How do you handle your couple's finances?
March 25, 2016 1:40 PM Subscribe
My SO and I are looking at moving in together when our respective leases are up in September. One of the things I want to make sure we have ironed out is finances, so I'm looking for any and all ways people have transitioned to handling finances as a couple.
We currently make roughly the same amount of money, have the same financial values (95% frugal, 5% splurgy) and want the same retirement goals. We're looking at likely purchasing a home together (which will also be occupied by my 12-year old son during the 50% of the week I have him).
When I was married, we just put everything in one account and I took care of all the bills. But I didn't enjoy that, and I think I like the idea of "yours, mine, ours" finances.
However! I'm sure I'm not thinking of all the different ways people have "combined" finances, and the things that worked and didn't.
So I turn to you! Tell me what you do, what you did, what you hated, what you wish you'd done, good, bad, ugly!
We currently make roughly the same amount of money, have the same financial values (95% frugal, 5% splurgy) and want the same retirement goals. We're looking at likely purchasing a home together (which will also be occupied by my 12-year old son during the 50% of the week I have him).
When I was married, we just put everything in one account and I took care of all the bills. But I didn't enjoy that, and I think I like the idea of "yours, mine, ours" finances.
However! I'm sure I'm not thinking of all the different ways people have "combined" finances, and the things that worked and didn't.
So I turn to you! Tell me what you do, what you did, what you hated, what you wish you'd done, good, bad, ugly!
My fiance and I have a joint account that we contribute to proportionally based on income, periodically changed to reflect raises, etc. We have a joint credit card that is auto-payed out of this account. We use it for meals out, groceries, trips together, etc. Basically any shared expense. Our rent also comes out of this account. All other money belongs to the individual to do with as they please. We have been using this system for about three years, and are yet to have any arguments about money.
posted by BusyBusyBusy at 1:49 PM on March 25, 2016 [19 favorites]
posted by BusyBusyBusy at 1:49 PM on March 25, 2016 [19 favorites]
We retained our own bank accounts (local credit union) and credit cards, but we also opened a joint bank account (ING, now Capital One) and converted a couple of credit cards to shared ones. The joint bank account gets money transferred into it every month, and we pay most bills online out of that account. I've liked the sync feature on Chronicle, which allows each of us to record paid bills.
If you're already on the same page on financial values, retirement goals, and contributions to the shared account, you'll do fine.
posted by RedOrGreen at 1:49 PM on March 25, 2016 [1 favorite]
If you're already on the same page on financial values, retirement goals, and contributions to the shared account, you'll do fine.
posted by RedOrGreen at 1:49 PM on March 25, 2016 [1 favorite]
My partner and I just use intuition to keep track of it. Right now I make more money than him but that will change in about a year; we don't own property or children. I pay for day-to-day stuff like housewares, laundry, and small grocery shopping trips; he pays when we do a big shop at Costco- this evens out pretty well. We split rent and entertainment bills 50-50. Whoever used the car more that month buys the gas. We each pay our own phone bill and we pay for our own hobbies. We don't have a shared bank account, but we have a small side business that brings in a couple hundred bucks a month, and we keep that money separate to pay for vacations and large occasional expenses like taking his car to the vet, or my cat to the mechanic's. It's worked pretty well so far. Having the side business cash feels great; later in life when we have less time for that, I could see us putting a couple hundred bucks a month into a separate account because it's nice to have that side pot and know we can draw on it for emergencies or major treats like travel.
posted by pseudostrabismus at 1:50 PM on March 25, 2016 [2 favorites]
posted by pseudostrabismus at 1:50 PM on March 25, 2016 [2 favorites]
We opened a joint checking account (and later, when we were firmly engaged, a joint savings account) and we did a budget and every month contribute our share of utilities, grocery money, and a few other things that made sense. We put travel/household improvement savings into the joint savings account likewise. I do most of the budgeting, because I like it and am reasonably good at it, but we're separately responsible for our own discretionary expenses and expenses for things we individually own (like her horse, my rental property, etc.)
posted by restless_nomad at 1:57 PM on March 25, 2016
posted by restless_nomad at 1:57 PM on March 25, 2016
Okay, my fiance and I set up this system, and it goes something like this: We have a joint account that we each contribute a fixed amount into per month. This fixed amount is determined based on what we're comfortable adding to the account, but it's proportional to our incomes. This joint account goes toward rent, utilities, vacations, big-ticket purchases, joint savings, etc.
We also maintain our personal accounts, and we've divided up the additional monthly expenses as such: I get groceries, the cell phone bill and household goods, he pays for dinners out, the internet and cable TV, and the 1-2 Costco trips a month. We also have separate health insurance policies and car insurance, so we each cover our own medications and car maintenance, etc. (This may change when we get married next year.) We also go dutch sometimes on things like movie tickets or museum fees.
This works extremely well for us, with the caveat that we agree to chat if someone's having a rough month. I had some major work done on my teeth in January, so he covered a few grocery store trips that month. Sometimes, like when I paid the deposit for or wedding venue, we agreed I'd put less into the joint account that moth to offset the fact that it should be an "our" payment. We each keep an eye on our finances, and every 3-6 months or so we talk and see if we need to adjust things.
Also, we try not to sweat the small stuff. If I forgot cream at the store, and it's more convenient for him to go pick it up before I can go get it, then he'll go grab it for me, even though groceries are technically my sphere. If he wants a souvenir when we're on a trip, I might tell him to throw it in with stuff I'm planning to buy.
He has more savings than I do (I'm more of a shopper than he is, and grad school wiped out most of my personal savings), but I've got a pension through work for retirement, so we'll sit and talk through it and figure it out.
