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Finances for married couples

Posted by rob333 (My Page) on
Fri, Jan 15, 10 at 11:30

This problem comes up a lot with my friends and I see it here on the forum today. I'll give the (albeit unsolicted this time) advice that works, is fair, and how I was told was best by an uninterested party decades ago. It works.

First, all the money that is income goes into one pot with no strings attached and no score kept. All of it because the tide will ebb and flow. It's never 50/50 and it changes with time. That takes the "but she makes more than I do", "he's worth more than I am", stuff out of it. Marriage is about joining, a union and all for one. It becomes the centerstone of your finances.

Second, the budget must be set up with all expenses and fun stuff set aside that are planned ahead of time. If you're going to go on a trip, splurge and buy that boat he's always wanted, it's a together decision. After the basic bills are paid, the emergency funds are set aside, and the big exspenses are worked out, there is spending money left.

Third, once all the bases are covered, and all the assets(2 savings accounts (one for the emergencies that goes untouched and one for the big purchases) and liabilities (checking account) are accounted for, there need to be TWO more accounts. One is his and one is hers. They each get to spend and save with it as they see fit, never having to explain or justify why they do what they do.

I hope this helps!

-Robin


Follow-Up Postings:

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RE: Finances for married couples

"...there need to be TWO more accounts. One is his and one is hers. They each get to spend and save with it as they see fit, never having to explain or justify why they do what they do."

IMHO, this is a very important point.

IMHO, any/every union of two people NEEDS at least this component of individual autonomy. Having to consider every purchase a joint decision is a demeaning PIA.


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RE: Finances for married couples

You reminded me (autonomy)... things come up that aren't expected and it's good to have a set amount where you don't have to defer. It was $100 for us. That means, I had to defer to his opinion if it was over $100. I couldn't just yank it out of savings without the courtesy phone call, "Hon, the dishwasher needs to be replaced and it's gonna be $200. So what do you think?" type of thing. Of course, we always said yes to other person because we trusted each other, but it saved us headaches later on. Your dollar amount might be much lower or higher, but it's another good way to keep your marriange finances on the same page.


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RE: Finances for married couples

"there need to be TWO more accounts. One is his and one is hers. They each get to spend and save with it as they see fit, never having to explain or justify why they do what they do. "

I disagree.
DH and I can spend and save as we see fit within the parameter of one account.


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RE: Finances for married couples

"...we trusted each other..."

Well, there's the bedrock of the whole thing.

Trouble is, "Trust" has to have an empirical basis. If the subject is important -- like management of household finances -- it cannot be assumed. Unfortunately I've known (and know!) so very many people who have so little sense money-wise. If your spouse is one of those, it's best to discover it early and make accommodation for it. I call this "financial illiteracy" and it is incredibly common.

My own experience was with wife #2 many years ago. By mutual agreement, I tended to making money and turned over the household accounting management to her. The dun-letters and penalty notices began arriving three months later, which she hid from me for an additional month at which time I started getting calls at work. When I stepped back in, I learned she had no idea (at age 38!) how to balance a checkbook. She just wrote the checks and recorded nothing...didn't know how much came in or went out from day one...just assumed the spring was ever-flowing...but never said so. I paid the bills, worked out the penalties, and straightened things out but it was a real eye-opener.

I managed things after that including providing her with her own separate account into which I put exactly as much as I put into my own. Interestingly, she was very careful about her own account. I learned something there, too, but that's another story.


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RE: Finances for married couples

"Of course, we always said yes to other person because we trusted each other, but it saved us headaches later on."

I am somewhat confused, maybe you are a different person...didn't your husband had affairs (at least 2) and his last affair caused the divorce? and you suspected affairs and didn't trust him. i understand finances is a different story but it is all related... how is that you trusted each other?


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RE: Finances for married couples

Different strokes for different folks. There is no one perfect way that works for all couples. We have been married 38 years and have everything in both our names, no separate accounts and it works for us. Some of our friends also married long term, have separate accounts and it works for them.


