The Slippery Slope of Separate Money

One of the basic rules of marriage that we were introduced to in premarital counseling: Don’t keep track.  Life is not 50:50, nor should it be.  While both spouses should contribute to a marriage and household, it’s both fruitless and fodder for fights to try to make everything fair and even.

 

At the moment, we keep our finances completely joint.  We still have some leftover separate accounts, but all of our functioning money is joint.  And while we keep track of our purchases, we don’t pay attention to how much has been spent on me vs. Kyle.  Honestly, I think this works in my favor, as my upkeep costs of food, clothing, and personal care are higher than Kyle’s.

 

While we were engaged, we planned to have a largely joint financial structure with minor separate checking accounts and a line item in our budget for a certain amount of discretionary spending for each of us.  My observation is that a lot of couples think this is ideal.  We never set up that individual discretionary spending  because when we created our first budget together we didn’t find extra room for those kind of expenditures.  All of our income was eaten up with bills, savings, and save-to-spend goals that we could agree upon together.  Two years later, that’s still our status, and at this point I really don’t know how we could implement individual discretionary spending.  Here’s why: what would it pay for?

 

Now I want a new camera and it’s going to be a fairly expensive.  The individual discretionary spending system is very tempting because I could just save that every month until I had enough to by the camera, which is after all my toy, not Kyle’s.  I wouldn’t feel like I’m burdening him with the cost of the camera.  But what would Kyle’s individual money go toward?  We bought him an SSD a few months ago – should that have been his purchase alone?  And last year we bought each of us a new laptop.  Even Steven, right?  Well, my Mac cost twice as much as his Lenovo.

 

What about all the rest of the purchases for items that we don’t share?  They go way beyond electronics.  Here is a list of things we buy that we could conceivably split as only one of us uses the item or we use it inequitably.  I’ve ordered the list from more to less reasonable (to me).

  • going out without the other
  • clothing
  • phones
  • personal care
  • hobbies – blogging and workout equipment for me, clarinet supplies and video games for Kyle
  • computing electronics
  • food – I eat low-carb, Kyle eats “normal American” so our groceries only have a small overlap
  • health/dental/eyecare (remember our differential dental costs? and my elective lipid panel?)
  • rent – the second bedroom in our apartment is virtually exclusively used by Kyle as an office
  • experiences – e.g. vacations, parties

 

The fairness game doesn’t stop with purchases, either.  We have a small difference in income now but that will drastically widen when Kyle graduates.  When he makes more money than me, should he get more individual discretionary money?  Should he pay a larger percentage of the shared expenses?

 

When did this degrade from a marriage to a micromanaged contractual partnership?

 

Yesterday, when I was talking this individual discretionary spending business and how to save for the camera over with Kyle, he proposed a new idea: What if we had a pool of money that was up for grabs by either one of us depending on how much we contribute?  For instance, if I did the dishes one night, I would get 2 points, if Kyle cleaned the bathroom one weekend he would get 5 points, etc.  At the end of the month we allocate the money proportionally according to the number of points we had earned.  This would motivate even more service to our family than we do right now!

 

I’m choosing to believe he was joking, because this is the most horrifying proposal I’ve ever heard.  Putting aside all of the implementation problems, this system removes giving for its own sake from our relationship and turns it into a competition that is at its root is about money-grubbing.

 

I see a continuum from the first bit of separate money in a marriage to basically living as roommates.  Now, obviously, this post has used hyperbole, but I am sincerely interested in hearing where and how couples that employ individual discretionary spending distinguish between what should be paid with individual money and what should be paid with joint money.

 

Do you have joint, separate, or both accounts with your spouse?  If you have some separate money, how do you draw the line around what your individual discretionary spending is responsible for?

 

photo from Kevin Saff

 

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91 Responses to "The Slippery Slope of Separate Money"

  1. Alex says:

    I’m also interested to hear what others say.

    My fiance and I have one joint account that we exclusively use for joint expenses – groceries, rent, dinner dates, vacations. We each then have our own individual checking and credit accounts. We are both responsible enough with own accounts that the other is never jeopardized (ex: we always make rent).

    I prefer this system because I don’t have to take him into consideration if I want to have a drink with a friend or buy a laptop.

    …however, I do understand your concerns about allocation of joint expenses. Groceries are really our only expense that isn’t split 50/50 and there have been some discussions regarding who eats more expensive food (I do) and who eats more food (he does). This is, as you said, a slippery slope, and one that I think we’d both prefer to avoid unless it becomes a more tangible problem.

    1. Emily says:

      Is that the system you’re planning to use once you’re married? I see problems with it in the long-term although it seems functional for now. We have the same issue with price vs. volume of food but I’m very happy to just not keep track!

      1. Alex says:

        I imagine we’ll maintain this through marriage, at least until big purchases are made (house, car [not for awhile]).

