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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comments

  1. Member
    annabat1 82 posts, Worker bee @ 9:17 am

    that’s a really good idea about allowances of 5%! may mention that in passing to SO for when the time comes in the future!

  2. Member
    brooklyn55 743 posts, Busy bee @ 9:36 am

    We aren’t married yet so we haven’t combined finances and even after the wedding in 6 weeks, I won’t be working so we have just decided to leave everything in his name since he will be paying all the main bills- I will have my own account to cover my gas and things I need (this is money I saved from when I was working) but I hope to start a new job early in the summer (since I graduate in May) and we have already decided that when I do find a job and have income coming in that we are going to do this very similar to you guys. We will have a checking and savings account (joint). The checking account will cover our bills and living expenses. The savings will be exactly that a saving account to save up for emergencies and a home since we do not own home. Depending on my job, we will look at retirement. My fiance has an excellent retirement set up through his work so we never see that money (its automatic out of how pay). We will probably have to set up retirement for me though. We also plan to do allowances although we can not determine that amount yet. It will depend on how much I end up making salary wise and how much our total bills/living expenses end up being.

  3. Guest Icon Guest
    Ben, Guest @ 9:41 am

    Combining finances is a tough decision but the harder one is communicating about finances without yelling after the wedding.

  4. Member
    AGDG2013 62 posts, Worker bee @ 9:43 am

    I really like the idea of the allowances! It will definitely help us buckle down on what we need to save vs what we can “play with”. Great job Wallabys!

  5. Member
    BookishBelle 1629 posts, Bumble bee @ 9:48 am

    We’ll be doing a similar thing, joint checking account for normal living expenses (so I can stop transferring money into his account for rent like a roomie!), joint savings account for things like a house one day, separate checking accounts (probably also going to use about 5% of our paychecks towards this) for separate fun without having to worry about what the other person thinks. We both make our own money, we should both be able to spend at least a small portion of it the way we choose without too much judgement!

  6. Member
    sweetie78 259 posts, Helper bee @ 10:05 am

    We have a joint savings and checking, but we both still have our own checking accounts. We put what we need to cover bills and other expenses into our joint account and whatever we have left is ours. I guess I was on my own too long to fork over my entire paycheck and only have a small portion of money left that I’m allowed to spend. To each their own!

  7. Guest Icon Guest
    Lone Star, Guest @ 10:15 am

    I think if this is what works then you should go for it. We just combined everything (well, I have a separate checking acct but it’s on our combined mint.com account so he can see exactly what goes into it and how, if any, is spent), and then we ask each other for permission if something is over $100. Luckily we aren’t really spenders. The only drawback is when we buy each other presents we have to tell each other not to look at the CC bill for that month until the present is given.

  8. Member
    lovelyduckie 756 posts, Busy bee @ 10:19 am

    Our finances are already semi combined. We have a joint account and separate accounts. A portion of my paycheck automatically goes to our joint for all our joint bills and to save a bit as a couple. The rest goes to my account and I pay out my student loans and personal credit cards from that. We always want to have separate accounts, I don’t want to have to explain the justification behind certain splurges and neither does he.

  9. Guest Icon Guest
    Gillian, Guest @ 10:24 am

    We do something very similar. Each week we both have our checks direct deposited into 3 accounts – joint checking, joint savings & personal checking.

    We sat down & calculated our monthly household budget (mortgage, utilities, insurance, gas, groceries, etc.) and figured out how much we each need to put in a week to cover everything (plus a little buffer). We did it by %, not $, since we don’t make the same. That amount goes into the joint checking.

    Same concept for the joint savings.

    Then whatever is left over goes in our own checking to do whatever we want with. We’re both paid hourly & are eligible for overtime, so this is the only account with a fluctuating amount. The only 2 are the same amount every week.

    It really works great for us. We did this back when we first bought our house in 2009 & I can honestly say, we’ve never had a fight about money.

  10. Member
    mstreasure 1655 posts, Bumble bee @ 11:08 am

    This is a great post! We have set a budget of what we’re allowed to spend each month. We discuss any purchases that would go beyond that. (For example, I’m taking a trip with a friend this weekend.) It works for us, especially since I’m still looking for employment. Maybe when I get a job, we’ll reevaluate and do something similar to what you two do.