On the whole though, I like our system.
posted by PearlRose at 1:58 PM on March 25, 2016
We also maintain our personal accounts, and we've divided up the additional monthly expenses as such: I get groceries, the cell phone bill and household goods, he pays for dinners out, the internet and cable TV, and the 1-2 Costco trips a month. We also have separate health insurance policies and car insurance, so we each cover our own medications and car maintenance, etc. (This may change when we get married next year.) We also go dutch sometimes on things like movie tickets or museum fees.
This works extremely well for us, with the caveat that we agree to chat if someone's having a rough month. I had some major work done on my teeth in January, so he covered a few grocery store trips that month. Sometimes, like when I paid the deposit for or wedding venue, we agreed I'd put less into the joint account that moth to offset the fact that it should be an "our" payment. We each keep an eye on our finances, and every 3-6 months or so we talk and see if we need to adjust things.
Also, we try not to sweat the small stuff. If I forgot cream at the store, and it's more convenient for him to go pick it up before I can go get it, then he'll go grab it for me, even though groceries are technically my sphere. If he wants a souvenir when we're on a trip, I might tell him to throw it in with stuff I'm planning to buy.
He has more savings than I do (I'm more of a shopper than he is, and grad school wiped out most of my personal savings), but I've got a pension through work for retirement, so we'll sit and talk through it and figure it out.
On the whole though, I like our system.
posted by PearlRose at 1:58 PM on March 25, 2016
We each get an allowance, out of which our personal fun stuff comes from. Everything else goes to a joint account. It works really well, actually.
posted by corb at 2:00 PM on March 25, 2016 [8 favorites]
posted by corb at 2:00 PM on March 25, 2016 [8 favorites]
Like uberchet, mr chapps and I list our incomes and all our bills, then assign them to ensure we get about the same amount of discretionary spending money each money after the bills are paid. Then we revisit any time there is a change, or once a year, whatever comes first.
Because he is the better saver, he keeps the joint savings for surprise expenses and long term travel planning.
posted by chapps at 2:01 PM on March 25, 2016
Because he is the better saver, he keeps the joint savings for surprise expenses and long term travel planning.
posted by chapps at 2:01 PM on March 25, 2016
My wife and I combined our finances even before we were married. It's all our money, none of it is "mine" or "hers". This works well for us because we're both pretty frugal and don't care that much about money compared to other things. I think this system wouldn't work for two people who deal with money in significantly different ways.
We've been together for over 25 years and have almost never fought about money.
If you're compatible this is the best system, in my opinion, because it reduces fiddling around with interpersonal bookkeeping to zero.
posted by crazylegs at 2:04 PM on March 25, 2016 [14 favorites]
We've been together for over 25 years and have almost never fought about money.
If you're compatible this is the best system, in my opinion, because it reduces fiddling around with interpersonal bookkeeping to zero.
posted by crazylegs at 2:04 PM on March 25, 2016 [14 favorites]
We used the Suze Orman method; added up our expenses, then paid them according to % of total gross income made i.e., if he makes 60% of the income and I make 40% of the income, then he pays 60% of the cost of the bills and I pay 40%.
After joint expenses, we divide what remains of our paycheck in half - one half goes to the "house" and one half is retained by each of us in our individual accounts. This way I never have to explain a splurge purchase, and neither does he. I maintain an independent savings account, and he does as well. We set it up this way at my insistence, because hubby is SUPER frugal and in the beginning was questioning me over $5 expenses. I shut that down pretty quickly.
Now, as for the money that goes to the house, we budget it for long term expenses like maintenance of the physical property, replacement of appliances or furniture, and cash set aside for purchase of our next car (we always buy our cars for cash). Some of it goes towards our yearly vacation.
Aside from fully funding our retirement accounts, don't ask me about investments and growth accounts because that's where we fall down, and we have a lot of cash sitting around doing nothing. We have goals to do better with that this year.
posted by vignettist at 2:12 PM on March 25, 2016 [3 favorites]
After joint expenses, we divide what remains of our paycheck in half - one half goes to the "house" and one half is retained by each of us in our individual accounts. This way I never have to explain a splurge purchase, and neither does he. I maintain an independent savings account, and he does as well. We set it up this way at my insistence, because hubby is SUPER frugal and in the beginning was questioning me over $5 expenses. I shut that down pretty quickly.
Now, as for the money that goes to the house, we budget it for long term expenses like maintenance of the physical property, replacement of appliances or furniture, and cash set aside for purchase of our next car (we always buy our cars for cash). Some of it goes towards our yearly vacation.
Aside from fully funding our retirement accounts, don't ask me about investments and growth accounts because that's where we fall down, and we have a lot of cash sitting around doing nothing. We have goals to do better with that this year.
posted by vignettist at 2:12 PM on March 25, 2016 [3 favorites]
My partner and I are likely a bit older than you (late forties and mid fifties). He moved into the home that I own. I have more assets. We treat the mortgage as a joint expense and have a co-habitation agreement that outlines his interest in the home in the case of a relationship breakdown (basically I stay in the home, he gets money back). We have wills and health care directives, giving the other person decision making responsibility if necessary.
We have separate accounts and also we have a joint account that we both contribute to in proportion to income. Joint expenses are paid from that account (groceries, joint entertainment, household stuff, property taxes, condo fees, joint vacations, etc). In oder to estimate the joint account payment, I tracked our individual expense for six months before we moved in together. We have similar spending philosophies and are reasonably frugal. Our base salaries are similar, but I got a substantial bonus this year and used part of it to increase his retirement savings with the goal of equalizing income at retirement. I wouldn't have earned that bonus without his support.
