"Should couples combine finances or keep personal accounts?"

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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WoodSpinner
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Re: "Should couples combine finances or keep personal accounts?"

Post by WoodSpinner »

AlohaBill wrote: Tue May 30, 2023 11:14 am On our wedding day night at a hotel near Honolulu’s airport, I took off my pants and offered them to my bride. I told her in no uncertain terms that I wanted nothing to do with everyday monetary affairs. She grabbed said pants (never giving them back) and said she wanted me to drive her everywhere. Since then she keeps the checkbook, pays the bills (I plug in the numbers on the computer) and says “no” to most of my ideas that involve spending her PRECIOUS money. I have driven her in Japan, Hawaii, Saudi Arabia and California. One of the reasons I assented to cardiac surgery was she said I still needed to drive her around. 8-)
Great story, gave me a chuckle this morning!

Must say I am a bit surprised but thrilled it has worked so well for both of you!

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AlohaBill
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Re: "Should couples combine finances or keep personal accounts?"

Post by AlohaBill »

Hi all,
Herein lies the truth. I am a very cheap, lazy boy from New England and my girl is an even cheaper Chinese Hawaiian girl. At said hotel almost 44 years ago, I expected her to kowtow and give in to me, the magic man. I never stood a chance.
In Saudi Arabia she suggested I do something about investing which became my hobby. I dazzled her with my manly knowledge of investing secrets. For 10 years, we never had more than 25% stock and after that for 11 years never more than 75%.
One time she mentioned that we were spending more than we were taking in. I felt the rath of her displeasure. I vowed it wouldn’t happen again. I was so guilty, but,but,but she had the checkbook.?
I get a kick when my dear one returns from shopping and finds an irregularity in the bill. It’s a disaster! However, when I tell her that we lost $50,000 in a day, she says: 1. Don’t let it happen again or 2. Maybe we need a new fellah. When I tell her we cleared $25,000 in a day, she just shrugs.
Sorry to ramble. After decades of worrying about checkbook finances, about if we will have enough, yet we do have enough: sons, daughters in law, and grandchildren. It is the amount of time left together that we don’t have an abundance of.
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

Wanderingwheelz wrote: Thu Jun 01, 2023 7:32 am I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together).
To be clear, everyone understands what you're doing and it wasn't a criticism. I was just opining that if the roles were reversed (i.e. you have a side business) then your spouse would likely claim their share of the business (regardless of contributions or a lack thereof).
LizBoots
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Re: "Should couples combine finances or keep personal accounts?"

Post by LizBoots »

Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
We maintain joint savings and investments accounts (except for inheritance money) but have always maintained separate checking accounts. It has worked well for 35 years and we have literally never had a disagreement about money.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

Marseille07 wrote: Thu Jun 01, 2023 11:31 am
Wanderingwheelz wrote: Thu Jun 01, 2023 7:32 am I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together).
To be clear, everyone understands what you're doing and it wasn't a criticism. I was just opining that if the roles were reversed (i.e. you have a side business) then your spouse would likely claim their share of the business (regardless of contributions or a lack thereof).
When two people are properly married it really doesn’t matter very much who’s name is on this or that. Our nicest vehicle is owned by her business. Does that mean I don’t drive it? Of course not. Does that mean the other vehicle is in my name only? No. When you completely trust a person you just don’t care about those sorts of things.

Also, what I’m talking about isn’t a side business- especially one that was started with marital assets. She was a kid who took a big chance on a dream and got a pretty big bank loan and paid a big price you achieve her dream. She didn’t even have enough money to buy food so she had to run up credit card debt for the first couple of years (this was before I knew her).

This is likely to set your hair on fire, but I made her a large loan not long after I met her because she wanted to make a gamble on growth that thankfully ended up paying off big. I don’t recall how large but I’m sure it was more than $25,000. I can’t recall if she repaid me but it never mattered one way or another.

How a couple titles their assets isn’t what causes money problems- it’s spending. We have very similar spending styles, which is a blessing for any relationship. My uncle died last week and because he was a surgeon just about all of their assets were owned by his wife, at least years ago when they were raising 6 kids. I remember my mom telling me that a long time ago. They’re wealth is large enough now that their farm has been donated to fund the cancer center at the local hospital. It’s their name on the building.

No matter how tightly you hug your money it’ll never hug you back.
Being wrong compounds forever.
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

Wanderingwheelz wrote: Thu Jun 01, 2023 11:52 am When two people are properly married it really doesn’t matter very much who’s name is on this or that. Our nicest vehicle is owned by her business. Does that mean I don’t drive it? Of course not. Does that mean the other vehicle is in my name only? No. When you completely trust a person you just don’t care about those sorts of things.

Also, what I’m talking about isn’t a side business- especially one that was started with marital assets. She was a kid who took a big chance on a dream and got a pretty big bank loan and paid a big price you achieve her dream. She didn’t even have enough money to buy food so she had to run up credit card debt for the first couple of years (this was before I knew her).

This is likely to set your hair on fire, but I made her a large loan not long after I met her because she wanted to make a gamble on growth that thankfully ended up paying off big. I don’t recall how large but I’m sure it was more than $25,000. I can’t recall if she repaid me but it never mattered one way or another.

