Why I Love Joint Finances

man thinking love and moneyFor those of you who don’t know already, my husband, Kyle, and I keep joint finances and we are advocates of joint finances 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 have just one Mint account so it’s easy to keep track of our accounts and either one of us can check up on the activity at any time.

 

We share a single joint checking account into which our paychecks are deposited and from which all our expenses are paid, we have all joint savings accounts for our various irregular expenses, and we share our base credit card.  We even added each other’s names to our vestigial accounts from before we were married.  The only accounts that are not in both of our names are our IRAs (not possible, but we think of them as pooled) and some credit cards we applied for individually so that we could get both sign-up bonuses when churning, like with our Barclaycards.

 

I have to tell you: I love this system.  I think our marriage is stronger because all the money we touch is “ours.”  While we have largely similar outlooks on money (we are both unconflicted tightwads), we do encounter friction from time to time – we have different definitions of frugality and are prone to overspending in different areas.  This means that we agree most of the time, and when we don’t agree we still know that the other person is trying to keep in mind what’s best for our family finances – he just has a different and probably complementary approach.

 

Here is a non-exhaustive list of why I love keeping joint finances:

 

  • we must contend with our differences and either resolve them or agree to disagree (they can’t fester)
  • I’m not going to make dumb decisions because Kyle can help me think them through
  • we make joint goals and work toward them together
  • we have complete transparency
  • it represents that our marriage is a full union of our two lives
  • it keeps us from drifting apart
  • it’s nearly impossible to keep a secret if money is involved
  • we share the burden of paying past debt
  • when we choose to treat ourselves, we share the experience
  • it teaches me to think of ‘us’ before ‘me’
  • I can see us practicing it for the rest of our lives (no changes needed for unemployment, reproduction, disability, etc.)

 

The cornerstone of what makes this money management system work for us is that we are both reasonable and want what’s best for each other.  We don’t get into tit-for-tat you-got-that-I-get-this arguments; we don’t bargain.  We evaluate each of our spending decisions on its own merits and how it fits into our overall financial path without give consideration to which one of us might benefit more.  It also really helps that we share a car and our life is very simple so our communication about our finances is easy.

 

What do you like and dislike about keeping joint finances with your spouse?  What advantages do you see for other money management systems (joint with allowances, yours mine and ours, separate)?

 

photo from Free Digital Photos

 

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40 Responses to "Why I Love Joint Finances"

  1. We keep joint finances, mostly because we’re both totally laid back and also really frugal – it’s just easier to have everything in one spot and there are never any fights over money simply because we’re both so much on the same page. When something does come up, like you said, it presents an opportunity for a discussion where both of us can throw in our opinions, and we can work together to come to a solution that is best. But I know we have it easy because we’re both savers and neither one of us has ever had debt – choosing to keep 100% joint finances is definitely more difficult when you bring more factors to the table.
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    1. Emily says:

      We come to it from a philosophical position rather than a practical one, so I’d say that the more challenges you have coming in to the marriage the more opportunity the joint finances system has to help your relationship!

  2. Sarah says:

    My husband and I have joint finances as well, and wouldn’t have it any other way. It’s so much less complicated than trying to divide up expenses fairly (which we did before we were married). It has also allowed us to pay down past debt more quickly, since both of us are fully invested in it.
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    1. Emily says:

      I don’t even know how you would try to settle on what’s “fair.” The two obvious types of contribution ratios are equal and percentage of income, but I don’t really view salaries as fair to begin with! Joint finances put you on the same side of the table as your spouse, not opposite.

  3. Couldn’t agree with you more! My husband and I both have fully joint finances and we keep on top of our spending that way. I understand there are situations where joint finances don’t work and they need to be separate for the longevity of a marriage but I think relationships where joint finances work end up removing a huge stressor for the cause of divorce -money troubles. Working towards having similar money goals can end up making a marriage even stronger than before!
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    1. Emily says:

      IMO you do what you have to do to stay married and if that means having separate finances in some situations I guess that’s how it will be. But I think that those people who are not yet married should really consider if they could share finance with their SOs, even if they ultimately choose not to. If you don’t trust your SO or you have wildly different goals in life or outlooks on money, the marriage should really be reconsidered. Agreeing on your finances means agreeing on your life to a great extent!

