Spinoff: How do you and your spouse/SO handle your finances?

[Seeker]

Sorry this is a long one again

I think that DisneySteve hit the nail on the head, the most important thing being to find someone that holds the same, or very similar values to you when it comes to money.

I don't think so -- because complete polar opposites can work too.

I'm not trying to pass judgement on you or anyone else. I just happen to think that this kind of thinking in general, is the reason why we do see so many divorces today, divorces of convenience.

Actually there are many marriages that happen for the wrong reasons in the first place. I don't believe that there's such a thing as a divorce of convenience..... because there certainly is not any convenience in going through a divorce process. There's no convenience standing before a lawyer or judge dividing up assets. Usually both parties lose.

If you are entering into a marriage, concerned about what was your money, and how you can set things up to protect yourself from your spouse, to still safely keep your money, it almost sounds like an escape plan, a just in case. Besides, what ever happened to a man and a woman becoming one, and everything going from mine and yours, to ours?

Well, if you are entering into a marriage with a financial escape plan already in place, isn't it very convenient and easy to jump out of a marriage at the first sign of trouble, or when things get difficult, like they do in every marriage?

It IS a just in case.

People don't jump out of marriage at the first sign of trouble, unless they made a mistake in getting married in the first place.

The beginning first years are the times when most marriages fail and it's not because of the "separation of finances" -- it is because of other more drastic issues: SO has been unfaithful. SO has found another person. Kids are abused. Drugs are rampant. SO is an alcoholic. SO never comes home to be with family. etc. There's probably many more failed marriages because of these causes (which "impact" the financial aspects of married husband and wife -- but the financial aspect is the secondary result of the real problem).

NOTHING happened to man and woman becoming one. But the point is when you first enter marriage, you don't really know if it'll work out -- do you? Woman has more to gain, because normally it's the man with assets and the woman with little assets.... and therefore man has more to lose. I stand by my thoughts.... no one should combine pre-existing assets with an "unknown".

However, I can't help but wonder about the mindset we have today in America. I think two separate people in these threads mentioned a 50% divorce rate, pre-nuptuals, having to have a backup plan in case your spouse goes crazy, etc.

In reality, all of these things happen every day. That said, I can't help but think that thoughts like these, and actions like these, are really just a self-fulling prophecy in and of themselves.

Are you saying divorce does not happen in other countries? There are many more man/woman abuses in other countries than there are in America.

Nor am I sure what you mean by "America's mindset." I was born in this country but my folks were not. They did not want me to go to "work" or go to college... my "job" was to find a man and marry and have a family. But I had to do what was right for me.... and I did not follow their thoughts about my future.

My mindset and my words come from the background of the reality of people (friends, feeling, issues) that I see and talk with. It's not a culteral opinion or mindset -- it's the reality of life today. Nor do I think it's only American. I think if you go out of this country into other industrialized nations, you will find the exact same concerns there, that we deal with here.

But getting back to the main topic... separation of finances.... there are numerous reasons for it.

If you were a woman intending to take the rich way out, ie "go out and flirt with a rich man and ultimately marry him" (one lady at one of my workplaces was consistently doing this).... what would happen to the man's finances? This happens. It's wrong but it happens. A separation of assets beforehand (prenuptial) is in his best interest.

If your significant other changed suddenly, (a blow to the head, a stroke) and suddenly was spending money right or left, what would you do? This happens. A separation of finances or getting control of all of it would be in the best interests of both parties.

If your SO suddenly was not keeping up their side of the "agreement" and not paying the mortgage when s/he should have been... then what would you do? This happens. Do I hear separate finances?

If your SO walked out on you, how would you survive? Or died suddenly, how would you deal with it? An EF and some separate money might be helpful here too. This happens.

If both husband and wife lost jobs and were on the verge of losing everything, how do you deal with it? Might a separate savings help just in case that other party was not saving as well as he or she should be?

If your home of 20 years was destroyed in a hurricane, fire or whatever, what would you do? Might some money saved up separately help? This too happens.

I do not disagree that beyond the emotional, marriage is a collaboration as far as the physical/financial. There's always going to be agreements and disagreements with two people, and there there must be a collaboration (talking/agreement) and compromise.