How a couple titles their assets isn’t what causes money problems- it’s spending. We have very similar spending styles, which is a blessing for any relationship. My uncle died last week and because he was a surgeon just about all of their assets were owned by his wife, at least years ago when they were raising 6 kids. I remember my mom telling me that a long time ago. They’re wealth is large enough now that their farm has been donated to fund the cancer center at the local hospital. It’s their name on the building.

No matter how tightly you hug your money it’ll never hug you back.
We're talking about two different issues here.
a) married life day-to-day: I 100% agree spending causes money problems, not assets.
b) the D-word happens: this is when who's name is on this or that matters, and which state you live in (community property vs separate property).

Either way, I wasn't criticizing how you run things and I'm glad it's working out just fine (I wasn't suggesting doom and gloom either, though).
AlaskaTeach
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Re: "Should couples combine finances or keep personal accounts?"

Post by AlaskaTeach »

Taylor Larimore wrote: Mon May 29, 2023 7:19 pm Bogleheads:

An important decision that all couples face is whether to keep separate or combined financial accounts.

Pat and I were married 62 years. We started out with combined finances. She was a spender and I was a saver which began to undermine our marriage. Fortunately, we decided early to change to separate accounts which solved our problem.

What do you think?

https://www.morningstar.com/news/market ... tudy-finds

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: “Learn every day, but especially from the experiences of others. It's cheaper!”
Thanks for the inspiration. When my dw and I moved to Alaska in 2018, we vowed "never again" to be in credit card debt, which she obviously did not mean. She is the spender and I am the saver. At some point a couple of years later I got some really good advice from a friend, who suggested a debit card for her with a limit. I tweaked the idea and came up with an "allowance." My salary is much stronger than hers, so she gets money or the value of money..i.e. me paying her car payment and insurance. I got my own checking account and bam! The $ stacked up big time fast. I have been in the northwest part of Alaska for two full years now, and am feeling much better.

There is hope. When I moved up north, I thought I would have to work in education until age 67. My target age quickly moved down, and I am about to pay off a 2022 car. My current target age to retire is 62, and depending upon how things go could easily go down to 61. (I am 58)
ChicagoBear7
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Re: "Should couples combine finances or keep personal accounts?"

Post by ChicagoBear7 »

We have been married over 37 years. We started out as an "everything joint" couple. After about 18 years, we went to an estate planning attorney to establish our estate plan. We were advised to split our assets due to the extremely low estate tax exemptions at the time, @$600k. So we re-titled all of our bank accounts, brokerage accounts, and real estate into one of the trusts. Now, maintaining the trust ownership is not a problem. Our decision was more "keep it away from Uncle Sam" than "I want mine".

While our assets are split between our individual trusts (and retirement plans), there is full disclosure, access and coordination as to which account will be used for which large expense - along with a joint checking account outside of the trusts for routine expenses (as suggested by the attorney, and the amount maintained there is well within the small estate limit in this state).

We had the trusts amended and restated about 11 years ago - the recent birth of our first grandchild and the retirement of our old attorney is finally prompting us to go in for a "check-up" this summer. Since our state has an estate tax, the two trust arrangement is still relatively popular, given our asset size, even though we are below the current federal estate tax limit. So it looks like the "separate, but together" ownership style will continue.
advice789
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Re: "Should couples combine finances or keep personal accounts?"

Post by advice789 »

When first married, we did joint, with understanding that either could use funds and inform other, note inform, not seek approval. We also met with a financial planner, Garret network, for retirement planning purposes. Wife did not work. After a six months, wife felt uncomfortable to not earn money. She had worked in the past, and the need to update husband of spending reduced her sense of independence. I do not remember an instance to voice a no, but recognized the desire for independence. At that point, we transferred a set amount to a separate account in her name. She felt better for the independence. Did same for myself. Later her former boss asked her to return. At that point, we deposited pay in separate accounts and transferred money for joint expenses. She is more a spender and made me appreciate using money for happiness vs am more a saver.
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Tyrael314
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Re: "Should couples combine finances or keep personal accounts?"

Post by Tyrael314 »

Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
Off the top of my head

1) Simplicity
2) Being on the same page
3) treating money as “ours”

I fully realize this doesn’t work for everybody.
"A society grows great when old men plants trees under whose shade they know they shall never sit."
Mr. Buzzkill
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Re: "Should couples combine finances or keep personal accounts?"

Post by Mr. Buzzkill »

Best of both worlds here.

Joint accounts for combined household expenses and investments that we agree on.

Plus separate accounts that we manage on our own.

Makes a little more work each year for tax paperwork and budgeting to negotiate and agree on the splits between three accounts but prevents arguments and poor communication rest of the year.
A strategy that works only in bull markets isn’t much of a strategy. Anyway, four dollars a pound.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

Marseille07 wrote: Thu Jun 01, 2023 12:01 pm
Wanderingwheelz wrote: Thu Jun 01, 2023 11:52 am When two people are properly married it really doesn’t matter very much who’s name is on this or that. Our nicest vehicle is owned by her business. Does that mean I don’t drive it? Of course not. Does that mean the other vehicle is in my name only? No. When you completely trust a person you just don’t care about those sorts of things.

Also, what I’m talking about isn’t a side business- especially one that was started with marital assets. She was a kid who took a big chance on a dream and got a pretty big bank loan and paid a big price you achieve her dream. She didn’t even have enough money to buy food so she had to run up credit card debt for the first couple of years (this was before I knew her).