      I agree that working together on goals can make marriages stronger. That’s why I don’t agree with people delaying marriage to pay off debt or keeping separate finances in marriage until the debt is paid. The marriage can improve by going through that adversity together.

  4. You make joint finances sound pretty good. ;) We don’t have joint accounts, but I would say it’s a matter of logistics more than philosophy. And since we were married in CA and are considered CA residents, all of our finances are legally joint anyways. Maybe later we’ll have a joint account, but for now it’s easier to keep them separate.
    Well Heeled Blog recently posted..Registered for my first 5K, sticker shock at race entry fees

    1. Emily says:

      I think in your situation separate finances for now makes sense, but I hope you’ll give joint a shot when you’re living together again!

  5. My wife and I have joint with our own accounts. We have done this during our whole marriage and have no plans on changing it. We have a great system for handling our bills and our joint expenses. I know how we are doing because we talk about it freely. I don’t like my money sitting in one account anyway due to security concerns.

    I don’t fault anyone for having joint finances. I have had a few say to me that my marriage is not true because we don’t share our money. All I could do there was laugh. Money is money, but love is something entirely different.
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    1. Emily says:

      Do you guys contribute equally, by percentage of income, or by some other delineation to your joint account and how did you come to that agreement?

      Well… money is money and love is love, but marriage is both plus a lot more!

  6. Mrs PoP says:

    I think you said pretty much exactly the way we feel about joint finances. How on earth would we have common goals without pooling funds?

    One couple we know is near to traditional retirement age and has separate finances and savings. The wife (who is te saver) has more than enough money and is demanding a high class expensive retirement, and says things like “my husband won’t ever be able to stop working some he has so little saved.” I just don’t get that!
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    1. Emily says:

      I guess you could have some common goals with some common money? But in the other areas I think you could be running at cross purposes, or at least independent purposes.

      That is crazy to me. I have a post in the works about just this subject. How? How?!

  7. We’re big fans of the joint money system, too! We started when we were just dating and it took some time to get through the conflicts of opposing goals (e.g. – she wants to allocate money towards travel, I wanted to invest those funds into retirement). But, over time, we’ve found ways to choose “both” for our opposing goals, rather than one or the other.
    Done by Forty recently posted..There Ain’t No Rest For the Wicked

    1. Emily says:

      We have chosen both for a lot of retirement vs. now-spending choices. Thankfully we learned from one another and came to a lot of agreement about how to handles our finances before we got married and combined everything. I’m glad you guys have been able to find mutually acceptable solutions.

  8. Ashley says:

    I like your method! I would want to have joint accounts, too. I had a coworker who had everything COMPLETELY separate from her spouse and I always thought that was so strange. I don’t want to have to think of “my money” and “your money”. Even now, living with Mike, it is so annoying to have to make sure our grocery purchases are split down the middle and to set up two rent checks and have him pay me back for utilities! It would be so much easier if we had joint accounts, haha.

    I do like the idea of separate allowances for some couples. If you and your sig other differ on spending habits, then it can be good to each have your own money. Then the saver can save up their allowance for something and the spender can buy whatever they want without grief!
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    1. Emily says:

      I’m not necessarily opposed to the allowance system, it’s just that for now we have so many goals that we agree on that there’s no more money left for individual discretionary spending! And we do make room for each of us to have discretionary spending (like clothing), it’s just that we agree in advance about it. We don’t, like, take the amount of money I spend on clothes and give it to Kyle to spend on clothes plus other stuff he wants – we just buy what is needed at the time.

      The only time I think the allowance system might get too close to his/hers/ours for my tastes is when one person is spending the allowance and the other is saving it indefinitely, so after some years one has a pile of money and the other has nothing. What then? Saving to spend wouldn’t cause a problem but I think saving for the long term would.

  9. David says:

    Great Article!
    Joint Finances are great especially when one of the individuals make a very sufficient amount of money.
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    1. Emily says:

      I wouldn’t know about that! My husband and I make basically the same amount of money. I think the great thing about joint finances is that you’re in it together for better or for worse, so it doesn’t matter if one is earning more (after all, that could switch at some point!).

