How We Handle Money As A Couple

by Frugal Babe on November 19, 2010

Adam Baker, who writes at Man Vs Debt, has published a really great article this week about couples and money.  It includes not only his own thoughts, but a substantial interview with Corey Allen of Simple Marriage, thoughts on the subject from Adam’s readers, and links to lots of other bloggers who have written about couples and money.  Since money is a major cause of relationship problems, and since most people will eventually be in a long-term relationship, Adam’s article is a good read for just about everyone.

Personally, I feel exactly the same way Adam does.  My husband and I have had joint finances since we bought our first home (before we were married), and I cannot imagine living any other way.  We both grew up in homes where our parents had joint finances, and until I read Adam’s article, I’d have been hard pressed to come up with any positives associated with having separate finances.

My husband and I are very much on the same page in terms of financial goals, which means that even though we’ve been through some very lean times, money has almost never been a source of discord in our marriage.  I don’t think either of us would have married someone who wasn’t financially responsible – that just would have been a deal breaker.  I know that people can change over time though, so I guess we’re fortunate that we’ve become more solidified in our joint goals as the years have gone by.

I cannot imagine either of us making a major financial decision without discussing it first.  That’s not to say that every purchase gets discussed though.  I do nearly all of the grocery shopping, and my husband has no idea how much the bill is each time.  Sometimes we go together, other times he stays home with our son while I go, but in general, he doesn’t know or care how much we spend on groceries.  He trusts me.

My husband loves everything about long term investing, and manages all of our investment accounts (retirement accounts and our HSA).  I know how much we put into the accounts, because I’m the one who transfers the money from our checking account.  But from there, he does the rest.  He loves to talk to me about it, and tells me exactly where everything is because he’s so excited about it.  But to be honest, I doubt I could tell you off the top of my head where even a quarter of that money is invested.  I trust him.  (And the balances in the accounts continue to grow, so he must be doing something right.)

We don’t sit down together every week and go over the details of where every penny was spent or saved.  I handle the bills, and let my husband know where we are in terms of spending on our credit card a few times throughout the month.  All of our income is deposited into one joint checking account.  The only separate accounts we have are IRAs (although both of us know the passwords for all of our accounts – there’s nothing that only one of us can access), everything else – like our online savings accounts and our HSA – is owned jointly.  We have one credit card (an AmEx) that we use for all of our purchases, and one backup card that we use at places that don’t accept AmEx.  Both cards are jointly held, which makes it easy to track our total spending each month.

I do tend to be a bit of a micro-manager when it comes to money.  The idea of paying a bill late makes my break out into a cold sweat, and I have been a saver since I was old enough to know what money was.  I got my first credit card when I was in college, and other than a couple years when we were paying off debt from starting our business, I’ve never carried a balance from one month to the next or not known what my total balance was.  My husband is a bit more relaxed about the details, but he’s very focused on the long-term goals, and the idea of living frugally and below our means.  So the arrangement we’ve got works perfectly for us:  I do the day-to-day stuff, keep on top of the bills and credit card balance, etc., and he makes sure that our long-term investments are on track.

For nearly ten years now, my husband and I have identified as a unit rather than a two separate people.  Everything we do, and all the goals we have are built around that starting point.  Obviously we have different interests, likes, and dislikes.  But everything we have is ours, and the life we’ve built together is ours.  It just makes sense that our money is also ours, rather than being mine and his.

Reading Adam’s post, I could obviously identify completely with his initial point of view, and was skeptical of the idea that any really strong marriage could involve separate finances.  But there are a lot of good points in the article, especially in the interview with Corey, and I can see a bit more of the other side of the issue after reading it.  In my own relationship, the idea of separate finances still has no appeal what-so-ever.  But my view of relationships that do utilize separate finances is different now.

