Tiny Steps To Adulthood: Managing Your Money

Really not wanting to deal with money, and doing it anyway

Managing married finances | APW (1)
A lot of the time, I still feel like I’m pretending at being a grown-up. I’m so easily distracted in the mornings that I rely on a checklist to get out the door, one that’s probably very similar to the one my dad put on posterboard for me in kindergarten (you wouldn’t think that I’d need to check off that I have my glasses, but there it is). I used to think adulthood was having a bed with room on either side (so one person doesn’t have to clamber over the other in the middle of the night to pee, or leave awkwardly in the morning without having to pretend that you’re actually going to brunch, if you get me). Now I think you must surely reach adulthood when you get to wash your pants whenever you want, without battling for a rusty drier at Bubble Up. But even with a daily checklist, even without the freedom to launder pants on my own schedule, I’ve managed to put into place a few decidedly grown-up life systems that serve me decently well.

The APW staff was talking about these various measures of growth the other day. One email led to another, boiling down to one conclusion: we have varying levels of success when it comes to ironing out the complicated stuff like managing money, joint vs. separate finances, wills, insurance, and all the other health-and-life-and-death-related stuff. And since we are always better together than on our own when trying to figuring this stuff out, lo, a new series was born: Tiny Steps to Adulthood, where each month we’ll tackle these complicated topics. Where better to raise questions, figure out what works for you, and get our collective acts together than the APW community? Let’s wade through the morass together.

money: facing it, holding onto it, and otherwise managing it 

My revelation that I needed to Do Something about money started during my Saturn Return. I don’t really put much stock in astrology but I totally believe in Saturn Returning, when I experienced the highest highs and lowest lows and came out on the other side of thirty. That was when I finally opened the credit card statements and realized, to my utter surprise, that not looking at them and pretending they didn’t exist wasn’t actually a viable strategy.

My credit card debt and ensuing crummy credit score were squarely my fault. I did not understand how to manage money, and was embarrassed that a simple concept like “stick to budget” didn’t make sense to me. I hadn’t ever found a money system that worked for me. I tried putting cash in envelopes labeled with different categories and tried budgeting and tried saving for important things “in my head,” and nothing worked because I didn’t completely get how to manage money, was reluctant to ask for help, and am very persuasive. Of course you can take money from the Food/Groceries envelope if you are going out for Food/Entertainment with your friends because you need to be nourished, obviously. By the time I finally sat down at my stepmom’s table with a calculator, and totaled up all the bills, a wretched number was staring back at me. I cried. But then I called all of the companies to figure out what should happen next.

That was one of the first times I felt like an actual adult, like someone who really did not want to deal with a problem, but who was doing it anyway. One by one I talked with surprisingly sympathetic agents who all told me the same thing: I’d need to shut down my cards, which would show up on my credit score. But once the accounts were closed, they could set up zero-interest plans with payments that were actually realistic for me, and I could get out from behind the crazy interest rates. My score was being ruined by my avoidance and balance transfers and late payments anyway, so I went with this plan. Four years later, I made the final payment on the last account and cried again. The relief at being out from under that debt was unreal, but I was still scrambling to make rent, even though it seemed like I should have had enough for my little studio in the hinterlands of Brooklyn. Then I met K, and once a respectable amount of time had passed, we started talking about money, and she helped me set up a system that became our joint system sometime on the road to getting married. I’m going to share it with you so that even if it doesn’t work for you, you have the opportunity to evaluate your own income flow and figure out what does.

How We Do It

We share three accounts—Household Business, Household Flex, and Household Savings—and then we both have our own Allowance accounts. HH Business contains exactly the amount of money necessary to pay our monthly bills and nothing else. HH Flex is for things we share, like groceries. Household Savings is where we’re working on our emergency fund and long-term goals, and one’s Allowance is the amount of money one spends on oneself.

So how did we figure out what went where? Like so many other things, we started with a shared google doc (you might have Mint or Quicken do this for you, but something about writing everything down really clicked for me). We looked at the bills from the previous month to figure out our bare minimum monthly set expenses. These are the non-negotiable expenses, and will differ for everyone, but our general ones are rent, phone bills, cat health insurance, student loans, and so on. They’re paid from HH Business, since they are essential to the business of running our lives. From there, we worked backwards to determine how much we’d allot into the other three accounts.

As is obvious from this piece, we are joint-finance people. Share the wealth, share the risk, you know? Even though K makes more money than I do, she’s not getting more Allowance than I am—we both agreed from the outset that we’d each get the same amount of personal spending, however small that might be. Her extra cash goes to our monthly expenses, and savings. She’s not working harder than I am; and it wouldn’t be fair to me to scrape everything I’ve got into the Business account with nothing leftover while she lives like a relative king. That seems a puzzling and complicated power dynamic.

So we played around with the numbers for a bit, and tested a few scenarios until we found the right balance between our shared Flex account, our shared Savings account, and our personal Allowances. We use the HH Flex account for discretionary stuff we do together, or buy for the household (like toilet paper, groceries, and the occasional dinner out). And we both automatically transfer money to our Savings account on a specific date, just like any other bill, and treat it as no more optional than rent. That leaves Allowance, my favorite account.

From the outset we agreed that there would be no judgment about the other’s Allowance. That has been one of the saving graces of our relationship. If I want to spend it all on peanut butter malt balls from the new Gowanus Whole Foods, fine. And I don’t care in the least about what K does with her Allowance. That’s her money, not mine or ours, and when she spends it on a peculiar-sounding book called Becoming A Supple Leopard, I only have mild curiosity that she’s into Big Cats. I don’t feel like she’s taking away funds that were intended for something more illustrious (anyway, I’m too busy eating my Allowance’s worth of peanut butter malt balls).

Relationship serenity aside, though, having this Allowance account separate from essential expenses has been a great teaching tool for me to better understand my cash flow. Here is where I practice keeping my spending in check without the fear of making a mistake that will end up in a late rent payment; it’s a debit card so I can’t get myself in trouble. I will always want to spend more money, even if I don’t have it. Someone needs to wear all of the sailor shirts, you know? But I’ve set this account so that I don’t have overdraft protection and those horrible $30 surcharges for overdraws, which means that if I don’t have the money, then the card doesn’t work until the next paycheck. This means I have the opportunity to practice prioritizing wants instead of wants and rent. If I get the sailor shirts, I don’t get the Dar Williams tickets. Many of you might have figured this out two decades ago, but it was damn near revolutionary to me.

This financial system means that we’re able to deal with money rationally, not emotionally. No one is resentful of anyone’s new Leopard book because we both have our own money. And our HH Flex account means that when we go out to dinner, we’re fairly splitting the cost and we’re also not choosing dinner instead of rent. There isn’t a ton of money in the HH Flex account, and dinners out are infrequent these days, because we’re trying to save a lot of bucks for potential gay babies, who are both theoretical and expensive, but also because we make choices about how to spend that shared money. Case in point: for the price of two dinners out, we can have a terrific collective cleaning service come once every six weeks. This means that the amount of energy I spend being infuriated with K for not loading the dishwasher properly is cut in half, which means we have the energy to be sexy with each other instead of ruminating on why she didn’t line up the mugs with handles facing out again. When I frame it that way, not going out to dinner for two meals is completely worth it to us. It may not be for you.

That’s where this month’s homework comes in

  • If you’re not looking at your credit cards, open the bills.
  • If you’re not sure how much debt you have, total it up.
  • Look back at last month’s bills to see what you might divide between required expenses and flexible ones, like groceries, dinners out, and clothing, to see if you are actually living within your means.

I’m curious to know how many of you have joint finances or separate ones, and why. Ultimately, it is your responsibility to talk about that shit, to ask for help, and to figure out how money makes sense for you and for your relationship. Because this tiresome stereotype about women being bad at math isn’t going to rewrite itself.

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  • Kelly Mine-His

    This is actually a very similar system to what we use – we have separate accounts for bills and savings, and our monthly deposits get treated like they are absolutely unnegotiable. We are a bit more flexible when it comes to household expenses and fun things blending together, but it hasn’t been a problem for us so far – largely because I think these things relate to each other. Some times you can splurge on the fancy ice cream or expensive juice and call it ‘groceries,’ and other times you can’t. But that largely depends on whats happening with your other spending. Our other key difference is that we still use credit cards – more for security reasons than anything else, and also we’re trying to build our credit to buy a home. But we do pay them off in full every month, no matter what.

    We actually went 100% to combined finances about a year before we got married. This was controversial but made sense for us, because we had jut moved into a new place together, he started a new job, etc. Since then it’s been remarkably easy and I don’t think Hubby has even thought about our finances except when we’ve had explicit conversations at my direction. This suits us both – I can be OCD about making sure we’re on track, and he can just trust that he doesn’t have to worry about it. We try to be gracious about allowing each other to have special things we want and balancing out those costs (and he is understanding of things like my haircuts costing more, or the fact that he will never need to get a manicure before an interview).

    And I keep VERY close tabs on all of our spending activity. I sit down every morning and go over our accounts and track spending and how we’re doing for the month. I have been through a lot of budget iterations, but right now I use LearnVest, which I am loving. It has a lot of great tools for helping you track your spending month to month and identifying problem areas!

    • Elisabeth S.

      Ooo. Can you tell us about LearnVest?? I hear the word Portfolio and all I connect it to is TrapperKeepers from fourth grade. I hate feeling dumb about money.

  • Liz

    Thanks for a great post! Here is my two cents, with the disclaimer that we are comfortable financially and naturally frugal. I get that it is good to know your finances, and don’t get me wrong-I am great at math and budgets- but since getting married and combining households I have only a big-picture sense of our finances. Husband started out as the one managing bills because I didn’t have time to be involved in the setup, and it stuck. It’s one aspect of our household that I trust him with completely (god knows it wouldn’t be meal planning or we would eat pizza twice a week), and it is great to have one less thing to worry about. I think money management is a chore like anything else. There is no excuse for incompetence, but delegating is not the end of the world.

    • Carly

      This is exactly what my partner and I do – he does the big- picture, data, spreadsheet stuff (because he LOVES it and does data analysis for a living) and I do the day-to-day money management, making sure we stick to line items like restaurants and booze (yes, that is a line in our budget).

      Sometimes I feel “un-feminist” for having it set up this way (which, logically, I realize is BS and an “un-feminist” thought in and of itself), but it’s worked really well for us and together we both feel like we’re managing way better than we ever did apart.

      • Elisabeth S.

        Amen to delegating. I have total access and insight into our larger budget, but K manages all of the minutiae.

      • ART

        Oh, my net worth tracking/financial planning spreadsheet is my second favorite part of payday, but honestly, it’s nearly a tie for first.

    • MEM

      we’re very similar. every couple months we sit down and have a “state of the finances” talk where we check on all the bank accounts and see if there is anything we should cut back on. Otherwise, he takes care of the bills and I take care of not spending too much on groceries.

    • GCDC

      I think delegating is efficient. If you were both trying to manage the day-to-day budget aspects of living, you would like just be spending twice as much time to accomplish the same task.

      My husband is the Chief Financial Officer of our household. As I’m also an executive (I vary between being the Chief Legal Officer, though we haven’t really had to use that skill much, and the Chief Party Planning Officer) I have to be consulted on major expenditures and need to have an idea of where we are financially at any given time. We also jointly come up with long term goals. But the day to day management is his job.

    • Caroline

      When we got together, I found money overwhelming, and delegated everything but the big picture to him. Web we realized we ought to start establishing some credit, and open some credit cards to use responsibly, my credit was better than his. (Not sure why). I was able to get a much bigger credit line. (Enough to actually pay his bills while he started with a very small secured card. I also started first. So I was then able to get a credit card that have miles with a high enough credit limit to put everything on it except rent every month. So that’s what we do. And since it is my credit card and he is an approved user, having to pay the credit card bills each month has made me learn to do the small picture finances, which is awesome. If both parties know how to manage money, I think delegating is efficient but it’s good to both know how to do it, which I didn’t feel competent in before.

  • Anne

    Joint all the way, which I think is completely necessary, especially given our income inequalities (I’m in grad school in the humanities, my husband is a computer programmer). We do each have a separate credit card, a holdover from the days before we were married, that we occasionally use to buy presents for one another (so the charge doesn’t show up in the joint account until *after* Christmas or birthdays).

    What we don’t do is have separate allowances for spending on fun stuff, which is an interesting idea. Maybe it’s because neither one of us spends much on extras with any kind of regularity, but we generally just trust each other to make good choices (that sounds really wishy-washy, I know) with the money we allow ourselves to spend on fun stuff. We consult each other before making any purchases that affect both of us, but otherwise spending is at your own discretion, and so far we haven’t felt any inequality in how we spend that money.

    • Gina

      I don’t think it’s wishy-washy to trust each other to make good choices! We do the same thing. And if it’s a bigger purchase (which I think of as anything over $100) we talk about it before we do it. Which, honestly, is better for me, because that curbs my impulse-buyer tendencies. Plus I do think it prompts good discussions on what your shared values are, as corny as that sounds. Recently my husband was like “I found a really good deal on a climbing rope, my current rope needs to be retired–do you think we should get it?” and I said “yes, we want to do a lot of climbing this summer!” Explaining WHY you want to purchase something or why think you need something helps a lot.

    • Rachel

      I am in a similar situation to Anne — We are also joint all the way. We have two joint accounts, individual accounts, and individual credit cards, but both have access to everything. The individual accounts are open still, but there’s no money in there.

      I am in grad school in international affairs and my fiance is a software
      engineer. So we’re a one income family now.

      We talked about allowances, but to be honest, we’re at the point now where every extra purchase is money that we aren’t going to be able to apply against student loan bills upon graduation or an extra money for more months of potential unemployment after graduation. So allowances don’t make sense, but discussing all purchases together do.

      I look forward to graduating, getting a job & income again, and then we can re-assess the financial situation.

      One thing that is kinda odd in our situation, is that we have had all joint accounts since I went back to grad school — when we were living together but not engaged. Some people have expressed concern about this, as we are not legally protected as we aren’t married and at the time, weren’t engaged either.

      Our solution to that is 1) We trust each other — his paychecks and my student loans are both getting deposited into a joint account that we spend from equally and 2) He made me the beneficiary of his life insurance and disability insurance, so that is something happens to him I would be able to stay in school.

      It works for us in terms of power dynamics, as I didn’t want to have
      ask him for money & am better at managing money/paying bills. Over
      time, we’ve worked on the “my money” vs. “our money” language, but that
      has also gradually changed as we have built a life together as well — and transitioned from dating to engaged.

      • Anne

        For what it’s worth, we actually ended up combining accounts before we were married — I did a master’s degree abroad, and it just made more sense for us to switch then, rather than each having to open a new account in a foreign country. There’s definitely technically more risk involved in having joint accounts and not being married, but yeah, when you’re in a financial situation where one of you is so “dependent” on the other, it often ends up being the best solution.

  • Sally

    Neither my husband or I have ever had any problem with finances (we’re naturally thrifty and more into saving than spending), but we do share finances. When we first pooled everything I tried to make things more rigid (let’s set a budget! do we want to share everything evenly when we don’t make the same income? let’s save x% each month!) and realized that was a lost cause. So we theoretically share everything but still haven’t found a way to give each other access to one another’s paychecks. We have one shared checking account and multiple shared savings accounts, and each also have individual shared checking/savings accounts (basically because we were just too lazy to change names on accounts). This totally works for us now while we still don’t have too much income or expenses (the general rule being something like no sailor shirts) and there’s a lot of inertia for changing something that works. If one of us does want to make a big purchase we run it by the other person and if we just want to buy some small treat we buy it if we feel like it. But like I said, we’re both prone to not buying things so it hasn’t been an issue.

  • This is so timely because yesterday I opened the envelopes, called Sallie Mae to clarify a few things, and did some maths…and then, the scariest part, emailed Eric and told him everything I had figured out (which always makes me feel incredibly vulnerable). We have had a joint account for two years, a joint savings for a year, plus our separate accounts. He is good with the monies and I am…not. (Someone DOES have to wear the sailor shirts…or try out that new beauty product…) Working on this (sometimes I’m more
    focused than others) is definitely a thing that makes me feel like an adult, and, frankly, is because my relationship made me want to do better. And his emotional support yesterday made me feel like we were adults and on the same team. It was good.

    • Heather

      Oh, it always makes me feel SO vulnerable to talk about what I’ve figured out about the monies, or to reveal that a big (ish) expenditure is coming. Oooof. It’s always a huge sigh of relief when he’s completely supportive, and I realize again that I have no reason to expect him to be anything else. Humbling.

  • Kat91314

    We are in the midst of trying to combine our finances, so this post is very timely for us. Can’t wait to see everyone’s responses & ideas!

  • Marcela

    We do pretty well financially despite our tiny income, but whenever I really sit down and think about how we’re managing our money I feel like we are doing it wrong. My husband is in school right now and will be for the next 3ish years and so he has basically no income. Our in-laws generously decided to help us with our rent while he’s in school as a wedding gift. We each came into our marriage with some savings (his from an inheritance and mine from being a pennypincher my whole life). Now all of our expenses (except for the portion of rent my in-laws pay for) come out of my paycheck and I manage all the money. This feels weird. My husband has a credit card linked to my account so he can pay for groceries/gas..etc when I’m not there with him, but I don’t have anything linked to his account. His savings are set aside for when he gets done with school as a starter for him to open a practice. Now he got a summer research job and is talking about spending that money on a new computer for himself and a bigger tv and maybe the new playstation 4 and the games he hasn’t been buying himself. And now I’m annoyed because my money goes towards gas and utilities and insurance and groceries and he gets to use his just for fun stuff?!? I want to be a marriage socialist but I think I may be a capitalist in the depths of my cold cold heart.

    TL:DR How do I not feel resentful when my husband doesn’t contribute to the finances and all my money is being used?

