Getting Hitched and Managing Finances

Two birds

There are several ways for couples to manage their finances.  Some choose to keep things completely separate and split the bills, some may keep their separate accounts and contribute to a joint account from which they pay their bills, and some completely merge their accounts and have everything joint.

Since the very beginning of our marriage, the Mr. and I have had our finances completely shared.  Although he robbed the cradle and put a ring on it when I was only 19, I always had, and still do have, a very traditional mindset.  We got married in the Catholic church (per my request requirement), and just as the church preaches, I very much believe that upon getting married we became one.  It also helped that I was a broke, 19 year old college student without a job, so merging my finances, or lack thereof, with him was not really a big issue at all.

All of our paychecks and any other deposits go into one checking account, all of our expenses are paid from the same account, and we save and invest money into joint savings and brokerage accounts, etc.  We both have access to all of our accounts.  The only accounts that are not in both of our names are our individual accounts (401K, TSPs, Roth IRAs) for obvious reasons.  But he even has access to log into my Vanguard account and modify what funds my Roth IRA is allocated to, and vice versa.

Naïve as I was, I totally thought this was how every married couple did things, but that obviously is not the case at all.  Had I gotten married later in life, however, I’m not sure I would do it any differently.

They say the three biggest issues a couple fights over and/or don’t communicate about are finances, sex, and kids.  Maybe having joint access to everything causes more fights and frustrations?  It could be the case with some couples who may not be on the same page, but in my opinion, this method provides the utmost honesty, visibility, and fairness for a couple’s finances.

I totally understand that not everyone shares my sentiments and am fully expecting comments that argue otherwise.  All I know is what I’ve observed first hand.  I’ve known several couples whose marriages have suffered greatly and they had separate finances.  Even if they ended up staying married (for at least some time), at some point the wives expressed to me that this was a major issue for them in the marriage.  In one instance, a wife legitimately felt like she was living paycheck to paycheck and struggling to pay her bills, meanwhile she had absolutely no clue how much her husband was paid every two weeks, how much of it was spent on his portion of their expenses, or how much money he had left over at the end of the month.  She knew he made significantly more money than she did, so for all she knew, he was comfortably affording all of his bills and blowing the rest on whatever he wanted that she had no clue about.

This was several years ago and I no longer have any communication with them so I don’t know how things worked out for them, but I thought it was so freakin’ effed up and extremely unfair to her.  Not only did it lead to trust issues on her part, but it led to insecurity and serious financial struggles for her.  Somehow they came up with who would pay what bills, and that was that; she had to survive on her own.  And when she was struggling she felt guilty asking him for help with her bills (which, by the way, included their kids’ daycare).  When he did help by paying some of her bills, it was almost perceived as an act of charity toward her.  What the flip?!

Several times after that I heard of other couples doing it similarly… maintaining separate accounts and agreeing on what bills each of them should pay.  And not surprisingly, it almost always involved a couple who was having some kind of marital problems.  Not that we don’t all have problems… I’m talking legit separating and/or on the brink of divorce.  Sure, maybe I want to punch my husband in the face sometimes, or maybe a lot of times, but divorce is not an option.  I told him when he married me, “You’re stuck with me forever.”

But I know many couples do it this way and they can’t all possibly be having marital issues, be it trust or otherwise.  So who does this strategy work for?  And why do couples choose to do it this way?  I can definitely see a few pros:

–  Increased independence and/or sense of autonomy

–  Less feeling of being micromanaged or every single purchase being scrutinized/spied on

–  Brings some surprise and extra effort to gift-giving, since it was purchased with the spouse’s own funds versus the shared funds

–  For couples married later in life who have lots of their own bills to pay, including child support, alimony, etc

–  For couples married later in life who have lots of money, period, and decide on a pre-nup

–  For those with small businesses or sole proprietorships that need accounts separated from everything else

But as alluded to earlier, I feel like this strategy can bring a lot of stress and distrust to the marriage.  Not knowing where your spouse’s money is being spent, if they’re saving sufficiently for your financial goals, if they’re even saving at all!  I know marriage is about trust, so should we trust each other enough to be able to have everything separately, or should we create the most trust possible by having everything jointly?

