Combining Finances

Mr. W and I didn’t become roommates until we got married. He obediently paid his own mortgage, utility bills, and car payments, and ate canned vegetables for dinner. I paid my own rent and utility bills, tried not to shell out too much money each week on gourmet groceries and eating out, and did my best to avoid Sephora. Sigh. We knew it would be an, ahem, transition to get used to each other’s spending habits, but at the same time it felt too weird taking turns paying for dinner once we were married. Or splitting the mortgage payment. So we paid a trip to our neighborhood Chase to straighten things out.

Cash

Photo via FinishRich

Single Mr. W had a checking and savings account at Chase, a Chase Sapphire credit card, and a Macy’s card. I had a checking account, savings account, and several CDs at Bank of America, a United Explorer credit card, and a Banana Republic card. Here’s how things went down.

We decided to keep Mr. W’s checking account as our primary joint account, since he already pays all of the house bills out of it. I closed out all of my Bank of America accounts and transferred the money to the Chase account. We added my name to the account and ordered me a brand new Chase debit card once I changed my name. That’s Mrs. Wallaby, thank-you-very-much. And we also added each other onto our credit cards. So we each now have a Sapphire card and a United Explorer card. (Mr. W wasn’t too interested in the Banana Republic card. His loss. ;) )

But, hive, Mr. W knows me. And I know him oh so well. We don’t see eye to eye on all of our spending… Like, if you ask me, we would totally survive without replacing our 55″ TV for a 60″ TV. (Right, ladies?!!) And Mr. W just makes a funny little sound and tries to stay mum when I bring home a new pair of boots. We’re both generally frugal and have the same financial ambitions, and we’ve carefully managed our personal finances and stayed out of debt. We make similar salaries, and through lots of (boring) conversations about money, we’ve both been putting aside similar amounts of money for retirement and savings each month. But when it comes to buying little things here and there, we don’t always see eye to eye.

Boots

Enjoying the hell out of my boots. Worth every penny. / Photo by Mustard Seed Photography

So to avoid arguments over small money matters, here’s our solution: allowances. We each get 5% of our take-home pay to spend on whateva-the-heck we want. If we want to buy something big that the other person doesn’t feel is necessary (cough cough, new TVs), we can save up our allowance, just like we did when we were five.

We’re still on the fence about how to carry out this allowance system. For now, we each have separate checking accounts at Chase and we transfer allowance money over to the accounts each month. (Funny story: Chase currently only offers two styles of debit cards: classic blue cards and Disney cards. So I ordered a 101 Dalmatians card for my allowance account. It’s like spending play money.)

101Dalm

Photo via Disneydebit.com

And we’ll see how it goes. I hope over time we’ll get used to sharing money and just rely on one account. It really would make things a whole lot simpler. As always, I’ll keep y’all posted. :)

How do you and your significant other manage your money? Did you combine finances when you tied the knot—or are you planning to? Is there are more efficient way for us to have separate “allowances”?

BLOGGER

Mrs. Wallaby

Location:
Houston
Wedding Date:
November 2012
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  1. Member
    PlumeriaSplash 243 posts, Helper bee @ 2:01 pm

    We’re going to also have allowances. We’ll put the money in a separate checking account and spend it on what ever we want. However, the money won’t come from 5% of the individual’s income but a portion of the overall/combined income. I think this is necessary to make things fair as we’re going to be trading off emphasis on each other’s careers. It also clears up confusion if someone loses their job or goes back to college.

    You could also tentatively consider “loans” from yourself. But that would require a lot of honesty, self control, and very stable income. My parents use this method if they have something big but don’t want to wait three months to save up. They always pay it back too.

  2. Member
    shortbread 290 posts, Helper bee @ 2:19 pm

    We’re not married yet but we have opened a joint credit card and checking account. I feel like this is good practice for paying joint expenses.

    I’m not sure I love the word “allowance”. I’ve been on my own so long that I don’t want to be told how much I can spend. Of course, once we’re married we’ll be a team and working towards similar goals. What we have decided is to put a certain percentage of our paycheck into our joint checking to pay all the bills. Whatever is left over after that will go to our savings and mad money funds. I’m sure we’ll have some trial and error to make sure we do things as seamlessly as possible.