    • MEM

      I would be annoyed as well if he used his savings towards “fun” things like a large TV and video games when you were not able to use joint account money for fun things as well. I think it’s important to talk to him about this, but avoid the “your money vs my money” phrasing. Right now, I am the student being supported by my wonderful husband who is paying most of my bills and when he says things like “i’m spending my money on your health insurance so now I can’t buy video games” I am pretty hurt and get defensive. So just be careful with wording is as “my money” because if he’s anything like me the conversation will end there and immediately become a fight :)

    • TeaforTwo

      Have you talked to him about this? He may be thinking of it as “we” (as in you and him, not him and me) have some extra money, and here are a few fun ways to spend it…which I think is perfectly natural. Household income is going up, household spending can relax a bit, too. Which means that YOU also get to buy that sailor shirt you haven’t been able to justify during the school year, or the two of you can go away for a weekend, or whatever.

      If he’s thinking of your income as joint, and his as his, that’s a problem, but it sounds like you need to have a talk about it and get on the same page.

      • Marcela

        That’s a bit of the problem, that his money is usually thought of as his own, but that is probably a joint fault since we never discussed discretionary money as part of the budget, so he probably feels like he CAN’T spend the normal household money of the things he wants. And when he does get his own money, all of these things he’s wanted all come out at once. And I freak out because its a lot of money.

        You guys are great, talking this out is helping me realize where both of us are probably struggling to communicate, especially since our families talk about money in very different ways (AKA his family doesn’t).

    • kcaudad

      I would suggest joining all accounts and getting rid of the ‘my money’ vs ‘you money’ and making it all ‘our money’. Use ‘we’ instead of ‘I’ & ‘you’ when discussing money. Maybe have seperate savings accounts for different things (opening a practice some day, saving for x, fun money, etc). This could also be setup in a spread sheet or budgetting tool so that you don’t actually have 10 differnt accounts For example: one large ‘savings’ account with x-$ for x-thing, y-$ for y-thing, etc. But, keep all of these ‘accounts’ so that you each person can access them and discuss what they can be used for. Think about it in terms of somethign really bad happening to one person, how would the other person be able to pay bills, access needed funds, etc? It doesn’t seem right that he gets to decide what ‘his’ money can be spent on and you are paying the bills and trying to make ends meet. However, if it was his inheritance, than you might not be able to have a say in what that money gets used for. But, all other future money should be shared, in my opinion.

      • Marcela

        We keep making noises about combining all of our accounts, but part of the problem is that we both really like our banks and don’t want to switch. We thought about opening a joint account at a whole new seperate third bank but when we moved to a smaller town, we found they didn’t have any big banks that weren’t our two. We really need to set up some time to sit with people at each of our banks and see where our money will go fartherest.
        The savings/practice money is an inheritance and it was specified that it would be preferred if the money went towards opening a practice. Family expectations are hard.
        Another big part of the problem is that I don’t really hold myself to the same standards (AKA my sailor shirt collection is the bombdiggity) and I don’t discuss my under $100 purchases with him. Over time I have clearly spent way more than he wants to spend on the X-Box (which I would also use all the time), but I am irrational when it comes to money.
        We need to set allowances.

    • I hear ya! We are in the same situation with my hubby in school and living off my income. I used to get really angry when we first got married that he lived off of “my money” but over time I saw how selfish that mentality is and realized that it’s “our money”. It took a while but I got there. We are partners and take care of eachother. Right now I make the money but that will probably change in the future, esp. after kids when I will want to stay home for maternity leave and he will be the one working. But being on the same page priority-wise is also key. Just a couple weeks ago my husband said he was gonna buy an Xbox One using the credit card. Um…no! We cannot afford it! And I think it’s an irresponsible use of the money but he probably thinks the same of some of my financial decisions. So instead of yelling at him I told him that we couldn’t afford that and that was too much money to impulsively spend, but if its important to him we can work together to save up for it. That appeased both of us and we are working together :) PS he hasn’t mentioned the Xbox since we have been talking more about saving for a house instead

      • Marcela

        So much inherent selfishness… I’m working on it though and these posts have been really helpful in making me take a step back and realize how unfair I’m being. BTW I’m now following your blog, great tips in there!

    • ElisabethJoanne

      As the employed spouse, I had similar resentments. Here’s what worked for us:

      1. I shared them with my husband. Even if I love him and want to share everything with him, it was hard to have finances be unbalanced, to be constantly paying for everything. I asked him to say “thank you” when I bought groceries and paid the rent.

      2. I made a list and encouraged him to make a list too, of things I wanted but couldn’t afford. Part of this was just getting the angst out, part of it was planning for the future.

      3. I let time pass. After a while, I no longer think of how marrying him changed my single-life budget. I think about how we can improve our present budget.

      • Marcela

        I like the idea of the list of things we both want so we can go back and revisit as needed. I don’t think that having him say thank you would work in our particular dynamic, he tends to take care of most of the house stuff since I am the one working and paying bills. Gender dynamics are definitely at play here too, because I’m not sure if I would be as bothered if I were the one not working with him supporting me as we are thinking of doing for some time when we have kids. goshdarn cultural stereotypes that devalue the work that goes into keeping the home. I hate it when I realize I’m falling into those traps.

  • TeaforTwo

    Sharing finances has been one of my favourite parts of being married, and it’s one of the ways that marriage has made me better. We could not have different approaches to money and we balance each other out really well.

    I love systems, spreadsheets and budgets, but am also impulsive and go wayyyyy over sailor shirt budget from time to time. He hates budgeting and talking about money, but never buys anything, ever. His money just kind of…piles up in his chequing account (and did even when he was in law school!).

    Now that we’ve pooled finances 100%, I feel like I need to ask him before I buy sailor shirts…which means that even though he won’t say no, I think twice and have curbed my spending. And while he is at his desk cursing his ancient laptop, I can show him a spreadsheet that says “go ahead and buy a new computer, turns out we can afford it.”

  • Juanita

    I am an almost college grad (holy crap!) and this is something I’ve been really thinking about, sorting out all my finances soon so one I can keep on top of those loan payments, and two so I can feasibly save up and marry S in the next 2 years. And this system or something very close to it sounds like something S and I would totally be into. But thanks for the little steps too, I have a hard time breaking up the big things into little steps, looking forward to hearing your next insights!

  • Ana

    My wife and I combine funds, but we each have a separate checking account with a small amount in it for “fun” stuff/gifts for each other. We don’t delineate beyond one joint checking account and one joint savings account. Since she’s a PhD student and I’m slightly overpaid for my field (education), we decided during our engagement that we’d put her whole paycheck in joint savings and my whole paycheck in joint checking. We essentially live off “my” money and save “hers”, though since we don’t have accounts/budgets for different purposes we do draw from savings for the occasional big purchases (Christmas gifts, vacations, vials of donor sperm(!)). Not perfect but it works for us, for where we are in our lives right now.

  • KH_Tas

    Our setup involves me trying not to buy myself anything ever, him begging me to spend money on me things, and me getting grumpy when he spends money on himself like a ‘normal’ person. It’s a work in progress, caused partly by past times when we needed my level of self denial to keep afloat.

    • Meg Keene

      You guys need allowance accounts. We call them Pin Money.

      • Violet

        Haha, we call ours Mad Money.

      • KH_Tas

        We totally do. And I need to get over the idea that we have psychically figured out a good amount of spending money together, therefore avoiding the necessity of talking about it.

      • TeaforTwo

        Hahaha – when I got my first full-time job and set up a more complicated banking infrastructure, I had an account nicknamed “Pin Money.” When my husband and I combined our finances in December he saw that for the first time and asked me what on earth “pin money” is.

  • Meg

    This is a very interesting and timely post for me! We’ve been married for four months and, well, we’re still trying to suss out a system that works for us. I’ve naturally been more selective with what I’m purchasing for “me,” as has he, partly because we’re hoping to buy a house soon (!) — but we haven’t completely broken everything into neat piles yet. But we’re getting there, and I like many of your ideas. Thanks!

  • Lollygagger9

    Great series idea! My husband and I went shared finances when we moved in together. All our paychecks and other income go in a joint account; 5% gets auto transferred to a charity savings account we alternate using to support our favorite causes, and a certain number gets auto transferred to each of us for our spending money. I’m responsible for the bills and finances because I love that stuff. Since January it’s gotten amazing because we started using You Need A Budget (YNAB). Free trial for a month – no I don’t work for them. It’s awesome because it forces you to both track all spending (like Mint or Quicken) but more importantly makes you budget. Not just for the household business, but also for upcoming expenses they call rainy day funds. We now save $9 month in our Amazon Prime fund so when the $79 annual fee is up, we have that saved. Same for things like car/pet insurance, travel, holidays and birthdays. It’s also helped us realize where there has been some waste, and adjust so we can more aggressively pay down student loans. The one thing that might be a drawback for some is you don’t have separate physical spending accounts, so your checking account may look like you have a couple grand to spare, but in reality it is accounted for in the rainy day funds.

    • tashamoes

      Another YNAB user – I agree, it is amazing.

    • Been hearing great stuff about YNAB! When we get home, I think we’re going to try it out!

  • Hannah B

    Does anyone have any thoughts on the wisdom of aggressively paying down student loans instead of saving? Or, like, what a good percentage split might be? FH and I are planning on joint finances, as we joke, “my nothing is your nothing, sweetheart,” and we’ll have substantial student loan debt from two expensive master’s degrees. Granted, the interest rates are low (ish? 7-8%?) and I’m already on IBR, and he’ll probably be, too, as soon as his loans come due. I know APW isn’t necessarily full of financial planners, but in case anyone out there is or has faced the “do we start a savings account or do we make a real attempt to pay off these student loans asap,” I’d appreciate your 2 cents. Or do people do the Income Based Repayment thing with the intent of just riding the poverty line for the next 20 years so that the loans may (or may not, depending on the whim of Congress) be forgiven?

    • Laura C

      I am no financial planner, but unless you’re doing 20 years of IBR, I can’t see where it doesn’t make sense to pay down as much as possible, since however low the interest you’re paying is, the interest you’d get in a savings account is a lot less. Interest on savings is comically low. The exception is tax-sheltered retirement savings, especially if your employer does matching. That I’d go for. But again, absolutely not a financial planner.

      • rys

        And student loans are not discharged in bankruptcy so they’re the one debt you have to pay no matter what. (Not that bankruptcy is the goal, just that student loans never go away unless they’re paid.)

        • Cam

          Not even discharged by death!

      • Emmers

        That’s how I view it– I have a small savings nest egg that I developed, and then right now I’m paying down student loans more aggressively rather than saving more. I view it as saving us 6% (by avoiding future interest), and I too think about how this is a better return on my money than if I were just saving it.

        • Tennymo

          I’m not sure the interest rate on your loans versus what you would earn in a savings account is the right comparison. My husband and I were “lucky” enough to begin our joint financial relationship with many student loans with different interest rates. After putting away some emergency savings, we tackled aggressively paying down the loans with interest rates of 8% or higher. After that, we each consolidated the remainder of our loans, leaving us each with interest rates of 5-6%. We now make the payments on those loans, but concentrate all extra money on investments, because over time we believe we will beat the interest rates with our investment gains. This year we certainly did – I think our mutual funds earned over 20%. (Obviously we don’t expect that to continue.) I also think that careful investment in real estate can make aot of sense to do versus aggressively paying back loans that don’t have out of control internet rates, and we’re currently looking into that. Of course your tolerance for risk is relevant to whether this would work for you, but there’s my 2 cents!

      • SarahRose

        I think the key concern is liquidity. If you have access to credit or a credit card, then I think Laura is right — you should pay down the student loans aggressively since you will reduce your interest paid (which will definitely be a larger amount than potential interest gained in a savings account). The situation you don’t want to be in is an emergency where you don’t have income and don’t have access to credit, but have paid down a bunch on your student loans. You also take the risk of an even higher interest rate if you have to keep a balance for a few months on a credit card, so that’s worth weighing too.

        • Laura C

          Yes, this is where I should fess up to the unthinking class privilege that went into my initial response: having emergency savings is not something I’d have thought of because, uh, it’s just never been in question.

        • TeaforTwo

          One thing to keep in mind about using credit as your emergency fund is that it isn’t guaranteed: as we saw during the financial crisis, the bank can yank your credit if they need to tighten their belt or you become a bad risk. And the time they are most likely to do that is when your chips are down, like after a job loss. (Plus, in a job loss-type of emergency, you’re less sure of when you’ll have an income to repay the credit again, which is almost surely at a higher rate.)

          So…cash emergency fund, for the risk-averse.

    • Cam

      Most of the advice I’ve seen is to work on emergency savings first–6 months of living expenses at least–before you start paying down your loans.

      • Dom

        I agree! Create a budget for your monthly expenses, and what ever you have left over I would split between your debt repayment and your emergency savings. Once there is 6 months worth of your living expenses in that emergency savings account, reduce your savings and increase the amount of that money going to the debt until it is paid off.

        Here is a repayment calculator, so you can compare any interest costs to keeping the loan longer:

    • Lauren from NH

      If you don’t have an emergency fund, you need to start building one STAT! Based on my personal finance understanding this is the one exception to what Laura C said about low interest in savings versus high interest on you loans. If one of you gets sick, fired, crashes the car, the bills still have to get paid. 3-6 months emergency savings in recommended at least.

      • Hannah B

        Thanks all for the advice! :-) I think what I was searching for was the solution of the “emergency fund,” and then paying down the loans. It’s basically the equivalent of paying a mortgage on a small house in the suburbs, but the house is all in our minds (Insert Thoreau quote about castles in the clouds here). I read somewhere about some family living on one person’s income, and the entirety of the other person’s income was dedicated to paying off the debt, and they were debt free from 100k in a few years. I’ve been wondering if that sort of sacrifice is the most intelligent way to do things (or feasible while in NYC). I think I’ll end up paying 10K in interest alone if I pay over 20 years. But in any case, it makes sense to build up some security (like the rainy day fund) and then pay the debts off as aggressively as possible. We both don’t put any stock in ever owning a home, because I can’t imagine taking out so much money on purpose ever again. We’ll see. Thanks for the 2 cent coins, you guys!

    • EllaByNight

      I think the best way to address this is to start a small emergency fund first then start paying down your debt aggressively once you have a bit of a cushion. How you define small will be influenced by your income and expenses, but it’s generally good to have at least $1,000 in an emergency fund to cover unexpected expenses like car repairs, large vet bills, etc. Having this cash set aside will help you avoid racking up high interest debt by charging emergency expenses. Once you have this cushion, you can start aggressiely paying off your student loan debt since even “low” interest rates are costing you more than you would earn just having the cash in savings.

      A caveat: if your employer offers matching contributions in your retirement plan, you should be taking advantage of them–even if it means not paying your student loan down quite as quickly.

      • kcaudad

        I agree whole-heartedly with this suggestion! Build up a small emergency savings amount (i.e: a few months bills, etc.) and maybe save for something else that you see as a ‘needed’ expense in the near future (for example: my car is old and will need to be replaced within the next few years – we have the amount for a new-to-us used car in a savings account waiting for the day my car dies!). Then, start aggresivly paying down debt! You cannot save enough or earn enough interest in the stock market to make up for 6-7% of compounded interest on loans! And, within a few years, your income may go up (hopefullly!) and you will have to make larger payments. I just can’t stand the thought of paying on loans for 20+ years! We are currenlty on-track to pay our’s off in 7. However, we do contrinbute to 401K’s because it’s required by my employer and his employer matches up to 6%. So, that seems worth it to me.

      • ART

        Seconding and thirding the advice here (save a cushion, then pay down that debt asap). 7-8% for student loans is not really that low – a lot of the advice out there about paying it off slowly is geared toward people with a 2-3% interest rate on their loans (while I know some, I am definitely not one of those people). Paying off debt at 8% gives you a great guaranteed return on that investment (i.e., not continuing to pay 8%), whereas no savings account will do that for you (either it will be lower, or it won’t be guaranteed).

        I paid off my grad school loan last month and it was awesome. Undergrad is next :)

        • Lizzie C.

          That’s a great way to look at it! I’m already annoyed at the low interest rates on my savings accounts, so now that I have an emergency fund I might as well channel that annoyance into extra loan repayments that could someday nibble away at the principal amount (gasp!).

          • ART

            One thing that REALLY helped me in my debt repayment-or-savings dilemma was to start tracking net worth. I made a Google spreadsheet with each debt account at the top with negative numbers (at the time, car and student loans), then each long-term savings/asset account (like house savings, Roth IRA, 401k), then a row that totaled those amounts (net worth). I don’t count my emergency fund among my “assets” for net worth purposes because the point is that it could be gone in a flash if there was an emergency, and that’s OK. Now, when I pay off student debt and update that negative number, my net worth goes UP and it feels amazing. If I put money in my house savings, the effect is the same. So I’ve learned not to value savings *over* loan payoff where it doesn’t make sense to do so.

            Hope that made sense :) PS – I do a lot more with my spreadsheet in terms of planning/projecting, but that has been added as needed over time.

    • Meg Keene

      Suzie Ormond has a bunch of GREAT stuff on this. Go buy some books or DVDs.

      But yes, emergency fund first.

      • ART

        I *love* her. Also, it sounds cheesy, but I found Smart Women Finish Rich by David Bach to be a worthwhile read. At first I was like what does this MAN think he knows about us!? But he makes some really, really good points about women’s finances (like, well duh, most run of the mill advice assumes you’re a man who, statistically speaking, will work more of his life, make more money while doing it, and then not live as long). Definitely a YMMV type of book with some of the chapters, but useful for me.

        He has a couples book, too, but I haven’t read it.

    • ElisabethJoanne

      In terms of just keeping money in the marriage, it’s an easy calculation: Can you get better investment returns than the interest rate on the loans? This is especially true if your investments are tax-advantaged, as in a 401k or “traditional” IRA, because interest on student loans is also tax-advantaged.

      But in terms of financial peace of mind, it depends on what size emergency fund you’re comfortable with and the terms of the loans. Our loans can be deferred in case of unemployment, so our emergency fund doesn’t have to be as big. Other loans don’t have that option. Some people have good, fast fall-back positions if they lose a job (move in with parents, certain they can get freelance work, good disability insurance). Other people don’t have those fall-backs or may be really worried about losing a job. They may want a full six months pay in liquid savings.

