merging money when you become a family

[Anonymous]

My husband and I have, until now, kept our finances separate. We write each other checks and/or take turns paying bills to balance shared living expenses, and we have one joint bank account where we've parked wedding gift money that is earmarked for a downpayment on a home, but but otherwise our money is completely separate. Now that we're expecting our first baby, I know we'll need to merge - at least to some degree.

Beyond a joint credit card to be used for all things related to our child - supplies, medical copays, etc. - I haven't come up with anything. Maybe that's enough?

How have you made it work in your family?

[Anonymous]

Will you be using daycare/nanny? Where will that money come from?

[Anonymous]

My husband and I basically make the same amount of money, so we pool everything together and it works for us. We don't even have separate accounts anymore, but we married right out of school and so basically came into the marriage with 0 dollars, equal debt, equal salary.

Two solutions I have seen that seem to work for couples who arent' comfortable with total merging:

1) combine a set percentage of your income into a joint account and all family/household expenses go through that. The percentage is useful when there's a big discrepancy in salary.

2) combine all money into a joint account, but each partner maintains a separate account with "their own money." My boss, who makes the same as her husband, does this and they use their separate accounts for fun stuff like girls' weekends, golf trips, spa treatments. Otherwise, they manage the household together.

[Anonymous]

Anonymous wrote:My husband and I basically make the same amount of money, so we pool everything together and it works for us. We don't even have separate accounts anymore, but we married right out of school and so basically came into the marriage with 0 dollars, equal debt, equal salary.

Two solutions I have seen that seem to work for couples who arent' comfortable with total merging:

1) combine a set percentage of your income into a joint account and all family/household expenses go through that. The percentage is useful when there's a big discrepancy in salary.

2) combine all money into a joint account, but each partner maintains a separate account with "their own money." My boss, who makes the same as her husband, does this and they use their separate accounts for fun stuff like girls' weekends, golf trips, spa treatments. Otherwise, they manage the household together.

PP here. I also want to note that you will both need to understand early on that there will be a lot of expenses related to your health that will come up due to the pregnancy/baby. Maternity clothes, doctor co-pays, nursing supplies, and continued health care expenditures (I had a very expensive two years following the birth of my first due to nursing issues, breast engorgement leading to need for mammograms, etc, and eventually some mental health treatment). Those should all be family joint expenses IMO.

[Anonymous]

We are basically setting up another checking/savings account for baby, and we contribute equally to it. We will use the check card/checks for doctors bills, childcare, activities, clothing, etc. etc. and it also helps us track expenses for how much a baby is really costing. The savings account will be for her long term interests too.

To avoid nickle and diming everything for her, we are just factoring in another $200 a month to the household grocery budget to cover the extras we know we will need to buy.

To determine how much you contribute to the account - use a similar manner to how you divide up household expenses. For us, we basically estimated costs for everything, and we make sure that that amount is deposited each month.

Does that make sense?

[Anonymous]

Well, based on a lot of the posts here about how couples fight about money, you need to talk to your H.

1. If you are both on the same page about money, it's just easier to have one account. Personally, I feel a couple who can maintain a joint account without arguing too much about $ seem to trust each other more.

2. If you have different spending habits and can't come to an agreement, maintain separate accounts, and I'd say put a % of joint income into each of your accounts for spending $. If you need to make it equitable, then put in a % based on your % of HHI. But be aware, if you ever decide to be a SAHM, that will be harder on you.

[Anonymous]

OP here - thank you, this is really helpful.

I am salaried but my husband is self-employed and his income varies from year to year. Sometimes he makes more than me, sometimes less.

I'm not sure we can afford a nanny or daycare, at least not for a while. I'm hoping to be able to work from home a few days a week and pay a college student to be a "mother's helper" while I'm there. My Mom will take the baby one day a week. Not sure what we'll do the rest of the time.

[Anonymous]

we hadn't merged our finances entirely until our daughter started daycare, either. We both had some debts we were paying off and things of that nature and it was just easiest to keep our separate checking accounts until that point. We went to the bank the first day we took her to daycare to open the joint account. It just seemed like it was time.

At this point, all checking and savings are joint. We got a financial planner involved when our daughter was maybe 9 months or so to get 529s and such started.

[Anonymous]

We have a shared checking account and credit card for all house bills - rent, utilities, lawn service, daycare, groceries. We have a budget and we each contribute proportionally. For example - if our monthly budget is $6k and I make $150k and he makes $75, I contribute $4k each month and he contributes $2k.

Our "house down payment" money and emergency fund are in a joint Vanguard account. We both had investment accounts there when we married and we joined them.

We each have our own checking, savings, and credit card. We keep our retirement separate - but my higher income subsidizes him being able to max out his TSP.

We pay for our own clothes, gifts, cell phones, haircuts. We're not super careful about keeping things even - which is to say we pay very little attention. I pay for some baby clothes out of our joint account and others out of my money. He pays for dry cleaning on the house card even though it's mostly my clothes. He often pays for dinner out of his account even though we agree it's a house expense.

[Anonymous]

We didn't share money - he paid for some stuff, I others until I quit my job/stayed home. Then we just used our joint account that we used to transfer money back/forth as our primary account and put his paycheck in that. We have one shared credit card. We have some separate accounts but mostly from pre-child days or savings. If he spends wisely, one account is easier, but if not, then keep money separate.

[Anonymous]

We have separate accounts and one joint checking/savings that we can transfer into or out of. We've found it easiest to just divvy up the bills and expenses and operate mostly out of our individual accounts. For anything unusual, like vacations or home repairs, we'll take it from the joint account.

This probably wouldn't work well if people were on a strict budget, since expenses can fluctuate from month to month.

[Anonymous]

My husband and I have been married for two years and still haven't merged finances. Honestly, it sorta bugs me because I end up paying almost everything b/c I earn more. I think we will end up pooling most everything in a joint account in the next few months before the baby comes (at least I hope we get around to it). I'm envisioning that we both keep separate accounts for our own slush funds, etc., but that the majority of our earnings get pooled in a joint account. Looking forward to getting more ideas from this thread...

[Anonymous]

I can't imagine writing a check to my wife. In our house, all expenses are "house" expenses, and they're all paid on the joint credit card, which is paid by the joint checking account. The only separate accounts we have are retirement accounts.

[Anonymous]

When we married, we had separate bank accounts and credit cards. We put each other's names on the accounts as joint holders, but otherwise continue to treat the accounts as functionally separate (he doesn't even have the online banking pw to "my" account, I don't think, and I rarely check "his" account). I also added him to my Am Ex account as another cardholder, which can make a lot of sense if you have a card with an annual fee - at least for Am Ex, the fee stays the same, but you get two cardholders generating points.

I pay for just about every expense from mortgage to credit cards and most bills from my account, except for a couple that he set up as auto-pays from his account. Obviously this runs down my account quite a lot, but I don't mind because we treat his account more as our investment account (our financial adviser manages that one).

This works for us because we're generally on the same page about financial matters and have similar spending habits. I agree with PP that that's really important. We also made the same amount of money for years and I have no doubt that helped. DH recently accepted a lower-paying job and we're expecting our second, so maybe our attitudes will change, we'll see.

[Anonymous]

Anonymous wrote:I'm not sure we can afford a nanny or daycare, at least not for a while. I'm hoping to be able to work from home a few days a week and pay a college student to be a "mother's helper" while I'm there. My Mom will take the baby one day a week. Not sure what we'll do the rest of the time.

Honestly, this seems like a HUGE reason to come up with a much more integrated financial plan. Whether you keep some funds separate (for "fun") or not, it seems that you need to do some serious financial planning together.