To the separate accounts and divide expense 50/50 folks, does that mean the one who makes the most gets to discretionarily spend the most?!?
If you did it like that, then yes...the one who makes more would have more discretionary spending.
But that's not usually how it works. In the case of my wife and I, we both earn roughly the same, but not quite. It works out to about a 60/40 split on income. Of our combined expenses, the mortgage works out to roughly 60%, and the remaining house bills (power/water/etc), internet/tv, food for house) works out to roughly 40%. So I cover the mortgage fully, and she covers the rest of bills. So we end up with roughly the same amount of discretionary spending. We each cover our 'own' expenses (vehicle payment and phone bill). With what's left, that's "ours", to spend as we see fit.
Most folks who keep separate accounts look at the combined %'s for income and outgo, and adjust accordingly. Just splitting expenses 50/50 doesn't make sense unless you both make pretty much the same amount of money.
As someone else noted...it may have to do with previous experiences in past relationships. My first marriage, money was a VERY contentious subject, and we pooled it. My first wife would often get furious with me for spending a buck on a Pepsi at the corner store, but if I pointed out she had spent $10 at Starbucks, well...that was allowed.
Talking money matters out and figuring out how your potential spouse deals with them before becoming a spouse is a huge thing. If you both deal with money in very different manners, there's going to be friction.
with the separate accounts what happens when some one just feels like buying a bike and does and the other feels like taking a trip that the other now cannot afford? I have seen this happen on more than one occasion with none of the couples still together. Anecdotal I am sure but that has been my experience. My wife and I are joint and have been for 20 years with no issues. I supported her for over 15 years and now she makes more than me but nothings has changed. Money goes in, money goes out, we talk about almost all of the expenses especially the big ones. There's no his or hers involved.
I get this is a very individual thing and what works for some will not work for others. But I think the key that just about everyone has mentioned is communication. Neither split or joint will work if you don't talk about things before, during and after.
Wife's father lived far away and I had never spoken to him up until a few months before the wedding. Knew the mom well but we had been together for quite awhile before marriage so the whole marriage thing was just a formality.
As I get closer to perhaps taking that plunge into marriage, I did have a few questions ...
Just the fact that you are thinking about these questions suggest that you definitely would feel more comfortable with a prenup. The thing is - asking your fiancee about it is not going to be easy. Not for you, not for her.
Unless, of course, she's rich!
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with the separate accounts what happens when some one just feels like buying a bike and does and the other feels like taking a trip that the other now cannot afford?
The annual family vacation expense can be a "shared" expense (just like cable) that both spouses contribute to monthly.
If one of the spouses want to go to Vegas with their friends for 3 nights - well - if they have surplus money - go for it.
That said there are limits to this surplus spending, and that amount will be different for every couple. Regardless of pooled / separate accounts - if you're going to spend a crazy amount (say, $250,000 on a timeshare) you should probably talk that over with your other half...
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with the separate accounts what happens when some one just feels like buying a bike and does and the other feels like taking a trip that the other now cannot afford? I have seen this happen on more than one occasion with none of the couples still together.
I think the issue here wasn't the separate accounts, but the lack of communication about things. No matter how the money is set up, I think things like taking trips would be something that you would discuss.
It sounds like in the scenario above, the one partner resented the other one's purchase, so they went out and planned something to get back at that person. That's going to cause issues, no matter what account the money comes out of.
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I understand the argument and somewhat understand it, but if you have pooled accounts you can still budget money for entertainment and fun things. Heck, having personal accounts almost encourages the practice.
Shouldn't be a me vs. you thing, if the family unit has the money for the pedicure or golf then go for it. You can budget fun spending without stashing it away in a personal account.
Separate account approach (ie each have their own money) just seems like setting yourselves up to ensure you have a quick divorce and less arguing about money when that happens.
We have a number of joint accounts but we also have our own personal accounts. We know what each other makes and nobody is hiding money away in some kind of squirrel stash.
It’s just the way we have done it and it’s always worked for us.
We’ve been together for fifteen years, married for five and things are great.
I was just saying what’s worked for us. If my wife came to me tomorrow and asked for me to put everything into our joint account, I’d have zero hesitation.
Most have said a proportional contribution to the family pot to limit this. However, you can just as easily have both partners keep the same discretionary amount of money
I just find it it’s a true shared pot , you end up with eye rolling and annoyance with the other sides purchases. New Xbox , ugh did you need that! $300 shoes? Reallly !!!
If each side retains some financial independence , in my opinion and experience there are less arguments and fights ( and guilt in some cases on what you buy )
Agree with this 100%. I know it’s important for my wife to have some financial independence.