  • MEM

    I know this conversation is about finances, but I just wanted to share that this saturday I am getting my first ever couch. the folding chairs in the living room are finally being retired. getting a couch is making me feel more like an adult than managing my own finances, living on my own or even getting married has.

    • Pbeth

      Yes! My husband and I recently bought our first new furniture not from Craigslist, and owning a new bed and couch has been wonderful. It definitely was an adjustment price-wise though…

      • Elisabeth S.

        Woo, getting a real couch! For ages we had a tiny, tiny loveseat that fit exactly 1.5 people; REALLY fun for relaxing. Also, this is why we sprung for the warranty on our couch. I think it’s the most expensive piece of furniture we own (and it wasn’t even that expensive, comparatively!), and I plan on sitting on that thing in 25 years.

      • MC

        Ditto – we just bought a new bed and new couch for the first time ever, and even though the prices of those items blew my mind, I looooove our new bed and couch – definitely worth it in the long run.

    • js

      Yes! God, I was such an intolerable human being when it came to combining our stuff once my husband and I moved in together. I was so proud of my couch and my dining room table, which were my first major adult furniture purchases, that I basically made him store all his things at my Dad’s until we moved into our first house. Nothing makes you feel more like a grown up than seeing the furniture delivery truck, I swear.

    • I bought my first new couch in January! It is a big deal! And I am sitting on it now and love it…

  • Sonora Webster

    Thanks, APW! I read somewhere that a lot of women start thinking about their finances after a breakup or divorce, and it seems like such a better idea to discuss it during wedding planning!
    Also, how smart to put this right after the post on roadblocks? So many roadblocks to talking about money!

  • Shauna

    One thing that marriage has taught me is the importance of saving for retirement. I was always leery of locking up too much cash in retirement funds, but my husband has encouraged me to save aggressively and it’s really paying off. He helped me realize that we actually don’t miss the money when it’s diverted from our paychecks, and seeing our combined balance growing (and both of our names on the accounts) feels lovely and secure.

  • Michelle M.

    My fiance and I have been sharing financial goals for a while now, but will actually combine them into joint checking and savings accounts soon. We will also each keep our separate checking accounts for fun/allowance money. The allowance amount will be the same for both of us (he makes a bit more than me, but we’re both equal partners in our relationship!). Our plan was just to have one household checking account, but I really like the idea of HH business and flex accounts, so maybe we’ll consider that! We’re lucky to be able to function with just a loose budget (that just exists in our minds) right now, but will look at building a firmer one after the wedding (in 4 weeks!). We paid off our credit card debt together last year and it was WONDERFUL. We will develop our budget and financial goals together, but I will manage most of the day-to-day financial activities (balancing the checkbook, paying bills, etc… Accounting major, woo!). I’m really looking forward to our shared finances. I do think it will take some time to decide what we want to come from a shared flex account vs. personal allowance accounts (haircuts? new clothes/shoes that are needed?), but the shared google doc is a good starting place.

    • kcaudad

      This is how my hubs and I started out. We did the shared and seperate accounts for about 6 months until it was just too crazy for us, then finally joined everything. It is so much simpiler and easier for us to do it all together with joint accounts. Best of luck as you negotiate the journey!

  • Laura C

    I think we are going to do basically what my parents do: totally pooled money, just one checking and one savings (and whatever 401k etc accounts). When we moved in together, we were doing a thing where each month I wrote him a check for my part of the rent and it was a set amount, but now he’s using my credit card (because Starwood points) and I’m paying that bill and then putting whatever I can toward rent. I figure while he’s in law school, better we live as much as possible on my salary than have him either accumulate more debt or take money out of his very well managed savings, which is yielding much better returns than my regular old savings account or my little CDs.

    The money management thing is one we have to figure out; A is so much more spendy than me. I mean, I buy more bronze lace dresses (but it was on sale at Anthropologie for $39.95!), but he goes to Starbucks most days, eats lunch out, can always find a reason we should be having a celebration dinner out somewhere. The goal is that when he starts earning piles of money as a lawyer, we keep living like we are now and aggressively pay off his loans. So that will be the set thing: a giant loan payment every month, bringing us down to about the income we have now to live on. But actually tracking expenses? Oh, wow, that’s hard to imagine. And since my parents don’t do it (high incomes plus generally frugal lifestyle means they don’t have to), it’s not something I feel a particular need for as part of adulthood. Though again, given A’s spendiness, we should probably discuss it sometime.

    • jashshea

      So, tracking expenses. I think if you’re trying to do something specific (save for big ticket item, pay down debt), have an unexpected fluctuation in income (someone loses a job/gets fewer hours), and/or have never tracked for a month or so, it can be a great process. I track expenses for a month or two every 1.5-2 years as a status check.

      Otherwise, I’m a big believer in automating what you can. If you’re able to pay your bills and hit your savings goals you should generally be able to say: “if I buy this dress and a drink from starbucks, it means I can’t have lunch with Susie on Tuesday.” So much tougher with credit cards than cash, of course, and not the right fit for everyone.

  • Lauren from NH

    Since this is going to be a new series, if I can make a suggestion/request? I would love to read about partners of different financial backgrounds, making the decision to combine finances. How to understand the changing status of privacy and control. I have a small inheritance and am the financially savvy one, he has major student loan debt and is learning personal finance at my insistence but still struggles to budget and track his money. While if we had shared finances it could be good that I can stay on top of things, but I wouldn’t want him to sit back, only aware of how much allowance he has. So yeah, a post about the transition from separate to joint would be awesome in my book.

    • Elisabeth S.

      That’s a great idea. I’m not the one to do it, since K and I have reasonably similar financial backgrounds (although our families have different opinions on spending), but it would be great to see a sort of How We Did It follow up to this post — http://apracticalwedding.com/2014/02/marrying-up/

    • twofishgirl14

      Side request – can we talk about what it’s like when two people walk into a relationship with debt? * cough cough * every couple where both people recently attended college * cough cough * because while I have NO issue with my fiance and I paying for each other’s food, utilities, whatever, I would mortified if he paid for my student loans or credit card debt, and he feels the same way. We both feel like we took on debt as individuals and should pay it off as individuals (which is different from, say, our joint car loan, where that was a decision we made together and therefore pay off together). But if one of us lost our job, or had a significant change in income, or if I were to stay at home with a kid, this is a thing we’d do right? We’d take on that other person’s debt? The thought makes me feel totally ill.

      • Kendra D

        We shared debt. You can’t actually combine two individual’s student loans into one consolidated loan specifically because it’s impossible to unconsolidate them on the occasion of a divorce, but obviously you can both contribute to paying things off. Right after we got engaged, my then-fiance cashed out some savings and wiped out what credit card debt I had left. We then tackled our student loans based off of which ones had the higher interest rate. It was important for us to set this balance from the start because I quit my job and relocated across country for him and less than a month after that we moved over seas. As long as we keep moving for his job (which we will) I will always earn less than he does, so it was important to us that we knew we were in it together – debt and all – from the start.

      • I’m the only one with debt in our relationship, and our plan is to pay it off together. In fact, technically, Chris has been making payments for me the past 6 months while I haven’t had a job. We are basically on board with the marriage as mini-socialism idea, but it’s also a logical choice for us. It just doesn’t make sense to us not to consider it both of our responsibilities, since its existence in our financial landscape affects us both. If only I was contributing to it, that’s just less money I can put into joint accounts, savings, retirement, etc. You kind of end up paying for it directly or indirectly, you know?

        • twofishgirl14

          I forgot about that “Marriage as mini-socialism post.” Excellent post, excellent point.

        • Bryan and I are also paying off all our debt together, starting when we got engaged. It made more sense for us because together we could keep from deferring his student loans (thus minimizing tax we’d pay later) and increasing my credit card debt. I credit this choice being a major factor in us being able to buy a house so quickly. But mainly I think that I didn’t want to use Bryan’s debt against him (as money has been used against me by my family in the past), and paying our debt off more quickly puts us on more even financial footing sooner, meaning less to feel bad about long term.

      • jashshea

        Not sure if this helps, but I think of money in two categories: What I/We Have To Give To Other People and What We Get To Keep To Spend On Future Fun Stuff. Rent, loan payments, credit card bills, etc are all in bucket #1. I’m always trying to push us further into bucket #2.

        The individual nature of SLs does make that more complex, of course, and it’s a relatively new problem. If you reframe it as “if we pay Bill XYZ off, we can put money into our fancy vacation/couch fund” it may help with the ill feeling?

        • This is how we think of it too–us against the world/bills!

      • enfp

        Great suggestion. This is a tricky issue, and I think relates to the point made above that dealing with money is very emotional! I am heavily indebted thanks to student loans, while my partner is debt free with a small nest egg. He hates debt and wanted to use his savings to pay off my debt. I resisted this for emotional reasons. What we ended up doing was I increased my debt repayments, and he directs his money towards a joint savings account. This way I can pay off my debt faster and not feel stressed that I’m not saving, and he still feels good that we’re on track in terms of saving and getting out of debt. There are different ways to combine finances, and this structure allows us to jointly work towards our financial goals, but mitigates my ill feelings because technically I am still solely responsible for paying down my loan. If things change for you, hopefully you can find a structure for joining finances that makes logical sense but also addresses your emotional feelings around money.

      • Nikki

        I felt like it’d be weird if my spouse paid off my student loan debt. Then I realized I had no problem covering for him when he couldn’t make rent (when we were still dating). I was annoyed at him when he was embarrassed to accept my help for rent and groceries, then realized later that I’d be doing the same by refusing to let him help me pay my debts.

        And I had the same thought you did: we’d have to support each other through illness, pregnancy, etc., and what we contribute to the marriage and what we need to spend is not dictated by what income we make. Everything that affects him financially, affects me financially, and vice versa. We ended up completely merging our finances.

      • Violet

        My partner and I pay for joint things in proportion to what we earn… AFTER monthly loan payments. My partner decided how much he was going to put towards his student loans every month (a LOT, he was aggressive in paying it off), we subtracted that from what he brought in, and we then used that number as his beginning contribution number. My contribution number was just my income. So while I *technically* helped pay down his debt (by contributing a larger proportion than I would have otherwise), I didn’t in a practical, Here’s A Check sense. We both felt comfortable with this arrangement. And really, what else is there than a plan that makes both people feel comfortable?

      • Meg Keene

        I just want to strongly urge everyone to look at the law here. Without a prenup, the idea that your debt isn’t joint marital property is…. dicy. You’d have to be SUPER careful to keep it as separate property legally. Which is why I think not having joint finances practically is pretty wild (not good wild). Plus, you now have a shared financial future, and you have to get that debt taken care of first.

        Student loans, as previously mentioned, are somewhat different legally (in good ways and bad ways). But you’re both reaping the benefits of that education, and your financial future still hinges on when you can pay them off.

        • Beth R

          Perhaps one of these articles could be about the laws? When I was trying to find this information before getting married, all I ever really came across was a lot of lawyer speak and bad government websites. Perhaps APW could look into easier to parse resources for this information?

          • Alyssa M

            I would definitely second this… if the laws weren’t so different depending on where you live…

      • I used to think that our debts would be separate, but I realized that if we were partners we needed to actually act like it. I started to learn it shortly after we got married when I got my retirement account statement and showed it to him so he knew what we had in savings and also so he knew what company to call if i get hit by a bus tomorrow. He said it wasn’t our money but was my money (he has no retirement savings). Nope. I told him that we weren’t gonna retire and have me well fed, housed, and clothed while he had nothing. That’s not a partnership. Same with our debts. I used to be angry with him and want to keep our debts separate so I wouldn’t have to pay for his mistakes. But I have debt too (also fraught with mistakes). It took a while but I realized that the debt and money was all “ours”, regardless of who accrued it. I realized that the more money one of us spent on debts (or anything else), the less we would have to contribute to our household. So one person’s penny pinching affects both people. So we agreed to get on a tight budget to work on paying off our debts. We lined them up, smallest to largest, and started making payments, working together in an agreed upon budget.

      • Caroline

        I think that if you are sharing income and are life partners, it makes sense to share student debt. Those debts are costs that hopefully, and in intention if not actuality, allow you to better help support your family together. Yes, one person gets the degree, but the whole family benefits from the degree. I just view student debt as part of the costs of the family unit. We don’t have any right now, but we may aquire some before my partner finishes school. Helping pay those debts is no different, to my mind, than paying our bills while he is in school, which I will do when I graduate, without any qualms, while he finishes his degree. It’s just part of our family bills.

      • La’Marisa-Andrea

        We both came into our marriage with debt, but our philosophy regarding that debt was different. We view ourselves as a team and therefore, paying off debt is viewed as a team effort because it’s getting the TEAM where we want to be financially speaking. So in that sense, it makes sense to us to share debts that were acquired individually. And also, since we have pool our money, there’s no such thing as using my money to pay my debt and vice versa.

        If this is something that’s going to bother you, I suggest you guys sit down and discuss what happens practically speaking if those things were to occur. Even if you plan to keep certain aspects of your finances separate, you still need to have a plan for what happens if someone loses their job etc.

    • Meg Keene

      Just a note: while I firmly believe that getting married is pulling together (in reality, if your partner is paying off their student loans “alone”, that’s money that’s not going to your future savings/ down payment/ etc. So it’s a fiction that you’re not both paying them off.) THAT SAID: student loan debt is blessedly attached to the person, so if they die or you divorce, you’re not stuck with it.

      • kcaudad

        Check your state laws on this… my sister-in-law is a lawyer and informed us that we live in a 50-50 state. Therefore, in general, if you divorce, the assets and debts are split 50-50. When we got married, I instantly owned 50% of his debt! Therefore, we are working to pay everything off jointly! Also, upon death, debt (including students loans) and assets get transfered to the surviving spouse automatically in our state. Therefore, if one person dies, the other is stuck with all the $ or all the debt! Fun times. But, that really changed my mindset on joint vs. seperate finances for us.

        • Meg Keene

          That’s usually true with debt, but federal student loans are the exception there. Federal student loans die with you. Double edged sword, because you can’t discharge them in bankruptcy court. (To be totally clear: PRIVATE student loan debt may work differently. I don’t know, we blessedly haven’t had to deal with much of it.)

          BUT. YES. To the greater point. YES. This is why I don’t believe in not pooling finances and getting hitched. (If you don’t want to, stay legally unhitched, even if you have a wedding.) You might not be helping your partner pay off their debt, but SURPRISE, it’s (probably) your debt now too. If it’s a issue, see a lawyer. You can keep debt as separate property with a prenup and no pooling of assets to pay it, I believe, but you’ll have to be careful. (And also, in real life, it still effects your joint financial future.)

          • Lauren from NH

            Hmm… Now you have me thinking. He definitely has some private student loans, so if we get married before those are paid off, it probably is worth consulting a lawyer at least to understand where that debt would land if he passed and if we are comfortable with that. Also I love that you are such a positive advocate on these issues. Silence and stigma serves no one.

          • kcaudad

            The issues of private vs federal student loans is a good point. ‘We’ have both, so I haven’t really looked into the differences. Either way, ‘we’ are working to pay them off ASAP!

          • Ashley Meredith

            “If you don’t want to, stay legally unhitched, even if you have a wedding.”

            Are there people who do this, and if so, can we get them to write about it on APW? Because it’s not something that ever really gets talked about (I mean, I can’t think of a wedding/marriage option that gets talked about less), and I’ve always found it really fascinating as an idea.

    • Great suggestion! I also have the same situation and I am the spreadsheet budgeter, the penny tracker and he is the Smoothie King purchaser, doesn’t open bills-er, debtor. We have spent all three years of our marriage (and many years dating) trying to navigate these financial waters, learn where eachother is coming from, compromise, and learn to work together. I do the budget and balance the checkbook since I like it and I show him it and we discuss it . He has veto power just as I do. Our money is our money (even if I earn it because he’s a student) and our debt is our debt (even if the majority is his). It took me a couple of years into marriage to really grasp that concept, to not demand that he do things the way I do them just because I’m more financially responsible, to allow his opinions to be valid, and to really have 50/50 say in financial choices. Honestly, its still a navigation process but the water isn’t so choppy. And if you want someone to write on this (shameless self promotion) I am a personal finance blogger and freelance writer so I would love to tackle this :)

  • Dom

    We have everything separate, but with a his, hers, ours mentality. I’m a big budget maker, and I have one for monthly, yearly and planned spending. Using my numbers, we pay all household bills on a percent scale (ie, he makes 65% of our total income, and I make 35% – so he spends 65% of the “ours” bills). It is really ad hoc, as we don’t share any accounts. So one month I may end up spending more on food, and he may spend more on the winter utilities but we keep talking about it and the single most important question I ask once a month is – does this still feel fair?

    Luckily, we are both frugal and have the same grand plan of retiring at 55 on a secluded acreage – so it is easier than if we had different goals.

    If anyone is having any issues with managing money or financial planning of the basics, my guru is Gail Vaz-Oxlade: http://www.gailvazoxlade.com/articles.html

  • We’re planning to have a joint checking and savings for joint expenses and keep our personal checking accounts for whatever is left over.

    I do worry slightly that since I make so much less than him it will leave me high and dry at times, so we might have to adjust the system, but objectively it seems like it will work for us. We’ll be beneficiaries, but not joint on our personal accounts. My fiancé doesn’t want to combine everything 100%, and I think I am way too obsessive to have to track ALL of our transactions in the budget (I use YNAB, which I love but which requires you to enter all transactions manually).

    It might just need to be one of those things we tinker with as we go…

    • This is basically what we do. I am the lower earner in our household so we contribute similar percentages of income to our joint accounts, which are used for things like groceries, vet visits, dinners out (unless we decide one of us is treating, which is another barrel of someting..), trips to the eye doctor, etc. I’ve finally established a comfort level with using our joint funds for going out to get food when I’m on my own (my husband travels for work). This came after a conversation with my partner where he flat-out said “you need to eat – we pay to buy food out of the joint account, why can’t you go to panera/order pizza/go out to eat and use that card, too?”
      I mean, it sounded obvious when put that way, but it wasn’t obvious until it was put that way. Since then we’ve established other ways it is okay for both of us to use the joint funds that may not be for the bills and other needs, but are things we would buy out of our joint account if we were out and about together, though with a reasonably set budget.

