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

Post by hoofaman »

When a married couple divorces, aren't the assets/liabilities accumulated during the marriage divided? It would seem separate accounts could be risky if one person goes deep into high interest debt to fund personal consumption, with the partner having no idea until it's too late to help/intervene. Or encouraging mismatched savings goals and priorities

I can see the case for pre-existing assets and inheritances staying separate
dcabler
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Re: "Should couples combine finances or keep personal accounts?"

Post by dcabler »

We started off with his/hers/ours checking accounts because we had already established careers and a sense of independence, having married a little bit later than our peers. Still, we didn't come into the marriage with a ton of money, so at this point 99.99% of everything we own probably falls into the community property category .

After about a year, we had a conversation where both of us said, in one form or the other, "What in the world were we thinking? That's 3 checkbooks to reconcile each month!" We then agreed that we are a single, financial unit and proceeded that way. Bills get paid, etc. and when a big purchase is needed we actually, you know, have a discussion about it first. Then we get on with life...

Regarding the title of this thread: Like everything having to do with finances, there is almost never a one-size-fits-all answer to any question. So it might be better to ask whether you, as a couple, should combine assets or keep personal accounts.

Cheers!
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Harry Livermore
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Re: "Should couples combine finances or keep personal accounts?"

Post by Harry Livermore »

We are a hybrid.
Joint checking and saving account, joint taxable investment account. But obviously our own retirement accounts. And we each have our own checking account in addition to the joint. I also came to the union with an Etrade account and many individual stock holdings in company-sponsored DRIPs. Like some others on the thread, we met and married after starting careers and making headway as individuals.
We divided our expenses very early on, spending money only after we had "paid ourselves first"; investments came right off the top of any paycheck. I took care of the mortgage and other big-ticket ongoing household expenses, and my spouse took care of day care, summer camp, extracurriculars etc. for the kids. That worked well for many years. Since COVID, my income has been spotty and I have sometimes found myself hat in hand for some bill here or there. Money is not important to my spouse; she sees it as a tool for a better life... I still have a bit of a "scoreboard" mentality. She happily gives me a check or approves my withdrawal from our joint savings, to which I murmur, "thank you my darling". We respect our union and don't move large amounts of money without talking (no set amount)
For many years, when I was pulling in quite a bit of money, I also took care of the AMEX bill (we try to run a majority of spending through our linked cards) so for many years I was taking care of much of her spending. Several car purchases over the years were made using our HELOC, which I would diligently pay off regardless of "whose" car it was. For the purchase of her current car, my spouse financed from Honda and took care of it on her own.
In short, we each know very well that the other is contributing to the team and help each other out. No judgement.
It's a bit sprawling and complicated, which is very un-Boglehead of us. But we married for love, not for finance, and we are mature people who have conversations about this stuff frequently. The abstract of money is not worth ruining a marriage, but both parties need to be on the same page, whether finances are completely separate, combined, or a hybrid like ours. The arrangement is not as important as the philosophy, in my opinion.
Cheers
Call_Me_Op
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Re: "Should couples combine finances or keep personal accounts?"

Post by Call_Me_Op »

I am glad my parents had separate accounts back in early 2000, when my dad put every cent he had in a high-flying technology and communications fund (against my advice). He went on to quickly lose about 95% of his money. (He succumbed to the talking heads on CNBC.) Fortunately, my mom was/is a good saver and follows my investment advice (they are mid-late 80's now). They are enjoying a secure retirement.

I think Taylor is onto something. Combine if you are of like mind. Otherwise, keeping the finances separate seems to make a lot of sense.
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Parkinglotracer
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Re: "Should couples combine finances or keep personal accounts?"

Post by Parkinglotracer »

Like a lot of things in life - I think it depends.

We always deposited our money together and agreed on our saving and spending.

I was primary earner the majority of time - later my DS worked part time in our local school system. Eventually she ended up with her own checking account where her part time school check was deposited to have pocket money.

