Money, Money, Money: His & Hers?

Money, Money, Money: His & Hers?

November 15th, 2010 @ 9:09 am by Mrs. Earrings
Share

I saw (and bought) this chocolate bar the other day:

I think I will sneak it in with Mr E’s other wedding day gifts to remind him what he is getting himself into, as well as make him smile. But besides giving me a bit of a giggle, this chocolate bar also got me thinking about the after-wedding budget and how we are going to manage our income(s) together.

Issues over finances have been cited as some of the main causes of conflict within marriage. So, it would make sense to plan out how to handle our finances before we take the plunge in a way that makes both parties happy. This is easier said than done.

Right now, our incomes and our expenses are fairly evenly divided. We both pay our own rent (we have been living in student accommodation with a communal kitchen so we cook and eat together and everything, but we still technically “live” separately). Mr E’s income is used for groceries, eating out, and other small living expenses. Mine is currently funnelled towards wedding expenses. If we want to make a small splurge on ourselves—say, if I want to buy a new shirt—then that comes out of our individual budgets. For this time in our lives this system has worked well for us.

But it might not work as well after we are married. We are going to have some decisions to make, such as: Are we going to pool our money together and just have an “us” budget? Or are we going to keep separate accounts and designate each other’s incomes to specific expenses? My income might be used to pay the rent, and he might pay the power bill, etc. What happens if one person is earning more than the other? And how do we handle the little splurges (or not so little) that the other may want to make when it is “our” money? We are both used to being fairly independent with our spending, but when our spending may affect our spouse, that changes the dynamics of the process.

These are all questions that we know we need to consider, but I am sure there are more, as well. As of now, we seem to have four options for managing our money together, while still maintaining some level of financial independence:

Have a joint account, pool all our money together and ask each other before making a personal purchase, such as an item of clothing.
Have a joint account, pool all our money together, and set aside a small weekly “allowance” for each person that he/she can spend on whatever he/she likes without being beholden to the other.
Keep our incomes separate, and keep no tabs on what each person spends on his/her own stuff.
Keep our incomes separate, and have a budget limit on how much each person can splurge on him/her self so that budget maintenance is still a joint effort.

More issues can arise within some of those options, of course. For instance, my splurges (cafe-hopping and clothing) are much less expensive than his (camera and music equipment), but mine are also much more frequent. So…the weekly allowance idea may or may not work with those factors. As you can see, we are pretty new at figuring this stuff out, but hopefully by trial and not too much error it will all fall into place eventually.

What roadblocks have you come across when learning to manage your money together? What is the most helpful method you have found for overcoming them?

Tags: budget, new-zealand, relationships |

Share |

Latest Gallery Pics

Hot Pink and White with Zebra 36" Lighted Spandex Ostrich Feather Centerpiece

14 Responses to “Money, Money, Money: His & Hers?”

Member

angela2011bride (message) 295 posts, Helper bee

My fiance and I chose to get joint accounts when we moved in together. We know that we are both fiscally responsible enough to spend money without making us unable to pay a bill, and have an agreement that anything over $100 needs to be discussed before being purchased by either party. We also each have a credit card with a small limit in only our name so that we can purchase gifts on there, that way we can still surprise each other. It has worked out really well for us!

11/15/10 @ 9:19 am (reply)

Member

gill84 (message) 725 posts, Busy bee

we’ve moved to the join account with the allowance thing, but it’s become tricky what we spend our allowance on. for example do we each play our own cell phone bills out of that, even though the landline comes out of the joint account? what about toiletries/haircuts, where I obviously spend a lot more than him and he maybe doesn’t want to pay for it? These lines are currently still fuzzy for us. Good luck!

11/15/10 @ 9:21 am (reply)

Member

elivt (message) 187 posts, Blushing bee

It is important to consider, too, what will happen with future debt (like car payments or a mortgage), and if one person stays home from work for a while (as a stay-at-home parent). If you’re going to do an “even split” it is definitely important to consider doing this relative to the amount of money each person makes, especially considering the pay gap between men and women. Another thing to consider is unpaid labor in the home- does one person do more work around the house than another? That is a contribution to the family unit, just like a paycheck is. I know it isn’t romantic, but I also think its important to discuss what would happen financially if you were to ever separate or divorce. In the US women tend to lose money in divorces (despite the stereotypes), and experience a decline in quality of life, and its important to keep that in mind.
One of my biggest peeves is people going into marriage with the romance blinders on, not realizing that it is also a sort of business merger of two lives. Unfortunately, because we still live in a patriarchally dominated society, if you go into these things without talking about it, the default/assumption can put women at a disadvantage.

11/15/10 @ 9:21 am (reply)

Member

crayfish (message) 4,993 posts, Honey bee

We funnel all our salary into one account, and have agreed on a monthly allowance that gets automatically transferred into our own accounts every paycheck. Anything essential (bills, food, clothing, car, joint entertainment etc) comes out of the main account. Anything not essential (an expensive pair of boots I don’t “need”, photography equip, etc) comes out of the individual account. That way, we can both see where the bulk of our money is going - crucial when you are either on a tight budget, or saving up for something big (like us). You can really see where the money goes, and see where you can cut back more easily. I like this system better than anything you spend on yourself coming out of your personal account, and only the few bills coming out of the main account. I like really seeing how all the money is being used.

11/15/10 @ 9:27 am (reply)

Member

crayfish (message) 4,993 posts, Honey bee

Oh, and I should say that we view each of our salaries as joint. It isn’t “my money” and “his money” - it’s OUR money. He realizes that it just costs more to be a girl because of societal pressures, so it isn’t an issue that my haircut costs more than his, or that I buy makeup. That’s all from the joint money.