      • Yeah, my fiancé works a lot at times, and that will only get worse as he moves up in his career. I’m sure that we’ll end up with a similar outcome. A girl’s gotta eat… :)

        • Yes she does :-). And occasionally add some random stuff to the weekly Trip to Target for Toiletries. Which we both do…

    • enfp

      This basically what we do. Our incomes are similar right now, but the amount we put into our joint accounts is tailored to our incomes, so I pay more because I make slightly more. This avoid him being high and dry (aka not having his share of personal discretionary spending). We’ve also had to re-jig a bit what counted as a household expense. For example, initially the car was treated as his personal expense since he needs it to get to work and I rarely use it, but for various reasons we ended up moving it into the household expenses because it was leaving him high and dry (and I didn’t think he should bear the costs alone since his insurance went up when he added me on). So we’ve found that with a little tinkering this system can remain functional and fair to both of us. We’re definitely going to maintain our separate accounts, we also enjoy it!

    • La’Marisa-Andrea

      The great thing is that you guys can always revisit and revise as needed. We started out with a system similar to yours because it seemed to make the most sense and two years in, it was no longer working for us. We still maintain separate accounts but there is complete transparency about what is in them and where the money in them comes from.

  • Cam

    I SO hate to be a wet blanket here but APW’s all about diversity of opinions, right? [Puts on her lawyer hat] Reading all this about joint finances brings to mind the following points: 1) I hope everyone has an individual savings account, which is accessible at any point (i.e. not an IRA or 401K)–if you get a divorce or your SO gets into financial or legal trouble or passes away, the joint assets could be unavailable to you for a considerable amount of time or at risk entirely. 2) if you are merging a considerable amount of your finances (not just a joint account here and there), I hope that you are legally married or in a legally-recognized domestic partnership–breakups are hard enough without steadfast rules about how money should be divided. 3) Know the laws in your state concerning allocation of assets in a divorce–you’d be surprised how courts treat things such as supporting a spouse while he/she gets a degree, etc. With that said, merge on!

    • Elisabeth S.

      Not a wet blanket at all! Those are great points. (This post was too long already, so I cut a section about our separate retirement accounts.)

    • Megan

      YES! These are incredibly important points to consider. I should prep the rest of my comment with two disclaimers: 1) I Am Not A Lawyer (IANAL) and 2) the hubs and I are ridiculously rational, pragmatic people. To the point where we were taking notes about getting our shit together (http://getyourshittogether.org/) in the airport on the way back from our honeymoon.

      Our situation is definitely made easier by the fact that we’re both financially very comfortable, and slightly more complicated by the fact that his family has a moderate amount of money. Due to this latter point we investigated signing a pre-nup. After reading a NOLO book (http://www.nolo.com/) we concluded that we would be content with how state laws would dictate dividing up our property (in case of either death or divorce), but knowing how that process was going to unfold legally was hugely useful and definitely informed later decisions we made about which finances to combine and which to keep separate. Regardless of your financial situation I *highly* recommend a bit of research on this topic; the ways in which your state allocates finances may totally work for you or may be a huge unpleasant shock. Better to figure that out now than in the midst of emotional upheaval.

      Similar to lots of other folks on this thread, we sat down with a giant spreadsheet to work out essentials, non-essentials, and our individual contributions to each. We take home roughly comparable amounts, but the details shake out quite differently (he’s a teacher, so has a pension, but no social security; my base salary is somewhat higher, but I sock away lots more in emergency funds since my job is somewhat less secure). We split essentials equally, but longterm savings and non-essentials are somewhat closer to proportionally split (that’s what works for us).

      We started sharing a credit card a couple of years before getting married, because that significantly simplified joint outings (no more keeping track of who picked up the last dinner bill, or swapping money back and forth for weekend trips, just an equal split of a single monthly visa bill). Now that we’re married we have joint checking and savings accounts, as well as individual checking, savings, and retirement. For our particular situation it feels very important to maintain these individual accounts, as this is how we’re ensuring that things we want to keep separate will stay separate (e.g., certain inheritances) and it’s how we both know we’re taken care of should (sadly, and hopefully not) things go south.

      • Caroline

        Yes, I found it helpful to read the NOLO book on pre-nups to look at options BS figure out how our state’s laws work. We decided not to do one because the way the state does money in marriage is what we want, but it was really important to me that we recognize that when you get legally married, you are essentially signing a pre-nup, but one you don’t see (the arrangement of money in marriage based on your state’s laws). It was very important to me that we decide explicitly whether that was the nuptial
        property agreement we wanted.

      • ElisabethJoanne

        That first site deals with another issue this series should cover: medical decision-making in the event of incapacity (e.g., coma). It wasn’t a big deal when I was single. My parents are still married and could work it out, I was sure. But I did not want my parents fighting with my husband over my healthcare, and in our state, there is no law that says who’s in charge if there’s a fight. “Next-of-kin” is legally meaningless here. So, six weeks after we got married, I completed an Advance Health Care Directive, signed it, and got it witnessed. Got my husband’s done a few weeks later so I won’t have to fight with my in-laws.

        They’re not a panacea, and of course you hope you never have to use them, but they’re a step to adulthood.

    • Meg Keene

      Yeah, these are all really important points that we’ve covered at length on APW before.

      I’m STEADFASTLY pro joint finances, and have never heard a argument that sways me in the least away from it. But, if you don’t have your bases covered, you’re a fool. And you should always maintain at least a credit card only in your name.

      That said, there is no reason joint accounts set up properly shouldn’t be available you to you if your partner dies. You might have problems with accounts solely in their name might go into probate, essentially tenancy in common accounts would go half into probate. But joint accounts with rights of survivorship or community property accounts are set up SPECIFICALLY so they don’t go into probate.

      And no one should EVER get married without throughly understanding the legal contract, and drawing up a prenup if there are problems with that legal contract.

      All that said, none of that takes away from the fact that marriage creates one joint financial future, and caring for each other financially is part of caring for each other. Full thoughts here: http://apracticalwedding.com/2012/03/combining-finances-marriage-wedding/

      • Cam

        Totally agree with all this. Not trying to indicate that joint finances are a negative–just trying to fill in for people who may not be so familiar with some of the finer points, or who aren’t familiar with APW archives! I agree that with a JTWROS, you are entitled to the full amount of account funds in the event of death with little fuss, but some people split accounts by adding their SO to their existing accounts (which in some places does not create a JTWROS) and the result isn’t the same. The nice thing about a JTWROS is that each person is entitled to the full amount of the funds in the account without consent or approval of the other, which is great in the event of one’s death, not so great if your SO drains all your accounts and moves away. Don’t laugh, it happened between a couple I’m close to and the SO left behind had no idea his wife was even unhappy. I’m just suggesting that maybe one individually-owned emergency account isn’t a terrible idea…it doesn’t make me less caring for my SO, just cautious by nature.

        • Violet

          Yeeeeeah, as my parents’ marriage was crumbling, the bank let my dad take all the money from their joint account and close it, without my mom’s signature. I doubt that’s legal, but they did, and my mom didn’t have the resources to fight that battle among the others being waged. I have a strong sense of Shoulds (ie, the world *should* operate a certain way), but often, you deal with what Actually happens, not what Should happen.

          • Cam

            I’m so sorry, Violet.

          • Violet

            Thanks. You know, it made us wiser for it.

          • Rachel

            So sorry, Violet.

            Happens more often than you might think. My father in law did the same thing to my mother-in-law and left her with a mortgaged house in the divorce settlement because he under-reported his assets (vs. having to chip in money from his retirement accounts). But I don’t think we should go into marriage planning for this… being financial literate about your own life is good and necessary but that doesn’t protect your from this sort of betrayal and break down in trust.

          • Violet

            Oh, you’re so spot on, Rachel. You do what you can, then leave fate up to fate. Applies to so many things when being a married Adult Child of Divorce.

        • Meg Keene

          I think it probably IS a very good idea.

          Though, Jesus Christ, with an account being drained, obviously divorce court is going to be where THAT is straightened out.

      • rys

        Joint accounts make the financial aspect of death much easier, as I’ve learned this year. At least be a signatory and have access — this is also true for safety deposit boxes which get sealed upon death notification if there is no other person in it. This is why my brother and I are now on my mom’s accounts, even though we don’t use or look at them. (Seriously: talk to older family members to get this stuff straightened out ahead of time.)

        Divorce is really different. In that case, joint accounts can be really problematic. One of the bankers we talked to told us this was why taking people off accounts (even when there’s a death certificate) is so complicated.

        Basically: what Cam said.

        • Meg Keene

          I want to add a caveat that we can’t just talk about “divorce.” Divorce works totally differently depending on the state that you’re getting divorced in. We’re in a community property state which means it’s ALL just going to get divided down the middle. That does not mean CASH is divided down the middle, that means all assets are divided in half. So, If I take the house (we don’t have one but let’s pretend) that may mean David gets all the money. And yes, you’re probably going to have to drain accounts and open new ones.

          The reason I believe so strongly in joint finances (with prenups as needed) is that marriage creates joint finances, flat out. (With the possible exception of personal funds that you never pool or use for support of the family, and god help you if you’re not strict about that, and don’t have a lawyer helping you.) But in short: marriage is a joint finance contract. So when you don’t have joint finances, what you’re doing is creating a little fiction of protection for yourself. Yeah, you may be socking more away, but if you get a divorce, it’s going to be split equally or equitably. In the first case you’ll loose half, in the second case you may lose more than half if you make more.

          At the end of the day marriage is about trust and joint support (and you know, financial literacy and covering your ass properly). But if you really don’t want to pool assets? You probably should not get married. I don’t mean that on some philosophical or ethical level, I mean that in a literal practical legal one. Most pre-nups aren’t totally bullet proof, even. In short: if you don’t want to share finances, I’d be VERY careful about getting legally hitched. And I’d only do it with a LOT of lawyers helping me out.

          (OH! And with older relatives, joint accounts are ok, but what you really should talk to them about is a living revocable trust.)

          • ElisabethJoanne

            Some banks offer pay-on-death accounts, or revocable trust accounts. These can be good options if setting up a trust for all the individual’s assets is unfeasible due to cost or stubbornness.

          • Meg Keene

            Or stubbornness, HA.

            That’s great to know (thank you!). But a general note, you still need a living revocable trust if you want things like HOUSES to not go into probate. And arguably, homes in probate is worse than cash in probate.

          • ElisabethJoanne

            Totally agree. I just figure if there’s a house, there should be money for a simple trust. It won’t always be the case, but it’s different from situations where the entire estate is that one savings account.

            Also, I know California has simplified procedures for heirs to gain access to bank accounts, title to cars, etc., for estates valued at less than $10,000. It’s something for the confident and motivated to look into if they’re stuck in a situation where there hasn’t been good planning. Otherwise, you’re probably stuck hiring a lawyer.

          • Meg Keene

            I just pointed out to family that it apparently takes $5K PLUS, plus 6 months to a year to get a house out of probate, and in the interim a sale can be forced if you can’t pay the fees. So, PLEASE spend the few thousand to set up the trust, because hi, it’s less in the long run. I recently learned about all this, and had a, “Oh holy fuck” moment.

          • La’Marisa-Andrea

            YES. ‘Cause in the event of divorce, having a separate account in your name with separate money legally isn’t going to help you if you’re in CA without a prenup because even the separate money you have in that account is more than likely a COMMUNITY asset as well.

            I agree with you. There’s really no way to get around the concept of a shared financial future when you get married and if you think there is, you’re fooling yourself.

          • Meg Keene

            PREACH. If you don’t want shared finances: don’t get legally married. Seriously.

            We talk a lot about what marriage is or isn’t on a philosophical level, but there isn’t a lot of debate on the actual practical legal level, and sadly there is next to no discussion. Marriage makes you a single financial unit and a family in the eyes of the law.

          • Megan

            I just want to clarify that (according to my non-lawyerly understanding of CA law) a separate account will be treated as community property if community income has been deposited into it and/or if community expenses have been paid out of it. It can definitely be very challenging to keep this sort of division consistently, so Meg’s advice to reach for a prenup or lots of lawyerly advice if such an arrangement is desirable in your case (as it was in mine) is absolutely spot on.

          • Meg Keene

            That’s just what I was going to say. Be careful.

          • rys

            Definitely talk about a living revocable trust. And make sure everything that ought to be in there is in there (because a trust without everything in it does not spare you probate). But the joint accounts thing can really help you find/access finances upon death because some banks can make access (even with death certificates and wills and trusts and whatnot) very challenging. Depending on the circumstances, this can be a minor annoyance or a major aggravation.

          • Elodie

            Just wanted to add a few things, as someone who is divorced and therefore got to figure out all the details in my (community property) state. One thing I see people confused about in community property states is that: all assets you have coming INTO the marriage, you get credit for and are yours when you leave. If you’ve got $1M dollars coming into your marriage, you get to leave with your million. You just split the assets acquired during the marriage. Also, inheritances are yours, UNLESS, you put them into joint funds and clearly mixed them in with the joint money. So, I’d suggest keeping any inheritances separate from your usual joint accounts. In my case, the financial division was simple, in part because we both had records showing how much money we each had coming into the marriage. (Not legal advice, just learned through experience).

          • Meg Keene

            My non legal advice would be to be very careful (and if you have an inheritance, consult a lawyer). If you co-mingle funds, it tends to not matter what you brought in with you. IE, I brought a bunch of funds in, but I co mingled them and used them for the support of my family, so now I couldn’t claim them and get them back.

        • Sarah E

          Totally talk to older family members about it. My extended family became a dramatic mess after the death of my great-uncle, and my mom is doing a fantastic job (with no thank-yous from anyone but me) making sure my grandma’s stuff is straightened out before she passes.

          Watching my mom as primary care provider for grandma has made me very aware of the impending care for parents in a way I don’t think my partner is, as his grandma lives in a assisted living facility, so her daily needs are taken care of, and his parents are involved more in a weekly sense than a daily one.

          . . .Can we add care for older parents as a discussion topic for Tiny Steps to Adulthood?

      • Laura C

        I’m not sure I’d ever read that post, and I love it so much. Just sent it to my fiance. This is how I was raised, this is what my parents do, and lately I’ve been thinking it through, trying to take it from a gut feeling to something more thought-through. I’ve been in all sorts of discussions with people making exactly the arguments you cited for split finances, and it just always rang false to me. The explicitly feminist arguments for split finances always made me, as a feminist, kind of queasy at the individualism they imply.

    • MisterEHolmes

      Thanks for mentioning all this, Cam! While I appreciate some of Dave Ramsey’s ideas, THIS is why I can’t get behind him: he advocates complete and total melding of finances, which just looks like a big pile of potential for problems to me.

      • sara g

        Yeah, Dave Ramsey has some great ideas, but I find him to be a little out of touch with reality in some ways. Like he pretty much says if you don’t completely combine your finances your marriage will fail… and he thinks if you take out student loans, you’re stupid (yes, he said this on his show just recently)… etc.

    • Caroline

      We do mostly joint finances, but I’m a big believer in the concept that a woman needs money of her own to be secure. It is something that I beleive in firmly, and if I have some money of my own, then he ought to also. For me, this means not just seperate bank accounts, but legally seperate property (we live in a community marriage state). I have a gift of some money to learn to invest with from my dad that will be my money-of-my-own nest egg, and when we have income (both students) we plan to save some money to set aside in an account for him designated as his legally seperate property.

      Overall we have mostly joint finances now, and in the long run the plan is that we have legally almost all community property and joint finances. We will have legally communal but mentally seperate allowances, and we will each have at least one legally seperate property account/ resource. It will include our initial seperate property as mentioned above and any inheritances. But otherwise, money will be joint.

    • ElisabethJoanne

      I agree with Meg that marriage means a joint financial future. I also know that there are circumstances more financially complex than divorce or death. Asset forfeiture related to criminal prosecutions is one. Another is collections from a civil judgment. In both instances, the law may technically be the same as in divorce or death, but there are practical issues of whether the creditor can find the assets in someone else’s name.

      Also, different kinds of assets are protected differently than other kinds. Retirement accounts (IRAs, 401ks) get more protection than what’s in checking and savings accounts, for example. There may be situations where a couple would want to move funds around, and set up accounts in only one person’s name so the assets are protected from creditors. Historically, for example, many doctors would have their houses in their spouses’ names so that the house wasn’t at risk following a malpractice judgment.

      Personally, I think going into marriage planning for asset forfeiture is similar to going into marriage planning for divorce. It’s such a huge change in the relationship, you can’t really plan for it. But when it comes to civil creditors, I can understand the scheming. But I don’t think it’s the kind of thing ordinary people need to worry about. It’s usually for people who are already regularly meeting with attorneys and financial planners.

    • Yes. When my husband left me, I did not even have a separate checking account. In the days after, I found myself in a bank explaining through tears why I needed a checking account. NOT FUN. I will never not have a separate account again. Even if I get re-married someday and do joint finances again (which I loved!), I would keep the separate account with a minimal amount of money in it (and nonjoint credit card, which I DID already have, thankfully). It was terrifying to suddenly be alone with a joint account that suddenly shouldn’t be touched, and about $20 in cash with about a week until I got my new debit card and could access the money from two checks I happened to have because I had procrastinated on depositing them. Thank goodness, because without those I would have been absolutely and completely broke when he left.