        I scrolled through the comments below. Lots of great points, but I guess I don’t see the point of combining our money more than necessary and then try to figure out how to divide it. We have a 50/50 joint account for joint expenses (anything we share) and personal accounts for personal expenses (everything else), with little gray area. We never purchase anything without having the cash on hand, so would have no need to dip into joint savings for personal items. Also, it has been explicitly stated that we will never live above the means of the poorest one. Each can contribute 50/50, which is honestly an integral part of our relationship’s emotional stability. Obviously, this system would change if one developed a life-threatening disease, lost a job, or had a mental breakdown. But for now, it’s working well.

        The idea of having one joint account seems a little antiquated to me. This is what my parents did when my mother wasn’t working – both had access to funds without having to issue her an allowance.

        1. Emily says:

          What you’re talking about is basically having separate finances or what I’m calling here the roommate model. Obviously, I don’t think that’s ideal for married couples or I wouldn’t have written the post the way I did. I guess the way I see it is that without having mostly or primarily joint finances, how do you dream together and set goals together? What does the higher-earning spouse do with all his/her excess income, if you are committed to living at the level of the lower-earning spouse? Or, for another perspective, what does the “low-desire” spouse (just wants less stuff/experiences overall, more content with the status quo) do with his/her excess money? If you put it into savings is that just kicking the can down the road as savings would be separate as well?

          I don’t really see joint finances as antiquated – especially with so many women outearning their husbands – though I agree that it’s vital when one spouse doesn’t have an income.

          I think the question of joint or separate finances boils down to a conception of marriage. I would like our marriage to be characterized by unity, teamwork, interdependence, and sacrifice, and I think having joint finances supports those attributes.

          1. Alex says:

            I think of it more as a hybrid roommate model. When I had roommates, we didn’t split food and we paid our own ways when doing things together.

            One reason this system has worked so well for us is that our dreams and goals are still smallish purchases. We are both savers, so taking trips together/going to school are things that we can easily fund jointly/separately as needed. Again, we’ll probably re-evaluate when we begin to think about purchasing a house.

            What does the higher-earning spouse do with excess income? I spend more on “personal” items, like clothes and hobbies. I should mention that our salaries differ by only $8,000. To be explicit, I promised my partner that I won’t pressure him into a housing situation/trip/other experience that we can’t split 50/50, unless it’s a gift from me to him. This was also how I wanted it when the situation were reversed a few years ago.

            When I said “The idea of having one joint account seems a little antiquated to me” I should have written, “the idea of having one joint account and ONLY one joint account.”

            I do agree that having joint finances supports a marriage of unity and teamwork, which is why we have a joint account for joint expenses. I just think that combining two salaries into one joint account and then trying to redistribute those funds for personal purchases is overly-complicated.

            Thank you for this post! It’s given me a lot to think about.

  2. WorkSaveLive says:

    My wife and I certainly have joint accounts. We budget together and we each have an equal say in everything we do and spend.

    As far as individual spending money we both get the exact same amount each month (regardless of if one spends it or not). It’s helped us a lot because it is completely fair and there is no arguing for the mere fact that it is PERFECTLY fair.

    Now, when we have a large purchase we make talk about it and make a decision together. For instance, I bought a $500 golf membership last year. That did not come out of my personal spending money though. My wife and I discussed it, talked about the pros and cons and we simply made a sacrifice together.
    WorkSaveLive recently posted..Would You Sell Your Wedding Ring – Part 2

    1. Emily says:

      Jason, this is exactly what I wanted to hear about. Even though you have joint accounts it’s still the same system. What generally month-to-month is paid from joint money and what is from your individual spending money? Food? Clothing? Going out?

  3. I’m not married to J but I am a believer of at least one separate account, for self interest and protection reasons. But I have seen my parents have a joint account mainly (they still have one separate account but they have great communication regarding it) and it’s worked for them really well – they just talk about bigger purchases and see if it’s feasible.

    I would lean more toward Alex’s model for when we do get married.
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    1. Emily says:

      We have all joint accounts actually in that both of our names are on each, but if we wanted to funnel some discretionary income we do have two extra checking accounts that could be used by the spouse who originally opened them (mine at ING, Kyle’s at BoA). So that structure is in place, we’ve just elected not to use it.

  4. Michelle says:

    Our money is mostly joint (but not retirement). We just throw everything together and we have never kept track of what the other spends, this is mainly because it would be pretty even.
    Michelle recently posted..Working Out and Being Healthy

    1. Emily says:

      Our retirement accounts are still separate since we started them before we were married, but we have agreed that they are joint property like everything else. I think if we kept track it would end up being pretty even too, but I’d rather not know the details.

      1. I don’t think you can actually have joint retirement accounts (there’s no joint IRA, for example), but retirement accounts are treated as marital / community property in many states. And in case of divorce you could be entitled to a portion of your spouse’s balance (and vice versa, obviously).
        Well Heeled Blog recently posted..Fess Up Friday: 5 Financial Stressers

        1. Emily says:

          That makes sense. Thanks for the clarification!