This is likely to set your hair on fire, but I made her a large loan not long after I met her because she wanted to make a gamble on growth that thankfully ended up paying off big. I don’t recall how large but I’m sure it was more than $25,000. I can’t recall if she repaid me but it never mattered one way or another.

How a couple titles their assets isn’t what causes money problems- it’s spending. We have very similar spending styles, which is a blessing for any relationship. My uncle died last week and because he was a surgeon just about all of their assets were owned by his wife, at least years ago when they were raising 6 kids. I remember my mom telling me that a long time ago. They’re wealth is large enough now that their farm has been donated to fund the cancer center at the local hospital. It’s their name on the building.

No matter how tightly you hug your money it’ll never hug you back.
We're talking about two different issues here.
a) married life day-to-day: I 100% agree spending causes money problems, not assets.
b) the D-word happens: this is when who's name is on this or that matters, and which state you live in (community property vs separate property).

Either way, I wasn't criticizing how you run things and I'm glad it's working out just fine (I wasn't suggesting doom and gloom either, though).
I know divorces happen. Been there, done that.

It’s true a) and b) are different things. That said, money is scarce compared to assets after you reach a certain point in life- once you accumulate enough money, you acquire another asset. Rinse, repeat. Before you know it you’ve got way more assets than money. And that’s where divorces can happen- one likes money, and the other prefers assets. The important question I think is what claim does one have on an asset where no money was paid for its acquisition- regardless of whether you’re married or seeking to dissolve one. I think it’s okay to benefit from something that you didn’t create or buy, as long as the other party is happy to share.
Being wrong compounds forever.
ETCS10
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Re: "Should couples combine finances or keep personal accounts?"

Post by ETCS10 »

Married 32 years and have an hybrid approach. Combined for all household expenses, investing, vacations, major purchases. Both have separate checking and CC accounts for discretionary spending. Wife wants to get mani/pedi, lunch with friends, new outfit, etc she uses her account. I want any mani/pedi, lunch with friends, etc I use my account. We decided jointly on monthly allowance to the accounts. When younger and money was tight I believe this approach saved us from overdrafts and fights.

The whole idea of the separate accounts came about from being in the service. Prior to being married when the ship pulled into a port all the married sailors would head to the pay-phones and see how much money they could withdrawal or after a few days in port calling to ask for more. Decided then that if I got married I would not be tied to phone call asking if I could withdrawal money.
ProsperGoalzz
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Re: "Should couples combine finances or keep personal accounts?"

Post by ProsperGoalzz »

Each couple should do what works best for them. Taylor, I think it's wonderful that you and yours figured that out and that it has worked for all of those years!

As for us, we moved to separately as well. We married later in life. One makes significantly more, owns property, has a child, is frugal. The other makes less and is a spender. The vegan didn't like paying for pasture-raised/wild animal protein. The other disliked paying for golf, toys and snack foods. Neither of us felt we had "enough". We now both feel to spend what we want on what we want, and we feel We each have enough. We take responsibility for ourselves. (No control issues!!) We split bills equitably and are generous with one another. The spendthrift is learning moderation given the $ is finite. This lesson should be learned by the time they retire :sharebeer
invest4
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Re: "Should couples combine finances or keep personal accounts?"

Post by invest4 »

Whatever works…even if it seems strange to us.

For us, it was never a question. We combined finances when married. From onset, I was much more interested in the financial side of things, although she willingly did the paying of the bills while I did the taxes.

Overall, we have similar attitudes toward money, which like many other things in marriage where you are easily aligned…helps.

When our first child was born, we decided she would be a stay at home Mom (what she always wanted) and have lived on a single income since.

I took over all of the finances and our marriage has been pretty traditional as far as our roles. In particular, while we discuss money matters together, I will have the final decision on large purchases. While there are some disagreements (should we buy a swimming pool?), we manage and keep going.

Of course, it is also helpful thst we have never had any money issues which can be such a stress on the family and marriage, which is also a huge help.
Cruise
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Re: "Should couples combine finances or keep personal accounts?"

Post by Cruise »

My wife and I started living together (in sin) 40 years ago shortly after grad school. At the time, how to handle our mutual expenses was a topic of discussion. I made around $21K a year and she made around $18K. She wanted to contribute to our joint account proportionate to our income. I countered that we were in this relationship 50/50, and that should be our contribution. She relented, and the concept that we have an equal relationship thrived. We only had joint accounts where all our income went, except for my business account. Over the first three decades, I earned more. I then cut back, sold my business, and her career skyrocketed over the last decade. Her pension income dwarfs mine, and will for the remainder of our lives. I’ve got way more in retirement accounts, and contributed way more to our joint non-retirement investment account. It sure would have complicated our lives if we had to rebalance our financial contributions every year. I can’t recall any strife over finances as we respect each other and have similar LBYM outlooks.

If she were to predecease me and if I were to remarry, it would be a different story and a prenuptial agreement would be important. Whether or not the 50/50 rule was imposed would depend on our level of wealth disparity.
Last edited by Cruise on Fri Jun 02, 2023 3:31 pm, edited 2 times in total.
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Elric
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Re: "Should couples combine finances or keep personal accounts?"

Post by Elric »

We had separate accounts for decades after marriage, and it worked very well. As we moved to retirement, we simplified and now have one combined checking account, one combined savings account, and a joint brokerage account.

