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Our approach to married finances

October 24, 2017

When it comes to married finances, there are a variety of ways to handle things.  If someone asks me, I generally say that we subscribe to a “one pot” approach.  But, if you dig below the surface, we have a lot of pots.

Account structure – the nuts and bolts

You don’t have to dig far – we actually don’t even have a joint checking account, despite operating on a “my money is our money” basis.  Here’s how our accounts work.

JointMoney

We both get paid into our individual checking accounts.  The mortgage automatically comes out of T’s account, and I pay the credit card (almost always) from my checking account (T will pay it if I tell him to). When either checking account  accumulates a large buffer, I transfer to joint savings. It could go the other way if needed.  Nearly all of our spending is on the joint credit card, but random bills or cash might come out of either of our accounts.  I am generally in charge of bills, except for any bill we pay with a check.

All of our savings accounts are joint, and that is the heart of our system. The most active account is the slush fund, which I occasionally pay our join credit card from.  Property taxes (paid twice yearly) hang out in “planned spending” until needed.  Our home maintenance fund and emergency fund are there, as well as any targeted savings. Retirement accounts have individual names on them, but legally and mentally, they are shared.

The main reason it is set up with separate checking accounts is simply inertia. We had these accounts when we married and saw no reason to change it.  Maybe there is some advantages to redundancy (like when T’s checking account number was stolen), but our system would work just fine with a single joint checking account.

Mini socialism for budgeting

We don’t really have “individual” expenses or a budget.  We each buy what we need and what we want. We don’t have a threshold where we must check in, but neither of us would want to make an expensive purchase without hemming and hawing over it first. In the rare cases when T wants to buy something that I think is not a good value, I tell him my opinion, but leave the final decision to him.  In the less-rare case where I want to buy something that he doesn’t think is a great value, I take his opinion into consideration. We both trust each other’s judgement.  This system works best if you are both frugal by nature and are not on a super tight budget.  If we had a tight budget, we might try adult allowances, but then you have to start figuring out exactly what should be an individual expense.

Money management

As the resident PF blogger who has an interest in this stuff, I handle nearly all of the planning and make most of the decisions. T is very much in the loop and understands what is going on with our money, but doesn’t specific actions himself.  We talk about money whenever I want to make a big transaction (a mortgage pre-payment) or approximately monthly when I update our net worth. We talk about it more when I come up with some “interesting” fact I want to share with him, like our progress towards Financial Independence, the percentage of our assets in our home, or what our net worth would do in a big stock drop.

We arrived at this system pretty naturally, and it works really well for us.  We both understand what is going on, but we spend only as much time on it as we want to (i.e. I spend time on it, he doesn’t).  We never fight about money, and we regularly talk about shared goals.  We aren’t afraid to share opinions with each other, and we listen to each other – but we ultimately trust each other to make our own decisions.

What system do you use?  Does it work well for you? Have you tried alternate systems?

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8 Comments leave one →
  1. October 24, 2017 7:09 pm

    We’re going to move from separate to joint finances w/ adult allowances in January. Any tips on a smooth transition when combining finances?

    • October 25, 2017 9:31 am

      I may not be the best person to ask since the adult allowance thing is (IMO) more complicated. You should talk about what counts as joint expenses and be fair, especially about things like personal care items. Other than that, just communicate about things often.

      To me, it is more of an emotional shift to start thinking of almost all things as ours. I think it happened over time, starting from when we lived together and got engaged.

    • October 25, 2017 1:25 pm

      My biggest tip is to regularly communicate and find the right strategy that works for you two over time. With allowances, it is a learning curve figuring out what should come out of household vs allowance. We’ve been checking in with each other every few months to see if we should switch any of those around. The trick with that though has been becoming comfortable discussing our personal spending with each other.

  2. October 25, 2017 9:10 am

    We’re still joint (separate credit cards, but I pay all the cards from our joint credit union account each month when I do finances) with DH getting an adult allowance and me not having any restrictions: https://nicoleandmaggie.wordpress.com/2011/01/17/in-praise-of-dhs-adult-allowance/

    The allowance is nice because he likes to feel like he can spend money without feeling guilty. Without it he would probably spend less than he does now and would be less happy. I don’t have that problem (and also tend to get everything I want that isn’t edible as gifts off my amazon list), so I don’t have an allowance.

    • October 27, 2017 7:48 am

      I have a problem where I’m embarrassed to put some stuff I want on my amazon wish list, because I worry my family would think that a $ cooking pot (or whatever) is ridiculous). If I’m buying for life, I want reasonably high quality or don’t want it at all but I feel silly asking someone to spend that much.

      • October 27, 2017 8:50 am

        If nobody is going to spend that amount on you, then don’t bother (though I will often put things on my amazon list to let me decide whether or not I still want to buy them later myself). So long as you have a lot of differently priced stuff on your list, I can’t imagine it being a problem. I feel happier getting something ridiculously priced that I want as a gift rather than something ridiculously priced that I don’t want (which is what would probably happen with my in-laws if I didn’t have the list)…

        • October 27, 2017 9:32 am

          That’s true. It isn’t so much that the dollar amount is so high, it is just the dollar amount is high for an item that can be bought much more cheaply (at a lesser quality).

          I have a separate private wish list of things I’m considering, but not yet ready to buy.

      • October 27, 2017 1:32 pm

        I had this problem with our wedding registry. In the end, no one bought us anything that cost more than $100. Anyone who gave us more than that gave cash.

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