      2. Retirement money from before the marriage is your own personal assets even after divorce.

        Retirement funds that you earn during marriage is considered community property especially in the CP states like CA and you will be forced to give away 50% of your account at divorce. (Prenuptial agreements may mitigate a portion but at the 10 yrs mark, it’s anything goes.)
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        1. Emily says:

          Thanks for the insight! For this community property designation you and WH have mentioned, it’s the law of the state you’re filing for divorce in that matters, not the state you got married in or the state you lived together in longest or anything like that, right?

  5. Our money is separate. I think everyone should have their own, individual savings account at minimum. Only because in this crazy world, you never know what’s going to happen, even in the best of relationships. No one thinks it will ever happen to them. I like Michelle’s idea of separate retirement accounts.

    Joint discretionary spending could be for things like gifts for each other or perhaps extraneous, optional professional training and supplies. I love my job, so I may be unique in that want. But with joint accounts it can be harder to surprise the other person.

    Sounds like his intentions were good with the chore/money system! It is kind of funny, though…sound like something my dad would have set up for us when we were kids. :)
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    1. Emily says:

      I thought a lot about how to respond to your idea of having at least an individual savings account. I realize that other people have different concepts of marriage and personal experiences leading to their decisions. Before marriage, we kept things completely separate. Now that we’re married, I’m comfortable with having totally joint money with Kyle. It is a demonstration of trust, but actually it’s probably only the third or fourth most important (to me) demonstration of trust that we went through in the process of getting married. So given that we trusted and committed to each other in all those more important things, joint money is actually relatively trivial.

      The gifts argument is one of the better ones for having some separate money, IMO. But honestly we don’t give each other gifts that cost money right now. We just decide together how we want our money to be spent. If one of us has a need, obviously we buy it. If one of us has a want, we talk it over and wait on it and make sure we have the money before we buy it. Those aren’t tied to special occasions or anything. To celebrate our birthdays and anniversary as such, we have been spending money on experiences/trips to enjoy together and both participate in the decision making.

      I agree that the system Kyle was talking about is something that you would set up for children. Not adults who WANT to serve each other. I think when he first got the idea he was serious about it, but as it elaborated in his mind it became more of a joke suggestion.

  6. We have separate accounts, and we will probably have separate accounts for at least a few years after we are married (we’re probably doing long-distance and logistically it’s just easier). That said, I view all of our money as a shared resource – especially as California is a community property state.

    I also think that while life isn’t 50/50 100% of the time, over the long run both partners need to feel like their goals and dreams are being supported and their priorities are being followed to have a happy marriage. That doesn’t mean no one makes sacrfices for the other, but those sacrifices can’t be all one-sided, all the time.
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    1. Emily says:

      I agree that in the case of long-distance marriage separate accounts makes more sense. You have to have a lot of communication on a nitty-gritty level to have joint accounts and that just doesn’t seem like how you should spend your time if you live apart.

      I totally agree that sacrifices should be made by both partners. This is why I prefer to have everything joint, actually. I think if you start separating any money, ultimately your dreams and priorities become separate. By keeping everything together you’re forced to discuss and agree to a greater degree on what your life is about, and that’s an opportunity for both partners to be heard.

  7. I am getting married this summer, and H and I still have not figured out exactly how we are going to manage our finances. There have been quite a bit of discussions about it, and we both know where the other is coming from, but still havent gotten anything firm yet. I’m sure we will get there in time, but i’ve been trying to figure out ways to maximize airline points and still make sure that each of us doesnt feel like we are constantly being watched by the other.
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    1. Emily says:

      Haha, I’m a control freak so I like being totally transparent with Kyle and talking over basically every spending decision. Our budget is so tight that it really couldn’t be any other way. It will be interesting for us when we make more money if I’m able to kind of loosen the reigns and give each of us more freedom. Or maybe I’ll always feel that our budget is tight – kind of a scary thought/personality insight.

  8. I’m so interested in this topic. I’m 30 and single, and 100% in charge of every dollar that comes in, and every dollar that goes out. Will this experience change me? Make me less desirable of a partner? Only time will tell, but I’m guessing I’m going to want to keep things separate.
    Frugal Portland recently posted..Dear Future Self, Part One

    1. Emily says:

      Obviously I’m interested too, and I haven’t gotten the specific answers I want yet! More people comment please and elaborate on where your lines are!
      There are plenty of advantages and disadvantages to marrying earlier vs. later and I think they all depend on the individual’s personality. Yes, becoming set in your ways from years of living and managing your life alone can present challenges when you merge with another person. But it also gives you competence and skills in a variety of areas. I don’t really know how couples can have joint goals for the future but keep separate accounts – not quite the topic of this post but related.

  9. Leigh says:

    I can’t really answer your question, but this is definitely a topic that intrigues me as I build my assets while single. My mom likes to say that I should find someone soon before I get too set in my ways, but somehow I doubt that will happen. (You do never really know though!) I worry a lot, but I worry about the fact that I could have a mortgage paid off or a rental property and a ton in investments by the time I do get married and I worry about how that will affect balance in the marriage, but as one of my friends says, I could meet someone who has a similar asset level – you really don’t know.