  • bsc

    My fiance and I are currently taking a finance class together at one of the local churches and it has been awesome for us both! We both have a pretty good relationship with money, but were still struggling with the “your money vs. my money” thing. After we took a general look at our spending and debt, we’ve devised a plan to pay off our debt aggressively because we want to be able to do other things (like vacations!) instead. Because his income is flexible (he’s in sales) and mine is not (paid on 1st of the month), figuring out a system based on how much money we make has been difficult, since it varies. Taking a team approach to it, however, is really important – this is probably the hardest part for us since we were so used to being independent with our monies! For the last month we have been writing down every penny we spend and it has really helped us see where most of our money goes (besides to the mortgage and student loan gods) and have been making a lot of decisions together! Great post and looking forward to this series!

  • emilyg25

    We have joint finances. We just believe that what’s mine is his and what’s his is mine. We lumped our expenses and debts together and are paying them off bit by bit. We save together. We have a joint long-term financial plan.

    Aside from the philosophy behind our decision, I’m really anxious about money and sharing everything gives me a clear picture of where we stand. Because really, even if we didn’t combine finances, his financial choices affect me. Legally. So now I control everything. Mwahahahaha. I use Mint for budgeting and I LOVE it.

    We do each get a small bit of fun money every month that goes into individual accounts. That way I can buy shoes or he can save something extra or whatever, without having to answer for it.

  • We are going to switch to joint account system like this when we get married. On your question about why different people in the relationship would have different allowance sizes – I can see it happening with us. It’s not just because he makes more, it’s because he’s made more for a long period of time and is accustomed to spending a greater proportion of his money, while I prefer saving a greater proportion of my money. So I think if I radically cut his allowance spending just because he got married, he would be upset, and if I increased my allowance to match his, I would feel anxious about spending too much. I think the idea is that in time, as we have more concrete things to save for, this would give him reason to cut down his allowance.

    • Rachel

      My sister and her husband did something similar to this — they gave themselves equal allowances, but her husband saved his & did not use it while my sister tended to spend hers down. Then, we then had a huge savings goal come up, he chipped in his savings to make it a reality. I also have a friend whose parents did this — the Dad spent his down, while the Mom saved for nice vacations for the whole family, because that’s what she wanted.

    • Caroline

      I think there can be a lot of reasons to have unequal allowances. If you both feel that allotment of allowance is fair, that’s fine.
      Another reason is the extra costs associated with being female or with one person’s career. Say that clothes and makeup come out of your personal allowance. Generally, such things are more expensive for women, because women’s clothes are more expensive, and women’s outfits are less multi-purpose (for instance, the same suit can serve a masculine dresser for interviews, weddings, funerals, church, and fancy dates, but almost all of those events require a different attire for feminine dressers.) It could also be that, say, you have jobs with different dress codes that have different associated costs. If one of you needs suits for work and the other needs jeans and a t-shirt, you might need to spend money differently on clothes.

      I think generally, equal allowances for fun stuff (not personal expenses) is a good idea, but not necissarily in every case.

      Thank said, it’s always worth talking about.

      • TeaforTwo

        YEP YEP. This is exactly why we don’t have an allowance system. I would feel strange pegging it unequally, but the reality is that our expenses just aren’t equal. His haircuts cost $12, while mine are ten times that much. I’ve had four years to build my “professional” wardrobe; he started his first full-time law job six months ago. At some point soon, we hope I’ll be buying maternity clothes, while the suits he has now will still fit him.

        Even if it weren’t about clothes and hair, we are into different stuff: I’m an extrovert, I like to go out and do things with other people. My husband wants to be at home, alone, reading a book. So when I spend $20 to go out for drinks with a friend, it gives us both what we need in order to stay sane. Right now, I probably spend more of our household income than he does. In a few years when he quits his corporate law job to go back to school, he’ll be spending more of it.

        “Joint everything” was our way of sidestepping all of those conversations. The way I see it, marriage is long, and it’s probably never going to be 50-50 at any one point in time.

        • Caroline

          Yeah, I LOVE having a clothing allowance (not equal, but according to our needs) because it makes me feel free to spend all of it on clothes, but our personal spending, we each have a dollar amount in the budget but it’s sort of fuzzily out of the joint pot which works. I get some of our money set aside for expensive haircuts because it’s an expense I have and he doesn’t. He spends less, I spend more, on ourselves (just with fun stuff like books, classes for fun, a night out) and it works out, because it’s based on a similar level of getting needs and wants met not a similar dollar amount.

  • Jules

    ” If I get the sailor shirts, I don’t get the Dar Williams tickets. Many of you might have figured this out two decades ago, but it was damn near revolutionary to me.”

    Elisabeth, this was the exact feeling I had when someone told me that the Disney logo spelled “Disney” and not “isney” with a funny picture in front, and when my boyfriend informed me that sunflower seeds COME FROM SUNFLOWERS. Spending money is a lot more painful when you realize that getting one thing means not getting another….(or maybe that’s just my pessimistic view)

    • MC

      Ha! My fiance just had the same Disney realization about a year ago.

      • Alyssa M

        I still think it looks more like Gisney with a backwards G…

    • TeaforTwo

      I loved that line. I have a coworker who is a very frugal superbudgeter. She was explaining her system to me, and I asked, “but what if you’ve spent all of your “eating out” budget for the month, and then someone invites you out for lunch?”

      When she said “well, I wouldn’t go if I’d used up all of my budget” MY JAW FELL OFF OF MY FACE.

  • Kelsey

    I am so pumped about this new series! Thanks for sharing your family’s system, Elisabeth!

  • honeycomehome

    I’d like to put in a plug for the joint credit card, especially as a first-step or middle-ground way of sharing finances. My partner and I have a joint credit card, on which we place all joint purchases (groceries, pet stuff, meals out together unless someone is treating, cable bill etc). We actually pay it off once every two weeks, on payday, as a way to keep our checking accounts in line with the reality of how much money were spending, but paying it off once a month would also work for the less neurotic.

    We also have a joint house savings, that we contribute to on an agreed on schedule.

    Pros of this approach: Sharing! But while still having a lot of personal control and independence. Also, racking up airline miles on joint purchases and demonstrating good credit. There are fewer complications than with a joint checking, since it’s easier to both open and close a credit card.

    This is probably not how we’ll handle money long-term, or once we are married and have kids. But it does work as two adults, and as a stepping stone between totally independent and totally combined.

    • js

      I just want to second the joint credit card, assuming that you and your partner are frugal enough to pay it off each month. I love ours because we get points and then turn around and turn them into gift cards we use for fun things. It takes some of the sting out of “having” to do grown up things like pay the mortgage when you know you’ll be buying a cool lamp or rug for the house, too.

    • TeaforTwo

      That’s what we did! When my then-boyfriend and I moved in together, we had almost exactly the same salary (within a few hundred dollars for the year), so we got a joint credit card for groceries, household stuff, and meals and travel together. Every month we split it down the middle.

      It was an easy way to start doing money together, because it was so clearly so fair and equal. I know some couples who keep grocery receipts and try to total and divide them at the end of the month…we were never going to be that organized. The joint credit card made everything really straightforward and neither of us started to feel like we were paying more because we straight up weren’t.

      • Not Sarah

        Thanks! I think this is probably what we’ll end up doing. For now, we’ve been reconciling travel purchases individually. We did link our checking accounts so we can transfer money to each other just as easily as our own accounts, which helps. And we have been using a grocery delivery service, so we have been putting everything on one credit card for a month and then reconciling. With one delivery a week and being able to look at the amounts online, it isn’t that hard. I really like the joint credit card idea as an eventual goal though and he seems to think it isn’t bad either to auto-pay bills on it and then have one manual payment. We could even make it so it auto-pays from his account and I pay half before the bill is due or something.

  • lady brett

    this is extremely similar to our setup. we have 6 bank accounts, which seems preposterous, but actually putting the money in separate pots by purpose is what finally got our shit under control (bills, household spending, kids, my money, spouse’s money, savings). joining our money was really never a question for us – i think in part because of the gushy stuff about everything being “ours”, but to be honest, it probably had as much to do with logistics and the fact that i was doing all the dealing with it.

    but also, it’s been *hard* – money is *so emotional*. as someone who was always super logical about money and budgeting, that came as a real kick in the gut. first because i *could not understand* why we couldn’t just sit down and hash out a plan (coming from the privilege of always having has a place to live, even when that’s all i had, and having a past partner who viewed us as a unit who kept each other afloat – it took me a while to realize that my spouse associated money with some real trauma from her past, which is rather different than being unreasonable or bad at math).

    and then came the shock that *i* am also emotional and unreasonable about money. i’m an inherently frugal person, which is generally a nice trait, but has the side effect that spending money *totally freaks me out* (seriously, i used to get in arguments with my mother when i was in *elementary school* because i thought that the clothes that she was choosing to buy for me with my parents’ money were too expensive. ahem.)

    anyhow. we’re getting there. i seldom cry over going out to eat (i also don’t look at the check). the spouse seldom cries when we’ve spent our whole grocery budget (i sometimes need to clarify that it’s gone because our house is now full of food to eat).

    • Caroline

      We have 360 capital one savings accounts which let you set up TONS of us account really easy. I think I have 10 savings accounts with them? It’s the best ever! I have one for the dentist and haircuts, one for annual household expenses (car registration, car maitenence, renters insurance, etc), one for clothes, one for emergencies, one for couple’s counseling, one for the honeymoon, one for our someday dream giant trip, one for saving up a big enough chunk to invest, etc. at the begining of the month, it automatically takes the appropriate, budgeted amount for that thing out of my checking account. Then when I buy the thing on my miles credit card, I transfer the money from the savings account to my checking account so it is there when I go to pay the credit card bill.

      For a long time, I just wouldn’t buy clothes and sun because I didn’t think we had the money. Now, I know exactly how much money I can spend on clothes (whatever is in the clothes saving account) and when I can afford a haircut, and I’m not worried we’ll accidentally spend the wedding ring money on something else. Also, the interest rates are shockingly better than my of bank. Like, I’ve earned about 10-15 dollars total in interest on my couple thousand in savings since August? I’m not sure that I had earned 15 dollars total in interest on my old savings account which I’ve had since I was about 12.

      But mostly, I always dreamed of having tons of bank accounts from which to manage each budget line seperately , and it is the best!!! We don’t have it set up for every budget line right now, although that may be my eventual goal… But it is so helpful!

      • Capital One 360 is awesome!

      • ElisabethJoanne

        I had about 6 Capital One 360/ING accounts when I was single for these reasons. I really liked it.

        Formal accounting works the same way, except the accounts aren’t separate bank accounts, but there’s still an “account number” for each kind of expense and income. I find it really intuitive, though I know other people like things simpler.

        • This comment makes me want to create financial statements for our finances. Like, have a full on trial balance with account numbers for everything.

          • ElisabethJoanne

            I have 0 formal accounting training, but my husband has a MBA and tells me I’ve apparently taught myself accounting. He thinks it’s hilarious that I’ll do in my leisure what was always his least favorite part of his work.

    • Amanda Michele Rhaesa

      I am totally with you on the frugal in a not healthy way. Seriously it took me an entire year to decide to spend $30 on boots I really really wanted (not healthy). Good for you guys it working on it and figuring out how to not stress each other out while not pushing the problem under the rug. It’s something my partner and I will have to work on. (he’s a spender but can afford it, it still freaks me out)

      • Meg Keene

        I’ve made huge progress on this in the last six years. Huge. Just to let you know progress can be made, slowly slowly.

    • Meg Keene

      YUP. Being frugal, or in my case being somewhat traumatized from money issues as a kid, makes you totally emotional in a different way. I wrote an essay that’s coming up about this, and my panic attack at a car dealership. It make you emotional in a lot of ways, not all of which are frugal, too. Like, you’re really really frugal, and then you finally have some money and you want something and you’re reaction is “I HAVE GONE MY WHOLE LIFE WITHOUT THINGS I WILL HAVE THIS THING FUCK THE MATH.” I’m not even arguing that’s always a bad thing, but it’s an emotional thing. And then you’ll turn around and have a panic attack about the grocery bill, because who cares about logic.

      And yes! We have a bunch of accounts (to be fair, counting different kind of investment accounts is probably cheating). But after reading this we’re going to open up YET ANOTHER checking account ;)

      • lady brett

        oh god, car shopping.

        • Meg Keene

          I just can’t. Previously we: didn’t have a car, were given a OLD impractical car, bought a car in cash because the idea of car debt made me have a breakdown. I am not taking well to this new level of adulthood.

          • ElisabethJoanne

            Glad I’m not the only one. I handle multi-million-dollar negotiations for work regularly, but car shopping is one of my roadblocks. [haha] Apparently it is for my husband too, because he’d rather be beholding to his abusive father by accepting a gift of a car, than shop for a car, when we could afford to.

      • TeaforTwo

        THE GROCERY BILL. Almost every financial disagreement that my husband and I have ever had about money has been about the damned grocery bill.

        I should disclaim that we are fortunate to be a dual income household with stable, well-paying jobs. We have no kids, and no debts other than our mortgage. Financially we are in a pretty good place. We don’t sleep on a bed of money, but we can buy whatever groceries we want without worrying.

        And yet nothing gets me more panicked about how we will wind up broke and homeless like when I find out that he has stocked with the fridge with individual pots of Greek yogurt (SO MUCH MORE EXPENSIVE than regular yogurt!) or bought fancy breakfast cereal when I can make our own granola with cheap bulk nuts and oats.

        Things that would actually make a difference to our financial situation: less international travel, a cheaper home, secondhand clothing, reasonably priced haircuts, less scotch. Breakfast cereal is absolutely not going to make a difference. But because it’s small, and I see it every day, it’s where so much of my family-of-origin “stuff” about money shows up.

        • Meg Keene

          Ha. That’s the list of stuff that would actually make a difference for us, less a home, which we basically can’t possibly afford here.

    • Audrey

      As the person who started from the super frugal side, one of the things that has really helped me is having sort of a reverse budget? Basically we have this:

      – Checking account should always have at least X rainy day/emergency dollars
      – Retirement and savings get X dollars every month (automatically done, calculated with the help of our financial person)
      – Generally know how much money we can spend each month (use credit cards primarily to help this).

      Around the 15th of the month take a look at checking account and credit cards and adjust spending appropriately – if we’re under for the month go ahead and eat out or make that bigger purchase! If we’re over because we made some big ticket purchases, reign in spending for the rest of the month.

      Honest caveat: this works for us partially because we’re not scraping by/have a fairly good rainy day fund and because my default is to save and not spend. But since I know that savings has already been taken care of automatically (and we’ve literally gone over it with an advisor and done the math that it’s enough to help us meet our goals, etcetera) I feel much more comfortable with little purchases.

      • The only way I’ve started saving any money is by setting up a savings account at the bank my check is direct deposited into, that way every paycheck a certain amount is automatically taken from that check and put into savings. Otherwise I find somewhere to spend it and it never makes it from my checking account. My checking account is where money goes to die.

        • DMarie

          I’m glad I’m not the only one with that problem! If I don’t get the money out of my account on pay day, it will get spent.

  • Lauren

    I posted this on the Wanting to Be a Mother post but thought I’d post it again as it is even more relevant here. Some financial resources that have helped my fiance and I are:

    YNAB (http://www.youneedabudget.com/) is a great budgeting tool. Unlike Mint, it makes you enter all your transactions, which was a big turnoff for me at first, but has led to me keeping a closer watch on what I’m spending money on. I think it costs $60, but is often on sale on Steam (the game application) for around $20.

    All Your Worth by Elizabeth Warren is a GREAT book for people with lots of debt and trying to get out. It proposes a stupid simple budget system based on percentages of your income (sounds similar to what you guys are doing). Some would argue that it doesn’t go far enough (see below) but it’s an awesome starting point and has been incredibly helpful for me.

    Mr. Money Mustache (http://www.mrmoneymustache.com) retired at the age of thirty with his wife so that they could spend more time with their son (among other reasons). He is a big proponent of financial independence, and I highly recommend flipping through some of his articles and the forum (you can even post your current budget on the forum to have it “critiqued” by fellow mustachians and given more detailed advice). The entire blog can serve as great inspiration.

    • Sarah E

      I still have the YNAB site open from your suggestion yesterday, so I can show it to my partner. And I totally added Elizabeth Warren’s book to my library list. Thanks for the suggestions!

    • Audrey

      I don’t know if this is true for other people who are sort of “natural savers”, but I find sites like mr money mustache are very bad for me personally. All I can think of after looking through them is “OMG we are the least frugal people on earth we are awful” Then my poor husband is left trying to be concrete “well, we could always try saving more money, but why do you want to?” while I’m not being rational at all. Total YMMV, but just a warning in case anyone out there is like me.

      • So, I’m personally a *huge* and long-time fan of MMM, but I’m totally sympathetic to how overwhelmed you feel when you visit that site. It might help to take it all in from a different angle — it’s empowering that you can do this same things I & MMM and his other readers do, you have all the power/control in your own situation, you can get started in the path on the right direction. The key takeaway (imo) is to be thoughtful/purposeful with spending, to think about what makes you happy.

        I find it really easy not to spend lots of money — being with my friends, fiance, family, spending time outside, running, reading good books, eating decadent cheese or drawing pictures or playing boardgames — this all brings me happiness, it doesn’t cost a lot of money (if you are purposeful, ie checking books out from the library instead of impulse purchasing everything under the sun to your kindle). On the flip side, I’m in a *very* good position financially because of this approach (and I’m not deprived of anything, just weigh what matters and what doesn’t, and it’s never a big deal to do anything spendy on occasion).

        I warmly suggest you check out this article (to me, it’s really down-to-earth and inspiring and yet makes everything feel attainable, I read it many times when I first discovered the blog) — http://www.mrmoneymustache.com/2011/08/01/a-millionaire-is-made-ten-bucks-at-a-time/

        • jashshea

          This site rules – just checked out your recommended link!

          I will say this: this site would have totally turned me off when I was in my early 20s and actually needed someone to explain this stuff to me. It took SLs+CC+BrandNewCar > Annual Salary for me to recognize that I was in a bit of a pickle. :)

        • Audrey

          Thanks, and I think I understand what you’re getting at. It’s just hard for me personally to read these things without ending up with the value judgement of wow, while I get a lot of enjoyment out of eating out at lunch (for example), I really shouldn’t be. So I really did just want to note that some of these websites may not be great for everyone.