BUT my point is that over time things do change; things happen and marriages do fail for reasons of other events as well as financial problems with the other partner.

In spite of anyone's best planning, there's absolutely NO CERTAINTITY in this life. The only certainty is that someday, we won't have to worry about it.

By protecting my own assets; you know what? I do protect his interests. I protect his interests better than he can (in my case). My assets will be his when anything happens to me. And that is fine. At that point, I won't need them.

All we can do is protect to the best of our ability, what we have. In order to yes benefit ourselves, but also to benefit our SO and our family and the rest of the people out there who might end up supporting me or my SO if we end up not being able to support ourselves.

In the ideal world, we wouldn't have to pay so much money for basic human needs. Unfortunately, this is not an ideal world. The years go by and people do change. Costs become greater and we are all living longer.

We all need to protect what we have, if you want to and can do it in a 100% equitable way 50/50 with everything, then kudos to you; and kudos to your partner. But it doesn't work for everyone.

I did not meet mr right until late in life; and my mr right had a bankruptcy and significant default on an education debt and a lease due on the car he was driving pre-marriage. His credit rating was so dismal, that he could not get any car loan and had to "lease". I on the other hand had a 100% paid-off condo and 100% paid off car and owed nobody a cent. Would you have recommended that I spilt my assets with DH?

Do you think I could even get a loan on my condo to get him a used car if I had changed the title to be in both our names? He with a bankruptcy under his belt?

I have also said that my SO is very giving and he has given cash to friends in need despite his own issues. Pre-marriage we talked what-if's and one of my questions was: "What if we won the lottery.... what would you do?

He'd give a great deal of it to friends even before his own needs. So we made an agreement. If the lottery ever comes to pass for us (we don't really play it; so it'll probably never happen anyway)... it will be spilt into 4 equal parts. 1/4 for him to do with as he wants (he can give to friends if he wants to); 1/4 for me to do as I want, and the 1/2 for us that will be collaborated and agreed to as far "us" spending.

Is that right? Is that wrong? Whether or not you understand doesn't matter to me. For me and my SO, we agree that this is fair. We agreed that when I got the loan on the house, the title should not change because it was 100% owned by me as Single Woman before I even met him.

Marriage is an agreement, teamwork is an agreement implictly. Love and respect and understanding are the emotional aspects of life. Without talking and agreeing and compromise, it's not going to work regardless of money.

Your ideas just plain very simply do not fit into our reality. They may for others, they just don't for me and my DH. And that's okay; we are all unique individuals.

[aurielle]

Sorry this is a long one again



I don't think so -- because complete polar opposites can work too.



Actually there are many marriages that happen for the wrong reasons in the first place. I don't believe that there's such a thing as a divorce of convenience..... because there certainly is not any convenience in going through a divorce process. There's no convenience standing before a lawyer or judge dividing up assets. Usually both parties lose.



It IS a just in case.

People don't jump out of marriage at the first sign of trouble, unless they made a mistake in getting married in the first place.

The beginning first years are the times when most marriages fail and it's not because of the "separation of finances" -- it is because of other more drastic issues: SO has been unfaithful. SO has found another person. Kids are abused. Drugs are rampant. SO is an alcoholic. SO never comes home to be with family. etc. There's probably many more failed marriages because of these causes (which "impact" the financial aspects of married husband and wife -- but the financial aspect is the secondary result of the real problem).

NOTHING happened to man and woman becoming one. But the point is when you first enter marriage, you don't really know if it'll work out -- do you? Woman has more to gain, because normally it's the man with assets and the woman with little assets.... and therefore man has more to lose. I stand by my thoughts.... no one should combine pre-existing assets with an "unknown".



Are you saying divorce does not happen in other countries? There are many more man/woman abuses in other countries than there are in America.

Nor am I sure what you mean by "America's mindset." I was born in this country but my folks were not. They did not want me to go to "work" or go to college... my "job" was to find a man and marry and have a family. But I had to do what was right for me.... and I did not follow their thoughts about my future.

My mindset and my words come from the background of the reality of people (friends, feeling, issues) that I see and talk with. It's not a culteral opinion or mindset -- it's the reality of life today. Nor do I think it's only American. I think if you go out of this country into other industrialized nations, you will find the exact same concerns there, that we deal with here.