We both see this relationship as permanent, but wanted to make our own rules rather than accepting the rules marriage would impose. I had a very bad marriage, previously.
posted by TORunner at 2:16 PM on March 25, 2016 [4 favorites]
We have separate accounts and also we have a joint account that we both contribute to in proportion to income. Joint expenses are paid from that account (groceries, joint entertainment, household stuff, property taxes, condo fees, joint vacations, etc). In oder to estimate the joint account payment, I tracked our individual expense for six months before we moved in together. We have similar spending philosophies and are reasonably frugal. Our base salaries are similar, but I got a substantial bonus this year and used part of it to increase his retirement savings with the goal of equalizing income at retirement. I wouldn't have earned that bonus without his support.
We both see this relationship as permanent, but wanted to make our own rules rather than accepting the rules marriage would impose. I had a very bad marriage, previously.
posted by TORunner at 2:16 PM on March 25, 2016 [4 favorites]
"yours, mine, ours" finances
This is how we do it and it makes it easier for me to manage my money when I know that X amount goes into the joint account and that pays for all of our bills, groceries, gas and eating out together and the rest is mine. When I was single, I had a "bills" checking account and an "everything else" checking account, so this is a similar setup. We both have different hobbies that we spend money on and don't want to have to check in with each other on every little purchase.
posted by soelo at 2:19 PM on March 25, 2016 [2 favorites]
This is how we do it and it makes it easier for me to manage my money when I know that X amount goes into the joint account and that pays for all of our bills, groceries, gas and eating out together and the rest is mine. When I was single, I had a "bills" checking account and an "everything else" checking account, so this is a similar setup. We both have different hobbies that we spend money on and don't want to have to check in with each other on every little purchase.
posted by soelo at 2:19 PM on March 25, 2016 [2 favorites]
Similar to corb, we have joint accounts that all our income goes into, and a joint credit card. We also each have a personal account dubbed the "slush fund" into which a fixed amount is automatically transferred each month.
Living expenses and anything that will benefit the family comes out of the joint account. Frivolous/personal expenses come out of the slush funds. This means one person can save up for a PS4, the other can have a million fancy coffees, and there's no score keeping about who's spending too much on frivolity. If the money's in the slush fund it's available for anything.
Savings are joint, except the 401ks, which we both max.
posted by telepanda at 2:57 PM on March 25, 2016 [1 favorite]
Living expenses and anything that will benefit the family comes out of the joint account. Frivolous/personal expenses come out of the slush funds. This means one person can save up for a PS4, the other can have a million fancy coffees, and there's no score keeping about who's spending too much on frivolity. If the money's in the slush fund it's available for anything.
Savings are joint, except the 401ks, which we both max.
posted by telepanda at 2:57 PM on March 25, 2016 [1 favorite]
Adding that this feels to us like a very equitable system and as long as you occasionally discuss the classification of expenses it's a great balance between autonomy and equity.
posted by telepanda at 3:03 PM on March 25, 2016
posted by telepanda at 3:03 PM on March 25, 2016
We each contribute the same percentage to a joint account and keep the rest. It fluctuates based on our joint expenses; currently, it is about 60%. He makes more than I do so his actual dollar contribution is more, but my 60% is an equal sacrifice to his. We never fight about money and we each have money to cover personal expenditures.
posted by JoannaC at 3:22 PM on March 25, 2016 [1 favorite]
posted by JoannaC at 3:22 PM on March 25, 2016 [1 favorite]
We do what BusyBusyBusy does. Our contribution is such that we have roughly the same amount in after-expense income left over. All else being equal, one person shouldn't be penalized because they make less than the other. It's a socialist nirvana!
posted by cnc at 3:43 PM on March 25, 2016
posted by cnc at 3:43 PM on March 25, 2016
My girlfriend and I (no kids) have kept everything basically separate since she moved cities to be where I am for grad school. We keep track of shared expenses and decided to split them 50-50. Every couple of months, we basically go through our expenses and split the joint stuff, with whoever is short paying the other back. (Since she moved in with me, a lot of things like the rent and utilities were autopaying out of one of my accounts, so she's generally paying me).
I make somewhere between a third and half as much money as her as a grad student but will probably make more when I graduate, and once we get married/decide to jointly buy property what makes sense will probably change. Since I had savings from my previous job, I've not felt like the 50-50 dollar split was unduly restricting my liquidity, but I'm pretty sure if our relative income were going to be stably unequal we would re-evaluate.
Our retirement saving is currently separate and hers is more sensible than mine.
posted by dismas at 4:00 PM on March 25, 2016
I make somewhere between a third and half as much money as her as a grad student but will probably make more when I graduate, and once we get married/decide to jointly buy property what makes sense will probably change. Since I had savings from my previous job, I've not felt like the 50-50 dollar split was unduly restricting my liquidity, but I'm pretty sure if our relative income were going to be stably unequal we would re-evaluate.
Our retirement saving is currently separate and hers is more sensible than mine.
posted by dismas at 4:00 PM on March 25, 2016
There are two general ways to do "yours, mine, and ours". One is default separate and one is default combined.
= default separate =
Before my partner and I got married, we had default separate. We agreed on budgets for shared categories (food, travel, entertainment) and we kept a joint account where we'd deposit pre-determined amounts. (In our case, it was 50/50, but it doesn't have to be. Even though I made 3-4x what he did.) He paid me monthly rent (since I owned both our primary residence and a rental).