          (FYI I followed some of these principles 10 years ago when I lived on as little as possible so I could pay off my student loans, so when I read this I seem to end up beating myself up that I’m no longer living as cheaply even though I make more money now.)

          That said, maybe this is a very personal issue – no one else seems to be talking about having this problem =)

          • Violet

            Huh. Interesting, Audrey. I happen to be very frugal already, so when I read things like, “It’s so easy to become a gazillionaire! Just cut back on your cable package!” I get a little angsty. Because we don’t have TV, let alone cable, let alone HBO, etc. So I’m like, “Why am I not a millionaire yet, and are you judging me, budget-author-person?” Anyway, it sounds like you know you best, and maybe reading the mass-market advice things isn’t going to be helpful for you. I find it helpful to read about benchmarks (emergency fund, retirement account, no debt), but the HOW of getting there (to me, at least) is very personalized.

          • Audrey

            Mmm, I think this judgement thing keys into something for me. I do feel like a lot of the big name financial advice does feel like they are getting very personal and even judgmental about what you’re doing. I also like reading about the benchmarks and goals more than the how.

          • Violet

            Me too. I ENJOY my morning latte from time to time, goddamnit! Solidarity, sister!

          • So I totally get where you’re coming from — I think you’re right in that there is certainly some judgement. Ie, I truly believe that if you have credit card debt and student loans, yet you’re buying lattes at Starbucks — you’re saying you value Starbucks coffee over getting rid of debt, which I would say is a bad attitude. So in that sense, MMM’s blog is giving a face punch to people who spend money they don’t have, since debt is an EMERGENCY, and going to coffee shops is a LUXURY, and getting people to realize they’re choosing to stay in debt by choosing luxuries over paying down debt is key.

            I have several friends that are put off by the website in the same way (ie, don’t judge me, don’t tell me I shouldn’t buy things I want). But what I see as the message of the website is an overwhelmingly positive one — EVERYTHING is in your control. Or, maybe everything isn’t, but a lot is, and if you focus on that, you can get ahead. For every person who has their finances under control and loves to indulge on the things that are worth it to them (me, you …), there are a lot of people that feel helpless when it comes to money, or feel like they can never get ahead. And you can, it’s simple (though not necessarily easy), and if you genuinely want to change your habits and life, you will find lots of information at the website.

            That’s why I like it — especially because thoughtful consumption doesn’t come equally naturally to everyone, depending on our upbringing. So I would just hope that instead of disregarding anything you read on MMM, discounting everything because you have a different experience or situation — use what you can and make it work for you, to live the life you want. I personally find it helpful when people question things I do or present their alternatives — I can evaluate whether my decisions are truly the best for me. If they are, I own them like the adult I am, and if they’re not, I try to take what I’ve learned to put myself on a better life track.

          • Audrey

            Oh yeah – just realized it might not be clear – I think MMM is a great idea/website, even if I personally have weirdness around it! I don’t want to discourage anyone else from getting help there if it helps them!

        • Not Sarah

          I’m a huge fan of MMM too. It really shows that the difference isn’t the little things, but the % of your income you save. My favourite article is “The Shockingly Simple Math Behind Retirement”: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ It shows that if you save X%, you’ll be able to retire in Y years. It helps me realize that spending an extra $50/month on something I enjoy isn’t the end of the world when I’m already saving 70-80% of my net income*. So sure, the total $ amount of money I spend seems like a lot to someone who still pictures the $250/month rent I paid in college, but so long as I take enjoyment out of something, I refuse to chastise myself for my spending like I used to. (I used to refuse to spend money on ANYTHING at all unless it was ABSOLUTELY required…despite having money in the bank. /headdesk)

          *I’m a software engineer.

          • AWESOME savings percentage! It’s funny, I went from making 85K as a consultant, to ~30K for my grad school stipend. And the crazy thing — I so easily save 1/3 of that, and I don’t deprive myself of anything I want. Totally agree that the big picture of savings percentage is what’s important. Jacob on ERE had a similar post on the % math and my mind was completely blown when I read it the first time (unfortunately didn’t have any luck googling for it). I’m totally digging the crossover of MMM & APW — I basically went nuts today and make an account to comment (though I’ve been reading for many months), because money and relationships are my favorite things to talk about, especially TOGETHER.

    • Sonny

      I really like YNAB too. There is definitely a learning curb, especially if you are used to budgeting based on forecasting income instead of an “envelope system”, but I find it really helpful and convenient. My husband has no interest in financial stuff so the phone app is great – I divide our money into categories on pay day and he can just check the app to see if something is covered in the budget or not.

  • KC from MA

    We are both engineers, so we make roughly equal large amounts of money. We went joint with the finances right away when we got engaged & moved cross-country together, because our “joint” goals (saving for the wedding, then buying a house, etc.) completely dwarfed our individual spending.

    The thing about being married for me is that planning 20 years ahead feels totally natural. We set some aggressive financial house-and-retirement goals, made some graphs together (engineers), and decided they were both feasible and worthwhile. So, joint-with-allowances, and I think it’s the mutual buy-in to these goals that makes that work so well.

    I’m surprised nobody has mentioned mint.com on here, or any of the other cool financial tracking website tools. They can automatically get your spending info and categorize it into your budgets (sometimes needs a little help from you), then generate fun graphs of your spending over time, how your savings is growing, etc. It definitely helps the motivation to have this evidence that you’re making progress.

    • Lizzie C.

      I LOVE Mint.com. It’s been an eye-opener into my spending habits and its budget tools are a great way to figure out exactly how much I can spend and save.

  • jashshea

    I’ll enjoy reading through these comments to find ideas and offer help where I can.

    We are ~65% combined right now, living together since 1/2012, married since 11/2012. We make roughly the same amount of money. We are in our mid-30s, which I say only to point out that we were financially established for years as individuals prior to marrying.

    Why are we only 65% combined? Well…it’s complicated. Mathematically complicated.

    I own a condo in my name. My mortgage is through my main bank. I lived there until 2012, now I rent it out.

    He owns a condo in his name. His mortgage is through his main bank. I moved here in 2012, then we moved out in 2013. Now we rent it out. We moved out because we…

    Bought a house with both of our names on the deed. The mortgage is through his main bank.

    Most of the time when we’re out together (for food/drinks/groceries), he uses his credit card so we can get miles. I pay for dry cleaning, warehouse store trips, & smaller grocery excursions.

    His paychecks do this:
    -Pay for house ‘stuff:” mortgage, electric, gas, water, etc

    -Pay remaining expenses for his condo (those not covered by the rental income)
    -Pay his CC

    My paychecks do this for us:
    -Pay remaining expenses for my condo (those not covered by the rental income)
    -Pay my own CC bill
    -Save money in various accounts
    -“Give” him money to cover large expenses or unexpected items on “his” side (1-2x a quarter)

    We both have 401ks through our employer, but are limited by his job function on what investments account we can have.

    We’re trying to trim down to fewer accounts, but we don’t have the same style. We’re trying to find a third style that we’re both comfortable with.

    I love money talk!

  • Kara

    My husband and I have 1 joint savings and 1 joint checking that are strictly for the mortgage and home repairs/updates. Everything else comes from our separate accounts.

    My income is nearly double my husbands, so we split the mortgage with me paying 67% and him 33% each month. He pays the cell phone bill, internet bill, and cable bill, and he pays both our car insurance bills. I pay the utilities bills (water, electricity, gas), the security system bill, the HOA fees, and vet bills. For groceries, dining out, and extras (like Target/Petsmart) we just pay out of our own pockets. We don’t keep count or score; normally, it’s whoever is running the errand pays. We each pay our own car loans and gas.

    It’s worked well for us this way. I’ve always been more interested in saving, and my husband has always been a “general” financial picture guy. I use Mint.com to track spending, and I routinely check CreditKarma to make sure nothing I’m doing is affecting my credit scores (or no one has fraudulently opened anything in my name).

    Since we didn’t live in the same city (separated by 5 hours) until we got married, we had our own financial systems set up well in advance.

    • Kara

      Oh, I totally forgot to mention, we pay our own CC bills. We each have our own 401k’s with our employer’s, and I have my own separate Roth IRA. My husband worked for himself for 3 years, so he didn’t have a retirement savings plan during that time, and thankfully, his employer (for nearly 3 years) has a 401k, so he’s getting some extra savings there.

    • jashshea

      Same on this: “I’ve always been more interested in saving, and my husband has always been a “general” financial picture guy”

      I call it financial vigilance. I have an xls that I’ve used for years to track ins and outs on my side and I zero out my checking account each pay period (if it’s not there, I can’t spend it). He’s more of a back of the envelope/buffer in the account sort of guy.

      • Kara

        YES! “Financial vigilance”. Spreadsheets are my friend! I use them for tracking all sorts of things.

  • Lynsey

    When it comes to finances, our biggest hurdle is boosting my fiance’s credit score. A few late payments and very little credit history set him back about 3 years ago, and his credit score only seems to be creeping forward. We are saving to buy a house in the next 3-5 years, and we are looking for ways to boost his score.

    Any advice for boosting credit? Any recommendations for good joint credit cards?

    • Those late payments should fall off his credit report after 7 years, so that should boost his score. Also, does he have any debt you could work on paying down quickly? I had a small mountain of credit card debt I recently paid off, and my score jumped like 60 points.

      • Elisabeth S.

        Mine jumped, too. Once the debt was gone, I opened a credit card with a tiny $400 limit and charged about nine dollars on it every other month, and pay it off immediately. Once I felt safe enough with that freedom, K offered to add me to one of her credit cards (she has impeccable credit history). I don’t carry or use the card, but it’s just sitting there building back my score.

        • Melanie

          A tip: some credit card companies don’t report secondary credit card users (called authorized users) to the credit bureaus so being on that card may not help as much as you would like. If you haven’t already checked, I’d take a look at your credit report to see if it’s showing up.

    • ElisabethJoanne

      Make him the primary account holder at a bank that offers credit cards. [I haven’t looked lots of places, but it seems one spouse must always be the primary account holder, even on joint accounts.] 6-12 months after my husband (and I) started keeping about $1,000 in a joint Capital One account, he started getting credit card offers for the first time in years.

  • twofishgirl14

    We’re partially combined – joint car loan, some joint savings accounts – but for the most part we keep our accounts separate.

    I’m in charge of tracking all the family bills and sending the payments, and setting our savings goals (because I am A-type and forget nothing) and the fiance gives me a lump sum of money on the first of the month that represents his share of our household expenses. He makes 40% of the family income, so he owes me for 40% of the bills and savings amounts. When either of us gets a raise, we recalculate. After that, he’s welcome to do anything he wants with his money without me tracking a dime of it. When we go out we like to take turns “treating” each other to dinner, which feels like this romantic little gesture we can make.

    We’re also both very financially ambitious (he wants to be an entrepeneur, also we expect to have to support 3 out of 4 of our parents in the future) so we have a lot of discussions about the places we’re putting our money, how much we should contribute to our 401ks / IRAs, my progress in paying down my small amount of credit card debt, etc. We both track everything in Mint.com and share the results with each other. So we’re very open to money talks and both fully aware of the other’s credit score, net worth and habits. It’s pretty awesome.

    • Jessica

      Mint transformed my way of thinking about budgets, income, savings, and the way to repay my loans. When I started using mint I had a lot of credit card debt that I was able to pay down relatively quickly because of their suggestions and the visualization of where money went. Mint forever!

      I find it hard to manage a joint account on it though. Right now The Dude and I have most of our money in personal accounts, and one shared account for rent, insurance, student loan payments, and some incidentals (when he gets back from Overseas we’ll probably add groceries and some other joint-living things to that list). Where Mint gets complicated is that when he puts a deposit into the joint account, Mint thinks that’s income for me. I can take care of it easily so it doesn’t think I’m making a lot more than I do, but it’s still difficult to get over that visualization hurdle.

      • twofishgirl14

        Totally agree. Mint changed my life and has made me incredibly aware of what kind of spender and saver I am. But it does get annoying with those joint accounts. Our (unfortunate) solution was to have him take the joint account off of his Mint. So I treat his lump sum as “income” and he treats it as “rent” and we both can look at each other’s numbers and understand what’s going on….. but it’s not a very intuitive system.

        • Jessica

          Yeah. I’m the one who uses mint out of the two of us, he has always had a great mind for finances and has taken several courses in money management from different perspectives. Given that, it’s a little easier to manage the joint account just by “hiding” the income rather than trying to mix it in with my other accounts.

          It’s probably better that I’m the only one who uses mint because my job requires that I buy a lot of things, and then get reimbursed. Luckily the turn around it really quick, but sometimes there will be an extra $700 on my credit card for 2 weeks because of that. It would probably give him a panic attack to see that actual number.

  • Kendra D

    We are fully combined financially.

    We started with our own checking accounts that things would be paid into and a joint account that we would both contribute to – but he’s in the military and the first thing he did after marrying me was move us to a different continent. We tried to stick with that arrangement, but I never had any money in my personal account due to the difficulty in getting a job while a military spouse overseas and, I also had to ask him for money to be put into the joint account so I could do things like buy groceries.

    I called kaput on that just a few short months into our marriage. It turns out, his biggest fear of combining accounts was the idea of judgement on how he wanted to spend his discretionary income. We mitigated that problem by agreeing that there would be no judgement on how the other person wants to spend their money. If he wants a new video game and I want new make up, then we get it without having to ask the other person’s permission.

    I know that we’re lucky to be able to have this lax of an attitude. Our first focus after combining finances was eliminating the debt we each carried. Having done that opened the door for us to make purchases without having to count every penny. Of course, we still do on most things, we just relax a little when it comes to having fun.

  • Gina

    Love the money talk! For the longest time, we split things 50/50. Then we got married, and decided to save for a house, so we are *just* living off my income, while his paychecks go straight to our joint savings. We love watching the down payment fund grow, and sharing the remainder has made us both more conscious and accountable about where our money was going. (Him: red bull. Me: yoga classes).

    We also have an excel spreadsheet with all the HH Business expenses, as you call it, and I print out a new one each month, tape it to the fridge, and we check off the bills as we pay them. We also both have budget tracker apps on our phone and we enter literally every single purchase in there, so we can track how we’re doing for the month. It sounds time-consuming and annoying, but honestly, it’s enabled us to do fun things (tickets to a hockey game!) even while saving over 60% of our total income. And we don’t get to the end of the month and think “where did all our money go?”

  • Jessica

    When I joined my husband’s Credit Union, we weren’t really sure of how it would be best to combine stuff. We asked if there were any financial advisors who could walk us through the options and give us advice and were told yes. Because of time constraints of him being deployed we weren’t able to take them up on that offer, but plan on it when he returns just so we both have a “mediator” in the room while we talk money and expectations (having an audience give both of us more control over fights/emotions). I highly suggest anyone who doesn’t know how to proceed with the joint accounts see if their bank or credit union has a similar option.

  • Love this new series! We started *very* far apart in our financial mindsets but, after a lot of difficult talks, have sort of grown together. I wanted to give a shout out to all the finances posts that have been on APW–there were seriously a godsend during our money discussions.

  • Ali

    Just want to say that posts like these make me wish SO SO SO much that taking an “understanding personal finances” course was a requirement at every single high school and college in the United States. Some of these issues are ridiculously complicated and we’re almost never taught them in a coherent way, so it gets way too easy for people to sign up for credit cards and student loans and not have a 100% understanding of what that means (heaven knows I didn’t really understand what I was signing up for, student loan-wise), let alone how to manage personal finances, how to create a budget for yourself, understand how to save for retirement, and the basics of investing. This information is crucial and I know so little about it – it’s just hard to believe that there isn’t a bigger push for widespread financial literacy education starting when you’re, like, 14. It’s so important!!

    • Elisabeth S.

      Just before my dad (my very practical, reasonable, sensible dad in all matters otherwise) pulled away from dropping me off at college, he showed me how to use a checkbook and I was like, “look at this magic money!!” I’d just been using an old-fashioned savings account and ‘pass-book’ from the little bank in my little town. THAT WAS ABOUT FOUR YEARS TOO LATE.

      • Yep, my dad sat me down and taught me how to balance a checkbook, and he always made me work out how I was going to prepare my itty bitty tax return when I got a job. I used Turbo Tax, but just being made to sit down and collect the documents and answer the questions gave me more perspective that I would have had if my parents just intercepted all the documents and did it themselves.

        • Kara

          YES! I’ve had my own savings account (at my dad’s employer’s credit union) from about age 6. Every 6-12 months growing up, I’d go with my parents and deposit *my* money in it (birthday $, chore $, etc.), so I was taught to respect money and save it at a young age. When I started driving, my parents allowed me to open a checking account so I understood the value of money, and that you can’t take out more than you have.

          When I went to college, they co-signed on my credit card. This taught me how to be responsible with credit. Hell, I didn’t know you could carry a balance on a credit card until about 3 years after college–I’d always been taught you pay it off in full, or else. I still haven’t had a balance on a card, and I’m 30.

          I’ve done my own taxes since graduation, and since getting married, I’ve done our combined taxes (thank you Turbo Tax!). I was also taught to start putting money in my retirement savings plan (401k, Roth IRA, etc.) starting with my first post-college paycheck.

          Just being taught a few simple things from a young age, can definitely make a big impact–even if you don’t have *much*.

        • Jules

          I’ve also been filing my own taxes since I was 16. Most of my college friends sent their stuff to their parents to “figure all that stuff out”. I used to be jealous; now, I don’t think I am.

    • Meg Keene

      You know, reading comments on posts like this, I’m always TERRIFIED about financial literacy, but particularly financial literacy with regards to marriage. We can pretend a lot of things “it’s my money, it’s your money, that’s your debt not mine.” But a lot of those things have NOTHING to do with the laws of marriage. And if you’re not down with the laws of marriage, that’s totally awesome, but DO NOT GET MARRIED. Or don’t do it with out a TEAM of lawyers. The marriage contract is the hugest contract you Will. Ever. Sign. If you don’t work on understanding it first, you’re going to screw yourself.