But getting back to the main topic... separation of finances.... there are numerous reasons for it.

If you were a woman intending to take the rich way out, ie "go out and flirt with a rich man and ultimately marry him" (one lady at one of my workplaces was consistently doing this).... what would happen to the man's finances? This happens. It's wrong but it happens. A separation of assets beforehand (prenuptial) is in his best interest.

If your significant other changed suddenly, (a blow to the head, a stroke) and suddenly was spending money right or left, what would you do? This happens. A separation of finances or getting control of all of it would be in the best interests of both parties.

If your SO suddenly was not keeping up their side of the "agreement" and not paying the mortgage when s/he should have been... then what would you do? This happens. Do I hear separate finances?

If your SO walked out on you, how would you survive? Or died suddenly, how would you deal with it? An EF and some separate money might be helpful here too. This happens.

If both husband and wife lost jobs and were on the verge of losing everything, how do you deal with it? Might a separate savings help just in case that other party was not saving as well as he or she should be?

If your home of 20 years was destroyed in a hurricane, fire or whatever, what would you do? Might some money saved up separately help? This too happens.

I do not disagree that beyond the emotional, marriage is a collaboration as far as the physical/financial. There's always going to be agreements and disagreements with two people, and there there must be a collaboration (talking/agreement) and compromise.

BUT my point is that over time things do change; things happen and marriages do fail for reasons of other events as well as financial problems with the other partner.

In spite of anyone's best planning, there's absolutely NO CERTAINTITY in this life. The only certainty is that someday, we won't have to worry about it.

By protecting my own assets; you know what? I do protect his interests. I protect his interests better than he can (in my case). My assets will be his when anything happens to me. And that is fine. At that point, I won't need them.

All we can do is protect to the best of our ability, what we have. In order to yes benefit ourselves, but also to benefit our SO and our family and the rest of the people out there who might end up supporting me or my SO if we end up not being able to support ourselves.

In the ideal world, we wouldn't have to pay so much money for basic human needs. Unfortunately, this is not an ideal world. The years go by and people do change. Costs become greater and we are all living longer.

We all need to protect what we have, if you want to and can do it in a 100% equitable way 50/50 with everything, then kudos to you; and kudos to your partner. But it doesn't work for everyone.

I did not meet mr right until late in life; and my mr right had a bankruptcy and significant default on an education debt and a lease due on the car he was driving pre-marriage. His credit rating was so dismal, that he could not get any car loan and had to "lease". I on the other hand had a 100% paid-off condo and 100% paid off car and owed nobody a cent. Would you have recommended that I spilt my assets with DH?

Do you think I could even get a loan on my condo to get him a used car if I had changed the title to be in both our names? He with a bankruptcy under his belt?

I have also said that my SO is very giving and he has given cash to friends in need despite his own issues. Pre-marriage we talked what-if's and one of my questions was: "What if we won the lottery.... what would you do?

He'd give a great deal of it to friends even before his own needs. So we made an agreement. If the lottery ever comes to pass for us (we don't really play it; so it'll probably never happen anyway)... it will be spilt into 4 equal parts. 1/4 for him to do with as he wants (he can give to friends if he wants to); 1/4 for me to do as I want, and the 1/2 for us that will be collaborated and agreed to as far "us" spending.

Is that right? Is that wrong? Whether or not you understand doesn't matter to me. For me and my SO, we agree that this is fair. We agreed that when I got the loan on the house, the title should not change because it was 100% owned by me as Single Woman before I even met him.

Marriage is an agreement, teamwork is an agreement implictly. Love and respect and understanding are the emotional aspects of life. Without talking and agreeing and compromise, it's not going to work regardless of money.

Your ideas just plain very simply do not fit into our reality. They may for others, they just don't for me and my DH. And that's okay; we are all unique individuals.

I could not have said it better myself!

This is not a first marriage for me or DH and our money is not all in one pot by mutual agreement. I'm not going to go into details but it works for us. Our marriage is strong and happy.

It's kind of like religious faith in the sense that if you can't wrap your brain around the concept, it doesn't mean that there's something wrong with it or that it doesn't work for others. It means that it wouldn't work for You.