Separate accounts didn’t make sense for us but communicating on our spending and savings goals was key. I was the force behind the savings rate so I could have “forget you” money and preserve the option to retire early.

Both our sons have DS ‘s with full time careers, separate 401Ks, bonuses, benefits - separate seems to make sense for them but I think that will require as much if not more communication and trust as they pay the bills and decide on what money each can afford to spend on hobbies, travel gifts etc.

Many ways to skin a cat.

My old habits die hard - I think the best for a married couple is all money after 401K deductions and benefit deductions go in one account, then 100% communication (and visibility) on spending and savings.

Of course the key to a happy marriage is no one feels like they are getting the short end of the stick. It can be easy for each spouse to feel the other is spending more and controlling the money more - one needs to have a plan to prevent that problem whatever plan they use.

Either way if the out goes exceed the income the upkeep will be the downfall as a smart person told me once.
JakeyLee
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Re: "Should couples combine finances or keep personal accounts?"

Post by JakeyLee »

I married later in life (both late 40’s.. both financially independent). Three accounts work marvelously. All bills, household expenses, groceries, etc come out of the shared account. We both transfer $1000 a month to shared account (we have zero debt). I pay for all my toys, hobbies, beer, and extra curriculars out of my personal account. She does the same from her account. It’s also a lot of fun to surprise your spouse with a big budget gift every now and again. There’s no stress. There’s no guilt. I’ve never been happier.
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Glockenspiel
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Re: "Should couples combine finances or keep personal accounts?"

Post by Glockenspiel »

We have always combined our finances. Within two weeks of getting married we had joint accounts and have ever since. Both my wife and I have similar financial values (save money, but spend on good quality long-lasting products) and it has never once been an issue. It helps so much having both of us work towards the same financial goals.
ScubaHogg
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Re: "Should couples combine finances or keep personal accounts?"

Post by ScubaHogg »

In general the law considers them combined. I see no advantage to pretending they aren’t

Personally if I weren’t willing to combine finances I probably wouldn’t get married, but that’s just me
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

ScubaHogg wrote: Tue May 30, 2023 9:53 am In general the law considers them combined. I see no advantage to pretending they aren’t

Personally if I weren’t willing to combine finances I probably wouldn’t get married, but that’s just me
Which law says premarital assets get combined?
pizzy
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Re: "Should couples combine finances or keep personal accounts?"

Post by pizzy »

ScubaHogg wrote: Tue May 30, 2023 9:53 am In general the law considers them combined. I see no advantage to pretending they aren’t
Lots of “we keep separate finances and file our taxes jointly” :oops:
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MStrambolo
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Re: "Should couples combine finances or keep personal accounts?"

Post by MStrambolo »

Marseille07 wrote: Tue May 30, 2023 10:03 am
ScubaHogg wrote: Tue May 30, 2023 9:53 am In general the law considers them combined. I see no advantage to pretending they aren’t

Personally if I weren’t willing to combine finances I probably wouldn’t get married, but that’s just me
Which law says premarital assets get combined?
Depending on the state (I'm in NYC) your are responsible for each other's debts (individually and severally) and you are considered one financial entity by the state. If you should ever divorce there is no her money and my money - it's all marital money to be divided.
The advantage of three accounts (yours, mine and ours) is that you have some assets of you own to use as you see fit. If she likes to spend and you like to save you can each do your own thing, after putting your share into the 'ours' account each month for joint expenses. It cuts down on negotiating over individual wants or needs. But you'd still be liable for any debts that the other incurs while married. It happens more than you think.
milktoast
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Re: "Should couples combine finances or keep personal accounts?"

Post by milktoast »

Combined finances. Separate checking accounts.

We have three joint accounts. Two checking and a savings at same bank. The checks only list primary name but they are joint. So we can see or access if we want. Super easy to move money.

Each of us has a monthly amount that goes into our checking and a set of bills we are responsible for. The rest is spending. That slight split avoids arguments on the “petty cash”.