  10. NZ Muse says:

    I think you summed it up well, plus a lot more factors I hadn’t even thought of!

    Separate finances would stress me out a lot, because we have quite different styles and I’d always be worried about what he was up to.

    Now that my husband is going to be on commission only, joint finances is definitely the only way to go.
    NZ Muse recently posted..I need your advice

    1. Emily says:

      It’s so interesting to hear people talk about trust in finances – some people think it takes more trust to make your own money accessible to another person and some people think it takes more trust to have your spouse operating without your oversight. As I said, we like the transparency. :)

      I think a regular paycheck from one spouse plus commissions from another spouse is a very enticing scenario PF-wise. You have security plus great upside with the variable income.

  11. SarahN says:

    We’re not married, and we share a ‘bills’ account, which we negotiated to contribute the same amount to every week (my pay frequency, he’s monthly), for our fortnightly rent, and bills and groceries. We also add meals out together, sometimes, but not always. If it runs short, we top it up equally. We started this when we moved in together, and it surprises me when others I know live together for AGES and still don’t have a shared account – it’s so simple.

    Do I wish it was all shared? Well, we’re not yet married yet. I used to think I would want ‘all shared’ but now I think we have a working system. The only thing I wonder about it travel. I always have money to travel (internationally). If we shared all, would he feel ‘richer’ and then agree to more travel?

    Also, I own an apartment, and he doesn’t. I feel that this is a good asset to have as a woman, and I know I’ve worked hard to secure my finances (I have a lot of retirement savings too). With divorce so prevalent, I wonder if fully shared might potentially leave me with nothing in the future. No one plans on divorce, but it does happen…
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    1. Emily says:

      I think how you manage your finances in marriage is closely tied to your philosophy of marriage generally. For us it’s an “all in” situation for sure.

  12. Cash Rebel says:

    The concept of letting someone else into my bank account and dealing with all their financial habits scares the bejesus out of me, so nice job on enjoying it so much. But I guess if you’re going to be fully committed in marriage, it’s worth doing. As an independent and frugal person, I can’t even imagine how I’d do it, but eventually I’m sure I’ll go that route when I’m in serious relationship.
    Cash Rebel recently posted..When it’s finally time to find a new job

    1. Emily says:

      I hope that by the time you are getting ready to be married to a specific person you’ll feel mostly excited about building something together and not so apprehensive. Obviously you’ll have to build a lot of trust and agree on how to handle your money before you even get to that stage, so it’s not like you have to jump right in!

  13. I wish my wife would do joint finances with me, she refuses to be part of the bills, all she wants is her credit card so at our home it is a one man show.

    HS
    HS @ Our Debt Blog recently posted..I Love Groupon

    1. Emily says:

      Does that mean that you have separate finances or that you have joint finances that you handle by yourself? Either way, I’m sorry she is taking that attitude.

  14. For all the reasons you stated, my wife and I have had joint finances since the day we were married. All of our financial goals are joint goals. We both plan to retire together in 9 years. I put down 40% on our house before we were married, but we paid off the mortgage together in 9 years. We have saved together to put aside enough money for our son to attend UC, Berkeley. (At least I hope he goes to Berkeley. He’s only 13, so we shall see.)

    On the other hand, my wife’s sister was in a marriage where he paid the mortgage and utilities, and she paid for the kid’s expenses plus food for everyone. It didn’t seem very equitable to me, and of course, it wasn’t. They are now divorced, and the house had to be sold.
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    1. Emily says:

      I love hearing about how you and your wife have worked together and are looking toward the future!

      It’s so tempting to take personal examples like yours of your marriage and your SIL’s marriage to try to make the case for joint finances. 80% of married couples have joint finances so that obviously includes lots of intact marriage and lots of eventual divorces. I would like to read more literature about account management styles.

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  17. I love joint finances too. It just makes sense when we have the same goals and values. And it’s also easier logistically.
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    1. Emily says:

      Logistically it’s easier for sure, and I love that we have to agree on our values and goals to a great extent to make it work.

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