    I really liked Meg at APW’s article on marriage as a mini-socialism and I thought that was a really interesting way to look at it: http://apracticalwedding.com/2012/03/combining-finances-marriage-wedding/

    I agree that Kyle’s points idea sounds utterly ridiculous!
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    1. Emily says:

      I don’t think you should put your goals on hold just because you don’t want to appear overqualified to a potential spouse. Chances are you’ll meet someone as you are pursuing your interests with whom you will have a lot in common.

    2. Jessica says:

      Thanks for sharing Meg’s article. I found it really healpful
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    3. Emily says:

      I really like that APW post and have many of the same views about togetherness and that it is a legal fiction to have “mine” and “yours” after marriage. Marriage means “we” before “I” for both partners, and I think many times having separate financial goals can impede progress toward joint financial goals.

      1. Emily too says:

        I totally agree with that. We have half joint, half separate accounts, but frankly we’re married, our financial self-interest is shared from here on out. We look at the separate accounts as a legal fiction to help us get used to different organizational styles (one savings account vs several delayed spending/medium & long term savings accounts, for instance), and to get to a point where some of our individual goals match up better (e.g. my husband really doesn’t want me to help pay off his student loans, and I put a big chunk of my academic year income straight into a savings account to help with summer bills). But as our situations change we expect to move more toward joint, and even now the money’s all “ours”, some of it is just separately managed.

        APW is a great website.

  10. bogofdebt says:

    We have everything jointly combined but we do get equal shares of “play money”. If I want to go out with my friends, that’s fine but it has to come from my money. Same goes for him. We figure equal is good even if I make more than he does now. But we also get a little bit of “together” money that works great.
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    1. Emily says:

      Just to get very specific – all your needs and the wants you can agree on are paid from joint money and your play money is basically just to blow on experiences or throwaway toys? Like on going out or something?

      1. bogofdebt says:

        Exactly. Sometimes if it is a new movie/book or something we both would enjoy, instead of making the one person who saw it and bought it with their personal money, we will reimburse the cost out of our joint money. If it is a date, that comes out of our joint money as well. (Sometimes one of us will treat the other after the date money is gone but that’s not expected)
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        1. H says:

          Wow, this would make me think about money way more often that I’d like! It reminds me of when I was dating, and we kept track of who paid for what so we could settle up later. I’m happy not having to be so conscious now that we share finances, but that’s just my personal preference! :)

        2. Emily says:

          OK I can see that you have a rather strict line around what individual spending is for, which is what I was looking for! This way you don’t have to consult with your partner for every purchase but if it turns out to be something you both want you can get the money half back.

  11. Jessica says:

    I’m really glad someone brought up this topic since I’m getting married in two weeks. Right now my fiance and I keep out finances separate, though he has money for his next semester’s tuition parked in my checking account since he does not qualify for rewards checking at our credit union.

    We’ve vaguely talked about having joint accounts when we’re married. We believe that it’ll promote unity in our marriage. Ideally, each month we will sit down to talk about our finances and necessary purchases. We’ve talked about having “free money” in the budget each month, where each of us can use the a set amount of money each month to use for anything, no questions (within reason–nothing illegal of course), no judgement. For now, we’ll only have about $20 worth of free money for each in our budget…hopefully that won’t be enough money to fight over or cause resentment. We been meaning to talk about what kinds of things the free money could go towards, but we haven’t had a chance since he’s in the middle of his finals. So far, this is all theoretical, so I have no idea if our plans will work or not. I’m sure once he’s out of dental school, we’ll bring up this topic again since we will have a lot more money for discretionary spending.
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    1. Emily says:

      Sounds like you are where we were when we were engaged, and we didn’t end up where we expected. I think making everything joint forces you to discuss and come to an agreement. Now that we have experience with this totally joint system it’s hard for me to imagine changing it. I think our blogs are named with the recognition that no financial system will work perfectly forever and you do need periodic reevaluation and shifting. That’s why I’m interested in hearing from people with the mostly-joint-but-a-little-separate system.

      Maybe it just all depends on personality type! Kyle and I are both frugal savers so we don’t have a lot of conflict over money. If we did, separate accounts might enable some harmony. I just have like a horror picture of a spender married to a saver where the spender’s discretionary spending gets wasted on momentary indulgences and the saver’s discretionary spending goes to retirement accounts, and in 40 years it’s “Well I’m going on a worldwide cruise, cya later sweetheart! Betcha wish you hadn’t bought so many lattes!” I’m sure this wouldn’t happen but I can see how a big emphasis on “fairness” can lead to “unfairness” later, and maybe being a bit unfair now promotes more equitability over the long term.