I can save up for a new tv and she can buy the kids random stuff. This solved arguments for us. I might think Starbucks is a waste and she might think the old tv is fine. But it’s part of the budget, so all good.

The savings account pays for vacations and major expenses.
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

MStrambolo wrote: Tue May 30, 2023 10:12 am Depending on the state (I'm in NYC) your are responsible for each other's debts (individually and severally) and you are considered one financial entity by the state. If you should ever divorce there is no her money and my money - it's all marital money to be divided.
The advantage of three accounts (yours, mine and ours) is that you have some assets of you own to use as you see fit. If she likes to spend and you like to save you can each do your own thing, after putting your share into the 'ours' account each month for joint expenses. It cuts down on negotiating over individual wants or needs. But you'd still be liable for any debts that the other incurs while married. It happens more than you think.
I'm not familiar with the NY law, but I find it difficult to believe that someone entering a marriage with 1M in premarital assets would have to split the 1M in case of a divorce. Being responsible for each other's debts would be a different matter, though.

A quick search indicates your separate property remains separate: https://www.nollettilawgroup.com/new-yo ... -property/
ScubaHogg
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Re: "Should couples combine finances or keep personal accounts?"

Post by ScubaHogg »

Marseille07 wrote: Tue May 30, 2023 10:03 am
ScubaHogg wrote: Tue May 30, 2023 9:53 am In general the law considers them combined. I see no advantage to pretending they aren’t

Personally if I weren’t willing to combine finances I probably wouldn’t get married, but that’s just me
Which law says premarital assets get combined?
“In general”
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
exodusNH
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Re: "Should couples combine finances or keep personal accounts?"

Post by exodusNH »

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!”
I've been with my partner for just under 10 years. She was married twice. I've never been married. Neither of us have children. We met when I was 39 and she 43.

She moved into my house after 4 years of dating. I owned the house for 12 years.

We maintain separate finances. It has nothing to do with trust or different spending habits. It's simply that we were independent people before we met and we have no shared property.

I pay the mortgage, taxes, insurance, and maintenance. We more-or-less split utilities. She contributes $600 monthly to a "shared" account in lieu of explicit rent. That shared account is used for dog and vacation/fun expenses.

She did pay to install a fence on one side of the yard to enclose it, because she brought a dog into the relationship. That money came out of the "shared" account, as will the shed that was just installed. While those are improvements to my property, her "rent" will pay for it.

As her "rent" costs her less than 1/4-1/3 of what it would cost to rent an apartment, having those shared dollars cover improvements to the house seems fair. (But as noted, I pay for regular maintenance and wear items.)
JayDee37
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayDee37 »

Marseille07 wrote: Tue May 30, 2023 10:21 am
MStrambolo wrote: Tue May 30, 2023 10:12 am Depending on the state (I'm in NYC) your are responsible for each other's debts (individually and severally) and you are considered one financial entity by the state. If you should ever divorce there is no her money and my money - it's all marital money to be divided.
The advantage of three accounts (yours, mine and ours) is that you have some assets of you own to use as you see fit. If she likes to spend and you like to save you can each do your own thing, after putting your share into the 'ours' account each month for joint expenses. It cuts down on negotiating over individual wants or needs. But you'd still be liable for any debts that the other incurs while married. It happens more than you think.
I'm not familiar with the NY law, but I find it difficult to believe that someone entering a marriage with 1M in premarital assets would have to split the 1M in case of a divorce. Being responsible for each other's debts would be a different matter, though.

A quick search indicates your separate property remains separate: https://www.nollettilawgroup.com/new-yo ... -property/
Another quick google search indicates that, at least in CA, premarital assets and debts remains separately owned by the individual. Thank goodness! My fiancé has a ton of debt that I do not want to be responsible for, ever.

