a relationship first-hand by watching my own parent''s marriage. After 30 years of marriage they are divorcing now, and one of the issues that stuck around for all those years was money. My mother never felt like she could trust my father with the finances, and rightly so. Ultimately, I think this was a contributing factor to events that led to their recent divorce. I also think this is why I''ve been obsessed with being financially secure since I was young, and I never spend money I don''t have. I suppose this was my not-so-concise way of saying that I think this issue is of paramount importance in a marriage. I suppose I could twist that old saying about sex into one about money--If the finances are good, money is 10% of a marriage. If they''re bad, it''s 90$, so make sure they''re good. Well, it doesn''t translate so well, but you get the picture.

Anyway, I love this thread, it''s so interesting to read everyone''s perspectives. Thanks.

 

[karasue91]

Thanks again everyone for sharing all of your perspectives and experiences.

DH and I had a talk yesterday after I brought home some after-christmas-sale purchases. We agreed that I would get about 7% of my monthly salary for my own spending (basically clothes, shoes, hair and makeup). We''ll see how it works. On the one hand when you work it out, 7% of my salary is a pretty good chunk of money, but on the other hand I also kind of resent getting an allowance. This still leaves us with plenty of money after paying our fixed expenses, which we figured out are about 25% of our monthly income.

It''s frustrating right now because we are kind of in a transition stage. We moved to Canada a year ago, but my student loans are in the US. We have no US income now, so we won''t get any kind of tax benefit from paying the interest, and if the CAD continues to weaken against the USD, my debt will grow which is a little scary. If we were still in the states we would definitely just continue to pay the payments since the interest rate is so low, but for right now it doesn''t really make sense to keep that debt. We do have the cash to pay off a big chunk of it, so we''ll be watching the FX rate and buying a bunch of USD if it gets down a little lower, but it''s just one more variable that DH brought up when we had our talk.

He also wants to buy a whole-life insurance policy for me, which is ridiculously expensive and he wants to have it paid off in 5 years or so as an investment, in addition to figuring out our retirement (the RRSP system up here is quite different than the 401k system in the states).

Well it seems like this post didn''t really have much of a point except to complain!! But the upside is that DH and I had a good conversation about money and didn''t end up in a yelling match...baby steps!

 

[Tacori E-ring]

Most financial advisers really, really hate whole life insurance.

 

[karasue91]

Date: 1/4/2009 9:19:04 PM
Author: Tacori E-ring
Most financial advisers really, really hate whole life insurance.

Really? Any idea why? I don''t really like the idea of it either, but it was a few months ago that we talked about it and I''m a little fuzzy as to why I didn''t like it in the first place. Outside of not really liking the idea of it and the fact that it''s a HUGE extra monthly payment (like about $600/mo), I already have life insurance for 2x my salary through work, and he has 1x his salary through work. Right now when we have no kids it just seems silly to get another policy...but his argument is that it will be more expensive if we wait a few years because we''ll be older....

 

[Tacori E-ring]

I love and respect Suze Orman. This is what she says on her website:
"SUZE SAYS

* I HATE WHOLE LIFE INSURANCE
* I HATE UNIVERSAL LIFE INSURANCE
* I HATE VARIABLE LIFE INSURANCE
* THE ONLY TYPE I LIKE – FOR THE PURPOSES FOR INSURING YOUR LIFE – IS TERM INSURANCE!
* If you are smart with the money you have today and you get rid of your mortgages, car loans and credit card debt and put money into retirement plans you don’t need insurance 30 years from now to protect your family when you die."

I would think getting rid of your student loan would be a better use of money. Also I have heard her say there are MUCH better investments than whole life insurance.

 

[neatfreak]

I'm with Tacori-life insurance isn't a good investment except potentially for term policies.

Do you have kids? And/or does your husband rely on your income? Those are the two things to ask before buying life insurance, nevermind MORE life insurance!

If the answers to those questions are no, I wouldn't even get a term policy especially considering you already have some through work. The chances of you using it are so low, and really, all it does it provide financial compensation in the event of your death. But if your DH doesn't *need* that compensation to keep up with the bills or support a child, it's not like it's going to make him feel better you know?

Seems like a waste to me. Especially at $600/mo!

 

[steph72276]

I totally agree with Tacori and Neatfreak. Whole life insurance is a waste of money. Insurance is meant to replace your income. If you have term insurance that covers you until you retire, and you were smart with your money, then your 401k and other investments would be enough to live off of for the rest of your life. I love Suzie too, and especially love Dave Ramsey. I think his book Total Money Makeover would be an excellent read for you and your husband and really any married couple.

 

[saltymuffin]

Karasue91, student loan interest is tax deductable in Canada. Have you confirmed that the loans have to be Canadian to qualify?

Is the 7% for your spending "reasonable"? Your feeling like you are being restricted to an "allowance" isn''t a good sign. Whatever you do has to work for BOTH of you. You need to feel like that 7% is the result of a budget that allows you to both to pay off your debt, cover your living expenses, and put away some savings. Not some random % that DH felt was appropriate.

DH and I approach things a bit backwards from some. We total our combined salaries, then deduct monthly bills, groceries, savings (including retirement) and even shared entertainment costs etc. What is left over is then split between the two of us for our personal spending. That way we know that our individual spending doesn''t impact anything we share, but we each are also able to balance and prioritize our own spending - that feeling of control and decision making is important to me. DH spends way more on food/coffee on a day to day basis, I choose instead to spend my extra $ on clothing.

Our combined income is all "our" money, but we put some of it into a joint account for bills, savings etc, and some into individual accounts for daily spending. Having an individual account isn''t about being secretive, it is just a place to keep my cash. A personal chequing account is just an extension of my wallet. I don''t share a wallet with DH because he isn''t with me 24/7. For the same reason it doesn''t work to share an account for daily expenses. We both like to have control of our finances. If I have $100 in my account and want to spend it on a pair of jeans, I can without worrying that he''ll go to buy something and find the account empty.

I also like that having individual spending money also makes gifts and dinners out that one of us may buy for the other more meaningful.