But in our case, it was in practice, not by whose name was on the account. All three checking accounts (mine, hers, and ours for joint expenses) were in both of our names. But I didn't touch hers and she didn't touch mine. This avoids some of the downsides mentioned in the article. We did proportional allocation of joint expenses. I didn't need to ask to spend "my" money, she didn't need to ask to spend "hers." It all worked very well. As we moved to retirement, we changed not because the old system didn't work, but just to simplify as we moved to decumulation.
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JayDee37
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayDee37 »

pizzy wrote: Tue May 30, 2023 10:57 am
JayDee37 wrote: Tue May 30, 2023 10:42 am Thank goodness! My fiancé has a ton of debt that I do not want to be responsible for, ever.
Money is fungible. How do the mechanics of payoff work once married? The net result is the same.
There are results other than "net dollar amount left over" that matter to people. In this particular case my determination not to pay off any of my fiancé's debt is in service of some of these other results. He has never developed the habit of living below, or even within, his means. He has historically used debt to finance his desired lifestyle and extravagant gifts for his kids that he could not afford, and relied on outside events (an unexpected windfall, his parents) to rescue him from his poor financial decision making. I am not enabling that behavior. He makes over twice as much money as I do--he will just have to dedicate a larger portion of his income to debt service.
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sketchy9
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Re: "Should couples combine finances or keep personal accounts?"

Post by sketchy9 »

UpperNwGuy wrote: Mon May 29, 2023 10:33 pm I think the best of both worlds is to have three accounts: his, hers, and ours.
We do the same. Paychecks go into a common account which covers most of our spending (food, bills, travel, etc.). We each get an equal monthly allowance transferred into our own accounts to do with as we please. I make more than her by about 50%, but in the eyes of our state government, and consequently us, it's all community money and is treated as such.
Youngbuck21
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Re: "Should couples combine finances or keep personal accounts?"

Post by Youngbuck21 »

Wife and I are both 38 been married for 14 years. We have always had separate bank accounts. She has a credit/debit card that my name is on that we share. She makes about 25k/year more than I do (I'm cool with that, no power struggle issues from me lol) we have a combined income over 200k. I pay the mortgage (2 years remaining whoop whoop), car insurance, life insurance, and kids 529 accounts each month. I'm pretty much broke after that. She pays the remaining bills and if I need anything I just give her a heads up and put it on her debit card. Its always worked for us we don't fight over money and we both have really good saving habits. Everyone at work tells me how weird this is but I already purchased my home while she was finishing up college so I never really felt the need to combine everything. I was already used to paying the majority of the bills. We just use her account for spending money.
digit8
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Re: "Should couples combine finances or keep personal accounts?"

Post by digit8 »

Married 16 years, we didn’t have much of a grip on finances to star or we might have combined them. It worked out well though. She’s with the state, underpaid but great insurance and very secure while I’m in banking, overpaid but prone to potential layoff. Every weekend we go through the bills and she writes checks from hers to cover our basics(yes she still insists of physical checks for things like the utilities) and I move money around from mine for the mortgage and retirement investing. I am also the one who sets aside money to two accounts every month, one for emergencies and one for the big ticket family purchases.
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Maverick3320
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

Marseille07 wrote: Thu Jun 01, 2023 11:31 am
Wanderingwheelz wrote: Thu Jun 01, 2023 7:32 am I don’t know why at least two people here were unable to understand from what I wrote that we own everything of significant value jointly that we acquired after marriage (I.e. together).
To be clear, everyone understands what you're doing and it wasn't a criticism. I was just opining that if the roles were reversed (i.e. you have a side business) then your spouse would likely claim their share of the business (regardless of contributions or a lack thereof).
This. I wasn't criticizing your actions, Wanderingwheelz, I was trying to understand your statement that "everything is combined except for the company that my spouse owns". That company is a pretty big outlier in an argument toward combining everything.

Personally I believe everyone should do what's right for them - there is obviously no one-size-fits-all.
Maverick3320
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

Tyrael314 wrote: Thu Jun 01, 2023 1:06 pm
Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
Off the top of my head

1) Simplicity
2) Being on the same page
3) treating money as “ours”

I fully realize this doesn’t work for everybody.
#1: I guess I don't see how it's more simple, unless both spouses are having their paychecks deposited into a joint account. Your retirement assets are separate to begin with as well. Since it seems that combined finances usually involves one spouse managing the money, either divorce (40% chance) or death of the spouse that manages the money (50%) first could make combined finances actually more complex.

#2: You can be on the same page regardless of whether you combine everything or don't combine everything.

#3: I still don't understand what you are trying to say here.

I'm not arguing against combined finances - there are tradeoffs either way. It just seems like your quote could just as well be an argument in favor of not combining finances.
Bh1984
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Re: "Should couples combine finances or keep personal accounts?"

Post by Bh1984 »

I believe this topic is interesting and the position changes depending on how old you get married, how many marriages you've had and how much money each person makes. I've seen significant others go to jail because of the financial fraud of their partners. You just never know what's going on sometimes.
randomguy
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Re: "Should couples combine finances or keep personal accounts?"

Post by randomguy »

Maverick3320 wrote: Tue Jun 06, 2023 11:52 pm
Tyrael314 wrote: Thu Jun 01, 2023 1:06 pm
Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
Off the top of my head

1) Simplicity
2) Being on the same page
3) treating money as “ours”

I fully realize this doesn’t work for everybody.
#1: I guess I don't see how it's more simple, unless both spouses are having their paychecks deposited into a joint account. Your retirement assets are separate to begin with as well. Since it seems that combined finances usually involves one spouse managing the money, either divorce (40% chance) or death of the spouse that manages the money (50%) first could make combined finances actually more complex.