      1. Jessica says:

        I agree with the whole personality issue, though personally I can’t picture myself with an super spender who has no desire to reign in his free spending habits. I guess I associate fiscal responsibility as a sign of overall maturity. I’ve noticed that couples from other countries aren’t as concerned about “fairness” in a relationship in regards. The US is a very individualistic society, which has it’s pros and cons. I would conjecture that our individualism and desire to be self-sufficient, which aren’t bad ideals, could cause problems for married couples in regard to finances, since we aren’t use to being interdependent
        Jessica recently posted..The Tax Withholding Debate

  12. renee says:

    We have personal allowances that are basically a subset of the “household” category. It’s a bit blurry what should come out of allowance vs household, specifically, but we generally try to be unselfish about allowing the other person what they’d like within the budget. The idea is that, in general, the household expenditures should be a joint decision. The weekly allowance subset, however, is a “no questions asked” category. Example: If I want to buy a card and small gift for a friend’s birthday, I would do this out of my allowance and J doesn’t even have to know about it. Sometimes, though, a baby/bridal shower gift (for example) would be more than I could save for with my allowance – so then we would discuss it jointly. (“Given the ‘household’ account status, can we afford the nicer shower gift? or should we give something cheaper, but equally thoughtful?”) [we have a separate budget for $$ gifts - for weddings/christmas/etc....] Sometimes we’ll gift each other a portion of our allowance – i.e., J will pay for a date night and flowers for me, or give me some $$ to buy a dress or I’ll give him some of my allowance so he can get a resistor kit. If we get a parking ticket or library fine or something, then this also comes out of our personal allowance. It’s been working well so far!

    1. Emily says:

      Thanks for being so detailed! What do you think the advantage is of your setup over just having everything joint? It seems like you end up communicating and agreeing a lot anyway. And do you track all your spending or is that allowance kind of a black hole, no-one-needs-to-know amount of money?

      1. renee says:

        I suppose we could have a joint allowance account. We just find that it eliminates potential for conflict or worry or meddling when we have some individual freedom and responsibility to spend on gifts or friends-night-out and/or to save for a hobby purchase as we please. Perhaps having a joint account would require us to “face up” to some of that, but we just haven’t seen the need. It also attaches meaning to a gift to each other or a date night, because there’s individual sacrifice involved (but that’s a side-effect, not a reason). We’re both personally responsible for tracking the allowance and categorizing it as we like. It’s not a requirement, but we both do it anyway. (We track our expenses manually, rather than through an online tool, because it helps us stay motivated to face the expenses/savings on a weekly basis.)

  13. My wife and I have joint accounts, we don’t keep anything separate. We have a similar outlook on finances so it’s a harmoneous arangement. For us, I think combining would merely complicate things.
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    1. Emily says:

      Thanks for your perspective. It sounds like you and I (and our spouses) have the same attitude. I think having separate money would be very complicated

  14. DH has an allowance. I don’t *WANT* to have to think about every little purchase he makes, or if he saves up his allowance I don’t want to have to have deciding power over something he really wants but I think is overpriced or worthless. I do want to be able to predict how much he’s going to spend every month.

    He has also used his allowance when there’s been a silly money error of some sort and he doesn’t want to spend time fixing it. Taking money out of the allowance to replace it works on many levels. We also let him keep some % of money he saves to add to his allowance when he calls up places to negotiate lower fees (something I can’t be motivated to do!)

    http://nicoleandmaggie.wordpress.com/2011/01/17/in-praise-of-dhs-adult-allowance/
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    1. Emily says:

      It sounds like your husband is a spender and the allowance allows him to indulge but keep in check. I think that sounds like a good solution for someone with a need to shop. I’m more like you in that it’s pulling teeth to get me to shop for something I need. Yours is the first I’ve heard of unilateral allowances.

  15. The choice of joint or separate finances will be different based upon every couple’s personal situations. It depends on your stage in life.

    If you marry late, your finances need to be kept separate and joint. This is to protect you in divorce. I recommend to my clients to keep their accounts separate especially when they marry a younger woman.

    If a couple have differing money values, you need a separate account for discretionary spending. One of my clients almost ended up divorced because his wife resented every toy he buys even though she spends money like water on clothes. He’s the main earner. After we set up separate accounts that gets an allowance each month, their friction lessens. They got equal money and she’s not allowed to use their joint account for personal spending. Since then, they’ve managed to save money for the first time and the anger got bypass because neither knew what the other was spending on.

    For me, we have separate and joint accounts but we share our financial picture with each other as a couple. I don’t count the cost differential when we make decision as a couple and I contribute heavily from my personal assets. Our last investment was 50:1 me/him.

    For women, it’s more important to understand the full financial picture than worrying about joint/separate account.
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    1. Emily says:

      Thanks for your detailed comment, Kim! I can see how individual discretionary spending would help the couple you mentioned as they each had a type of indulgence they enjoyed spending money on and there was resentment. But it seems that everything that could be a need or a reasonable want was still joint?

      For you and your husband, how do you navigate what will be paid for with joint money and what with separate? For the expenses that come up monthly or several times per year.