11/15/10 @ 9:28 am (reply)

Member

SoontobeMrsBland (message) 7 posts, Newbee

My finance and I set up a joint account when we bought a home a few months ago. We pay all of our joint expenses like our mortgage, utilities, groceries, wedding expenses, etc. out of our joint account and we each contribute a portion of our income to fund what we call our “joint ventures”. We also each maintain our original personal accounts, which we use to pay for personal expenses like our individual student loans or other bills as well as “splurges”. Currently, we contribute about 50% of our incomes to each account. Our system has been that we discuss nearly everything spent out of our joint account, unless say I’m at the grocery store and the bill is what it is to feed us. From our “personal money” though, we are each fully entitled to spend and save as we see fit with no questions about purchases made by the other from that pool. We do however occasionally have to revisit how much we are each contributing to our joint account, or add money as needed in order to meet the goals we have agreed upon. So far, this has worked very well for us.

11/15/10 @ 9:30 am (reply)

Member

ohheavenlyday (message) 2,400 posts, Buzzing bee

We had separate accounts when we lived in Texas, and generally, my FI paid the household bills and things like that. I paid my personal bills (student loans, cell phone, car and car insurance, stuff like that) and we’d sort of just trade off on who bought dinner if we went out, or who paid for groceries. But when we moved across the country, he needed to open a new account at a national bank since he was banking from a local Texas bank, and we decided to just add him to my account since I already was banking with a national bank. When we did that, we went ahead and consolidated a lot of stuff to make it more simple- we got a family cell phone plan, and a joint car insurance policy, which reduced the number of “double bills” we’d be paying and also saved us money. Since we’ve done that, I just handle all the money since he hates to have anything to do with it. I pay all the bills and then just tell him what’s leftover in our account after everything that needs to be paid is paid. I’ll double check with him if I want to spend a good chunk of money on anything, and he does the same, and as long as we agree it’s a good use of our money, we’re fine with it. Anything small is no biggie. If he goes out to lunch with coworkers or, I don’t know, buys a shirt or two, it’s not a big deal, just like it’s not a big deal if I buy a couple books or things for the house or a dress. It works for us; I’m a control freak and like having control of the bills because I know when everything is due and how much, and he hates having to deal with that stuff, so he just leaves it up to me.

11/15/10 @ 9:32 am (reply)

Guest

Married In Chicago

I don’t mean this to sounds mean, but I’m just wondering - what kind of “financial independence” do the two of you really have as college students? And if you are paying your own way through college - a good question to think about might be how to handle the debt. Will it all be “our”debt or will each of you be responsible for paying off your own debt?

11/15/10 @ 9:37 am (reply)

Guest

Mindi

What has worked well for my fiance and I is that we have a joint account where most of our money goes and we each get an allowance into our own accounts each month. We thought that it was important for each of us to have some money each month that would allow us to be able to spend in any way that we would like. The only kind of regular thing that comes out of our individual accounts instead of our joint account is haircuts - I just didn’t think that it was fair that my fiance’s haircuts cost $15 max each time and mine were closer tot $150. I like being able to go get a pedicure or buy a new shirt without feeling guilty for spending money!

11/15/10 @ 10:33 am (reply)

10.

Guest

CTS

@Married In Chicago

I am paying my way through college and will be graduating next semester with no debt! My boyfriend is in the same boat. I don’t know Miss Earrings’ personal situation, but there are college students out there that maintain “financial independence” through college without going into debt (even though I’m sure it’s rare). I think that all financial situations really depend on the individual.

11/15/10 @ 11:10 am (reply)

11.

Bee

Mrs. Sand Dollar (message) 1,305 posts, Bumble bee

I’m a big fan of joining accounts, then having a separate “mad money” accounts for your non-bill purchases. That way you can still come together for the big stuff, and handle your smaller wants separately. Best of both worlds!

11/15/10 @ 11:14 am (reply)

12.

Guest

Erica

I think the major change needs to be mentally: it’s not your money to spend anymore, or his. Any money each of you makes is of the couple, regardless of who of the two earns more or less. Once this is accepted, it’s not so hard anymore to manage the joint finances.
When my fiance and I moved in together, we decided to keep our separate accounts and created a new one where most of our money went it and from where we pay all the joint expenses. We agreed on how much money we wanted to keep monthly on our personal account (which is the same amount for each: so even if one is making more than the other, the extra is put anyway on the account).
Of course we can spend our personal money however we see fit, but we never make a big purchase without consulting the other, since we have decided to save up for our future (and that includes not spending all of our personal money as well).
For my fiance it was more difficult to get used to this than for me, but now we are both very comfortable with this!
If you mark clear lines between what’s yours and his I think you risk building up resentment if you don’t agree on each others spending habits!

11/15/10 @ 11:14 am (reply)

13.

Member

Minutiae (message) 2,371 posts, Buzzing bee

We’re using your scenario #2 when we get married, to avoid “mystery money.”

11/15/10 @ 11:16 am (reply)

14.

Bee

Miss Earrings (message) 2,481 posts, Buzzing bee

@Married In Chicago: Hiya Thankfully Mr E has no student debt, and my loan is very tiny thanks to scholarships, and will take hardly any time to pay off when that time comes. But good point to consider debt when figuring out this financial stuff

Thanks for all your tips and hints so far everyone, they have been very helpful. So far Im liking pooling most of our money in a joint account but keeping some aside each month in our personal accounts.

11/15/10 @ 1:37 pm (reply)