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{ 15 comments… read them below or add one }

Meg November 19, 2010 at 12:35 pm

My husband and I have sort of a mixed system in that we have joint for everything but our “fun money” accounts. That helps us keep in budget some of our discretionary spending and without either of us feeling like we’re not getting our “fair share” since we have different spending patterns and that’s harder to budget (I spend more often on cheaper items, he spends less often on more expensive items). But we don’t have that sort of money system where we’re deciding who pays for what food at checkout and how to split the mortgage. And it’s still all “our money”. Even clothes usually come out of the joint account unless it’s something that is completely unnecessary and not in the budget. AND, though we have our fun money accounts and wouldn’t veto each other’s purchases with them, we DO still talk about our purchases A LOT. At this point, it’s just something that comes naturally, though it wasn’t always so.

And, I think that’s the big thing. Whether you have joint or separate accounts or a mix, TALK to your S.O.! There shouldn’t be money secrets. I speak from experience when I say that they are bad, bad, bad (though you can get past them and change habits, as I also learned from experience). And when you’re planning how you’re going to spend and save your money for the future, you get to talking about other aspects of life and your priorities. Planning your finances together becomes planning your life together.

Madeleine November 19, 2010 at 1:27 pm

Hi, you sound just like our family. I really don’t understand how you can have a marriage, raise children, a mortgage and have separate bank accounts. I was bought up with parent’s that shared everything (though my mum stayed at home with us so may that has something to do with it). I’m now a stay at home mum so obviously I don’t bring any money in but before that as soon as we bought our home together we have joint accounts for everything. I like you pay all the bills as I hate wasting money by bills being paid late (grr late fees) and my hubby loves it as it means he doesn’t have to worry about money at all, he just asks what account to use (especially if it’s not pay week). This system works really well for us but I guess it wouldn’t work for everyone. I’ve almost written a blog post here hehehe maybe I should blog on this topic?

Amanda November 19, 2010 at 10:15 pm

I read bakers post first so my comment is there!

morrison November 20, 2010 at 10:34 am

These words made me laugh the most: ” I trust him”.

After 29 years with my husband, I was shocked to find out one day that he split and took up with some younger woman who was 4 years younger than our youngest daughter.

I think women should wake up and smell their own coffee. We’re foolish for trusting anyone other than ourselves.

My whole family was shocked over my husbands’ behaviour because for the 29 years that we all knew him, this was bizarre. But not uncommon. Over the years, I split everything down the middle (because I trusted him) and held everything jointly. Boy, was I in for a real surprise when I got served with divorce papers. If I didn’t act fast, I would have wound up a bag lady. Now, at the age of 60 WTF am I supposed to go and WTF am I supposed to do with myself?

All of us will at one time or another, live alone. Might as well prepare for it now while you can. Death is not an option. Eventually we all get left alone.

Live and learn.

Cortney November 20, 2010 at 1:28 pm

I’m not married, but I’m with morrison when it comes to one specific financial area. Because of the uncertainty of marriage, I would probably want to take care of my own retirement. Everything else, sure, joint account, split it all down the middle, share and share alike, mortgage, kids college funds, mutual savings, etc. But it would make me nervous to have my retirement accounts wrapped up with someone else. One of my previous partners had a terrible story- after 20 years of marriage, his father left his mother, who had been a stay at home wife their entire marriage, dutifully raising their 4 children. He took EVERYTHING. All retirement accounts, all savings, the whole lot. Oh, and she was diagnosed with cancer 3 months after they divorced- and he kicked her out of the house as well, since it was only in his name! If they had at least had separate accounts- so she had *something* in her name- it wouldn’t have been so bad. I hate to be a negative Nancy, but when it comes to projecting as much as 50 years into the future? I can’t say that I know for sure I and my partner would be together. So in that one area, retirement, I want to go my own way. Everything else 50/50 is only fair.