[scfr]

I should add that while ours is a "community property" marriage and that our system has worked extremely well for us, ours is a first marriage where both of us had very limited assets going in.

Now it's a different story.

If DH died, I honestly can't see myself remarrying. But if I did, I would have a pre-nup and would most likely want a "yours, mine, and ours" set-up. If I died and DH remarried (something I can definitely see him doing and in fact would want him to do if he found the right person), I really hope he'd get a pre-nup and would keep some of his assets seperate!

[feh]

My wife and I don't keep our finances separate. We never have.

All income goes into one pot. Large purchases aren't made without discussion.

[jIM_Ohio]

We have many variations of all the above.

5 joint bank acccounts at 2 banks. I put paychecks into 3, wife puts check into other 2 and one which I use as well. Some of accounts are designed to run at zero balance (one account pays 3 bills and is zero at end of month, when two of the cars are paid off and we switch cell plans, we'll close that account, for example.

We each have power of attorney signed, so some accounts are only in one name, but other could get access if they opened safe and brought the notarized document. Some CDs are only in my name. 401ks and IRAs are in individuals name too.

I create the budget and define how much is in each account. Wife pays out of the accounts. Raises are strategic- wife's raises go to account which is spent, mine go where money is saved.

[DebbieL]

DH and I keep our finances separate - and we are EXTREMELY happy. We have no fights over anything financial - ever. I like it that way. I don't ever intend to mingle our funds. We have one joint account for savings, but both of us have our own savings accounts and our own chequing accounts. He pays for groceries, electricity, phone, cable, internet and gas. I pay the rent and car insurance. It’s easy and we have no arguments over money. I would absolutely hate to have to check with someone if I wanted to buy something, etc. It would drive me crazy. I would also start getting angry with my DH if I thought he was buying stupid stuff (too many Cds or movies for example). This way it’s none of my business (and vice versa) and we’re both happy as clams. I’ve always been independent, and have never mingled finances with any of my previous relationships either.

[Snave]

[QUOTE=jIM_Ohio;159687]We have many variations of all the above.

5 joint bank acccounts at 2 banks. I put paychecks into 3, wife puts check into other 2 and one which I use as well. Some of accounts are designed to run at zero balance (one account pays 3 bills and is zero at end of month, when two of the cars are paid off and we switch cell plans, we'll close that account, for example.

Jim, is there a reason for so many bank accounts? I know you post on here a lot and are quite savvy with your money, so I was wondering the reason behind so many accounts. I know it would confuse the heck out of me figuring out what was where. I am lucky to know what is in one!

[cptacek]

Couples talk about religion. They talk about how many kids they want. They talk about where they'd like to live, what they like to eat, what type of vacations they like to take, what kinds of movies they like to see, etc. But they all too often don't talk about how they handle money until after they are married, and by then it is too late.

We made sure we talked about this quite a bit before we got married. Not only were we merging personal finances, we were also merging businesses.

We went to an Engaged Encounter that was required before we could get married in the Catholic Church. It was a 3 day thing where the format was a group session where the leaders told their stories, 15 minutes of individual writing in a book about the particular session topic, then 15 minutes of you and your fiance talking privately with diary-like entries a good starting out point. They were good questions (how you both stood on religion, how many kids you wanted, how you would raise them, how you would handle the in-laws, how clean each person wanted the house to be, who would be in charge of getting the oil changed, gender roles and how traditional (or not) each person was, etc). There was a very basic personal finance section, too. But, we didn't get much out of it, because we had already talked about all of it.

There were some people there, though, that we both thought "good luck. You're going to need it!" because they hadn't talked about any of this stuff. We took the class in August and were getting married in January. Most of the other people were getting married 2 months later (in October)! If you hadn't talked about this before then, then good luck!

[jIM_Ohio]

We have many variations of all the above. 5 joint bank acccounts at 2 banks. I put paychecks into 3, wife puts check into other 2 and one which I use as well. Some of accounts are designed to run at zero balance (one account pays 3 bills and is zero at end of month, when two of the cars are paid off and we switch cell plans, we'll close that account, for example.