  11. Member
    sinfoniaxid 62 posts, Worker bee @ 11:36 am

    I’ve been talking with my fiancé about doing something similar. However, we’re roommates now, so it’s hard to tell what to implement now and what to wait on til after we’re married. As of right now, I’m still on the job hunt, so most (okay all) of the money we spend is his, and he has the ultimate say. After I get a job (hopefully soon!!) my earnings will go towards saving for the honeymoon/a house eventually, and our day-to-day finances will still be his. BUT, after we get married, I think we’ll adopt a more shared view, like the one main account with individual account branching off. Let us know if it works/doesn’t work!

  12. Member
    shaynapunim 654 posts, Busy bee @ 11:38 am

    We won’t be combining our finances. I like how you guys organized yours, though!!

  13. Member
    missaliam 219 posts, Helper bee @ 11:41 am

    This is pretty much how we will be organizing our finances, once we get married. For now, we are going to set up a joint checking account to put the money for our wedding in, and that will become our joint “let’s pay for bills and other such grown up things” account, and we will have separate checking for our personal spending.

  14. Member
    bracelet 1419 posts, Bumble bee @ 11:44 am

    We haven’t changed our finances since getting married. We keep meaning to, but we currently draw our resources from so many different funds that trying to combine things would unnecessarily complicate things! I hope we can straighten things out by the end of this year.

  15. Member
    mrscvsomeday 162 posts, Blushing bee @ 11:53 am

    Helpful ideas! My SO and I have been talking about this quite a bit. Like you, we are both generally frugal souls and have no debt other than mortgages. However, also like you, we have very different “splurge” ideas. I believe the occasional (regularly occasional) strongly-desired new outfit is almost a need, and he feels that way about his boy-toy items that I’d be able to forego for life. :) So, how to allocate the splurge money is definitely something we have to figure out. I love the 101 Dalmatians card! :)

  16. Member
    mstoadstool 2485 posts, Buzzing bee @ 12:09 pm

    I love that card. My bank lets you send whatever pic you want and puts it in your card. My mom did it, but it’s a bit odd when the cashiers look at the pic of me and my sister and ask if that’s a real credit card.

  17. Member
    Ms.Bookworm 195 posts, Blushing bee @ 12:44 pm

    My DH and I are having issues with this right now. As in, I like to pay bills…he likes to let the season for a couple months and then pay…the only issue with that is now his car insurance has been cancelled and the car loan place is threatening to charge an extra 140 each month…needless to say I’m now taking care of all of the finances…he doesn’t get to pay bills any more ;)

  18. Member
    hyena 2537 posts, Sugar bee @ 1:12 pm

    We don’t have separate accounts for allowances. We’re pretty cheap, though, and we always ask each other about major expenses. (Like new TVs… yep, we just upgraded. Men.) That said, we each keep our own credit card that the other person doesn’t have access to, so if we want to do gifts or personal shopping, we can keep it separate/secret. So far it hasn’t been a problem!

  19. Member
    courtoni 177 posts, Blushing bee @ 1:48 pm

    We have been having the same conversations. He wants to combine pretty much everything and I’m reluctant. We both have credit card debt that we will combine but as someone getting married in my 40s I’ve never had to explain my spending to anyone. Or ask for an allowance.

    And to be honest he spends more than I do. I feel like there is a J Crew or Vineyard Vines box showing up weekly. I guess I am just concerned that if I want to get a manicure or load up my Starbucks card it will mean a whole conversation? I like the 5% idea though!

  20. Guest Icon Guest
    Zoe, Guest @ 1:58 pm

    Before we got married, I had the idea of just doing a joint savings account and then keep separate checking accounts for our own stuff. During our engagement I remember talking to my dad, and he told me, “doesn’t matter what you do, once you’re married you, and everything else, will become one.” We ended up having joint checking/savings after we got married, and it was definitely hard at first, and at times it still is, but it’s definitely worked out for us in wanting to save up for our future.

  21. 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.

  22. 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.

  23. 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.

  24. Member
    DBS5127 220 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!

  25. 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.

  26. Member
    cowpoke06 127 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!

  27. Member
    braverbeating 1131 posts, Bumble bee @ 7:46 pm

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

  28. 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!!

  29. Member
    mswallaby 2066 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.

  30. Member
    mswallaby 2066 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.

  31. 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.

  32. Member
    mswallaby 2066 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!

  33. 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!

  34. 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…

  35. 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…

  36. 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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