FrugalBabe November 20, 2010 at 2:52 pm

Morrison and Cortney,
I know that nothing is ever certain in life, but I can say that there is nothing in my life that I’m MORE certain of than the fact that my husband and I will be together until one of us dies. (We each have a significant amount of life insurance to protect the other if one of us were to die young). That said, nothing we own is held by just one of us, except our retirement accounts. So the scenario that Cortney described with one spouse kicking the other out of the house because it’s held in just one name wouldn’t be possible.

Our retirement accounts are held individually, with the exception of our HSA, which is a joint account. But our IRAs and our SEP IRAs (funded through our business) are owned individually, and funded equallyl.

I think that problems can occur if one spouse is kept in the dark with regards to finances. For example, if everything is jointly owned but only one spouse has the account numbers or passwords, problems could arise. Or is one spouse controls the money and gives the other an “allowance”. I see situations like that as being about control, with one spouse wanting to control the other’s spending and/or behavior, and it seems like a recipe for problems. In our case, both of us have access to everything we own. We both have all of the login info for online accounts and we each know where all of our money is.

Kelly November 21, 2010 at 4:18 pm

One caveat to jointly held finances that I never knew or considered was what happens when one person dies. My grandpa just passed away at 90 and although he and my grandma (also 90) held two AMEX cards they were linked and cancelled. It’s been hard for grandma to make all the arrangements and payments without the convenience of the card. She also ordered new checks for the trust after he passed so at times she has felt very nervous with the credit card as backup. Now AMEX is telling her she can’t reapply in her own name or they won’t reissue the card because she already has an account (which they cancelled!).

For the sake of my credit score and this risk alone I will always seek to have at least one card in my name only.

Trust is a great thing but I don’t believe in blind trust. A regular review of the accounts and balances and credit reports does a lot to build trust. Not to mention when a spouse sees all the work and considerations that go into choosing retirement funds or running the household it should inspire gratefulness and thankfulness.

Rachael November 21, 2010 at 6:19 pm

Finances aren’t a one size fits all thing, especially when it comes to marriage. Everyone is different and for some people, keeping their money seperate is the best option. As with most of you, I grew up with parents who shared all of the bank accounts and bills. When I got married, I wanted the same thing and promptly closed my “single” bank account and added my name onto my husband’s. Almost a year and a half down the road of marriage and seven months of him being unemployed and myself being our only income, I now have my own bank account again which is only in my name. That’s not to say I wouldn’t give him the password or the debit card if he asked or needed it, but it is just mine. I think the reason I was so quick to merge our finances when we were first married was because I wanted to seem like a “perfect” couple, and obviously a “perfect” couple should be able to share their money and not have issues because of it, right? I have no issue with sharing money, but I bring in the money, I pay all of the bills and make sure they are paid on time, I do the budgeting, and at this point in our marriage it just makes for sense for it to be this way. I’m sure when my husband is employed again, or even before then if he wants, I will add his name to my bank account. Currently, though, he doesn’t even have any finances so the finances are mine.

Tiffany November 22, 2010 at 1:51 pm

Frugal babe,

You sound like me and my fiancee. We combined accounts when we bought our house. I think when you share financial debt it is also important to share financial responsability.

I love having one joint account. It brings a real “team” feeling to our financial management strategies. We are pretty flexible with our money, and don’t have a household budget. We know our monthly expenses and set loose guidelines for spending money. We are both naturally frugal and like to save money, so we don’t have to worry about one person blowing a bunch of money. We discuss big purchases before we make them (we usually end up NOT making them), and always see things in the perspective of our long-term financial plan. It helps us eliminate spending waste.

We still have separate credit cards, but I don’t see a big need to change that. We both have online access to the account so can see where the money is going.

For me, there is no other way to manage money as a couple. I really believe that separate money leads to separate lives and resentment. For us it doesn’t matter who makes more money, or who spends more in one month. It’s not a competition. We’re a team working to build a better, stronger team. And sometimes that means him taking a trip to see his brother with money that I’ve made, or me flying my mom out for a visit with money that he’s made…and it doesn’t matter! We’re in it together. I love it. (I also have the luxury of being with a partner who has the same financial mindset as me…so it’s all very easy)

That’s just my .02.