Of course there is the issue of "comingling" to be aware of, for both separate assets and separate debts.
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Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

ScubaHogg wrote: Tue May 30, 2023 10:37 am “In general”
It might be state dependent, but generally your premarital assets remain yours. At least I'm not aware of a state in the United States where this isn't the case. Now, you could get sloppy and get assets *commingled*, but premarital assets don't automatically get combined.
secondopinion
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Re: "Should couples combine finances or keep personal accounts?"

Post by secondopinion »

cb122 wrote: Mon May 29, 2023 7:34 pm Combined accounts once married. We were both on the same page prior to marriage since we had open discussions about finances during dating/engagement. Once married finances were simplified even more.

IMO, a couple deciding to openly communicate their finances/goals or not, prior to marriage, is the more important relationship decision.
Agreed. I can visualize that some couples do better if their discretionary income is separate and some do better if it is all together.

Of course, I have no experience being in any relationship to give a practical example.
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vested1
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Re: "Should couples combine finances or keep personal accounts?"

Post by vested1 »

Our finances are combined and I pay all the bills. I'm more of a free spender and my wife is more frugal, which works surprisingly well. She has several credit cards that I don't ask her about and which she pays off every month. That gives her more of a feeling of freedom and independence, and I know I can trust her not to run up a large bill. All major purchases are agreed upon first. I have no secrets but don't mind her having a few, which has resulted in zero arguments about money during our 30 years of marriage.

My parents were married for 72 years and kept their finances entirely separate. They each had their own assigned bills and had their own separate checking and savings accounts. Neither was good with money, and it was a constant source of conflict between them until their deaths.

My dad had a safe at their house that only he had the combination to, and it was assumed that was where he kept his fortune. After he died my mom ransacked the house until she found a slip of paper with the combo on it. My siblings and I were there when she opened it, an event reminiscent of Geraldo Rivera's much ballyhooed opening of Al Capone's vault in a 1986 two hour special on network TV that drew 30 million viewers, the largest TV audience of the year.

Capone's vault contained a few empty bottles, which was three more items than were found in my father's safe.
JayhawkGolfer
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Re: "Should couples combine finances or keep personal accounts?"

Post by JayhawkGolfer »

I’ve been with my partner for 5 years. We both have kids from previous marriages. Under current tax laws, it would hurt us financially to get married. There could also be extra friction based on spending different amounts on kids - her ex helps some with college costs - my ex does not. Trying to balance an equality on some things doesn’t seem to make sense. I’m not sure what the benefit of combining accounts would be. Marriage thoughts could change as we get closer to retirement and maybe health insurance, spousal benefits come more into play. I don’t know that we would need combined finances though.
pizzy
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Re: "Should couples combine finances or keep personal accounts?"

Post by pizzy »

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

Post by ivgrivchuck »

It depends. Personal finance is personal.

In my case: first marriage for both us, 5 children, neither of us had significant assets or debt when we got married, neither spouse is a spendthrift. So combining assets from the beginning made the most sense.
Last edited by ivgrivchuck on Tue May 30, 2023 11:03 am, edited 1 time in total.
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ScubaHogg
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Re: "Should couples combine finances or keep personal accounts?"

Post by ScubaHogg »

Marseille07 wrote: Tue May 30, 2023 10:49 am
ScubaHogg wrote: Tue May 30, 2023 10:37 am “In general”
It might be state dependent, but generally your premarital assets remain yours. At least I'm not aware of a state in the United States where this isn't the case. Now, you could get sloppy and get assets *commingled*, but premarital assets don't automatically get combined.
Well there are post-marital assets, co-mingling, and debt issues

So I stand by “in general” with “not” being the exception
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
alexbogle
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Re: "Should couples combine finances or keep personal accounts?"

Post by alexbogle »

I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
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exigent
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Re: "Should couples combine finances or keep personal accounts?"

Post by exigent »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If they one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
Not sure if the numbers are as intended, but it really doesn't seem like a true partnership if someone is bringing home 4x as much and only contributing 3x as much. That results in a situation where one spouse is 'richer' than the other. That wouldn't sit well with me.