Jim, is there a reason for so many bank accounts? I know you post on here a lot and are quite savvy with your money, so I was wondering the reason behind so many accounts. I know it would confuse the heck out of me figuring out what was where. I am lucky to know what is in one!

I've documented this before in other threads, here is some history.

In 1997 I moved to Cincinnati. I chose a bank because it had branches in both Cincinnati and Buffalo (I grew up in NY and visit there often). At minimum this allowed me ATM access in the cities where I would spend 50 of my 52 weekends per year.

A few years later I opened a savings account at same bank with a tax refund.

At one point my girlfriend/fiance/wife was given access to both accounts (atm card). She started depositing her paychecks there when we got engaged. One year we refinanced and we had "one months expenses" in the account based on budget- that money got spent right out of account. One other time a large tax refund was deposited into the account and that also got spent. So a problem was identified by me and needed a solution (wife will spend money in savings accounts).

Fast foward to 3 years ago. We sold a condo in 2005 and had a 5 figure check. I opened an account at a new bank- it was a free account and is in all grocery stores in Ohio. Weekend hours on Saturdays and Sundays to boot. This account was opened without an ATM card. We also have limited checks. We put the minimum in a checking account and the rest in savings. New account was designed to keep money away from where it would be spent. This money was marked for furniture for the new house.

We then came up with a budget in new house where we paid various bills from the various accounts.

Old bills got paid from whichever account they were automatically set up to. For example- my wife had her students loans being taken out of the checking account at the old bank, I think sateliite dish was the same, and the cell phones are taken out of the savings account at the old bank.

New bills were put into 3 categories- mortgage/IRA, utility/recurring monthly and other, and we also broke bills down as to whose check covered what bills the best. For example, the mortgage payments would have been close to 100% of my wifes check, I think they were 75% of mine when I carried health insurance and 50% of mine when wife carried health insurance.

The mortgage and IRAs were being paid out of the savings account at new bank. This is around 75% of my paycheck each month. 75% of net pay. Because my check covered this whole amount with wiggle room, it made sense for my check to get deposited here. I then send rest of my check to another account where the utilities are paid from, except for $20/check ($480/year) to a savings account to build it up. (so my three accounts are mortgage IRA to one, utilities to a second and savings to a third).

The utilities get paid from the checking account at new bank. Online bill pay is free from new bank, at the time the old bank charged a fee for this (this has since changed). I put a fraction of my paycheck here (maybe 23%) and wife also puts a fraction here. The combination our deposits pay the utilities without issue. Especially works well because many bills are paid by the quarter and not by the month.

The money we spend cash on (gas, grocery) is put into checking account at old bank (the account with atm card). Wife's check covers this.

The checking account at old bank pays the car payments and cell phone. The logic being that when cars are paid off this account accumulates money for something else and earns interest. Wife's check covers this.

Fast forward to 9/11 and the patriot act.

The patriot act restricts what types of things a savings account can be used for. My IRA has 5 mutual funds, I put a little into each fund each month, plus my wife's IRA is a 6th withdraw, and the mortgages (first and second) are another withdraw. The 7 total withdraws violated the patriot act and subjected me to fines. I showed the bank the signature guarantee their rep signed to approve the withdraws, got the fines waived, and moved the mortgages/IRAs to a new checking account at same bank. I put $20 into the savings account each paycheck still.

The goal is to eventually have mortgages and IRAs paid from a money market fund at T Rowe Price. But I need 10k to open that account (I believe) to get check writing.

The biggest advantage is the money we budget to spend is only in 1 account, and other than the satellite dish, no other bill is paid from that account (I believe)- the student loans were paid off last month, I think.

The other accounts have just enough in them to pay next months bills- so we don't worry month to month about whether wife gets paid weeks 1 and 3 or weeks 2 and 4 (or weeks 1-3-5).

I get paid twice a month, which makes budgeting off my checks much easier. I keep the IRA payments in account 1 month out, and pay the IRAs on the 23rd of the month (and we budget $625 for my IRA), so at anytime I have $1250 sitting in the account, with $625 coming out on 23rd and then my paycheck on 1st puts $325 in for IRA, and paycheck on 15th puts other $325 in (the $325 is the IRA portion, plus another $1200 or so for the mortgage payments).