      • Lauren from NH

        Exactly the sentiment driving my request for a separate to joint transition post. I am down with the shared finances, but both parties need to be on board with the joint responsibility and need to jointly informed!

      • Emily

        Any tips on where one can find out what the “marriage contract” entails? I tried looking up my state’s laws, but they were more about the process of marriage than the thing itself.

    • Lauren from NH

      Yup. It shouldn’t be surprising that not everyone has a mom in finance who would sit them down before major money changes and go over numbers and concepts, but I am often shocked by how little people know and how few people have a credit card or know how to use it responsibly, not shooting yourself in the foot with the interest.

    • bsc

      THIS. A thousand times.

    • Lizzie C.

      No kidding…in 5th grade my class had a unit on how to write a check (I think it was mostly to practice writing large numbers as words, like “One thousand one hundred ninety-five”). But did the district include any financial literacy in our high school “Life Skills” classes? Nooooo. The result: legions of 18-year-olds who can write checks like pros but don’t necessarily understand how to make sure their checks don’t bounce.

      • Kara Davies

        People still use checks? They aren’t used much here in Oz and I prefer not bothering with them!

        • Lizzie C.

          They’re still used to varying degrees in the US–our landlord and my cello teacher prefer them–but I wish I could just PayPal everyone. Someday maybe we’ll catch up with Oz. :p

          • Kara Davies

            Not so much on the paypal down here for me. Direct deposit and direct debit, ftw!
            Pay gets depositied automatically. No faffing about with depositing a paper check and waiting for it to clear. Rent is a direct debit.

            We have lots of online transfers here. Need to pay mum or dad for dinner while we’re out and have no cash or friendly ATM around? “So, Mum. What are your bank details again? *log into bank online or bank app, transfer money* there you go, I’ll email you the reference number/code too just in case”. Need to pay a friend for concert/movie tickets? Same thing. Money clears instantly if from same bank to same bank, within a week for interbank transfers. Sooooooo much simpler. Trying to do that with my American account is more like pulling teeth! Yuck! (We keep one US account open for relatives to send birthday/Chrstmas/just because money to.)

            We personally don’t have checking accounts. Just savings accounts with debit cards attached to them. If we don’t have the cash on hand or in the bank, we can’t and don’t buy stuff. Saves a lot of heartache. We’re both pretty religious about checking our balances and reconciling anything odd when it crops up. Hubby also doesn’t have any student loans to pay off, nor do i. (Holla for finishing up all that before we met!)

            That said, it’s a MASSIVE PAIN IN THE ASS when government agencies will only accept a bank check as payment for a service, and my bank charges *me* to print a check! Ugh! Those getting police certificates (to prove you don’t have a criminal record, which you need in Oz for getting permanent residency) in Oz, be forewarned! ;)

  • N

    We fully combined finances as soon as we got married. This meant we payed off his student loans with my savings (because really, who wants to pay student loan interest). It also meant that we lived off of his income for more than a year while I was sick and unable to work.

    One thing I really like is that we really don’t think about our incomes separately. They go into the same account, so the total number incoming is all that matters.

    • “One thing I really like is that we really don’t think about our incomes
      separately. They go into the same account, so the total number incoming
      is all that matters.”

      I’m really hoping we can achieve this. I’m a type A personality with a few insecurities about “not being good enough” (which made me succeed in school- so yay good grades, boo crippling insecurities) who is now working in the social services. And not making nearly as much money as he is. We’ve talked about it, and we’re both fine with it intellectually- but I’m hoping my own brain stops tallying up the difference as the years go by.

      • La’Marisa-Andrea

        I definitely think merging income helps with this. At some point, you will just look at the joint account and see the money that’s there without a thought as to who brought in what.

  • js

    We have joint finances. A joint checking and savings and individual personal savings. We use a joint credit card on which we earn points to pay all our expenses. At the end of each month the card is paid off, so we never carry a balance. Then we use the points to purchase gift cards to use towards entertainment, things for the house, etc. I feel it’s like getting “paid” for money we have to spend anyway. We also both have personal credit cards that enable us to buy Christmas presents, birthday presents or what have you, so the other can be surprised. A certain amount of privacy in how you spend your money is very important to me. How much we put in our joint and personal savings depends on what’s left at the end of each month. My husband is the sole source of income right now. It has taken me a long time to get used to thinking of the money as ours and to realize that I am contributing to the household in other ways that don’t need to involve money. In seven years, the way we’ve handled money has changed often as circumstances change. For example, when we were saving for our wedding, all the “extra” money that would have been divided between joint and personal savings all went into the joint, as the wedding was something we both wanted. I think the most important thing couples should learn about dealing with money is to talk about it, often. Our way may be changing again, now that we’re starting to save for babies.

  • Lena and Aggy

    This discussion is so helpful. My parents were typical 9-5ers, poor when they got married, but worked their ways up the ladder to provide a comfortable, 80s-style life for my siblings and I. My partner grew up in a family that never knew where their next meal came from, let alone anything about retirement accounts. So even though we’re preengaged and not combining finances, I have brought up the idea to him of him starting a retirement account and perhaps trying to put some savings together. He’s open to it, but not committed. I’ve offered to take an “eating out” hiatus with him, and even plan date nights at home so that we can save money. He in part feels like he’s “not adult” enough yet to have a retirement account, and also constantly says when he’s making more money, then he’ll start with savings.

    Anyone out there dealing with/dealt with a partner that doesn’t see how they could possibly SAVE money when it feels like they’re just scraping by as is?

    • Meg Keene

      I was that partner. We had time on our side, so I’d worked on it alone for five years of coupledom and seven years of post college life before we combined accounts, so that helped. But in short, combining and having someone to help you through it can be so important.

    • Audrey

      At least for retirement, there are some great articles that compare how much money you end up with depending on when you start saving. Not sure if he’s the type of person who would be influenced by the numbers, but here’s an example:


      • Lena and Aggy


        This is the kind of thing that makes me light up (I’m definitely the CFO of our relationship)…thanks for the link. I like it because it’s super straightforward and not too muddled with percentages and weird acronyms.

        Like Meg mentioned yesterday, I’m the “David” side, in that I will push and prod and poke and do the initial leg work for my partner until he feels like he has enough steam to get it done himself. He had some fraud on his credit card accounts for six years (!!!) and when he told me about it, I immediately put an action plan together for him to get it dealt with. Just this week, he cleared most of it from his credit. Perhaps with a retirement account, I just have to really do the back end stuff so that he feels like it’s not such an overwhelming process. Good thing I enjoy it.

    • Lizzie C.

      Yes, that’s me! My husband grew up poor and made a pittance as a teacher for the past 15 years, so he’s been 100% focused on paying off debt between forkfuls of Top Ramen. He has no savings. (Though he does have a retirement account that he’s been blindly contributing to for years.) In contrast, I’m taking my sweet time paying off my student loans but have a nice start on retirement and an emergency fund.

      Have you tried suggesting to your partner that saving even a little, like $50 a month, can help shelter you both from emergencies down the road? I keep hearing that unexpected medical costs are the top reason for bankruptcy in the US, and while that’s an extreme example, the gist is that saving a little is a little painful now, but not saving at all could be super painful later. Too much scare tactic?

  • Emmy

    Can we talk retirement on APW? I am 27 and just starting to look into it. Paid my last student loan payment two months ago – YAY! My husband has a Roth IRA that’s been set up since before we met. While I know that his retirement is my retirement, I still want my own or to be jointly on his. Is there such a thing as joint retirement accounts or joint Roth IRAs? I’m pretty money savvy and love math, but still seem overwhelmed by retirement lingo. What are you lovely ladies doing for retirement?

    • ElisabethJoanne

      Yes, there are joint retirement accounts and joint Roths and joint “traditional” IRAs. Also, if you’re in a community property state, no matter the designation on the account, it’s joint (absent tricky stuff) for purposes of divorce and inheritance.

      I imagine you’ll have some trouble with the IRS if you put both spouses’ IRA contributions under only one spouse’s name, but technically you can do that, especially if you’re coming from a community property state. But really, just take the 3 minutes to open the account together.

      My husband is an investment banker, and our IRA is with Vanguard because of its low fees and choice of funds. If you’re new to investing, you might want to start with a firm that has higher fees but one-on-one guidance. Once you’re comfortable choosing funds, you can open a lower fee account elsewhere and just let the old account sit. Sometimes you can also roll it over.

      • Not Sarah

        There’s actually no such thing as joint retirement accounts – they are called Individual Retirement Arrangements for a reason. The other spouse is generally a beneficiary on the account in case of death and in case of divorce, they would probably be split according to some formula, but they are labeled with one spouse’s name. If you can only afford to contribute less than the maximum ($5,500 in 2013/2014) for one IRA, then some people choose to only use one.

    • Lauren from NH

      There is an awesome blog/site/thing called Money Under 30 that helped me get moderately up to speed on some of these concepts. I would highly recommend it.

    • Audrey

      Personally, retirement accounts are the ONLY financial thing that my husband and I are keeping separate. I’m not sure why that’s the line for me, but there it is.

      However, in general I highly recommend IRAs no matter joint or individual! Yay for retirement planning. You’ll want to look into whether Roth or non-Roth is best for you.

    • Not Sarah

      Yay for paying off the last of your student loans! I would definitely go and open up your own Roth IRA! Mine is at Vanguard and it’s been really cool watching it build up over the last few years. You can still contribute for 2013 up until April 15th! Does your employer have a 401(k)? I’ve been contributing to that as well. I also have some index funds at Vanguard outside of my retirement accounts that I have labeled for retirement.

    • It’s awesome that you’re looking into retirement accounts! It’ll be so worth it to get started early and benefit from the amazingness that is compound interest. Basically, an IRA (individual retirement account – this is attached to a single person, cannot be joint), 401k and 403b (company-sponsored plans, depends on whether you’re at a private vs non-profit, etc) are vehicles for your retirement. You still need to pick your investments on top of that, but the account type tells you what tax benefits you have. At the crux of it, a roth (401k, IRA) means you put in after-tax money, but all the growth and everything you take out you don’t pay taxes on, assuming you don’t withdraw the earnings before 59.5 (principal, aka amount put in, you can withdraw at any point). A traditional (401k, IRA) means you put in pre-tax money, and then pay taxes when you take it out.

      Here’s what I recommend (and do myself): first, contribute to your 401k up to what your company matches (if you don’t do this you’re losing free money, many companies will say, match 50% up to a 6% contribution of your salary, in that case you should be putting in the 6% for sure). Next, max out both your and your husband’s IRAs ($5,500/pp currently if you’re under 55) – I recommend a Roth IRA with Vanguard (what I have), as they have the lowest cost index funds and are owned by their customers (no conflicts of interests like privately owned companies such as Fidelity have). But most of their funds require a $3,000 minimum, so if you can’t put in big chunks of money, other places like Schwab can put you on a low monthly contribution plan. The Roth is good because it’s flexible in that you can withdraw the principal at any time — you shouldn’t, but the option is there. Next, assuming your 401ks have some decent options, max out your 401ks. Next, invest your money in taxable accounts – same deal, can do this with any brokerage like Vanguard, Fidelity, Schwab, you just won’t get any perks on taxes.

      Since you’re a math nerd like me, I’d recommend checking out ERE (early retirement extreme) and MMM (Mr Money Mustache) – two websites that are really helpful in opening your eyes to what is possible. My goal is to, at 40, be in a comfortable enough financial position that I don’t have to work if I don’t want to, or have the freedom to work on something non-lucrative but personally interesting. I love the freedom that money can give you =)

      Good luck!

      • Emmy

        Thank you! Super helpful!

  • Rachel

    I commented below, but wanted to add this: http://www.slate.com/articles/life/home_economics/2011/01/our_newlywed_money_dilemma.html

    This article was a life saver to my sister & her husband, as well as to my finance and I when we were combining finances.

    • Ally

      THANK YOU for this article – loved it! I just completely reworked our finances after coming to the same conclusion as the author and the husband is psyched.

      • Rachel

        We’re Common Potters, but I think the rational of going over choices makes this article extremely useful. Glad you loved it!

  • Fiona

    My fiance and I have the insane luck of having no debt….but we also have no money. Combining finances is going to be very interesting as I’ve not lived on my own, and though he has, he’s lived in a place where insurance, retirement funds, savings, are stratospheric, unrealistic goals. I want to do some stellar financial planning, but I also like nice things in life (though I’m good at getting them cheaply). My fiance is not terribly good at financial planning (there have never been finances to plan), and also likes nice things, though he knows how to live with no money.
    At any rate, We’re starting at a good place, but I have no idea how to handle all these adult things.

  • K_

    What you describe is sometimes called a “reverse budget.” You set aside money for the basic bills and then don’t sweat the rest of your spending. I like that you keep separate accounts so that it’s very easy to keep straight (mental accounting doesn’t work well, as you point out).

    In my marriage, I handle the money almost exclusively. Once a month, I try to sit my husband down to show him the monthly snapshot that I create, but he usually opts for a thumbs up/thumbs down summary. When we got a mortgage last year, the feedback from the bank was that we had one of the most complicated, but best documented, set of bank/investment accounts they had ever seen for a residential mortgage. I’m aware that I could very easily steal all of the money from our joint accounts and hubby would never know until I was long gone with the money. I do not at all plan on doing this, but it’s interesting because it does happen to women sometimes, and I realize I could do it.

    I work hard to keep hubby included in goal setting, such as balancing savings/debt priorities and deciding on how to save for college. Sometimes it’s hard, though, because I’ve thought about it extensively, and he makes off-the-cuff suggestions. Twice, we’ve met with a free financial planner for 45 minutes (many larger employers offer this service through 401(k) plans), and each time, the planner has given us positive feedback. That helps my husband feel better without having to wade through the details.

    • La’Marisa-Andrea

      Ha, this sounds like us. I handle the money and my husband is not terribly interested except to know how much he can spend.

  • enfp

    Great discussion! Shortly after I moved in with my partner, we went to see a rad feminist financial planner (seriously! they exist!) and she helped us come up with a plan to start combining our finances and deal with our major dilemma which was debt repayment vs saving.

    We opened a joint chequing account to pay all of our household expenses (including food and some eating out together) and a joint savings account for short term things like big purchases or vacations. The amount we put in is based on our income, so right now I am putting in a little more than him because I’m currently earning a little more. We also opened a second savings account which is intended to be our emergency fund in case of job loss, and which we could use to keep us afloat during a parental leave in the future. He is solely responsible for paying into that account, while I am solely responsible for paying down my student loan. We chose to divide responsibilities this way because I have major student debt that I wanted to remain responsible for and he is debt free. However we mutually agreed on the amounts we pay for the emergency fund and my debt, with the help of the financial planner. We have maintained our individual chequing accounts, where we are responsible for paying individual expenses (eg I pay my own cell phone bill from my own account) and our discretionary spending money. We both have some long term retirement type savings which have remained separate, but we will revisit that after we get married this summer.

    I think we’ll maintain this system going forward. Overall we don’t think of our incomes as separate, and we feel that we are jointly meeting our financial goals, but we maintain some individual control over a small amount of discretionary spending, so we don’t have to justify to each other those small purchases.This seems to work for us.

  • Violet

    I would just say that there are so many different ways at looking at money, which is one reason it causes disagreements between partners at times. Some ways of looking at it meet our practical needs, other ways meet our emotional needs, or security needs, control needs, you name it. You can do whatever manipulating you want with your finances to meet these needs (go to town), but when you’re wed there is a legal truth: Your finances are shared.

    We once had a conversation with my partner’s grandmother about the Brita pitcher (I know, I know, bear with me here). We were saying how if you let the water level go below the bottom of the filter, it dries out and the little carbons get into the water. So my partner was telling her how we never let it get empty. She said, “But doesn’t the water at the bottom get stale?” Finances in marriage are like water in a Brita. They might be separate going in, but once you’re married, the water is the water is the water. You can have different accounts, different cards, whatever you need do to “feel” okay. But don’t lose sight of the ultimate fact that it’s all water.

    • Meg Keene


    • SarahRose

      I learned a new fact about my Brita filter today.

  • Rachael

    Finances have been a really interesting aspect of marriage that I really hadn’t anticipated as being such. We’re fortunate in that we’re both decently careful with money, neither of us have debt other than student loans (and they are very manageable), and we make plenty more than we spend. I thought having similar familial financial backgrounds (ie. scraping by) would be more of a benefit for us – and it is a benefit, don’t get me wrong, but it has been counter acted by our own adulthood financial situations to some extent. My husband was a bachelor living cheap and making decent money for several years before we got together and was responsible in the way that he made sure the savings account numbers were always increasing. I was in graduate school (barely) living off of a measly stipend. The result is that we spend and keep track of money very differently: he spends (responsibly) and doesn’t keep track at all, I don’t spend and keep track of every dollar.

    We have combined our finances for the most part since our summer wedding – we’re still in the slow process of making it complete. But while we still have some separate accounts, everything is considered the same pool. What we haven’t done is really made a budget. We have what our base costs are and what we spend, and on what, in a typical month (spreadsheets and pie charts galore). But we don’t have an actual budget of the dollar amount for what we will spend on groceries or going out to eat or whatever else. I’m torn on whether we need this or not when we are still saving a hefty sum of money most months. I lean towards yes because sometimes we don’t pay enough attention to our discretionary spending (again, still within our means), but my husband isn’t keen on it. It’s really interesting to see how it comes together and how we each handle the issue.