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  18. SB @ FPR says:

    Earlier our only checking account was locked because of my wife’s paper work. Now we have one joint account ans one separate account, where she is the nominee.
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    1. Emily says:

      For what do you use each of the accounts?

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  21. Emily too says:

    We do half joint, half separate, but “half” was a fairly arbitrary amount we picked as a first step of learning to have joint finances. We thought it would about cover the shared bills that are annoying to split (rent, gas, electricity, stuff like that). It sort of works so far, although we fairly frequently wind up asking each other if something unexpected “should be joint” (e.g. individual medical/dental stuff); often the answer has more to do with whether we have enough at the moment in the joint account to cover it than when we think a cost is “mine” or “yours,” because we generally prefer to say yes.

    The thing is, we look at it as the beginning of the sloppy slope toward sharing more, not toward roommate-hood. Right now we have somewhat similar incomes so we can contribute more or less equally, and having the flexibility to work with our old forms of organizing and managing money or our new one is nice, especially because my pay and research-related costs are more irregular over the course of a year than his. When we hit a point where one of us makes more, one of us is unemployed, or kids enter the picture, we definitely are going to move to a more shared model.

    1. Emily says:

      I can see that the slope could point the other way from totally separate down to totally joint. But why don’t you just jump into fully joint if that how you think of it anyway? I think it may be more difficult to draw out the process. You can still have your separate organizational structure for his debt and your summer and such, but just start from a “together” place.

      1. Emily too says:

        Partly caution (we wanted to make sure our system is adjustable if it turned out our preferences and habits differed in unexpected ways), partly convenience. Name changing in our state is INCREDIBLY irritating and time consuming, so switching over all our accounts from our hometown banks and applying for new credit cards at the same time as waiting for name change documents to go through with various agencies was just too much. (I still don’t have my new SS card but badgering the agency is going to have to wait until post-qualifying exams.) We got married quite recently and it has been a pretty overwhelming time at work since then, so we’re operating under the “it’s not broke, no need to fix it right now” system.

        1. Emily says:

          It does take a while to sort things out with the name change legalities and all. It took us almost a year to get to the system we have now! We couldn’t even agree on where to house our joint account for months so even though we wanted our money to be all combined it didn’t happen right away.

          1. Emily too says:

            I will say that this did inspire me to bring it up with my husband and we made plans to talk about going default joint, with some smaller percentage going to individual savings, debt, and personal spending, since he is in favor of the “allowance” model. So that’s something we’ll deal with this summer, when we have a little more time to hash out the system. It’ll have to be a bit more complicated than his “spend less than you earn” budget and a bit more regular than my “revising categories every month based on income and anticipated costs” system, but you’re right, we’re going to have to do that eventually anyway, might as well get started.

  22. [...] Emily from Evolving Personal Finance takes a look at the slippery slope of separate money. [...]

  23. [...] Lose Control. Financial planning doesn’t get easier after marriage, and Evolving Personal Finance explains that despite the complications that a joint account can cause, the best plan is to let go [...]

  24. Great post, and I tend to see things the way you do on this. I think it really matters how one sees marriage on that continuum: as a true partnership between man and woman for life, or as separate people with individual lives who just happen to choose to cohabitate together.

    Joint finances all the way, in my view. With, of course, the ability to compromise and share some similar life views and goals in the first place.
    Tie the Money Knot recently posted..Couples and Retirement

    1. Emily says:

      Thanks! If you can’t agree on general life goals and views of money you would have lots of problems with joint finances – but if that’s the case the marriage may be ill-conceived in the first place. :/ Joint finances force you to compromise but if you’re on the same page to start with it won’t be much, and I think it helps strengthen your overall marriage.

  25. H says:

    I’m seeing that many many factors contribute how a couple decides to run their finances! And there are so many varieties (allowances, separate and joint, etc.) Seems like all are right so long as communication and understanding is at the heart of it. My sister is getting married this summer… I wonder what she and her spouse will decide to do.

    For us, it’s joint accounts. This was a natural thing for us, in fact, I don’t know if we even had much discussion about it before we got married. In pre-marriage counseling, I remember our minister asking about *who* was going to take on the role of handling finances, not *how* we were going to handle them. (Although maybe this was a gentle way of entering into the topic rather than implying he wanted to provide financial guidance?) N and I looked at each other and hesitantly replied, “Well, both of us. We’re on the same page about most everything.” As I read these comments, I realize there were many reasons why this was our case: 1) similar spending habits (we both enjoy living frugally, even when we don’t have to be, but aren’t afraid to buy the “good stuff” at times, like quality chocolate, a good computer, etc.) 2) everyday lifestyle (this goes for what we eat food, ideas of fashion/clothing, outdoor equipment, recreation, travel, pretty much everything), 3) similar (great) examples from our parents (both parents are still married, keep joint accounts, and always lived within their means), 4) personality (we’re both responsible, but not too controlling), and of course 5) trust/mutual ideas about marriage. You could say that we were “lucky” that we are so similar on these things–but really, I think that’s what we looked for in a life partner, someone who fit well in all these ways.