Taken to the extreme, as in my case, where I work and my wife has historically stayed home, how would that even work? I'd be paying everything out of 'my' account(s) and then what? Giving her an allowance so she's not completely broke? That doesn't seem like a healthy way to approach a marriage, but that's just my opinion.

Yes, we both have Roth IRAs, I-bonds, etc. but we don't have a choice on that, and they are (effectively) jointly funded in equal measure (maxed out in both cases). I also have a 401(a), 403(b), and 457(b) at work that are in my name (no choice) but we both view them as ours.

Maybe I'm naïve and too trusting, but I'm perfectly comfortable with it, and it's worked amazingly well for us.
AlohaBill
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Re: "Should couples combine finances or keep personal accounts?"

Post by AlohaBill »

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-)
bondsr4me
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Re: "Should couples combine finances or keep personal accounts?"

Post by bondsr4me »

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.
+1

If people trust each other enough to marry, have children…combined is the answer.
sailaway
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Re: "Should couples combine finances or keep personal accounts?"

Post by sailaway »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
We split responsibilities in such a way that each was able to save more than we had been saving as individuals. For example, DH started paying for car insurance because he was still young enough that insurance on his own was more than our joint insurance. So he saved a little and I eliminated car insurance as an expense.

It was all very ad hoc and intuitive and we were both happy with it until situations changed, at which time we adjusted. We had already been together for nearly a decade when we successfully established our first (and still only) joint account. It has made it much easier to move money around, though.

One reason we maintain separate accounts is for estate planning. If anything ever happens to both at the same time, our secondary beneficiaries are our respective mothers. It is a bit silly and doesn't affect how we move money around. DH just transfered a large sum to me because I have access to a higher interest option in existing accounts. But that is also the funds we will live on while deferring his entire paycheck for the rest of the year, and to buy ibonds in October so it isn't like the money is now "mine."
rockstar
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Re: "Should couples combine finances or keep personal accounts?"

Post by rockstar »

We keep everything separate. And we’ll do account transfers for one off stuff.
6bquick
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Re: "Should couples combine finances or keep personal accounts?"

Post by 6bquick »

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-)
This is adorable. Bravo.
If your outgo exceeds your income, your upkeep will be your downfall
Carguy85
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Re: "Should couples combine finances or keep personal accounts?"

Post by Carguy85 »

Both our paychecks goes in to one checking account and then I pay our future selves asap automatically (Vanguard brokerage account in addition to maxing 401k/Hsa). This has helped more than separate accounts which we in part tried and it just didn’t make any sense for a number of reasons and really just kidding ourselves. After all we are “business partners” in life and all money is our money. It seems atypical that she is not the CFO of the household (it seems the woman usually is?) but it is what it is. She doesn’t have any interest in investing or making sure bills are paid etc.
buzzz_buzzz_buzzz
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Re: "Should couples combine finances or keep personal accounts?"

Post by buzzz_buzzz_buzzz »

hoofaman wrote: Tue May 30, 2023 5:13 am When a married couple divorces, aren't the assets/liabilities accumulated during the marriage divided?
Even without a pre/post-nup, it would depend on the state(s) you live(d) in.


Combined seems to make sense based on simplicity and trust, but I do wonder if separate makes sense in certain instances for tax or legal reasons (e.g. sheltering some assets if one partner ends up with some massive unexpected liability).
DoTheMath
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Re: "Should couples combine finances or keep personal accounts?"

Post by DoTheMath »

MN-Investor wrote: Mon May 29, 2023 11:22 pm One absolute that I've learned from reading Bogleheads is that the best answer for combined vs separate accounts is Whatever Works For You.

Ever person is different and every couple is unique. I guess the best advice is to discuss this issue BEFORE you get married or move in together. And be prepared to discuss this again if you discover that your original decision is not working, or if there is a major change in your life such as the birth of children.