#2: You can be on the same page regardless of whether you combine everything or don't combine everything.

#3: I still don't understand what you are trying to say here.

I'm not arguing against combined finances - there are tradeoffs either way. It just seems like your quote could just as well be an argument in favor of not combining finances.
You end up with different streses. If you keep things separate, you have figure out joint expenses and have stress of different incomes (one is making 200k and can spend a lot more than the one making 50k). Mix them up and you have stress of the spouse complaining about how you spend the money. You have to figure out which one is easier for you to live with...
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Re: "Should couples combine finances or keep personal accounts?"

Post by NYCaviator »

randomguy wrote: Wed Jun 07, 2023 6:45 am You end up with different streses. If you keep things separate, you have figure out joint expenses and have stress of different incomes (one is making 200k and can spend a lot more than the one making 50k). Mix them up and you have stress of the spouse complaining about how you spend the money. You have to figure out which one is easier for you to live with...
This is a great point. We are joint everything with vastly different incomes. Even if we paid a proportion of joint expenses based on our incomes, one spouse would have a lot more “fun money” in their account than the other, which I don’t think is fair. With joint accounts we have shared goals and are more accountable. We spend freely within reason, but before either spouse makes a big purchase they talk to the other. I can tell you my spouse has definitely saved me from making some stupid purchases that I would have regretted later :D

Works for us, but I totally respect that it may not for everyone. Also helps that we didn’t get married with a bunch of premarital assets so we built what we have together.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

NYCaviator wrote: Wed Jun 07, 2023 7:21 am This is a great point. We are joint everything with vastly different incomes. Even if we paid a proportion of joint expenses based on our incomes, one spouse would have a lot more “fun money” in their account than the other, which I don’t think is fair. With joint accounts we have shared goals and are more accountable. We spend freely within reason, but before either spouse makes a big purchase they talk to the other. I can tell you my spouse has definitely saved me from making some stupid purchases that I would have regretted later :D

Works for us, but I totally respect that it may not for everyone. Also helps that we didn’t get married with a bunch of premarital assets so we built what we have together.
As far as paying living expenses (not discretionary fun money), the fairest is to pay what you consumed. Food eaten, clothes bought, a portion of housing cost etc etc.

Now this would be a nightmare to track, and hardly anyone does this; so the next fairest thing is to simply split 50/50 *regardless of* income levels. It's actually unfair that the higher earner has to foot a bigger bill just because they earn more, since consumption has little to do with income.

Of course, whether you want to strive for fairness or not is a different question.
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayDee37 »

Marseille07 wrote: Wed Jun 07, 2023 11:23 am
As far as paying living expenses (not discretionary fun money), the fairest is to pay what you consumed. Food eaten, clothes bought, a portion of housing cost etc etc.

Now this would be a nightmare to track, and hardly anyone does this; so the next fairest thing is to simply split 50/50 *regardless of* income levels. It's actually unfair that the higher earner has to foot a bigger bill just because they earn more, since consumption has little to do with income.

Of course, whether you want to strive for fairness or not is a different question.
This is *one* idea of fairness. It is not the only one. A number of people on the board (of which I am one) have a different idea, namely, that proportional expense-sharing is fair.

I don't want to get into a debate about whether there is an objectively true, ideal definition of fairness. I doubt there is a point to that. I do believe that the question of whether 50/50 or proportional allocation is "the fairest of them all" is one of those things where reasonable people can disagree. Neither is wrong, people just have different instincts about this.
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Cruncher
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Re: "Should couples combine finances or keep personal accounts?"

Post by Cruncher »

Combined.

With a mug like mine, wife knows I am not having an affair.

JK, works for us though. 28 years.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Elric »

JayDee37 wrote: Wed Jun 07, 2023 3:32 pm
Marseille07 wrote: Wed Jun 07, 2023 11:23 am
As far as paying living expenses (not discretionary fun money), the fairest is to pay what you consumed. Food eaten, clothes bought, a portion of housing cost etc etc.

Now this would be a nightmare to track, and hardly anyone does this; so the next fairest thing is to simply split 50/50 *regardless of* income levels. It's actually unfair that the higher earner has to foot a bigger bill just because they earn more, since consumption has little to do with income.

Of course, whether you want to strive for fairness or not is a different question.
This is *one* idea of fairness. It is not the only one. A number of people on the board (of which I am one) have a different idea, namely, that proportional expense-sharing is fair.

I don't want to get into a debate about whether there is an objectively true, ideal definition of fairness. I doubt there is a point to that. I do believe that the question of whether 50/50 or proportional allocation is "the fairest of them all" is one of those things where reasonable people can disagree. Neither is wrong, people just have different instincts about this.
I agree with JayDee37. And even proportional may not go far enough in some circumstances to be "fair," although that's how my wife and I handled expenses while we were working.

Adam Smith wrote about equivalent "pain" and stated, "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

Elric wrote: Wed Jun 07, 2023 9:38 pm Adam Smith wrote about equivalent "pain" and stated, "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
Being reasonable and being fair are two different things. In many cases people may accept unfair arrangements because they think it is reasonable to do so, and they may even genuinely believe they are getting a fair deal. I didn't say anything is wrong with that.
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Re: "Should couples combine finances or keep personal accounts?"