Whoever made more money tended to have more spending money, which is okay if you make about the same amount or if the person who makes more money is relatively generous.
When we wanted something that was joint (e.g. small kitchen appliance), we would negotiate. But both parties have the right to veto, in which case the other party gets to decide if they want to pay for it in its entirety or forego it completely. (It was never an issue for us, since we didn't mind each other using our stuff. But may depend on your individual personalities.)
This kind of became an issue when he was unemployed with limited savings fund. Our agreement was that he would still pay rent. For food, he would do all the cooking and grocery shopping, and limit the budget to half of the usual. (That is, I would pay what I normally paid, and he would be ingenious about using it to feed two.) He also did extra chores that I normally hired out. (I make more money and also am more lazy.)
= default combined =
After we got married, we switched to default combined. (This was mostly motivated by taxes: being able to max out good retirement account options and the vagueries of who the tax refund belongs to.) This meant all money except retirement goes into a shared account. Every month, money gets disbursed to our individual accounts for spending money.
In our particular case, I enjoy the minutiae of personal finance. So I keep track of the details, including churning credit card rewards. My personal expenses go on credit cards and I just keep track of it in my ledger. My husband prefers being able to look at his checking account balance to determine if he has funds or not. He has a $X,000 buffer in his account for emergencies and to buy larger items. He has access to all our information (ledger is a text file shared on Dropbox, and he can always ask me) but rarely checks because it doesn't interest him.
Again, something can only come out of a joint account if it is something we already budgeted for or if we talk about it and both agree to it. Things that come out of joint accounts by default: housing, utilities, food (as long as it's groceries or we're both eating out), transportation, travel (currently Uber/Lyft/bus pass), medical/dental/vision, gifts, charity, stuff for the house (though we typically discuss this one). Otherwise, it comes out of our personal allowances.
This has been (and is still) is an adjustment for me, because it means my discretionary spending has drastically lowered. For example, I'm considering taking some personal improvement courses, which are outside of my normal budget. I have to talk with my partner and we have to agree how to make it fair, since he's not interested in the same courses, but I feel like he shouldn't get to spend an equivalent on toys either. However, this is a good opportunity for practicing communication skills. It just takes some patience and coming up with creative solutions.
Another thing that is tricky is side incomes. For example, if you both pick up full time jobs, but one of you decides to spend an extra 10 hours/week on a side income, how is that income distributed? For us, historically, the amount has been low enough (<$1000/year) that we just put it in our personal funds. However, a side job means less time with your partner, doing less chores at home, and/or being more stressed and impatient around your partner. So it is really fair if you ask your partner to do extra emotional labor and then you reap all the financial benefits? Just something to think about.
posted by ethidda at 4:07 PM on March 25, 2016 [2 favorites]
= default separate =
Before my partner and I got married, we had default separate. We agreed on budgets for shared categories (food, travel, entertainment) and we kept a joint account where we'd deposit pre-determined amounts. (In our case, it was 50/50, but it doesn't have to be. Even though I made 3-4x what he did.) He paid me monthly rent (since I owned both our primary residence and a rental).
Whoever made more money tended to have more spending money, which is okay if you make about the same amount or if the person who makes more money is relatively generous.
When we wanted something that was joint (e.g. small kitchen appliance), we would negotiate. But both parties have the right to veto, in which case the other party gets to decide if they want to pay for it in its entirety or forego it completely. (It was never an issue for us, since we didn't mind each other using our stuff. But may depend on your individual personalities.)
This kind of became an issue when he was unemployed with limited savings fund. Our agreement was that he would still pay rent. For food, he would do all the cooking and grocery shopping, and limit the budget to half of the usual. (That is, I would pay what I normally paid, and he would be ingenious about using it to feed two.) He also did extra chores that I normally hired out. (I make more money and also am more lazy.)
= default combined =
After we got married, we switched to default combined. (This was mostly motivated by taxes: being able to max out good retirement account options and the vagueries of who the tax refund belongs to.) This meant all money except retirement goes into a shared account. Every month, money gets disbursed to our individual accounts for spending money.
In our particular case, I enjoy the minutiae of personal finance. So I keep track of the details, including churning credit card rewards. My personal expenses go on credit cards and I just keep track of it in my ledger. My husband prefers being able to look at his checking account balance to determine if he has funds or not. He has a $X,000 buffer in his account for emergencies and to buy larger items. He has access to all our information (ledger is a text file shared on Dropbox, and he can always ask me) but rarely checks because it doesn't interest him.
Again, something can only come out of a joint account if it is something we already budgeted for or if we talk about it and both agree to it. Things that come out of joint accounts by default: housing, utilities, food (as long as it's groceries or we're both eating out), transportation, travel (currently Uber/Lyft/bus pass), medical/dental/vision, gifts, charity, stuff for the house (though we typically discuss this one). Otherwise, it comes out of our personal allowances.
This has been (and is still) is an adjustment for me, because it means my discretionary spending has drastically lowered. For example, I'm considering taking some personal improvement courses, which are outside of my normal budget. I have to talk with my partner and we have to agree how to make it fair, since he's not interested in the same courses, but I feel like he shouldn't get to spend an equivalent on toys either. However, this is a good opportunity for practicing communication skills. It just takes some patience and coming up with creative solutions.