The annual family vacation expense can be a "shared" expense (just like cable) that both spouses contribute to monthly.
If one of the spouses want to go to Vegas with their friends for 3 nights - well - if they have surplus money - go for it.
That said there are limits to this surplus spending, and that amount will be different for every couple. Regardless of pooled / separate accounts - if you're going to spend a crazy amount (say, $250,000 on a timeshare) you should probably talk that over with your other half...
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Originally Posted by Amethyst
I think the issue here wasn't the separate accounts, but the lack of communication about things. No matter how the money is set up, I think things like taking trips would be something that you would discuss.
It sounds like in the scenario above, the one partner resented the other one's purchase, so they went out and planned something to get back at that person. That's going to cause issues, no matter what account the money comes out of.
For sure, has to be limits and communication is definitely key. For my one friend he and his wife really had money issues and if one bought something the other had too as well. We tried to talk to him about it but he never understood. On the flip side my sister in law and her husband have a joint account and it is a complete disaster. They do nitpick about every little thing. But that's more because he's an insecure putz and can't handle that his wife makes money than he does.
Pool everything. Who makes how much is not a factor in anything. When one of us gets a bonus or a raise we don't even think of it as our own money, it just goes into the pot. We have a certain amount we can each spend on discretionary stuff. It's modest and doesn't cause any fights.
We were broke when we got married and lived hand to mouth. Neither had what you'd call a career, and sometimes I made more and sometimes my wife did. Neither of us had an opportunity to develop expensive hobbies or habits before we became a unit.
I'd guess most couples who have separate accounts and finances got married later, or are on their second marriages. To each their own. I do have to raise my eyebrows, though, at a couple where one who has substantially higher incomes gets substantially higher discretionary spending than the other.
Age may also be a factor. My wife and I grew up in an era when half of moms still stayed home and didn't work. It's hard to imagine families where dad got to spend way more on himself than mom because he made a good salary and she made nothing.
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It's funny that this thread has been started as it's been a topic of conversation among my friends and I find the entire topic fascinating. Some observations from someone who's single.
I find a lot of the people who advocate for keeping all income and expenses joint generally come from traditional backgrounds. They may have grown up in a traditional household where mom may not have worked or didn't work full time with a full time salary. These people also tend to be of immigrant backgrounds or children of immigrant backgrounds who might have grown up in a household described above.
I also find the way some couples deal with expenses very interesting and in some ways, counter initiative to a "family unit" mentality. A few friends who swear by keeping things separate are not able to take advantage of savings when combining things like home and auto insurance, mobile phone plans and lines, gym memberships, credit card and banking products. It can just end up increasing the cost of life with less income left over for everybody.
Just the other day two couples had a similar scenario but dealt with it totally different and in a different mindset, was amazing to see and hear the deails.
Couple #1: Lower income spouse (male) is complaining about the state of his car which is very poor, meanwhile the higher income spouse (female) drives a luxury car and has sizable assets and flat out says "Well, he can't afford a new car, so what should I do about it?"
Couple #2: Higher income spouse (male) mentions that him and the wife are looking for a new car. Her car is in poor shape and they are buying something so that she can have a safe, reliable car for the wife to drive around the children. It came across as "Well, this is what WE need as a family and I am in a position to have it done"
Just a different way of looking at things. Everybody has their own way and their own opinions.
Yeah, I have a mindset that probably isn’t popular on here, but it’s my job to be the provider for the family and it’s her job to prudently manage the day to day expenses. There is no ‘my money and her money’. It’s our money that I make for the family. She hasn’t worked since she was pregnant with my first kid and that’s pretty much how we expected it to go when we got married. It works for us, but I can see how it might not work for people that have some sense of independence even within the family unit.
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I think it doesn't really matter whether others agree with how a couple does things, as long as the couple agrees to the plan. The only arrangement I would have concerns with is if one spouse had total control over all the money, as that makes it difficult for the other person to leave the relationship (such as one spouse being abusive).
I just find it amusing that it seems like all the "combine everything" people seem to think anyone who doesn't follow that plan is headed for divorce.
We do the separate accounts thing and it has never been an issue. We still consider all of the money 'our money', if she or I is running low the other will just send funds to top them up. I think it works because we both earn about the same amount and have the same mindset regarding saving/spending etc.
We don't keep a spreadsheet and do any kind of allocation, one of us pays mortgage and other fixed bills, the other pays the random bills and contributes most of the savings. In the end it all works out, have rarely ever had an argument about money.