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RE: Finances for married couples

roseabby--exactly. There is no one perfect way.

What there has to be is communication and each person has to know exactly where the money is going, and exactly how much there is. In other words every financial transaction should be known by both husband and wife. One person can pay the bills if that's the way you want it, and each can have a fixed amount that they don't have to account for--again personal preference. All purchases should be known and discussed by both parties.


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RE: Finances for married couples

"roseabby--exactly. There is no one perfect way.
What there has to be is communication and each person has to know exactly where the money is going, and exactly how much there is. In other words every financial transaction should be known by both husband and wife."

This is such a HUGE issue for me! I think Dh & I have made some positive strides in our personal relationship, but he continues to make major financial decisions without so much as mentioning it to me until it's done. He did admit to me a few weeks ago he was very insulted that I insisted on a life ins policy for him a few years ago (I pay it, not him).Why, though he wouldn't say. I have one on me in case I die first. I don't get it.

The only way I've been able to deal is by just keeping my fiances totally seperate...We just can't get on the same page because he refuses to communicate about it. I hate to think money is going to be what kills it but I think it's just the one issue among many that is glaringly there all the time. I also think DH is very old school about it & feels he makes the money & he decides where it will go-period.

But, what's fair is fair..and I would no longer feel obligated in any way to first discuss with him my decision to purchase a car or vacation home either.

~Cat


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RE: Finances for married couples

Have to disagree with the 3rd paragraph of the "never having to explain or justify why they do what they do" accounts. That just smacks of hiding, secretive actions and lack of trust imo. Not something you want to do when you are starting out. Wayne and I have been married for 28 years and we both know all of our money transactions. We don't have separate accounts. His and my money go into a checking and savings account. Whether it is for paying bills or entertainment we both know what is going in and what is going out. Both should be aware of all finances. NancyLouise


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RE: Finances for married couples

Sounds good in theory, but sometimes you get a spouse that refuses to discuss/and or is secretive about what he/she does with money. Then I think its best to keep things seperate.
-Cat


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RE: Finances for married couples

Everybody's different. Different couples can certainly do whatever works for them. But whatever that method is DOES have to work. Only saying household finances are important and it is important that they remain on sound footing and the parties be in agreement about how things are handled.

In my personal experience separate as well as joint accounts accomplish the task. However, both parties need to know where they're at with the union's money at all times regardless of the procedures used. Ignorance and/or secrecy about money matters in a marriage (or anyplace else) is bad news IMHO.

(I see that by typing "finances" above the site automatically triggered a pop-up ad for the topic. Please be advised it isn't my doing.)


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RE: Finances for married couples

This is absolutely a topic where each couple has to forge the method that works best for them. There is no one right answer, no wrong one--as LONG as the couple makes their method work.

I personally feel extremely strongly that couples need to keep their money separate. DH and I have been married 37 years, have always had our own accounts, our separate investments, etc--and not once EVER have we fought over money (plenty of other things, but never money). After all, being married doesn't make you one person--you don't automatically merge and start using each other's clothes, shoes, jewelry, do you? Of course not. Most couples I know have separate cars--they may occasionally use each other's car, but for the most part, each drives one more than the other. There's absolutely nothing wrong with keeping finances separate. DH and I--while both frugal and very fiscally responsible--have differing investment preferences. I can't imagine having to balance a checkbook every month that's being used willy-nilly by 2 people--it's much simpler to each have your own.

Aside from the convenience factor, every person, IMO--should absolutely have enough money put away, IN THEIR OWN name so they can get along for at least 6 months or so. Any number of different disasters can affect one's ability to access community funds. Death, a split, a partner who suddenly decides to empty the joint account, legal action, etc etc etc. I've known too many older women who let their husband's manage/control the family finances who, at the worst time of their lives had to deal with not only losing their husband and planning a funeral, but having also to try to find and understand all the various investments, insurances, savings, etc. When you manage your own money, all your life, you don't have that panic to go through.