Another thing that is tricky is side incomes. For example, if you both pick up full time jobs, but one of you decides to spend an extra 10 hours/week on a side income, how is that income distributed? For us, historically, the amount has been low enough (<$1000/year) that we just put it in our personal funds. However, a side job means less time with your partner, doing less chores at home, and/or being more stressed and impatient around your partner. So it is really fair if you ask your partner to do extra emotional labor and then you reap all the financial benefits? Just something to think about.
posted by ethidda at 4:07 PM on March 25, 2016 [2 favorites]
Oh, one thing about having a joint food account is that we can both spend from it. This means that when we go out, my husband can "take care" of everything. I don't know why it matters, and I feel silly for saying that it matters at all, but it feels nice to me that he's the one physically paying, even if the money is at least 50% earned by me.
posted by ethidda at 4:16 PM on March 25, 2016 [1 favorite]
posted by ethidda at 4:16 PM on March 25, 2016 [1 favorite]
We do something similar to many of the previous answers - my husband and I each have individual accounts, and we have a joint account for household expenses. We each transfer our share of the bills into the joint account and most bills get paid from that account. When we got married, I made significantly more than he did, so my portion of the household expenses was higher, proportionate to our incomes; now we are about equal, so we split it evenly. We have a couple of joint credit cards which are paid from the joint account, but we also have our own personal credit cards for personal spending on whatever that we're each individually responsible for paying.
If you are going to buy property with someone to whom you are not married, I strongly suggest that you iron out some sort of legal agreement and put it in writing. The smallish legal fee to do so can save you a lot of headaches in the future.
posted by bedhead at 4:27 PM on March 25, 2016
If you are going to buy property with someone to whom you are not married, I strongly suggest that you iron out some sort of legal agreement and put it in writing. The smallish legal fee to do so can save you a lot of headaches in the future.
posted by bedhead at 4:27 PM on March 25, 2016
ethidda, that sounds so complicated to me :-) For example I took some professional development classes and I did pay for them myself, but my boss reimbursed me partially, and then I got a tax refund for some of it...
One thing I forgot to mention is that for all expenses other than rent, which comes directly from the bank account, we use jars and we physically deposit cash into them every two weeks. If someone buys groceries, they just take from the jar. If someone buys gas etc. they take from the jar. There still are communications around this. We found for a few months we were coming up short because husband would run out of sandwich bread mid-week and replenish at drugstores because he was too lazy to go to the grocery store, for instance. This wound up being much more expensive and we had to discuss planning our weekly grocery trip better.
I am going on maternity leave in November too, and our plan right now is to just make a jar for the baby and pay for its clothes and necessities out of that. We'll see if that works. I think the vital part of our system is that one of our jars is a savings fund. When something special comes up that we want to cover jointly (most recently, driving lessons for me) it can come out of there.
posted by JoannaC at 4:32 PM on March 25, 2016
One thing I forgot to mention is that for all expenses other than rent, which comes directly from the bank account, we use jars and we physically deposit cash into them every two weeks. If someone buys groceries, they just take from the jar. If someone buys gas etc. they take from the jar. There still are communications around this. We found for a few months we were coming up short because husband would run out of sandwich bread mid-week and replenish at drugstores because he was too lazy to go to the grocery store, for instance. This wound up being much more expensive and we had to discuss planning our weekly grocery trip better.
I am going on maternity leave in November too, and our plan right now is to just make a jar for the baby and pay for its clothes and necessities out of that. We'll see if that works. I think the vital part of our system is that one of our jars is a savings fund. When something special comes up that we want to cover jointly (most recently, driving lessons for me) it can come out of there.
posted by JoannaC at 4:32 PM on March 25, 2016
We have always operated on a pretty separate finances system. We have a joint account that our mortgage payment comes out of, so we each contribute half a mortgage payment monthly to that, plus a bit more to save for things like paying our house insurance and random "oops, this thing in the house broke" stuff.
We split responsibility for bills/expenses in a way that seems pretty equitable to us- for instance, one of us pays the electric bill, the other pays the cable bill, one pays the car loan payment, the other pays for car insurance/gas/oil changes, one pays for heating oil, the other pays for groceries.... We have a joint credit card for one-off expenses that we can split 50-50, and we put our childcare on that card for that reason, too. When we go out to eat we generally split the bill between us, but if one of us has bought a few things for the other recently we try to even it out by the other one buying dinner here and there. It's a pretty loose arrangement for non-bill expenses that come up, we usually let each other know if we need the other person to kick in money for whatever.
The really nice thing about this system is that as long as the bills are being paid, we each can do whatever we want with our discretionary money. No stress if one of us goes on an Amazon binge or buys $50 of fancy soaps for no reason at all, no need to ask permission to spend money like we would have to if it was all joint money. My parents fought about money a lot when I was a kid, and I feel really strongly about not having those fights as long as we are privileged enough to have the means to pay our bills.
posted by banjo_and_the_pork at 4:43 PM on March 25, 2016
We split responsibility for bills/expenses in a way that seems pretty equitable to us- for instance, one of us pays the electric bill, the other pays the cable bill, one pays the car loan payment, the other pays for car insurance/gas/oil changes, one pays for heating oil, the other pays for groceries.... We have a joint credit card for one-off expenses that we can split 50-50, and we put our childcare on that card for that reason, too. When we go out to eat we generally split the bill between us, but if one of us has bought a few things for the other recently we try to even it out by the other one buying dinner here and there. It's a pretty loose arrangement for non-bill expenses that come up, we usually let each other know if we need the other person to kick in money for whatever.
The really nice thing about this system is that as long as the bills are being paid, we each can do whatever we want with our discretionary money. No stress if one of us goes on an Amazon binge or buys $50 of fancy soaps for no reason at all, no need to ask permission to spend money like we would have to if it was all joint money. My parents fought about money a lot when I was a kid, and I feel really strongly about not having those fights as long as we are privileged enough to have the means to pay our bills.
posted by banjo_and_the_pork at 4:43 PM on March 25, 2016
We have a similar arrangement to corb and others. We have all joint finances and then a personal amount that we can spend on whatever we like. I earn more than mr pretty and we each brought a significant asset to the relationship. I also keep a fairly detailed budget.