My husband and I married shortly after graduating from college and easily agreed that we would combine our finances. We had similar attitudes on spending and saving, so it worked well for us.
+100

In our case, we got together around age 30 with established finances and independent streaks. Separate works for us. But that doesn't mean secrets. We have a good idea of each other's financial situation; we just don't bother with the minutia of "allowances" and fine-grained financial planning. It helps that we have similar attitudes about spending and saving and that our incomes are more than enough to meet our goals. It is easy to be hands-off when you trust that the other person makes decisions based on shared values and that where we would disagree is not enough to matter.
“I am losing precious days. I am degenerating into a machine for making money. I am learning nothing in this trivial world of men. I must break away and get out into the mountains...” -- John Muir
DS03
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Re: "Should couples combine finances or keep personal accounts?"

Post by DS03 »

Separate works for us for the same reason (spender vs saver).
pennywise
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Re: "Should couples combine finances or keep personal accounts?"

Post by pennywise »

alexbogle wrote: Tue May 30, 2023 11:05 am I'm curious about advice from those with separate accounts.

If one salary is a lot more than your partner's salary (4x), how do you pay for shared costs?

Up until now, I have been comfortable paying about 3x compared to her 1x. And I'm fine continuing to do that. Maybe contributing roughly those amounts to a joint account that shared costs get paid from?

We have no plans for children so the "stay at home" aspect doesn't really come into play.

Anyway, I'm curious what others do in this scenario. Including, the technicality of what accounts pay what and if you also have a joint account in addition to the separate accounts.
Proportional contributions are fair, easily scalable and leave both partners with some personal spending money. If your spouse makes 25% of what you make, then you should be paying 75% of the expenses and she contributes 25%. If you each make the same income, you each pay 50%. If one person makes all the money s/he puts in 100%.

We used that system for years after we had a lot of issues around money management early in our married life. As often happens one of us is a saver, one a spender. The saver also had some fairly rigid and outmoded ideas based on an upbringing in a family where the sole breadwinner literally dictated how every penny could be spent and the non-employed housewife partner had no say whatsoever.

Eventually we figured out the amount we needed monthly to cover expenses and give us a cushion for emergency or unexpected costs as well as periodic needs like insurance, taxes, kids' school tuition etc.

Then we set up what we called the house account, into which we deposited the needed amount based on our proportional incomes. What was left over from each partner's income went into individual accounts to be saved, squandered or otherwise allocated as we each decided.

We could always view each other's accounts and were beneficiaries for each other but control remained with the person who owned the account-we already had independent checking and savings accounts. And of course we funded our own retirement accounts.

At one point one of us was working very part time, but that still meant we both were contributing and also we both had some money of our own, even the one with minimal income.

In practice eventually 99.9% of all expenditures were coming out from the house account. And when we retired we mostly dropped the distinction. Now we each deposit our pension and SS payments into a joint account and work from there. Actually that's not true; saver spouse asked to hold back $50/month to go into a separate account. Sometimes it's the little things that make a happy spouse isn't it?!

Last but not least as others have said, it's not the specific plan that makes for success, it's the commitment to create a plan that feels fair and respectful to each person and to the partnership.

The rest is just bookkeeping.
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

pennywise wrote: Tue May 30, 2023 1:05 pm Proportional contributions are fair, easily scalable and leave both partners with some personal spending money. If your spouse makes 25% of what you make, then you should be paying 75% of the expenses and she contributes 25%. If you each make the same income, you each pay 50%. If one person makes all the money s/he puts in 100%.
Proportional sounds fair but it's actually not. When you pay for housing, food, utilities etc etc your fair portion doesn't increase by your income proportion. It can also incentivize the lower earner to earn even less, the ideal amount being $0 so they can ask the other party to foot the bill.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
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Johnny Thinwallet
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Re: "Should couples combine finances or keep personal accounts?"