    It’s funny you mention American’s being more wanting to pursue separate accounts, because just the other day I was talking with one of my female Latin American friends who is seeking her PhD–she keeps separate finances from her husband. They’re in their 2nd year of marriage, they both work, he lives in their home country, and she in the US. Her reasons were because she wants to feel comfortable eating out, renting movies when she wanted, buying him gifts, etc. without having to check with her husband first. She mentioned the importance of being independent–which does seem unique to Latin American women, perhaps because she is in the US seeking her PhD. I mentioned that logistically it must be a lot easier to deal with taxes and banks while they are living apart, but she didn’t think these things would change once they live in the same place. Maybe they’ll do a combination of joint and separate accounts someday when they have some mutual expenses.

    1. Emily says:

      As was also mentioned in the comments, there are some advantages to marrying young! (I think we both got married pretty young for couples pursuing double PhDs!) I think Kyle and I are similar like you and N are but like you said, it wasn’t luck. I can’t say that I was looking for these financial characteristics when Kyle and I started dating because I hadn’t developed my own financial personality very far yet, but because we made the transition from dependents to independents alongside each other we were able to influence each other’s money personalities. I helped Kyle become more responsible accounts-wise – saving for retirement! – and he likes to joke that before I met him I had never even been to a thrift store – true story! Thankfully we were similar enough in our general personalities that it was natural to learn to agree on money stuff.

      I think long-distance marriage is one instance where separate accounts makes sense – I would consider it if we have to live apart from a time, if it’s not too much of a pain to switch our structure around. Did you start with your joint finances when you were living apart (can’t recall when N moved to your city in relation to your 1st wedding?)?

      I’m also noticing from the comments that the transition into joint-ness is rather bumpy and not everyone is where they thought they would be. We didn’t get our direct deposits in line for almost a year after our wedding – I was manually transferring my paycheck from my individual checking account to our joint account for months.

      1. H says:

        Re: Did you start with your joint finances when you were living apart?

        It depends on how you define “apart”… We had a slow transition process that lasted about a year after we first got married. (And even last summer N had a summer internship in yet a different state for 2 months!) Once we finally decided on a bank and which credit cards to keep (5 months after getting married), we merged accounts; this was while we each had our own apartments in separate states, but seeing each other every weekend. During this time we each were responsible for paying our own rent/internet/utility/credit card bills, but all the $ came from the same joint account.

  26. renee says:

    Emily – On a different topic, I would see the camera as a joint investment. While you may take up the difficult hobby of photography, you’ll both enjoy the benefits of having high-quality records of your adventures together. It really is pleasing to flip through old photos and to have beautiful shots to look at. Also, the camera itself should be relatively inexpensive (even baseline models of SLRs are awesome) – it’ll be the lenses that end up costing $$. The baseline lens (which is what I still have) is less than inspiring. But I think it’s all a low price to pay for an item you’ll use for a lifetime and continually reap pleasure from.

    1. Emily says:

      I think the camera will end up being a joint expenditure as we have no immediate plans to separate any of our money. We’ll probably re-evaluate that when Kyle graduates. We knew we wanted to buy a DSLR before we have a kid so really we’re just stepping up the schedule. I agree that it is an investment and the upgrade in picture quality will be well worth it. Just need to scrape up the money!

  27. Hi Emily,
    I don’t have anything to contribute but I’m interested in this topic. I like reading the comments and getting some ideas. When I was last with someone, we never really discussed finances but just contribute our share depending on who has the larger earnings at the moment, but I’ve always felt that I would like to have a separate account aside from a joint account.
    I guess there are many factors to consider but in the end it’s what will work for the married couple that counts.
    Thanks, I’ve learned a lot from the discussion.
    Theresa Torres recently posted..How to Build Business Credit

    1. Emily says:

      Yes, it seems like every answer is unique to the couple! I’m sure our solution will change a bit over time as well.

  28. [...] The Slippery Slope of Separate Money was listed in One Smart Dollar‘s recap, Finance Product Reviews‘ weekly roundup, and Credit Sesame‘s week in money management. [...]

  29. [...] a conversation with my officemate about the diversity of comments concerning joint and separate money within marriage, she told me that during college she had read a sociology paper on the ideal number of accounts for [...]

  30. [...] in marital and cohabiting relationships, inspired by the great discussion in the comments of my slippery slope of separate money post.  In each post in this series, I review the methodology and major findings of a paper in the [...]

  31. [...] money in marital and cohabiting relationships, inspired by the great discussion in the comments of my slippery slope of separate money post.  In each post in this series, I review the methodology and major findings of a paper in the field [...]

  32. [...] Want to be financially successful? Check out this short mantra, and repeat it daily.Emily presents The Slippery Slope of Separate Money posted at Evolving Personal Finance, saying, If you have individual discretionary spending money, [...]