Edit: For the last part about asking her father before proposing, I recommend doing it. I did not ask my wife's father for permission, it was not a big deal at the time. But he died shortly after we were married and I have always regretted that I didn't ask him.
Ha, a smattering of this seems to be sliding from at least semi patriarchal to something else, maybe.
When 'the little woman' and I met, we were fully made individuals in chosen our career paths, earning similar incomes. During our life together my income has risen more or less commensurate to inflation while hers has more than quadrupled - in part because we decided I would take care of the mundane time killers, enabling her to do her thing - but mostly due to her advanced degree, which she sacrificed to acquire, and her incredible individual skill set. Our joint success allows us to enjoy a lifestyle that is far beyond my means, but to suggest that somehow she should not be entitled to individually reap the rewards of her success is almost as ludicrous as suggesting that one of us suffers while the other enjoys the high life. And so while my contribution, for example, to a dream vacation might be the car rental (while hers is airfare and hotels) it's no less important to me, and her, that we both make meaningful (but appropriate) financial contributions to every aspect of our life together.
There is no one size fits all, or any right or wrong way to successfully navigate this, but mature, like minded people are more likely to do this successfully, regardless how they choose to accomplish it.
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No need to "ask" and jointly agree - isn't that paradise? (and a big source of arguments in marriages?)
Well I'd argue that if a purchase were to cause friction in a marriage, there is likely a reason (i.e. can't afford it, dumb purchase) and discussing it is the best course of action to potentially revise or abandon the purchase if it doesn't make sense for the family unit. Giving each party impunity in their "extra money" spending sounds like a recipe for unnecessary spending.
It also allows for better financial planning and asset management. Potential income splitting, capital gains decisions, and tax planning (aka tax savings!) opportunities could be missed because each party is still operating as a single person financially. Just because we manage finances jointly doesn't mean we don't have individual accounts and savings in our own names, but all of the money is 50/50 regardless of account bearer.
1. Separate plus a joint for mortgage, bills etc. I pay way more than she does, as I make more, and she is on EI for summer months, working at a school. Pisses me off sometimes, but like she says, she spends minimal on shopping,. entertaining, boozing etc. I pay for holidays, most of the bills and lots of groceries. It's probably proportional, since I have a wicked golf + booze/food habit.
I think some of you really interpret having "split accounts" as in you're not partners or are roommates don't really understand where a lot of people come from. I mean my wife and I make about the same amount of money and it is a thing of pride for my wife. She likes having her money and doing what she wants with it.
However, saying that, if something comes up and she needs some cash to buy something I have no issues giving her some and its not "strings attached" that she has to pay back. We just have our own money we can spend on what we want (golf and booze for me, shopping and other such things for her).
Ha, a smattering of this seems to be sliding from at least semi patriarchal to something else, maybe.
When 'the little woman' and I met, we were fully made individuals in chosen our career paths, earning similar incomes. During our life together my income has risen more or less commensurate to inflation while hers has more than quadrupled - in part because we decided I would take care of the mundane time killers, enabling her to do her thing - but mostly due to her advanced degree, which she sacrificed to acquire, and her incredible individual skill set. Our joint success allows us to enjoy a lifestyle that is far beyond my means, but to suggest that somehow she should not be entitled to individually reap the rewards of her success is almost as ludicrous as suggesting that one of us suffers while the other enjoys the high life. And so while my contribution, for example, to a dream vacation might be the car rental (while hers is airfare and hotels) it's no less important to me, and her, that we both make meaningful (but appropriate) financial contributions to every aspect of our life together.
There is no one size fits all, or any right or wrong way to successfully navigate this, but mature, like minded people are more likely to do this successfully, regardless how they choose to accomplish it.
I assume in 10-15 years this is going to be the scenario I'm in.
While I've seen significant advancement in my position over the last decade or so, once out of University, my wife has seen almost equal advancement in hers (though at a lower base) and I've been fractionally outpacing her in the years since.
There's always the chance that I could keep it up over time, but considering the top-end of her field, it's also very possible that come our 40s she could be out earning me by 50% to 100%.
We keep separate accounts for our "personal" cash, and make proportional contributions to the savings pool (and RRSPs and such) to our wage (so I pay ~10% more than she does month to month due to wage disparity). When I want to buy a TV or a video card or some gadget, it comes out of my personal cash.
When we have a child, we've already agreed to increase our pool contributions by another 10% or so, but we carry a relatively minimal debt load as we only have 1 car payment (done in 11 months), bought a house at 75% of our max affordability, and had no outstanding debt at the outset of marriage.
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