Whether it was selling old toys at a garage sale or doing office work during the summers, I’ve learned how to manage money fairly well over the years. Along the way I learned some interesting lessons. One, is that it was wasteful to plunk $20 on drugstore makeup because I thought it was funny — gold and purple lipstick? I want that money back! — and how wasteful eating out can be when I had already bought food and it would eventually go bad. Frivolous spending now can delay saving toward something you really want. Like a house, car or even just a fun trip.
Money is also a powerful tool: known to create a void in relationships, even those with families and close friends. So, how do two adults manage money in a marriage?
Into our engagement, we started the process of combing our finances. First, we started making financial decisions together. We decided to contribute to our individual savings accounts that would eventually be used for a down payment on a house. There were also decisions on wedding spending — do we spend money on wedding things, or put it towards the honeymoon or a house down payment?
Matt and I with the key to our first home we bought together -- after years of saving!
It wasn’t until our honeymoon that the concept of “our money” officially hit me. A poolside lava flow cocktail was $12. Do I ask my new husband if that was okay? Suddenly my determination of an object’s value seemed different: $12 was fairly reasonable from a resort bar, but I couldn’t help but think what he would be sacrificing in order for me to enjoy a pricey, icy tropical beverage.
Two years later, I still struggle with this. I don’t have a problem with him spending “my money” or vice versa — which can be an issue for some — it’s the problem of deciding how to spend it. Will I always have to ask permission before buying or do I risk feeling guilty for selfishly spending?
Some handle the “our money” issue by eliminating the idea completely. Each person will manage money with separate accounts and split expenses so each is paying “their fair share.” I must admit, I’m not too familiar with this idea, as I don’t know many people who adhere to it. If you do, I’d love to hear more about it.
However, Matt and I do a little bit of this separation, because we each had established credit cards before we were engaged. We combined what was easy enough — for example, our Costco accounts — but we still pretty much use our own credit cards. Yet, our incomes are deposited into a joint account where we pay for our credit cards and other expenses. It takes a certain amount of trust for this plan to work. It’s not ideal, but it works for the time being.
Do you have a set strategy in how to deal with combined finances? What has helped you in combining finances?
We combined finances as soon as we were married and always have. All of our income goes into one “pot” and all of our expenses come out of that pot. We don’t really have a set pattern on how we decide what to buy (or what not to buy). So, I have no personal wisdom to share!
One couple I knew years ago had “allowances.” This could be cash they pulled out, or just a set dollar amount they agreed for each to use each month. Each one could use their “allowance” for whatever they wanted, save it up, spend it, etc. (It would be easier to save it up if you pull out the cash and hide it somewhere, though.) They agreed that the other wouldn’t have any say in what they did with their money. (If one thought the other spent his or her money stupidly, it didn’t really matter.) It didn’t interfere with regular finances because they had set it aside, and they each got to decide how to treat themselves – or not. It seemed to work for them.
My bf and I split everything 50-50 (obviously, since we’re not married, you can see how that makes sense). We have since we moved in together last year.
Where it starts getting mixed up is me not having a job now. However, I was the one with the savings before, so I took a little more than half the load while he was building up his. Now I’d say its 25-75… until I can score some employment
I think splitting things is fine as an unmarried couple, but it does lead to arguments sometimes. And also, the questioning still occurs. “Why do you need that? We should be saving money for something else,” etc. I guess there’s always positives and negatives to each side.
I am a SAHM now, so there is only one income, but I worked for the first 8 years of our marriage and we tried different things to make the “our money” situation go as smoothly as possible. I always balanced the checkbook, and I didn’t want to fall into the role of “mother” letting him know if we could afford something, etc., giving him permission to spend money etc., and I also didn’t want to feel resentful of what he spent money on so what finally worked best for us is this: We had 3 checking accounts and a savings account. Both of our paychecks were automatically deposited into one account, and we both contributed a certain amount to savings and then we had a set amount of “allowance” per paycheck that we deposited into the other two accounts. I no longer had to tell him “yes, we can afford it” or “no we can’t,” Christmas presents were easier to keep secret, and I didn’t feel bad about spending money b/c it was officially mine. (I had the tendency to not spend because I was scared we would need the money and then I would resent his ability to buy something for himself). It was perfect. Most of our fights diminished because either we had enough allowance or we didn’t.
Jamie — I like that idea! I was just chatting with a girlfriend of mine who said they do a similar thing. I think some of my aversion to it in the past had to do with managing all the different accounts, but come to think of it, we already have three checking accounts. And I totally commiserate with you about the not spending and then watching closely my husband’s spending. Thanks for sharing!
We do the allowance thing too, it means he can’t judge me when I spend all my money on fabric or yarn! haha But the separate account is a great non-cash way of doing allowances!
We are still trying to work on smoothing out the kinks; but we have established a generally good framework…we each have separate personal checking accounts for what some label “allowance” and then we have a joint savings and a joint checking account that all our bills come out of. The tension comes from the fact that my paycheck is directly deposited into the joint account, but his is directly deposited into his own account…for nearly a year, he would take cash out of his account when he remembered (or I had reminded him enough) and deposit it into the joint account…or in later months give it to me to deposit into our joint account after I got off from work. Now, at least he has ordered checks for his personal account and just writes a check to our joint account…but this also tends to happen on an “as he remembers” basis…
So, my advice if you go for the joint account with individual “allowance” accounts is to very firmly establish upfront that absolutely all direct deposits go to the joint account and you allot the others from there…my experience tells me that this would work much more smoothly…