  33. [...] money in marital and cohabiting relationships, inspired by the great discussion in the comments of my slippery slope of separate money post.  In each post in this series, I review the methodology and major findings of a paper in the field [...]

  34. [...] be mine, instead of all being ours from the get-go.  I talk a lot on this blog about how we have NO SEPARATE MONEY and that’s true, but receiving these individual checks has made me think about this money more [...]

  35. [...] 4) The Slippery Slope of Separate Money Spouse’s Love Language Affect Your Finances? [...]

  36. [...] swear, I wasn’t trying to test my husband.  I honestly was reconsidering our TOTALLY JOINT MONEY arrangement for Kyle’s sake.  My personality as drifted further toward “saver” since I [...]

  37. [...] How money matters affect relationships and vice versa – between spouses, between parents and children, and among peers (“The Slippery Slope of Separate Money”) [...]

  38. Alan says:

    Our income is very good. I build a business before I met my wife and it has continued to grow. I do all the work in the business and she has a little side hobby/business she runs. I turned all the finances over to her when we were first married but she cannot manage money and spends like crazy. I was brought up to be very frugal and put your money to work for you. She was brought up to be sneaky and spend. Now, we have separate accounts. She gets $2500 per month from our business account which is only for household food and minor expenses. The rest can be used for her personal spending. We have no debt, the business pays all the utilities and some of her fuel expenses too.

    I have had problems keeping her out of the business account as she always runs short every month then raids the business accounts. I have now locked up the checks and extra money in a safe and opened up accounts without her name on them, but she still gets through once in awhile. She says I never trust her but admits she is ‘bad’ with money. When we go on vacation, the business pays 100% including any major purchases like a SUV just purchased for her. If we could eliminate these money problems, it would eliminate at least 50% of our marital problems

    HELP-TELL ME WHAT TO DO?

    1. Emily says:

      Hi Alan,

      Thank you for reaching out and I’m very sorry for the situation you are in. I don’t think people on the internet – PF bloggers like me – are going to be able to give you any useful money management answers, though. It seems you’ve already tried several money management systems with your wife and they have all failed. Therefore I do not believe that this is a systems problem; you have a very grave marriage problem.

      I think that you and your wife should be in marriage counseling together. From what you have said it seems that your wife is untrustworthy regarding money and the she is even going so far as to steal money from your business. You stated that she brought bad money attitudes from her upbringing into the marriage and she may need individual counseling as well to surmount those. Of course I have only read your side of things – you probably have communication problems on top of these trust problems. Since you make good money it should not be a hardship to pay for quality marriage counseling and perhaps some financial coaching/advising as well after you finish marriage counseling. I wish you the best in working past this issue so that your marriage can thrive.

      Emily

    2. Tana says:

      Well, maybe if the rest of the problems are solved, there will be no money problems. She seems to have some issues, and money is just the way it manifests. Think about it….mom went sopping with dads credit cards when he didn’t pay attention to her…

  39. […] secrecy as a reason for having partially or completely separate finances.  My opinion is that married couples should have joint finances (perhaps with “allowances”), although if a couple agrees to practice partial pooling or have […]

  40. […] for totally discretionary use, and in discussions about that point with my table I have said that we keep all of our money completely joint and don’t have separate discretionary spending each month.  If we can’t convince the other […]

  41. […] for married couples.  We have a completely joint money management system, which means that we have no separate money whatsoever, not even monthly ‘allowances.’  We share a Mint account so it’s easy to keep track of our accounts and either one of us can […]

  42. Tana says:

    I have been married 25 years. Happily married. Best advice was to have separate accounts.Money talks and negotiations in my eyes ruins happiness that can only come from complete respect and acceptance for the other human being.if you plan on having children and the woman is still the main caregiver, a man should assume all living expenses that don’t include luxury. Really basics. If he can’t , well that’s a situation. He will either have to find a way and get creative, or the woman will slowly start shouldering more than she should. I’m an overly generous person granted the basics are covered. I didn’t surrender my money and ability to manage it.We have had a greater quality of life because how we love eachother and give eachother without negotiation. Thanks to him taking care of us I managed our past,present and future, including a patrimony for our children.Dont surrender all.the only place a couple should be one is I the bedroom.

    1. Emily says:

      Thank you for sharing your opinion, Tana. I am still a bit unclear about how you manage your money or what you are suggesting for single-earner families. My idea of separate accounts does not include one spouse providing the ‘basics’ for the whole family. I disagree with your assessment that talking about money reduces happiness or that sexual unity is the only type of unity for a marriage. However, I am glad that you and your husband have found an arrangement that has worked for you for all these years. Clearly, different personality types are drawn to different money management systems.

  43. […] makes my head hurt.  Kyle and I love having joint finances and we don’t want to start down the slippery slope of determining what costs should be shared and what should be paid individually by using the joint with allowances system.  We don’t even keep track of what money went toward […]

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