  3. Member
    mslemur 616 posts, Busy bee @ 3:43 pm

    This is exactly what we’re planning on doing :) I can already tell that having multiple accounts would be way too hard, just trying to divide up bills now. I’m the “numbers” person so I’ll most likely manage our account, but we have to figure out how to do allowance…

    My parents do $25 a week that they take out in cash. It works pretty well for them. They just keep cash in an envelope and pay for little things they want with that — and they’ve been married for thirty years! This is what they did for us when they were younger. Except we got varying amounts of money, from $5 a week in elementary school up to $25 a week in high school.

  4. Member
    DBS5127 214 posts, Helper bee @ 5:50 pm

    My FI and I have combined everything (except one credit card). Right now, we just talk about it if one of us wants to spend money. It works well, but I’m really interested in the allowance idea to avoid arguments later on. Question: Where does money for something like going out to dinner come from (as in something fun that both of you want)? Thanks!

  5. Member
    Almost Mrs.P 2056 posts, Buzzing bee @ 6:55 pm

    We are halfway through combining finances… need to wrap that process up! I’m so tired of juggling multiple accounts.

  6. Member
    cowpoke06 169 posts, Blushing bee @ 7:30 pm

    You are a genious. My fiance and I are in the midst of combining our finances and bills. We are now added onto all of eachother’s accounts and are going to use one for direct deposits and bills and then we each have one that is “our” account for whatever we want to spend money on. But I could NOT figure out how to determine what each of our “allowances” is or how to do it. You’re idea of doing it as a percentage is flipping genious. I’m stealing it!

  7. Member
    braverbeating 1126 posts, Bumble bee @ 7:46 pm

    Sounds so smart! I’m keeping this for when I combine finances someday!

  8. Guest Icon Guest
    Ak, Guest @ 4:42 am

    Use mint.com! It’s amazing. We’ve been using it for a year since combining finances, and its so easy. You can set budgets for personal spending etc. we ditched credit cards we weren’t using and no need to transfer funds between checking accounts. Try it!!

  9. Member
    mswallaby 2042 posts, Buzzing bee @ 6:31 am

    @Brooklyn55: That sounds like a good plan – definitely get started on retirements savings now if you can!!
    @BookishBelle: Yes, I agree!
    @Lone Star: Yeah, I wasn’t sure how we would handle the gifts thing if we were 100% joint finances…It’ll be nice to have my own account for secret gift purchases ;)
    @Gillian: That sounds like a good system!!
    @SinfoniAXiD: Yes, I will definitely keep ya’ll posted!
    @MrsCVsomeday: YES! I have the same philosophy ;)
    @Mrs. Toadstool: Haha interesting, I’ve never heard of custom cards like that before!
    @Ms.Bookworm: Oh girl, that sucks…I hope things are better managed now that they’re in your hands!
    @Mrs. Hyena: Good system! We may switch to that rather than the separate accounts if it gets too confusing/cumbersome.
    @Zoe: Yeah, I really like that attitude…And it helps to prepare for a time when one person is out of work, so you’re used to sharing everything and seeing the income as shared between both people.

  10. Member
    mswallaby 2042 posts, Buzzing bee @ 6:37 am

    @PlumeriaSplash: That’s what we’re doing – oops maybe I didn’t make it clear – we’re each getting 5% of our combined income, so it’s fair even if one of us gets a significant raise or takes a pay cut. I think we may end up doing the “loans” from ourselves too, Mr. W has a few big things he wants to get this year…
    @Shortbread: Yeah, I know, I feel kind of weird calling it an “allowance,” since it’s our hard-owned money.
    @Miss Lemur: I love that idea! It’s very in sync with Dave Ramsey’s money-managing tips. Unfortunately, Mr. W hates to carry cash…
    @DaniLyn: Money for dinner comes out of our joint account! We allocated part of our joint account for groceries and dining out. Even if I’m going out to eat with friends, I can pay for it from our joint account – because we both eat out about the same amount, so we thought that was fair. Our “allowances” are more for non-food-related expenses, like clothes and electronics ;)
    @Almost Mrs.P: Yes! It’s such a tedious process! I switched companies, so I still have my “single girl” accounts open to make sure none of the direct deposits bounce, before I close out those accounts.
    @cowpoke06: Do it! And take it as a percentage of your combined income. I think it’s very fair!
    @Ak: We already use Mint, and I love it!! It’s so, so, so helpful and I love how it sends you an email if you go overbudget.

