Wednesday, July 20, 2011

Handling money as a couple

My SO and I have been living together for a few years now and we've got money management pretty much figured out.  Like most couples we don't agree on everything, but we never really fight about money.  Instead of shouting matches when the credit card bills come in, we have discussions about financial priorities, goals and implementation on a regular basis or when one person feels things are out of whack.

Each of us has kept our own accounts and we have yet to open a joint account except for a shared business venture.  We split joint expenses down the middle and keep track of who pays what through Mint and a spreadsheet.  This allows us to correct when one person has been paying for things more often than the other and it allows us to track spending for things like groceries that would be irregularly split between both of us.  Our incomes have been in the same ballpark and our long-term earning potential is similar so a 50-50 split has seemed the fair option.  When I want beer and my SO doesn't, I pay, no split.  The reverse is true if my SO wants coffee.

Adding to our individual Mint accounts, we have a joint Mint account which has all of our credit cards, retirement savings, and bank accounts added.  This enables each person to see the bigger, joint picture for goals like retirement or spending and to have read-only access to the others finances.  I really like the joint Mint account because it gives us really good transparency and builds trust while allowing us to maintain independence.

In general we are fortunate to be fairly similar in our financial goals, propensity to save, and spending habits.  My SO lives in the now more than I do, but it's an excellent balance to my need to plan and control.  In reverse, I'm much better at paperwork and minutia so when I make my roth IRA contribution each year or rebalance my 401k I mention it to my SO.  When we were looking to buy a house both names went on the mortgage and the down payment would have been split evenly along with the monthly payments.  The paperwork, research, house hunting and so on also all got split down the middle except for when I was out of the country on business.  (Yes,  I did that twice just after we'd decided to put in an offer on two different houses. To my SO, you're the best ever.)

What's your system for managing money with your significant other?  Does it work well for you?

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  1. My husband and I have a his, hers and ours approach. I handle the day-to-day, short-term finances and he handles the long term planning. Before we got married, it was a little more muddled.

    The timing of this post is amazing. I was planning on writing a couple of posts for my blog on how my husband and I handle our money. Thanks for the reminder and inspiration!

  2. We have his, hers, and ours accounts. We split joint expenses 50/50 and pay those out of the joint account, and then we pay individual expenses individually :)

  3. For daily expenses we have one checking account and adult "allowances". This is the sum of money that each of us are allowed to spend without consulting the other for the full course of the year.

    Thus, when the money is spent it is visible in the checking account and tracked in a spreadsheet. It has been amazing since we are able to arrive at a sum for each of us, and a way to track in Excel so that each other could see where we are at during the year. Yet, by having it funnel through the checking account, we see what is of priority or interest to each other and it has had the effect of deepening our relationship.

  4. I recently got engaged and this is a topic of conversation now. I always assumed we'd do joint accounts, but I also know that if I see a lot of spending, I'll bring it up and we'll get into fights about it, so maybe making some guilt-free spending money in each of our accounts is the way to go.

  5. Nice article and sounds like you guys have a great team. Your formula is fair as both of the partners are almost equal. How would it work for a stay at home mom or dad or a partner who makes a certain percentage more than the other partner?

  6. Full discloser he works full time so that I can stay home with our 2 young daughters, but I plan to go back to work once they are in school.

    My husband is a excel spread sheet lover. He also has set up Mint accounts. He is basically better at handling the money better than I am and we both realized it. So he has made it as easy as possible for me to be accountable for our expenditures, retirement, monthly expenses, big expenses, stock, etc. (yes he totally rocks).

    He created a spread sheet that I enter our daily expenditures into (also I track where our money is going and if it is meeting our budgeted allotment). Our monthly fixed expenses come out automatically, but they are still on the sheet. Our mortgage calculator and all other things are also on the sheet. So we both no what is going on, what it will take to save up for a big purchase, where we are on paying off our mortgage and school loans (our only debt), etc. It is fantastic and keeps our marriage healthy in the financial area.

    The spreadsheet is named Budgenator :). Money truly was the only area our marriage had big issues in and my rockstar husband figured out a way that we both could be accountable and have control. I love him big time.

  7. Jana - I think we'll move to that sort of approach long-term. A lot of joint goals around here!

    Jackie - I do like being able to have completely individual expenses.

    Super Frugalette - Interesting way to jointly prioritize. I do think it is really important for relationships.

    Daniel - Congrats! I'm sure you'll find something that works for you.

    Buck Inspire - I am happy with our team :) As for if we don't make the same, that'll be happening in the next couple months when I head to school, but I think we'll still be splitting necessities 50/50. I've budgeted for it and I think that's how I'll feel the most comfortable. Long-term that answer may vary. Good question.

    tiffany - Go spreadsheets! Love "Budgenator" :)

  8. Guess we are old school as we have everything in joint names, with informal agreements on what we should consult each other on - dollar limit wise.

    It has always worked for us and eliminates a lot of the tracking it seems like you would do if you tried to separate it out individually.

  9. Marie - I think we'll be headed towards your system eventually. The tracking isn't so bad since we just have yours, mine, and ours Mint accounts to track spending.

  10. My husband and I have had separate accounts the entire 16 years of our marriage. It was because I had kids from a previous marriage with their own expenses. We'll transition to joint accounts in a couple of years as we move towards retirement. No reason to keep them separate now.

  11. Being a newly wed, I should know how to deal with these kinds of things. Money is not important but necessary so I have to deal with it assuming my partner would help me.

  12. I think 50-50 split would be good.