Cortney November 22, 2010 at 4:22 pm

Frugal Babe,

I just wanted to clarify that my comment was about my opinion on this subject in general, I hope you don’t think it was a commentary on how you and your husband personally handle finances :) The thing about the separate retirement accounts is my only sticking point when it comes to sharing finances, just because I can count on two hands the amount of people I know personally who were divorced/separated after 15-20 years together. So as a result, when it comes to combining finances I’m just personally wary of entangling my 50 years in the future self that way. Also, I’ve been reading that simple marriage site the last few days, and it is great. Thanks for the heads up!

FrugalBabe November 22, 2010 at 4:42 pm

No worries Cortney, I knew it was just general commentary, but it did bring up some really good points. There’s so much to think about with this topic, and so many different styles of handling money and relationships… it’s interesting to see other’s points of view.

less than average November 26, 2010 at 11:51 pm

Really touched a nerve there, Babe.

Since you never know what will happen in life, and everyone comes from different experiences and relationships/families… one person’s ceiling is another person’s floor. And you can’t please anyone other than yourself.

We have it very differently. My wife earns very little (for a variety of reasons: born in a foreign country, not having many transferable skills, not highly skilled in English), so I basically pay for everything. What little she does earn from her tutoring, she keeps and uses as she sees fit. I give her whatever money she wants. It’s all OK with me.

Since all circumstances are different, and even with a few sentences one can never get the full story, then these blogs and responses are just glimpses into others’ lives. We have a chance to see and reflect, and hear from others. We take what we read as either confirmations or warnings.

Sustainable PF December 9, 2010 at 12:33 pm

Hi FrugalBabe,
Mrs. SPF and I are almost identical to yourself and your husband in that we trust in each other on our financial goals and philosophy. We too can not understand why couples would want to manage their finances separately. We did so when we were dating and while living together up until a year before we wed and it was such a hassle! Every month we had to review our bills and figure out how much each of us should pay (we had a weighted payment system as I was working and Mrs. SPF was in university so we had differing income sources). Today while we make different incomes, it is so much easier to simply pool our income, pay the bills, stick to our financial plan and then figure out what to do with excess, if there is any.

Leena December 10, 2010 at 1:59 am

Hi, I just found your blog and will read some more of it, but want to comment on this one, eventhough I’m a bit late maybe.

My system with my boyfriend might sound quite complex but in practice it’s super simple. We have a joint account, where from we pay for our house, car, food and insurance and all things used by both of us. Then we have our own accounts where from we pay things we want only for ourself.

Each month we pay certain amount to the joint account, the total amount is always the same, but the amount I or he pays may vary from our own income. So if I earn 10 % more than he does, then I pay 10% more to the joint account than he does. Our income is generally very stable so we do not have to check the amounts every month. We just pay the same as last time.
First we thought of paying same amount each to our joint account, but then realized it is not very fair to the one who earns less, like lets say one gets unemplyed, or maybe in future stays home with children for a while.

Just wanted to introduce this system, it works for us.

eemusings December 10, 2010 at 6:30 pm

T and I were at a comedy show last night and one of the gags was about going to the supermarket and arguing with the wife over the phone about buying something frivilous that he wanted.

“No, of course I don’t need ice cream….yes it’ll come out of my money…no, you’re ABSOLUTELY right. Okay, so just shampoo and tampons then…”

T was poking me and nodding solemnly. Oh, how we laughed, because once upon a time that was us.

He now has his own money to spend on whatever he wants so I don’t need to get an ulcer about the crap he wastes it on. Gas, etc comes out of our main joint account, but if something else comes up that is needed (ie) new work shirts, he’ll generally call me and check that all is okay. We don’t really have a set dollar amount on that, but common sense prevails.

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