Post by Johnny Thinwallet »

We are combined, for the most part (excluding stuff like retirement accounts that have to be separate). Our paychecks go into the same joint checking account, dollars are moved to retirement/savings from that same joint checking account and all bills are paid from that same joint checking account. Our house (deed) and both vehicles (titles) are officially jointly owned.

We have separate credit cards, but they're separate due to reward dollar buckets. She does the grocery shopping so she carries an AMEX with bigger reward dollar perks for grocery spending. I carry a Fido Visa for 2% back on everything. The bills are paid from the same joint checking account. We'll trade CCs when one of us runs an errand that makes more sense to use the other CC.

That said, we do each have our own fun/personal individual savings accounts and $100 each pay period goes into these accounts for each of us. We each have 24 pays annually so that's $2,400 per year into each individual account. Personal fun expenses are then pulled from those accounts. We both agreed to this when getting married, mostly to avoid giving each other the stink eye when we choose to spend on fun stuff for ourselves. It works very well.

That said, we're both frugal so the reality is that the fun/personal individual accounts grow in size each year (i.e. we're each spending far less than our $2,400 annual deposits). Over time, when the accounts get too large we'll take an equal chunk from both individual accounts and move them over to a joint savings bucket (such as our joint taxable account).

I won't say never, but I will say that we very, very rarely have a disagreement over anything money related. For big purchases, we talk it through and make sure we're on the same page before proceeding.
Marseille07
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Re: "Should couples combine finances or keep personal accounts?"

Post by Marseille07 »

Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
Sounds separate to me. You contributed to her success through helping with family chores. At least that's often the argument made when a homemaker argues their contributions toward a higher earning spouse.
6bquick
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Re: "Should couples combine finances or keep personal accounts?"

Post by 6bquick »

Johnny Thinwallet wrote: Tue May 30, 2023 2:32 pm We are combined, for the most part (excluding stuff like retirement accounts that have to be separate). Our paychecks go into the same joint checking account, dollars are moved to retirement/savings from that same joint checking account and all bills are paid from that same joint checking account. Our house (deed) and both vehicles (titles) are officially jointly owned.

We have separate credit cards, but they're separate due to reward dollar buckets. She does the grocery shopping so she carries an AMEX with bigger reward dollar perks for grocery spending. I carry a Fido Visa for 2% back on everything. The bills are paid from the same joint checking account. We'll trade CCs when one of us runs an errand that makes more sense to use the other CC.

That said, we do each have our own fun/personal individual savings accounts and $100 each pay period goes into these accounts for each of us. We each have 24 pays annually so that's $2,400 per year into each individual account. Personal fun expenses are then pulled from those accounts. We both agreed to this when getting married, mostly to avoid giving each other the stink eye when we choose to spend on fun stuff for ourselves. It works very well.

That said, we're both frugal so the reality is that the fun/personal individual accounts grow in size each year (i.e. we're each spending far less than our $2,400 annual deposits). Over time, when the accounts get too large we'll take an equal chunk from both individual accounts and move them over to a joint savings bucket (such as our joint taxable account).

I won't say never, but I will say that we very, very rarely have a disagreement over anything money related. For big purchases, we talk it through and make sure we're on the same page before proceeding.
This. except we NEVER have surpluses in the 'fun' account, since they're often used for kids stuff and other expenses that aren't truly 'fun'. we also don't mess with the CC swapping. She's an authorized user on my fido CC, end of story.

We also didn't agree to this prenuptually. This was the result of some early conflict in our marriage. but for the last 7 or 8 years, this seems to work swimmingly. *knock on wood*
If your outgo exceeds your income, your upkeep will be your downfall
pizzy
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Re: "Should couples combine finances or keep personal accounts?"