Post by crinkles2 »

Combined

She does have her own account for minor things though

What's mine is hers and what's hers is hers
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Re: "Should couples combine finances or keep personal accounts?"

Post by loukycpa »

I was married for over 26 years and we always had combined finances. I was always the higher earner. We started with essentially zero net worth. We divided our assets ($2.8M) evenly in the divorce.

Our maintenance agreement calls for us to split our combined incomes so that we both have an equal amount to spend annually after taxes. According to my divorce attorney this is an unusual arrangement but it works for us.

I am in a new relationship and we are cohabiting. I don’t anticipate we will combine our finances for various reasons.

I am generally agnostic on the subject. What works for one couple at one stage of life may not work for another couple, or even the same two people if they meet at a different stage of life. Personality, style of living, children etc. There are a lot of valid reasons to keep finances separate and I see no reason for dogmatism.
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Re: "Should couples combine finances or keep personal accounts?"

Post by weimanxi »

22 years married. Husband has always made a lot more than I do, expecially when I took time off to be at home when the kids were small.

We are generally on the same page about daily lifestyle, investing and long term goals, but he has some more expensive hobbies. It caused some friction early on.

We quickly settled into a yours-mine-ours system where both paychecks go into joint checking and we get an equal amount of individual discretionary spending, no questions asked. Investments, bills, home, food, vacations, are all out of the joint account.

He spends his on...I'm not sure. Fishing rods? I don't even ask. I invest most of mine in an index fund (after paying for the occasional mani/pedi or newly released book). It makes me feel more secure and keeps us both happy .

We occasionally bicker if an expense is from the joint or solo account. Like a for a deep sea fishing trip, if the family eats the fish. :annoyed
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Re: "Should couples combine finances or keep personal accounts?"

Post by quantAndHold »

We lived together for 14 years before we were married, and never expected to be able to get married. We were both adults with careers and assets before we got married, but I always made about twice as much as my wife.

When we first moved in together, we opened a joint account for our household expenses. Mortgage, utilities, food, etc. Since I made twice as much, I contributed twice as much to the account. The rest of our money was ours alone. My wife argued with the split at first, because she wanted to “pull her own weight”, but I was able to convince her that it was more fair to split household expenses according to income.

Over the years, as we learned to trust each other’s financial sense, we gradually moved more and more of our individual expenses into the household column. Haircuts, vacations, cars. After about ten years, we knew we were together for life, nearly everything was being paid for out of the joint account, and keeping track of the three checking account system was getting annoying, so I threw everything together into one account. It was also around that time that I started treating our retirement assets as though they were “ours” instead of hers and mine, even though legally, they were still hers and mine.

A couple of years later, we were finally able to get married, and we haven’t looked back. Marriage is a gift that I think straight people sometimes take for granted.
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Re: "Should couples combine finances or keep personal accounts?"

Post by BrooklynInvest »

From my perspective -

Being "on the same page" and combining accounts are not the same thing. In our case (got married later, me for the second time) they're completely unconnected.

Separate accounts for the most part. Expenses (house, kid, entertainment) are split roughly equal. My wife spends far more on clothes than I do and likes to keep our boy well dressed (but from Target!) but I have a nice motorcycle and, some would say, expensive camera gear. All evens out give or take.

We've never had a fight about money. But we got married at a time when we were both solvent and doing OK so there's always been enough of it to support our only occasionally high end lifestyle. She's benefitted from my fiscal prudence. I've loved splurging on occasional fancy vacations and high end dinners. Things I wouldn't have done myself but could have.

Large spends and ongoing money management are discussed openly. I think that's the only part that really matters.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Lazareth »

Never having to ask, "Honey what was this $$ charge for?" is priceless.

Forty years happily married. Our respective checking accounts are at separate banks, but in joint ownership. Everything else...the important stuff.... joint taxable brokerage/investment accounts, and our retirement accounts are all under one joint Bogel-friendly brokerage.

Tax, mortgage, utility payment duties change over the years as our respective situations evolve i.e. full-time executive, raising kids, retirement, second career etc. If one checking account gets lop-sided, we simply adjust by allocating a major purchase or the annual Roth contribution payments etc. I wouldn't want it any other way.
a/69, retired, married, enjoy p/t employment. Three-fund portfolio, after decades of chasing active-managed fund performance.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Sandwich »

Lazareth wrote: Thu Jun 08, 2023 11:09 am .... Our respective checking accounts are at separate banks, but in joint ownership. Everything else...the important stuff.... joint taxable brokerage/investment accounts, and our retirement accounts are all under one joint Bogel-friendly brokerage

Tax, mortgage, utility payment duties change over the years as our respective situations evolve i.e. full-time executive, raising kids, retirement, second career etc. If one checking account gets lop-sided, we simply adjust by allocating a major purchase or the annual Roth contribution payments etc. I wouldn't want it any other way.
Same here.
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Re: "Should couples combine finances or keep personal accounts?"

Post by 28fe6 »

Answers to this question, as with many questions like it, depends entirely on the people involved. There is no generic advice because the circumstances, people, etc. is all individual.

My wife and I started with finances combined. That was the natural expectation and the model from our parents.