As to the person who couldn't understand nor agree with individuals wanting money that they could spend without accounting for it? Well, even in the best relationships, one may want to buy the other a special gift--without having to ask for, or justify using the money.

To me, as I said above--money is exactly like shoes. It does NOT adversely affect a relationship if each person keeps their shoes and money separate from the other. In our case, I have been so effective at managing my money, that even though I havne't worked full time in over 28 years, I had enough money saved, to be able to buy--on my own--our retirement home 2 years ago, and maintain it financially. I'm proud that I was able to do that for my husband. And he has so much respect for my money managing ability that he recently received a sizable inheritance that he immediately handed to me, and told me to 'do what I wanted with it'--knowing full well, I will care and grow that money for our retirement years, as I have with all other money I've gotten my hands on in the past 4 decades.

I'm not saying that our method is right for all (even though I do believe everyone needs some money of their own), but I do wish to illustrate that there are many, many different methods that couples can use, that may work for them. Lastly--I have to make this point--if you knew us, you'd agree that there are few people you know in life who are more married, more devoted to each other than my DH and I--keeping money separate is NOT a detriment to a good marriage, any more than dumping it together will insure one will never get a divorce. Every couple is different, and the more important thing is that the two of you work together, agree on how you will manage money, and then follow through responsibly.


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RE: Finances for married couples

"...keeping money separate is NOT a detriment to a good marriage..."

Thank you!


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RE: Finances for married couples

I can't imagine having to balance a checkbook every month that's being used willy-nilly by 2 people--it's much simpler to each have your own.

In my case, after many years of marriage, this is not a problem -- then again, we don't use it "willy-nilly".

Separate accounts can be a problem if a husband or wife is leading a secret life. This happened to a friend of ours; she had no idea her DH was leading a double life until it suddenly it came to light after he abandoned her and their children -- just took off and didn't come back. His separate account made it possible for him to keep both women ignorant of each other for a long period of time (more than 10 years).

IMHO, no money-management system is foolproof.

Every couple is different, and the more important thing is that the two of you work together, agree on how you will manage money, and then follow through responsibly.

I totally agree.


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RE: Finances for married couples

"Separate accounts can be a problem if a husband or wife is leading a secret life. This happened to a friend of ours; she had no idea her DH was leading a double life until it suddenly it came to light after he abandoned her and their children -- just took off and didn't come back. His separate account made it possible for him to keep both women ignorant of each other for a long period of time (more than 10 years)."

Trust me on this--the separate accounts were NOT the cause of that marriage's failure. With or without a separate account, anyone determined to lead a double life will find a way. You can't blame that on the couple's choice of money management. That was a doomed marriage, no matter how they organized their money.

I don't think anywhere in my post, did I say that each couple should keep their finances SECRET, btw--I just said that each should have money of their own to manage. Maybe I assumed that people would realize that honesty and openness is definitely essential to a good marriage. DH and I may keep our money separate, but we each know WHAT the other has, where it's invested, how to access it in event of an emergency, etc. None of it is secret, unless you count the temporary 'secret' of money spent for a gift for the other.

However, I did say, a couple of times, that it's important for couples to work out a system that works for them. I was merely illustrating how separate finances has been successful for us. Not everyone likes the idea of having separate money--and that's fine, as long as they find a way to keep the bills paid, save for longterm needs like the kids' college, their own retirement, etc.


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RE: Finances for married couples

azzalea, I did not say (and do not believe) separate accounts were the cause of that marriage's failure.

What I did say was that the separate accounts made it possible for that husband to lead a double life. He was able to keep two women completely ignorant of each other for more than 10 years.

That's not to say (or even imply) that separate accounts are necessarily problematic. I simply mentioned a possible issue that many people may not consider.

ITA with you that it is important for couples to work out a system that works for them. I also made the point that a common checking account (and other accounts, as well) have been successful for us.


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