By way of background, we were late 30s early 40s when we got together and were each very well established.
Hope you find a way that works for you. You don't need to find the silver bullet right off the bat. Our current method has evolved over the course of our relationship and we've adopted and then discarded things that haven't worked.
Most important thing is that you can talk about it in the first place... everything else is detail.
posted by prettypretty at 4:47 PM on March 25, 2016
By way of background, we were late 30s early 40s when we got together and were each very well established.
Hope you find a way that works for you. You don't need to find the silver bullet right off the bat. Our current method has evolved over the course of our relationship and we've adopted and then discarded things that haven't worked.
Most important thing is that you can talk about it in the first place... everything else is detail.
posted by prettypretty at 4:47 PM on March 25, 2016
JoannaC: Yes, it is more complicated, in that it involves more discussions. But that can be beneficial as well. For one thing, the personal improvement courses I'm talking about would involve quite a bit of time, so it is something we need to talk about anyway. (I find that is true for most large purchases.) The refunds and taxes isn't so complicated. I made a spreadsheet in about 10 minutes to figure out different scenarios and how much we are paying net. (Did I mention I like doing finances?) It's good to use your budget as a tool and a starting point to talk about how your life together looks and what you want it to look like 5, 10, 30 years in the future.
posted by ethidda at 5:06 PM on March 25, 2016
posted by ethidda at 5:06 PM on March 25, 2016
We do the combined finances thing, no separate/personal funds at all, which it sounds like isn't your preferred alternative, so I won't go into any details there.
But what we do, that might be of use to you regardless of how you decide to allocate your me/you/us funds, is to have a set dollar criteria for purchases/decisions that need to be discussed out of the shared money. For us that is $200, either as a single purchase or as smaller purchases that collectively will hit that number (like a $20/month subscription, say). The exact amount could be much higher or lower, it just serves to provide an agreed-upon check-in point to make sure that both people are on board when there is a financial decision that affects both (out of the "us" money, if you are breaking it that way).
posted by Dip Flash at 6:32 PM on March 25, 2016
But what we do, that might be of use to you regardless of how you decide to allocate your me/you/us funds, is to have a set dollar criteria for purchases/decisions that need to be discussed out of the shared money. For us that is $200, either as a single purchase or as smaller purchases that collectively will hit that number (like a $20/month subscription, say). The exact amount could be much higher or lower, it just serves to provide an agreed-upon check-in point to make sure that both people are on board when there is a financial decision that affects both (out of the "us" money, if you are breaking it that way).
posted by Dip Flash at 6:32 PM on March 25, 2016
My husband and I lived together and then bought a house together before we were married, so we set up our finances as a couple well before marriage. It's worked out so well that we felt no need to change it after we married.
We primarily keep our money in our own checking/savings accounts, which the other doesn't access or really know anything about. I have no idea what his balances are, and he doesn't know mine.
We have a joint checking/savings account that we automatically transfer a set amount into each month, for shared expenses like the mortgage, property taxes, utilities, groceries, dinners out, pet expenses, etc. We make about the same amount of money, so we deposit the same amount each month. We don't spend the money in the joint account for anything outside its understood purpose without checking with the other first.
We have no shared credit cards. Neither of us really uses a credit card much, except in emergencies, and we never carry a balance. (I am very gratefully aware that we're lucky not to need to spend money we don't have.)
Before we opened the joint account and bought the house, we talked about our credit scores, sources of debt, and general ideas about money, which revealed that we both feel similarly about money and financial issues. As part of this discussion we asked ourselves if we should combine finances completely, but we couldn't think of a compelling reason to bother.
posted by jesourie at 7:00 PM on March 25, 2016 [1 favorite]
We primarily keep our money in our own checking/savings accounts, which the other doesn't access or really know anything about. I have no idea what his balances are, and he doesn't know mine.
We have a joint checking/savings account that we automatically transfer a set amount into each month, for shared expenses like the mortgage, property taxes, utilities, groceries, dinners out, pet expenses, etc. We make about the same amount of money, so we deposit the same amount each month. We don't spend the money in the joint account for anything outside its understood purpose without checking with the other first.
We have no shared credit cards. Neither of us really uses a credit card much, except in emergencies, and we never carry a balance. (I am very gratefully aware that we're lucky not to need to spend money we don't have.)
Before we opened the joint account and bought the house, we talked about our credit scores, sources of debt, and general ideas about money, which revealed that we both feel similarly about money and financial issues. As part of this discussion we asked ourselves if we should combine finances completely, but we couldn't think of a compelling reason to bother.
posted by jesourie at 7:00 PM on March 25, 2016 [1 favorite]
This is, in addition to being a practical question about who has access to what funds, also a pretty complicated legal question, especially since it sounds as though you don't intend to get married, which means that there's no legal contract in place to dictate the terms of your financial relationship or of any possible future split. You don't say where you live, but national and state laws have a lot of quirks in them that you should know about before making this decision so that you understand what rights you would each have to each other's property and to joint property in the future.
I also think you might want to consider what you would want, financially, for your child if something happened to you. Would you want to ensure that your SO keeps the house, or would you want your child to also have a financial claim to it since you paid for half of it? How much would you want to leave to your child if you died when he was still young? Would you want your SO to continue to be able to make financial decisions about money you earned, for your son, if you weren't around or became incapable of making your own decisions, or would you want your son's other parent to make such decisions, or someone else entirely? Would you want your son to inherit money from you right away, or only once he reaches a certain age, or only to be used for certain things?