I like keeping small discreet amounts as it makes my wife realize the piles of money are set aside for things. If those small piles were added up, it's possible she would spend it and not let budget work.

[aida2003]

Ours everything is joint, except 401k's and RothIRA's. However, I'm the one who handles our finances. DH is not interested in that area and I enjoy doing that. He hardly ever takes a checkbook in his hands. I've printed out a list of all accounts and hints about passwords, so he'll have to figure out by himself if I drop dead tomorrow. He said he will.
On the other hand, he earns much more than me. We're both quite frugal, so we have no worries about each other's spending. We discuss about bigger purchases. But I'm the one who reminds him about his car's maintenance, because he thinks it's a hassle. Dude, but you need to get from point A to point B.

[Gruntina]

Pesonally if a couple divorce because of money issues, the issue is bigger than the money itself! To be in sync with each other takes efforts and choices, communications, steamlining goals if they are not the same and a genuine care for eachother to be treated as how they would want to be treated. Money does funny things to people but if it overides communication, care or whatever, then the person is being consumed by letting money rule them instead of it being a tool of how to live day to day life.

[jIM_Ohio]

Pesonally if a couple divorce because of money issues, the issue is bigger than the money itself! To be in sync with each other takes efforts and choices, communications, steamlining goals if they are not the same and a genuine care for eachother to be treated as how they would want to be treated. Money does funny things to people but if it overides communication, care or whatever, then the person is being consumed by letting money rule them instead of it being a tool of how to live day to day life.

I would agree. Wife and I get along great. I think 33% of all arguments come from how one of us treats another person (I don't always treat acquaintences with respect). I think another 33% are money, and the other 33% are an assortment of other things from housework to what to have for dinner or what time to leave for whatever.

On the money side, I would say communication of financial goals, the execution to reach those goals, and the priority of the goals are all hot topics for any relationship.

My wife does not like talking about a financial plan very much. Once a year is more than enough for her. My wife likes having money in the bank too. But does not like talking about it.

So communication, even when it occurs, may not be a comfortable subject to discuss. Especially if one of the spouses does not like my spreadsheets

[fruitbowlk]

My husband is not good with money and very childish. we have seperate everything except a joint savings account and a six month cd.

[zetta]

Our day to day finances are joint -- all income is deposited into a joint checking account, and all bills are paid out of it. I manage all the bills and track the budget, and am usually the one to go to the ATM for cash. We don't have individual allowances, but would probably consult with each other before spending over $250 on a splurge. We differ in that he has an intuitive feel for how our cash flow is going just by looking at the account balances, where I feel the need to write up a budget and track the spending against it, and to do a detailed analysis before making a major purchase like a new car.

Our investments, on the other hand, are completely separate. We can't agree on a philosophy, so he manages his IRA/401k/ROTH/taxable investment accounts and I manage mine.

[skydivingchic]

DBF and I run our finances completely separately. The mortgage is in both our names and we each write a check for half the mortgage and half the HOA fees each month. Throughout the month I pay the electric bill, cell phone bill, and the groceries. Half the amount for these expenses gets written on a white board on our fridge. At the end of the month, I add it all up and he writes me a check for the total. This system has worked beautifully for us for over 7 years.

Both us are pretty independant and I am fiercely so. I believe it is extremely important for me to pull my own weight financially and would not feel comfortable giving up any control of the finances to someone else. I've seen too many cases of women who feel trapped in an abusive relationship simply because they don't have the financial means to get out or who have given up their career to stay at home and then have an extremely difficult time making it on their own when something goes wrong with the relationship and it ends in divorce. I strive to make sure that will never be me - I have the ability to walk away today if the need arose and I have developed a good name for myself in my career. The fact that I have my own EF also gives me the cushion I might need if something were to happen to DBF. I also hate the thought of having to justify any of my purchases to anyone but myself.

DBF and I both have pretty similar outlooks on finances - save aggressively for retirement, pay all bills on time, pay a bit extra on the mortgage, pay cash for vacations, etc. We both have enough life insurance so that if one of us were to die, the other could cover the balance of the mortgage. While we love and trust each other, mingling our finances is not something either of us wants to do. Our system works for us, so why mess with it?