It would have destroyed our finances for certain, and our marriage probably. We had a "financial divorce" which has been very successful (both financially and relationally) for over ten years now. I only regret all the money lost and tears spilled by not doing it sooner.

If you have never been in a close relationship with a true "spending" personality, you would not understand what a disaster it is or how deep of a behavioral addiction it is for them. I have much more respect for those who manage hoarding, gambling, substance, or other addictions in themselves or others.
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Re: "Should couples combine finances or keep personal accounts?"

Post by ThisTimeItsDifferent »

Even with both separate and joint accounts, you still need to trust the other person not to misuse the joint accounts. Expenses there need agreement and both parties to honor the agreement--at all times.

"I took money out of the joint account, but I'll put it back" doesn't work. That's true even if they do put it back, but even more so if they don't, or if it is without prior agreement, or contrary to an explicit disagreement, or part of a foolish, obvious Ponzi scheme that the one party already just sent everything else they could get access to....
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayDee37 »

28fe6 wrote: Thu Jun 08, 2023 11:41 am If you have never been in a close relationship with a true "spending" personality, you would not understand what a disaster it is or how deep of a behavioral addiction it is for them. I have much more respect for those who manage hoarding, gambling, substance, or other addictions in themselves or others.
+1

It's excruciating.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Tyrael314 »

Maverick3320 wrote: Tue Jun 06, 2023 11:52 pm
Tyrael314 wrote: Thu Jun 01, 2023 1:06 pm
Maverick3320 wrote: Mon May 29, 2023 10:30 pm
Tyrael314 wrote: Mon May 29, 2023 7:28 pm Wife and I have everything combined. It's easier to keep track of and quite frankly she gave birth to my children if we can't trust each other on finances then :oops: . I understand that there are certain scenarios where it makes sense to have separate finances etc. but when you look at leading causes of divorce money always seems to be in top 3.

Combining everything just fits with how we operate our lives.
"When you look at leading causes of divorce money always seems to be in the top 3"

I'm not exactly sure how this is an argument in favor of combined finances.
Off the top of my head

1) Simplicity
2) Being on the same page
3) treating money as “ours”

I fully realize this doesn’t work for everybody.
#1: I guess I don't see how it's more simple, unless both spouses are having their paychecks deposited into a joint account. Your retirement assets are separate to begin with as well. Since it seems that combined finances usually involves one spouse managing the money, either divorce (40% chance) or death of the spouse that manages the money (50%) first could make combined finances actually more complex.

#2: You can be on the same page regardless of whether you combine everything or don't combine everything.

#3: I still don't understand what you are trying to say here.

I'm not arguing against combined finances - there are tradeoffs either way. It just seems like your quote could just as well be an argument in favor of not combining finances.
1) Less accounts, not worrying about who has to pay what or whether or not so and so paid this bill like they said they would. As others stated did so and so pay their fair share. Did they stick to the budget we discussed or are they buying this that or the other instead.

2) I don't disagree but IMO this makes it easier. Reasons above and below.

3) I'm not sure how I can help with the confusion. I don't have "my" checking account, she doesn't have "her" savings account. We have joint accounts that we direct deposit "our" money into and pay "our" bills from and save towards "our" goals. I have a good friend who doesn't have their money combined with their spouse and they think we are nuts. We went out to eat a while back and they were debating who would pay the bill between the two of them. My wife and I have literally never had a conversation like that. I think they are nuts and the world keeps spinning.
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Re: "Should couples combine finances or keep personal accounts?"

Post by sperry8 »

Mr. Buzzkill wrote: Thu Jun 01, 2023 1:09 pm Best of both worlds here.

Joint accounts for combined household expenses and investments that we agree on.

Plus separate accounts that we manage on our own.

Makes a little more work each year for tax paperwork and budgeting to negotiate and agree on the splits between three accounts but prevents arguments and poor communication rest of the year.
Finally. Was reading and reading and never saw the answer of "both". Co-mingle some things, keep others separate.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

Elric wrote: Wed Jun 07, 2023 9:38 pm
JayDee37 wrote: Wed Jun 07, 2023 3:32 pm
Marseille07 wrote: Wed Jun 07, 2023 11:23 am
As far as paying living expenses (not discretionary fun money), the fairest is to pay what you consumed. Food eaten, clothes bought, a portion of housing cost etc etc.

Now this would be a nightmare to track, and hardly anyone does this; so the next fairest thing is to simply split 50/50 *regardless of* income levels. It's actually unfair that the higher earner has to foot a bigger bill just because they earn more, since consumption has little to do with income.

Of course, whether you want to strive for fairness or not is a different question.
This is *one* idea of fairness. It is not the only one. A number of people on the board (of which I am one) have a different idea, namely, that proportional expense-sharing is fair.

I don't want to get into a debate about whether there is an objectively true, ideal definition of fairness. I doubt there is a point to that. I do believe that the question of whether 50/50 or proportional allocation is "the fairest of them all" is one of those things where reasonable people can disagree. Neither is wrong, people just have different instincts about this.
I agree with JayDee37. And even proportional may not go far enough in some circumstances to be "fair," although that's how my wife and I handled expenses while we were working.

Adam Smith wrote about equivalent "pain" and stated, "It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
Reasonable doesn't necessarily mean fair, and I think we are all intelligent enough to see the gray area in that quoted comment.
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Re: "Should couples combine finances or keep personal accounts?"