I realize I’m asking a lot of questions here, so please tell me your thoughts.  I suspect that for this FIRE community who has a big focus on financial responsibility that most of us would have joint finances, but maybe I’m totally wrong.  I can’t see us ever doing it any other way!  I feel it is so much easier, more organized, and more streamlined.  Whenever he buys me a “surprise” gift, but I happen to see the charge before he gives it to me and I know exactly how much the gift cost, I still appreciate it and pretend like I had no idea 😉 but gifts are few and far between nowadays anyway (at least those that cost money), so that’s really a non-issue haha 🙂

 

14 thoughts on “Getting Hitched and Managing Finances

  1. mrsssc says:

    Personally, I always think it is weird when couples keep their finances separate – like they have one foot out the door. We operate using an ‘allowance’ system. We each get $XX a month put into our own savings account. We also each have our own credit cards and a shared card. Anything that qualifies as allowance (gifts, entertainment, clothes) goes onto our personal credit card, and then I pay off that card from the persons allowance. Its great because Mr. SSC and I don’t have to justify lunches out with friends, or me buying too many shoes to each other. And gifts stay hidden and secret 🙂

    Liked by 1 person

    • Mrs. DTG says:

      One of my good friends uses this method! It sounds good.. I guess we’ve just never had a problem with having to justify any purchases to each other so it’s never been an issue. I’m sure that would work for us too, but since we haven’t done it in 10 years I doubt we’ll start now haha. Thanks for sharing!

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  2. lknant89 says:

    Separate accounts. I can manage my money how I please and she can do the same. We to tally up all our joint expenses like rent, cable, food etc and split the expenses on a pro rata basis based on how much each earns eg. if I earn 12,000 and she earns 8,000 and our joint expenses are 6000, I would pay 3600(12000/20000*6000) and she would pay 2400(8000/20000*6000).

    Liked by 1 person

    • Mrs. DTG says:

      Thanks for stopping by and chiming in! That’s interesting.. So every month you are adding up all the different bills (since utilities vary month to month) and calculating how much each one should pay…? And when someone gets a raise you redo the formula? I’m sure you have the system down pretty well, but I just wonder if it’d get complicated and/or time consuming. Do you guys have finance/retirement goals as a couple, or are you guys just on your own with money and when you retire..?

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  3. Mrs Groovy says:

    We got married later in life and handle it the way you do. The only thing we have separate, aside from retirement accounts, are two individual Visa cards that we use for on line purchases. They’re linked to a joint account. I’ve heard separate finances works for some couples, but for us it would be harder to concentrate on mutual goals if all our resources were not combined.

    Liked by 1 person

    • Mrs. DTG says:

      You definitely hit the nail on the head! It’s something I failed to explicitly mention in the post but probably the most important part… I don’t see how you can have mutual financial and retirement goals but have everything completely separate and spend your money however you please. To be honest, we spend our money however we please too…just so happens our spending habits and goals are aligned. I suppose if they weren’t aligned and we didn’t have fire aspirations maybe we would do a little better with a hybrid system of the two extremes.

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  4. Lisa says:

    Since the day we got married 27 years ago, we have had a joint account. But then it gets complicated. We each have a checkbook/debit card for that one account. We each log our own paychecks into our own checkbooks and split the bills and savings goals as financially prudent as possible depending on work situations (I stayed home for ten years and worked part time for five of them. Now he works part time). Leftover money is ours to spend as we wish; however, except for gifts, we show each other what we buy anyway. At the end of the month, I reconcile two checking accounts. Time consuming and messy, but it really works well for us and we both see everything. I actually learned this from my parents. Of course we still have money disagreements, I am a total saver, but definitely yes on the shared finances.

    Liked by 1 person

    • Mrs. DTG says:

      Thanks for sharing! Interesting! Definitely seems a little time consuming. After reading these comments I think I’ve deduced that maybe I’m just too lazy to deal with multiple accounts.. Everything coming into one and leaving (usually automatically) out of one is much easier for me haha.

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  5. MrFireStation says:

    We put everything in joint accounts and have full visibility. Our twist is we have annual “Sunshine Funds” allowances for any silly expenses/luxuries that either of us might like to splurge on. We mark them down and even-up at the end of the year.

    Liked by 1 person

    • Mrs. DTG says:

      Thanks for stopping by and sharing! Yeah that seems to be a common theme… We just had a friend over for dinner who does it this way as well. Glad it’s working out well for you guys, that’s all that matters! 🙂

      Like

  6. our next life says:

    I think money problems are almost never just about money — they’re usually a symptom of something bigger, like those trust issues you mentioned. I think it’s fine if people want to keep separate accounts, so long as they are transparent about it all, and both sides feel like the arrangement is fair. But if one partner thinks that they should each play by different financial rules, then that’s an obvious recipe for disaster. Plus, keeping things separate is a myth — unless you have a prenup, when you go to get divorced, most courts will split things evenly without regard for who pays what bill, etc. We have completely combined finances, and for things that are separate (travel credit cards, 401ks, etc.), we each have access, and we keep our spreadsheet up-to-date so we both have access to the full picture. I don’t think we could do what we’re doing without that trust and openness!

    Liked by 1 person

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