  • After four years of marriage, I think my husband and I have a pretty ok set up. We have one account that all the bills get paid from (mortgage, utilities, phone, internet, insurance) and that’s where my paychecks go; and everything else goes on a milage card (assuming we ever can afford to go on vacation) and is paid through the other account where my husband’s paychecks go. We pay off what we owe on that card every month. We are lucky. We don’t have any student debt, and the only debt we have is for our house (only 27 more years – yay.). Until the last year, things were going pretty smoothly because we both made about the same amount. But for the last year, I have made about half that because of leaving a terrible job and trying to find something more fulfilling. I have used a good chunk of our emergency savings (which was my savings before we were married) and my family has helped out a little here and there, but no matter what I put in as work or energy, I still feel as if I am not pulling my weight. I curb my spending like crazy (I have a running list of things I can reward myself with when I get a better job). I try to save money on food and anywhere I can, but it’s never enough. My paychecks are inconsistent and because I took another stint at a temp job, today is day six of a twelve day work week where in the end, I will still come out with less than I used to make at my terrible (and low paying but steady) job. I have no idea what I should do to make money less stressful except just make more. Any advise?

    • Three months before we got married my husband lost his job and became a full time student instead. We re-did our budget to live off of my income, cut where we could to make it work. I coupon to save us money on groceries, we rarely eat out (and then we use a Groupon), we try to keep other expenses low and pay for the things that are really important (like HBO). Any other money that I make or that he makes from side jobs is “extra” and goes to pay off debt, into savings, or to cover any overspending in our budget that month. Even though our budget is small, it is less stressful because we know what we can and cannot afford and spend accordingly.

    • jashshea

      You’re working more than one job, right? I think I remember that from one of your comments. Your schedule sounds exhausting.

      You sound a little burned out on working so hard and seeing a smaller reward. My best advice would be to allow yourself to feel what you’re feeling, but know that you’re going through a life change. Changes are hard and uncomfortable. You get an internet high five from me for toughing it out.

      You sound like you know the personal finance basics – cut the food/entertainment budgets, call service providers and ask for any discounts/promotions, perform routine home/car maintenance yourself if you’re able, clip coupons/use groupons, unplug unused electronics to cut on the bills. Do you have any unused gift cards you could sell (or use as a treat for yourself?)? Do you have any furniture or clothing that you could consign? You’re short on time, but do you have any special skills like sewing that you could turn into a side business?

      Specific to food (because this is actually an area my family should be doing better): When I was growing up, we were low low middle class and my mom wasn’t working FT. She spent a good portion of her time finding sales for our meals. They have an extra fridge and a deep freeze, so if something was a good deal, she snapped up extra and froze it. And she never wasted a thing. Three chicken breasts for dinner on Monday? Tuesday’s lunch will be chicken salad. She’s boil potatoes for Wednesday, throw in an extra and that would be Thursday morning’s “hash browns.”

      • Thanks for the pep talk. I was actually quite proud of myself for last month’s food bill – I cut it by a third by preparing bulk meals and freezing them for later. Yes, I’m super burnt out. Today is day 6 of my 12 day work week. After that I have 1 day off and then I will likely work another 8 days in a row. At that point it should go back to a more regular schedule, but I just took a part time job in the floral department of the grocery store I already work at. While I should be happy because it will be better for a lot of reasons at work and I will also be getting more hours in one place, I can’t shake the feeling of being overqualified and underutilized and underpaid. I should probably put a pause on speculating about my goals when I’m this tapped out, but if I don’t do something now, when?

        • jashshea

          Cutting the food budget by a third is HUGE. It sounds like you’re definitely pulling your financial weight by reducing the bottom line.

  • Sara

    As a single lady, I can’t comment on a joint system as of yet. But as someone with low debt, I will say what works for me is thinking in terms of paychecks. I essentially designate one paycheck for bills – car, rent, cable, electric, etc and one for savings/credit cards. My savings is automatically deducted every month from my checking, so I have no choice in the matter (in a theoretical sense, but also because its with a different bank, its a pain to transfer back. That is by design). I also need to have a minimum of $150 in my checking for emergencies. So that leaves a very specific amount I can use to pay off the credit cards, and the goal is to pay them off in full every month. I can’t do it every time but it has helped keep me in check. Relatively. I do have a debilitating kate spade/all the shoes problem, so some months I look at the statements online and realize I screwed myself out of going out the next weekend.
    I also get the 401k deduction pre-tax so I don’t even miss the money for that, and I pay Sharebuilder as part of the ‘bills’ to keep a few stocks as an ultimate emergency fund.
    I will say I have a good credit score but I have a significant amount of credit cards because I am the type of shopper that loves a good deal. So I have about 10 store cards that I opened specifically to get 15% off the purchase. I don’t use them frequently, and I keep them in a box in my desk, but it did damage the score for a little while and because they weren’t Chase (like my major cards so I can see them online) I actually forgot about using them a couple times. Beware of store cards.

  • ElisabethJoanne

    If there’s a “plus” to one spouse’s long-term unemployment, it’s not having angst about separate v. joint finances. We have joint finances because only one of us earns the money, but obviously we both need to spend it. I don’t think it will change when we have two incomes, because we’re comfortable as is.

    While we’re both very analytical and frugal, we have different attitudes about moving money. I very much need to feel in control of where and when the money moves (from checking to savings, from savings to investing, etc.). My husband just needs to feel informed. He reads all the fine print about our investment accounts, but is totally fine with me actually making the transfers, or with the banks doing it any-which day. I married him so I didn’t have to worry about investment strategy, but can’t let go of tracking spending, being able to log into all accounts, etc.

    A quirk about our finances: We both brought student loan debt into the marriage. While those debts may be separate property, all the income during the marriage is community property. We’ve only been making payments on the employed spouse’s debts, though. The other creditor has forbearance as long as the debtor is unemployed. Technically, we should be paying on both because both spouses have (community property) income, but we couldn’t afford full payments on both loans, and didn’t want to negotiate with both creditors. This means that if we divorced, the employed spouse would owe the unemployed spouse half the student loan payments made during the marriage.

    The unemployed spouse has an interview today. If they get the job, it still may not pay enough to cover the student loan payments, even if 100% of the take-home pay goes to the creditor. A bridge we’ll cross if we’re lucky enough to get there.

  • Sarah R

    We have a very similar set up as well. And we “pay ourselves first” and push the money into savings almost right away.

    My husband jokes that I make him feel like a poor college student because we both live on a small allowance so we can put money into a bunch of savings buckets (new car, car maintenance, vacations, house maintenance/improvements, insurance, emergency savings, etc.) But he’s seen how freeing it is to have that savings to draw from when the time comes.

    When we started, he was pretty resistant to savings and was less comfortable with managing his money. I have always enjoyed personal finance (ask me about my spreadsheets!) so I’ve taken on the CFO role, but I always communicate everything that’s going on. Now he’s happy to round up our mortgage payments and gets just as excited that we could pay our mortgage off early!

  • Just to throw it out there, there’s a great free budget app/website called Good Budget (www.goodbudget.com) that allows two users to sync to the same budget. So you and your partner can both see what is left in each budget envelope and you can see whether you can afford something. You manually enter your purchases and it doens’t link to your bank account (which I prefer anyway). I have been using it for years and its awesome. just thought there might be another couple out there who may benefit from it :)

    • That’s great to know. I currently don’t need to sync with anyone, but that has previously been a frustration of mine, so I made a note of this website for (hopefully) someday…

  • Elisabeth, I love this post. I thought it would be obnoxious to have several separate accounts, but it really seems practical. (hey, practical… ;) I’m definitely going to suggest this when we finally sit down to officially combine post wedding finances. We’ve still been using our previous separate 56%/44% split, which we need to reassess.

  • kelly

    Sidenote: Is there a post about TAXES? I know two couples who paid tons of taxes the year after marriage when they first filed jointly and they thought they had done everything right. I’d like to avoid the same problem!

    • Audrey

      Basically: the marriage penalty is real if you and your husband make similar amounts (unless those amounts are small). Definitely happened to us.

      – If you’re financially well off and have money set aside and did NOT owe money the previous year, you may have a high tax bill but the IRS won’t charge you interest. Tools like Turbotax will then help you figure out the correct withholding
      – If you aren’t well off and/or a sudden big tax bill will be a problem you need to figure out how much extra to withhold the year you get married. I don’t know any tools off the top of my head but I’m sure they are out there.
      – For reference, in order to get the right withholding my husband and I basically have to do “Married, but withhold at higher single level” + 0 allowances. I know some people even have to ask the IRS to take extra money out! If you don’t want to think about this too hard and don’t mind a big refund switching one or both of you to single + 0 will of course help.

    • Not Sarah

      I’m not married and don’t plan to be any time soon due to the marriage penalty.

      I would try playing around with the IRS’s withholding calculator to see what you should do with your W-4s. Here’s a link: http://www.irs.gov/Individuals/IRS-Withholding-Calculator I’ve found it really helpful in the past, though it’s enough of a hassle just with my single income let alone two.

    • Mezza

      I did a draft of our taxes this year (first year of marriage) and was SUPER annoyed at how much less we will be getting back. So annoyed, in fact, that I held off on submitting.

      And now I’m glad I did, because it actually looks like we might do better as married-filing-separately. I have student loans on IBR, and her income will wildly throw off my monthly payment amount. We have very similar incomes, and from what I’ve read, that’s the situation in which filing separately can work better. I need to do a real draft to make sure, but I think that will make the most sense for us. If anyone has more experience with this, please weigh in!

  • Carolyn

    All my debts are medical. I don’t know how it happens, but I get it paid off and the next thing I know I’m up to my ears in debt again. The last was a visit to the ER for stitches on my thumb, from poor saw usage. Now I’m back in debt AND have residual nerve damage in my thumb. Thugs just keep getting better.

  • Daniella

    Thank you for sharing! I want to know all the different ways that people tackle this! I’m trying to be a sponge on this topic and know all the different ways out there to pick what works best for us. Thanks!

  • Lizzie C.

    I didn’t realize I was the black sheep here, but my husband and I have 100% separate finances. Reasons for this include:
    -we married in our 30s and already had our own jobs, accounts, debt, etc. (translation: inertia);
    -he paid off all his debt but I still owe a bunch on my student loans, which I feel he shouldn’t have to help with;
    -he’s had his financial account info stolen repeatedly and was told by his bank that once it happens to you, you’re more susceptible to it, so I’m afraid our joint accounts would get raided too;
    -he’s incredibly frugal, so if I’m going to spend money on myself, I figure I should spend only “my” money, not “his.”

    That said, Elisabeth’s post and all these comments are a great wake-up call that we need to see a financial planner so we can get the basics (in case of death/divorce/retirement) squared away. Thanks, APW.

  • Kate

    I’ve been reading APW for ages now, since I got engaged, and this is the first time that I’ve commented. I don’t even know why. But THIS. I didn’t get it. I never understood. Elisabeth, this article rocked my world. I own my own business and I’m 25, my partner is a lawyer, and I have so, so much guilt about his income vs mine. Meg and Elisabeth have totally blown all of my ‘rules’ out of the water. It’s like a wall of stress just disappeared. Thank you for these unbelievably awesome tips, and a freakin’ awesome perspective.

  • Thanks for this article. Finances can be really, really daunting, and I appreciated hearing about how you and K take care of your monies together!

  • itsaprocess

    I’m a little late to this party, but I am wondering if anyone has thoughts on how to address the (in our case likely) necessity of supporting parents in the future. We are the first in our group to get married and start taking some of these big steps, and anyone I talk to about this seems to get the huge, frightened, pitying eyes like I told them that we were planning to cut off each other’s right arms in about 10 years.

    Basically, my husband comes from a VERY poor background. His life was a series of evictions, he has never had health insurance, and he began our relationship with a significant amount of debt and very little in the way of personal finance skills. Together, we have worked to bring ourselves (but esp him) up to speed on financial planning and have been getting a LOT better at communicating regularly about money.

    That being said, we combine our monies (at least practically- we are still sorting out what kind of accounts to get that would let us operate effectively while not putting either of us at ridiculous risk should something go wrong). Given that his parent barely support themselves now (we often cover bills for them when things get tight) I am very worried about what happens when they are no longer able to work. I don’t know when that might happen, or what kinds of things we should expect once it does. Does anyone have any resources/ insight on how to plan for this? We don’t make a lot of money, and I don’t know how we could effectively save for a house, emergencies, AND his parents’ retirement, but I’m willing to try because… family.

    • ElisabethJoanne

      Many communities have senior centers that may be able to refer you to financial planner types familiar with this situation. In my county, the place to start is the Human Services Agency.

      An elder law attorney may be able to walk you through how to set up your in-laws’ finances, and your support of them, to maximum advantage in terms of Medicare, Medicaid and Social Security. The general idea is to maximize their government benefits while still being able to support them as you are able/willing, rather than paying for things the government will cover. There are also programs where their benefits can pay a family member to be a kind of home health aide.

      • itsaprocess

        These are fabulous ideas- thank you! We’ll definitely check out the senior centers around here. I know that in my state you can legally “adopt” your parent in order to have them covered under your benefits. These are the kinds of things I must find more info on.

        • ElisabethJoanne

          Good luck. I know it’s hard dealing with agencies that usually handle crises, to get advice on avoiding crises. Keep asking until you get answers.

          2 more ideas: I’ve read it’s possible to hire social workers for consultations. It may even be a Medicaid or health insurance benefit. [My employer-provider insurance has hundreds of social workers in our state we can see for behavioral health.] That would be cheaper than a lawyer and could set you up with a game plan and referrals.

          I’d also check out support groups for people taking care of the elderly, or the organizers of support groups. They’re usually run through hospitals. I see them listed in the paper. Those people will be able to tell you “When your in-laws can’t live in their home, the government gets involved by x,y,z / these are the best senior living places in the area / here’s how to qualify for senior housing.”

    • Lizzie C.

      Have you or your husband brought up the topic with his parents? My in-laws are in a similar situation, but are already mostly retired and luckily they own their home, so when they’re ready to downsize they can use the sale price of the house to partly finance a move into a smaller place near us. If yours have no assets like that to draw on, man, I don’t know…maybe plan for a multi-generational household where they move in with you later on to save money on rent/mortgage?

      • its a process

        We’ve brought it up, but on the (long) list of reasons why they are in this situation is that they are not super functional when it comes to money conversations. There is lots of “we’ll make it work” and his mom hiding bills from everyone else so they don’t worry. They own a trailer, but it has not been maintained and is almost unlivable (e.g. the heating/ air has been out all year because there simply is not the money to pay for a new unit) and the land it sits on is rented. Multi-gen has been discussed, but I’m going to explore every other option while we still have some time in the hopes that there is another way.

  • Bronwyn

    Out of curiosity, do your paycheques get deposited directly into one of the three types of accounts you mentioned above? Or different accounts you didn’t mention.

  • Kara Davies

    Hubby and I have a shared account and our own separate accounts.
    His pay goes into his own account, my pay (when I had a job, I’m now unemployed) goes into the joint. I transfer to my 2 other accounts to pay for big ticket items, or for my small business.

    Hubby pays our rent, phone/gas/electricity bills. I pay for groceries. That’s how we’ve set things up and it works for us. Now that I’m unemployed, everything is coming out of hubby’s accounts. We don’t have a credit card, nor can we afford to have one. I’ve seen what credit card debt does to people and I don’t want or need that hanging over my head. I know that I can’t pay my balance at the end of each month so I don’t bother with having any cards. Just. isn’t. worth. it.

    For big ticket items -like airfares for trans-Pacific flights- we each have our own separate savings accounts. Mine has a debit visa attached to it so that’s how big stuff gets paid.

    After rent, groceries, utility bills and the like are paid, whatever money we each have left is ours to do with as we like. Hubby has a steady job and pay so he can afford to sock away extra cash each month if need be. I don’t.

  • Butternut B

    Oh god. I hate being an adult. I went to visit my family last weekend, and for the first time since I left home 18 months ago, I have felt a little ‘homesick’ this week. It was just so great to be a member of a household rather than keeper of a household. I hate decisions, I hate cleaning. I hate managing. I don’t want to be in charge anymore!!


  • Caitlin_DD

    Thank you so much for this post. I forwarded it to FH, just as a food for thought kind of thing, and lo and behold, about 3 hours later he presents me with a detailed spreadsheet of how great this would be for us, and here’s-the-numbers. We have always been a team on finances, and are generally supportive of each other’s (minimal) fun spending, but with student loans, tuition, a move, and a wedding coming down the pipe, this seems to be a system that will work for us.

  • Beth Peters

    I think the Tiny Steps are going to be fantastic, especially if they’re like this! My husband and I have joint accounts but separate credit cards, which may have been our greatest financial demise. During a year of extraordinary poverty. we took out $10,000 in student loans. (This is a comparatively small number, I know.) My husband does not help AT ALL with finances. Like, at all. I’m pretty confident he has no idea how much we even make a month and frequently forgets to pay HIS ONE BILL (a credit card). While he supports all the financial decisions I make, he does so passively and doesn’t actually make any himself. It’s really isolating. We talk about him helping all the time, but it leads to nothing. We have a great relationship, I really don’t have any complaints but this one! It’s a relief to get some help with financial things that make me feel so helpless and uneducated, even if it’s from the internet and not my spouse. Keep it up!

  • Annie

    We just opened a Household Business account and figured out how much we should pay into it each month to pay our necessary expenses! We also got on the same page re: an aggressive “pay off the student debt as quickly as possible” spending plan, which includes pin money for each of us and a Household Flex amount. I know there are a lot of potential curveballs, but we could be out of debt and saving for hypothetical and expensive gay babies soon. Babies are a powerful motivator for my debt-ridden future wife… Thanks, APW, for this new series!

  • SarahNH

    So, of course, when I realized my household needs to do this, preferably before the wedding at the end of May, I turned to APW first. I’m having trouble starting the conversation, and wondering if anyone can help. Darling is very frugal. Most of the time. He is a saver, he hates spending money unless totally necessary, and I am not like that. We are both from single parent households and have no model for this…. HOW to just, start the conversation… Advices?

  • Ang

    THANK YOU FOR THIS! Having been married for a month, we are finally taking the “set up joint finances” step this week. I am most definitely the K of the relationship (right down to not having a clue how to best load the dishwasher) and I’ve been seeking out any and every option/article for sharing our finances. Right now he’s doing a kick @$$ job of eliminating his debt and I know how overwhelming starting that process was.

    Thanks again for sharing what works for you – we are going to borrow this method at the get go and see how it goes.

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