Post by Maverick3320 »

weimanxi wrote: Thu Jun 08, 2023 9:15 am 22 years married. Husband has always made a lot more than I do, expecially when I took time off to be at home when the kids were small.

We are generally on the same page about daily lifestyle, investing and long term goals, but he has some more expensive hobbies. It caused some friction early on.

We quickly settled into a yours-mine-ours system where both paychecks go into joint checking and we get an equal amount of individual discretionary spending, no questions asked. Investments, bills, home, food, vacations, are all out of the joint account.

He spends his on...I'm not sure. Fishing rods? I don't even ask. I invest most of mine in an index fund (after paying for the occasional mani/pedi or newly released book). It makes me feel more secure and keeps us both happy .

We occasionally bicker if an expense is from the joint or solo account. Like a for a deep sea fishing trip, if the family eats the fish. :annoyed
You can put an exact value on the fish that were consumed and subtract it from the total expense of the trip....husband pays the difference!
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Re: "Should couples combine finances or keep personal accounts?"

Post by Mr. Buzzkill »

sperry8 wrote: Thu Jun 08, 2023 9:56 pm
Mr. Buzzkill wrote: Thu Jun 01, 2023 1:09 pm Best of both worlds here.

Joint accounts for combined household expenses and investments that we agree on.

Plus separate accounts that we manage on our own.

Makes a little more work each year for tax paperwork and budgeting to negotiate and agree on the splits between three accounts but prevents arguments and poor communication rest of the year.
Finally. Was reading and reading and never saw the answer of "both". Co-mingle some things, keep others separate.
It helps to have a spouse who is roughly similar in priorities regarding thrift, attention to detail, and investment risk tolerance.
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Re: "Should couples combine finances or keep personal accounts?"

Post by fourwheelcycle »

weimanxi wrote: Thu Jun 08, 2023 9:15 am ... We quickly settled into a yours-mine-ours system where both paychecks go into joint checking and we get an equal amount of individual discretionary spending, no questions asked. Investments, bills, home, food, vacations, are all out of the joint account.

He spends his on...I'm not sure. Fishing rods? I don't even ask. I invest most of mine in an index fund ... It makes me feel more secure and keeps us both happy .

We occasionally bicker if an expense is from the joint or solo account. Like a for a deep sea fishing trip, if the family eats the fish. :annoyed
This sounds like a well-staked-out (demarcated) relationship. As a compliment to you, it requires two spouses who are both involved in the family's finances. In our marriage, like many others on this forum, my wife (for better or worse) trusts me to manage all our savings. She pays the monthly bills from our joint checking account, which is great, but that is all she cares to do (even though she is a finance professional). I manage our taxable savings, in one joint brokerage account, and I also manage our retirement accounts (with full agent authorization from her). I do our income taxes, and we joke that she will go to jail with me if there is fraud in our MFJ returns.
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Re: "Should couples combine finances or keep personal accounts?"

Post by rick51 »

Are there any estate tax issues that are impacted by this decision? The federal estate tax exemption is pretty huge, impacting very few, but several states have a much more modest exemptions. What happens if you only have a will (no revocable trusts) with a “poor over”trust in the will, and all your assets are commingled? Does the state just consider half the assets yours and that’s what pours over into the trust that kicks in when you die?

As for me, and my spouse, we got married 50 years ago, right out of college, and all of our assets are held jointly. Fortunately, money has never been a contentious issue. I’m great at saving and she’s great at budgeting and not very materialistic.
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Re: "Should couples combine finances or keep personal accounts?"

Post by JackoC »

Obviously there are different valid approaches. And accounts being in particular people's names is not the same as whether 'finances are combined'. I view our finances as completely combined yet only the main checking account and a less used back up are actually joint. The large number of other accounts and house are directly or in trust for one name or the other. That's about estate planning. Credit cards are mainly in one name with other as authorized user, one the other way around mainly in case of sudden death of the other. Each has a little used checking account solely in own name for same reason. It doesn't mean, in our thinking not speaking of legalisms, that the person whose name is on the card is the one whose expense it is or the person whose name is on the asset account owns it to the exclusion of the other.

The main question seems to me is whether (labor, particularly) income vs spending is viewed as separate rather than whose names are on accounts. Unless divorce is something you think about as a real thing (not telling anybody who does to think differently, but we just don't). And 'my income' naturally declines as a concern when retired. It's a step removed to be proprietary about returns on years ago's investments that are 'yours' vs money you got up early every day last week to work for, and somewhat that way even for a pension (SS or private). The whole thing tends to decline as a concern when you have more money. While there's an instinctive negative reaction by some to the idea money helps with human relationships, the more money there is, the more 'pages' you have to be apart on spend/save or what to spend on for it to cause a real problem. Still possible, but less likely IMO. There's no way to scientifically experiment but I believe our spender v. saver gap would have caused more friction if our income had stayed in the same CPI adjusted ballpark as when we were first married.

Our so far two married kids have different approaches to this, different from us and not the same between the two, from what I know. Change of the generations and age at marriage (one more than a decade older than we were) besides different relative incomes.
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Re: "Should couples combine finances or keep personal accounts?"

Post by logiclife »

it's pretty simple. joint accounts for the last twenty plus years.

I don't understand the concept of separate accounts UNLESS you have a good reason or some trust issues then I guess probably shouldn't be together in the first place.
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