  11. Member
    mslemur 616 posts, Busy bee @ 6:50 am

    @Mrs. Wallaby: My parents are very Dave Ramsey types :) I have tons of respect for them, they have managed their money very well and taught me a lot!

    I hate carrying cash too though. I always always use my debit card and keep track of it through my online banking account and Mint.

  12. Member
    mswallaby 2042 posts, Buzzing bee @ 7:25 am

    @Miss Lemur: Yeah same! Sigh…It doesn’t work exactly the same, though. I think if we ever go down to one income, we might switch to the cash system, because it doesn’t rely on accountability the way carrying a debit card does. Glad you have financially-savvy parents – I do too, and I look up to them so much. They’re retiring now at the age of 55 – lucky them!

  13. Member
    ChicagoDreamer 509 posts, Busy bee @ 9:20 am

    I’m not married yet but my boyfriend and I treat our money as each others. So far, so good. But I love the allowance money! I sometimes feel guilty if I spend when he doesn’t, but I think this is a great compromise!

  14. Member
    This Time Round 10219 posts, Sugar Beekeeper @ 5:46 pm

    You might be interested on this very workable solution for Newlyweds that I saw on a Financial Advice Program (sorry don’t remember which one)

    1- Combine ALL incoming monies

    2- Deduct ALL the Living Expenses / Bills (Housing – Utilities – Groceries – Transportation Costs / Car Expenses – Insurances – Medical etc)

    3- Decide on an amount that you’ll put into a JOINT Savings account… for larger purchases, or things you are saving up for together (a House, a Car, Furniture, Vacation, Boat, Kid’s College Fund… whatever)

    4- Take the remaining amount and divide it in half…

    (a) With equal amounts going into EACH of your Independently administered Retirement Savings Plans

    (b) And then lastly, Equal amounts go into your “Spend as you wish” fund… the allowance that each of you have… which can be kept in an account under your own name.

    NOTE – the numbered order here is arbitrary… some couples follow the theory of pay themselves first and live off the balance… but the idea on how the money gets appropriated stays the same. In this way, BOTH partners have a equal stake… no one having access to more. So much better than splitting things proportionately such as 50-50 or he makes 2x as much so he pays 2/3 and you pay 1/3.

    BECAUSE, utimately there will come a time in the Relationship when a financial change / crisis will come about where percentages distribution based on income won’t work… usually when the woman takes leave to have a baby, raise a child, or look after an ailing parent.

    If you follow the above method from day one then it truly is a partnership, and no one person has more financial control over the other (Money being a HUGE issue in marital discourse).

    And as someone who has been Divorced (ya it sucks and it happens) it means that IF that fate should ever befall you… that no one person will have more control or access to more money… you’ll both have had half all along… so the split should be better… and not so much one using their wealth to dominate the seperation / divorce process (which happened to me… and put me at a terrible disadvantage… meaning that when after everything was said and done, I lost out on aprox $ 100 K that should have come to me, because my Hubby had managed the majority of our income thru his accounts etc). Something to think about.

    Hope this info helps someone…

  15. Member
    elky 968 posts, Busy bee @ 3:48 am

    We have a joint checking account that 100% goes into and we have “The Budget” that breaks down every category. We’re with ING Direct so we have like 8 or 9 savings accounts because they’re all free and we name them things like “Car” “Wedding” “Pet” “Home Improvement” “Emergency” etc. And I divide the money as per the budget into those accounts. When we’re paid we each get X amount for Allowance and X for RSP contributions. We deposit those into personal accounts and go about our way. We have the budget and anything that doesn’t work in it needs to be discussed. We live together and this has happened since then. Due to the income disparity it would have been unfair to split things 50/50 and not combine as otherwise it would build further resentment — its already difficult for guys when their lady makes more, no point rubbing it in by getting extra personal money…

  16. Guest Icon Guest
    Dessy, Guest @ 6:56 am

    Combined finances will ultimately test you as a couple at first. Whats great about combining finances is that you get the ability to be open and share what you or our spouse have for quirks about money, the issue is also the quirks about money. Go into this with a single thought in mind, it will not define your relationship!

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