You've asked a practical question about day-to-day budgeting. But, especially given that you have a child who is not your SO's child, I think you also need to ask yourself some questions about that, and then talk to a lawyer about what you need to do in terms of bank accounts or trusts or separating funds to make sure that what you want to happen actually happens if you're not able to make it happen. Because some of the decisions you make about whose name goes on which bank accounts may also change what happens to your money if your relationship ends or if something happens to you. And those are bigger decisions than just how much you should each put into the grocery fund, but your decisions about he grocery fund (and the house and savings accounts and retirement funds and all your other accounts) may have big ramifications for your and your child's legal rights. (IAAL, IANYL, TINLA, IANAfamilylawexpertofanykind).
posted by decathecting at 8:58 PM on March 25, 2016
I also think you might want to consider what you would want, financially, for your child if something happened to you. Would you want to ensure that your SO keeps the house, or would you want your child to also have a financial claim to it since you paid for half of it? How much would you want to leave to your child if you died when he was still young? Would you want your SO to continue to be able to make financial decisions about money you earned, for your son, if you weren't around or became incapable of making your own decisions, or would you want your son's other parent to make such decisions, or someone else entirely? Would you want your son to inherit money from you right away, or only once he reaches a certain age, or only to be used for certain things?
You've asked a practical question about day-to-day budgeting. But, especially given that you have a child who is not your SO's child, I think you also need to ask yourself some questions about that, and then talk to a lawyer about what you need to do in terms of bank accounts or trusts or separating funds to make sure that what you want to happen actually happens if you're not able to make it happen. Because some of the decisions you make about whose name goes on which bank accounts may also change what happens to your money if your relationship ends or if something happens to you. And those are bigger decisions than just how much you should each put into the grocery fund, but your decisions about he grocery fund (and the house and savings accounts and retirement funds and all your other accounts) may have big ramifications for your and your child's legal rights. (IAAL, IANYL, TINLA, IANAfamilylawexpertofanykind).
posted by decathecting at 8:58 PM on March 25, 2016
Response by poster: I appreciate all the "see a lawyer" feedback, but am really just looking for the 'day-to-day' financial advice, but wanted to answer a couple things I saw pop up -
We'll likely get married, it's just not on the immediate horizon. Additionally, I'll be amending my will when we purchase the home to account for my possible early demise - and my son is very well settled financially due to his father/some inheritance stuff so it's less a concern than if I were a traditional single mom.
But I'm loving the day-to-day stuff, so please keep it coming!
posted by dotgirl at 9:21 PM on March 25, 2016
We'll likely get married, it's just not on the immediate horizon. Additionally, I'll be amending my will when we purchase the home to account for my possible early demise - and my son is very well settled financially due to his father/some inheritance stuff so it's less a concern than if I were a traditional single mom.
But I'm loving the day-to-day stuff, so please keep it coming!
posted by dotgirl at 9:21 PM on March 25, 2016
We have separate bank accounts and a spreadsheet, in a shared Dropbox, called "from_each_according_to_their_ability_to_each_according_to_their_needs.ods". We save receipts and stick them in a box with our initial on them; once a week or so, someone enters them into the spreadsheet. The spreadsheet keeps track of what the total expenses are, what each person actually paid, and what they should have paid if it had been perfectly proportional to income. When whoever feels like they "owe the community" a sufficiently large amount (i.e. we've deviated too much from the ideal), they pay for something that ordinarily would be paid by the other person.
Recurring things tend to fall to one person (e.g. I pay the rent + council tax by direct debit), but these go in The Spreadsheet. Things like food are paid for by whoever happens to go shopping. All we have to do is remember to get receipts and we can keep things relatively equitable without too much discussion or formal division of expenses.
If incomes change, we can easily update The Spreadsheet to reflect that fact. We used to be more casual about it, but our incomes recently became more disparate for the time being, and my partner felt uneasy about contributing less; the spreadsheet allays those feelings through formalization.
We don't tend to have too many non-communal expenses, but in those cases, we just do whatever we want with our own money, and everything is fine as long as we meet our individual commitments to The Spreadsheet.
posted by busted_crayons at 10:15 AM on March 26, 2016
Recurring things tend to fall to one person (e.g. I pay the rent + council tax by direct debit), but these go in The Spreadsheet. Things like food are paid for by whoever happens to go shopping. All we have to do is remember to get receipts and we can keep things relatively equitable without too much discussion or formal division of expenses.
If incomes change, we can easily update The Spreadsheet to reflect that fact. We used to be more casual about it, but our incomes recently became more disparate for the time being, and my partner felt uneasy about contributing less; the spreadsheet allays those feelings through formalization.
We don't tend to have too many non-communal expenses, but in those cases, we just do whatever we want with our own money, and everything is fine as long as we meet our individual commitments to The Spreadsheet.
posted by busted_crayons at 10:15 AM on March 26, 2016
We split the fixed-cost bills based on our income ratios, and revisit this whenever our incomes or the costs change a significant amount.
We totalled our typical fixed-cost monthly household expenses on a spreadsheet - the car payments, the mortgage payment, our utility and phone bills, etc. We've noted who pays what and have those subtotals, so we have the "I pay $X in bills each month, he pays $Y in bills, and the combined total expenses is usually $Z" each month.