Post by pizzy »

Johnny Thinwallet wrote: Tue May 30, 2023 2:32 pm
That said, we do each have our own fun/personal individual savings accounts and $100 each pay period goes into these accounts for each of us. We each have 24 pays annually so that's $2,400 per year into each individual account. Personal fun expenses are then pulled from those accounts.
For those of you that do this (I like the idea), how do you spend from these accounts? Debit card? Cash?
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qbanfellow
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Re: "Should couples combine finances or keep personal accounts?"

Post by qbanfellow »

Delete
Last edited by qbanfellow on Sat Dec 23, 2023 11:47 am, edited 1 time in total.
Wanderingwheelz
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Re: "Should couples combine finances or keep personal accounts?"

Post by Wanderingwheelz »

Marseille07 wrote: Tue May 30, 2023 2:49 pm
Wanderingwheelz wrote: Tue May 30, 2023 2:13 pm We combine everything.

I will add that my wife owned a company when we met 20 years ago and she’s still the sole owner of all the shares. It’s the only asset we own that’s not owned jointly. If someday it’s sold I’d have nothing against her retaining the value in an account that’s in her name only, since I haven’t contributed all that much to its growth. If she tells me to pound sand tomorrow she can keep it.
Sounds separate to me. You contributed to her success through helping with family chores. At least that's often the argument made when a homemaker argues their contributions toward a higher earning spouse.
Nah. Nice try though.

[Unnecessary comment removed. Moderator Pops1860]
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dagsboro
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Re: "Should couples combine finances or keep personal accounts?"

Post by dagsboro »

There should be no hard and fast and immutable rules in 2023. No cookbook. No algorithm. It depends on the couple. It depends on the situation. It depends on the generation. It depends on the knowledge. It depends on the income. It depends on emotional intelligence. It depends.
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TomatoTomahto
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Re: "Should couples combine finances or keep personal accounts?"

Post by TomatoTomahto »

Our finances are combined. Our spending is done mostly from my wife’s checking account (she still works for a paycheck; I have not worked for a paycheck for decades).

We keep separate brokerage accounts, in large part because I have two children from a previous marriage. Our annual gifts come from her checking account.

I don’t recall having an argument or disagreement about money, ever, other than I think she should retire and she thinks I should get a new car (she thinks a Rivian or a Porsche). Those disagreements are very civil.
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Munir
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Re: "Should couples combine finances or keep personal accounts?"

Post by Munir »

I don't think it makes a difference if your accounts are separate or joint. If one member of the couple is a spender, he/she will keep spending whether the accounts are separate or joint. You might as well keep them joint and discuss large expenditure before they are incurred in a civil and courteous fashion.
A separate account for the spender may be added for small expenditures to provide a sense of independence and freedom to the spender but it will not break the bank.
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yatesd
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Re: "Should couples combine finances or keep personal accounts?"

Post by yatesd »

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!”
Taylor, I think you were the exception rather than the norm in making it work, but very impressed with 62 years of marriage.

Personally, I’ve always considered separate finances as a red flag for other issues. In my opinion, marriage is a lifelong commitment and compromising on this is not a good start, same with someone that takes more than 5 years to decide on marriage! We’ve been married for 31 years so far and counting.
Cubs Fan
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Re: "Should couples combine finances or keep personal accounts?"

Post by Cubs Fan »

We have been married for over 53 years and have always combined our accounts. We are frugal, but we do not deprive ourselves. There is no need for either of us to have an allowance or to ask permission to buy something. If I were to leave I would take all of my possessions with me. That would be my car and my toothbrush!
wait until next year!
barberakb
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Re: "Should couples combine finances or keep personal accounts?"

Post by barberakb »

there is no wrong answer...

Do what works best for you in YOUR relationship. Everyone is different.
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MrBobcat
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Re: "Should couples combine finances or keep personal accounts?"

Post by MrBobcat »

Meh, I don't care what people do, nor do I think there is a best way for everyone. We got married at 22, had nothing, we've always done joint, never a problem. If one of us tips over and the survivor remarries, yeah separate accounts with new spouse, family dynamics will have changed drastically.
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