And then separately we have our typical monthly incomes, and obtain the ratio of what we each make to the household total income. That ratio is applied to the typical total monthly household expenses, so that we determine any difference owed. Though I pay $X, my share should only be $x, and so hubby pays me $(X-x) every month, which is just a few hundred dollars each month.
Stuff like groceries, going out to eat, and dates - we alternate who pays. Major purchases/projects we often split 50/50, or I offer a specific $$ amount that is within my budget. And otherwise it is up to ourselves individually to save for retirement or spend our cash as we see fit.
I acknowledge that right now money isn't tight for us so we don't worry about who pays for what or reining in expenses closely. But when money has been or will be tighter, we talk about it more often and keep each other aware of the need to keep an eye on costs.
posted by lizbunny at 12:00 PM on March 26, 2016
We totalled our typical fixed-cost monthly household expenses on a spreadsheet - the car payments, the mortgage payment, our utility and phone bills, etc. We've noted who pays what and have those subtotals, so we have the "I pay $X in bills each month, he pays $Y in bills, and the combined total expenses is usually $Z" each month.
And then separately we have our typical monthly incomes, and obtain the ratio of what we each make to the household total income. That ratio is applied to the typical total monthly household expenses, so that we determine any difference owed. Though I pay $X, my share should only be $x, and so hubby pays me $(X-x) every month, which is just a few hundred dollars each month.
Stuff like groceries, going out to eat, and dates - we alternate who pays. Major purchases/projects we often split 50/50, or I offer a specific $$ amount that is within my budget. And otherwise it is up to ourselves individually to save for retirement or spend our cash as we see fit.
I acknowledge that right now money isn't tight for us so we don't worry about who pays for what or reining in expenses closely. But when money has been or will be tighter, we talk about it more often and keep each other aware of the need to keep an eye on costs.
posted by lizbunny at 12:00 PM on March 26, 2016
Trying to maintain individual finances seems great - until it isn't. We've been using Quicken since the beginning to track financial activity, so understanding what's going on with the money isn't a problem. We used to pay proportional amounts into a joint account to cover all bills, and kept other finances separate. That worked right up to the point where the wife went back to school for several years and had no income. By that point, we knew that we were reasonably similar spenders, frugal but not stingy, willing to spend money on certain kinds of things. It wasn't making sense to have three separate financial systems (hers, mine, joint). We basically sidelined the individual stuff as a rainy day fund.
It basically developed that I had an aggressive policy towards finances that she appreciated, and she is good at detail-oriented work. So I tend to set goals and policy while she implements it. She can usually guess what I'd do in a given situation, so it works out pretty well. We paid off our mortgage in under half the term and are now debt free, except for revolving debt.
Today, we run most expenses through credit cards, with data entered immediately into Quicken at time of purchase via smartphone app, so we always have a perfect understanding of where finances sit. Some credit cards are hers, some are mine, but for most of the major ones we're both on the account. One of the nice things about a shared credit card is that it will show up on her credit report as well as mine, so by adding her to a credit card I'd had for years before we were married, suddenly her average age of credit went up substantially. We always pay the credit card off in full, quite often before the statement is generated. Credit cards are great when they're not charging you fees and are paying you rewards and other benefits.
Looking back on it, I know it feels good to keep things separate, and there's no particular reason that you have to go all joint or anything like that. However, financial stuff can get complicated fairly rapidly, and for two people who see eye-to-eye on most of it, it may be making more work than is strictly necessary.
posted by jgreco at 4:33 PM on March 26, 2016
It basically developed that I had an aggressive policy towards finances that she appreciated, and she is good at detail-oriented work. So I tend to set goals and policy while she implements it. She can usually guess what I'd do in a given situation, so it works out pretty well. We paid off our mortgage in under half the term and are now debt free, except for revolving debt.
Today, we run most expenses through credit cards, with data entered immediately into Quicken at time of purchase via smartphone app, so we always have a perfect understanding of where finances sit. Some credit cards are hers, some are mine, but for most of the major ones we're both on the account. One of the nice things about a shared credit card is that it will show up on her credit report as well as mine, so by adding her to a credit card I'd had for years before we were married, suddenly her average age of credit went up substantially. We always pay the credit card off in full, quite often before the statement is generated. Credit cards are great when they're not charging you fees and are paying you rewards and other benefits.
Looking back on it, I know it feels good to keep things separate, and there's no particular reason that you have to go all joint or anything like that. However, financial stuff can get complicated fairly rapidly, and for two people who see eye-to-eye on most of it, it may be making more work than is strictly necessary.
posted by jgreco at 4:33 PM on March 26, 2016
We each put x%, where x is about 75, of our take-home pay into the joint account, which pays for rent, bills, activities together, and savings. Works fine most of the time. We'll significantly raise x -- or just combine altogether -- once we have kids. Both of us max out our 401k, even though I earn less.
posted by redlines at 8:49 AM on March 27, 2016
posted by redlines at 8:49 AM on March 27, 2016
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This has worked for us pretty well, though in the last couple years we did adjust it a bit to better capitalize on Amex points. Now, all gas and all groceries go on the Amex account, and she now carries a sub-card on my account to support that.
This also works well, but we rejiggered some other things to keep it equitable.
Other bits that may or may not be on point or interesting: I already owned a townhouse when we got together, and we still live in it. We both nearly max our respective 401k plans, but are generally bad at other savings.
They key part of everything has been communicating about it, and being clear about expenditures and debts and whatnot. Just because my money is still "mine" doesn't mean I can or should spend like a drunken sailor, since we're in this together regardless of how we divvy up the logistics of it.
posted by uberchet at 1:47 PM on March 25, 2016 [3 favorites]