Merging finances - how much to contribute to the joint account?

[Anonymous]

Anonymous wrote:OP, you just need to figure out what works best for you. Clearly there is not one answer from the posts.

Before we had our child, each of us just paid specific bills and just worked it out. It wasn't a big deal. Post child, I ended up leaving my job and we just use one joint account and one main credit card. I do most of the shopping and bill paying so it is just easier. We kept our premarriage savings separate and we contribute to a Roth IRA for me every year.

OP here - I have started to make up a budget (giving YNAB a try), and we plan to set up joint checking and a joint credit card to use for most of our spending. 'Til now we've just taken turns paying for things, and figured it all shook out in the wash. Going over our respective credit card statements from the last few months, it's been a real eye-opener! I realized that I've been spending twice as much on groceries as my husband (though I know that in some previous months he's spent more), and also that I've been very wasteful with eating out at lunch. So I need to start following my husband's example of packing a lunch every day, and once we throw our money in the communal pot, it won't matter who's shopping for groceries. We're preparing to buy a home (our current mortgage plus condo fee is only $1200) and our baby is due this fall. Feels like jumping off a financial cliff; hopefully the water's not too shallow below, but we'll make it work!

Thanks everyone for all the great advice.

[Anonymous]

Figure out what types of expenses should come out of your seperate accounts (just fun spending?) as opposed to your joint accounts and draw up an overall budget that includes daycare and other baby expenses. I would give each spouse the same dollar amount as "fun spending" rather than a percentage of individual income. How are you going to deal with the ups and downs of DH's income? I think DH should have a separate business account, and should talk to an accountant. His "allowance" should be seperate from his business expenses.

[Anonymous]

Anonymous wrote:100%. All of it. There's no "yours" and "mine." Only "ours." When you marry, you become a single financial unit.

+1

[Anonymous]

Anonymous wrote:Ignoring the wacko judgmental "WE ARE ONE AND TRUE" bunch....

We basically looked at all our monthly bills and came up with a number to cover that plus a decent cushion. And even though our incomes aren't exactly the same, we put in the same amount. (On a HHI of about $230k, we each put in $3k a month)

So if one spouse feels the house needs to be painted, but the other disagrees, who pays or does it come out of the joint money?

[Anonymous]

Anonymous wrote:I'd be curious to know how old people were when they got married and then whether they do joint or combined finances.

We do 100% joint, but we have been together since we were 20 and barely had two nickles to rub together. At first we needed every penny that either of us earned just to keep the lights on!

I certainly don't judge people that do things more separately, it just never worked out that way for us.

We are 100% joint. I had several hundred thousand dollars when we married, he had negative net worth. He was 33, I was 31.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We merge 100%. But we each get an allowance that we use for our own personal stuff--social stuff with friends, my hair, clothes shopping, his golf trips, etc.

So sort of the opposite of your idea, but in a way we have joint and individual monies.

This is what we do too. Essentially we're paying into the family first, and then getting individual shares of the disposable income to spend/save as we please. We each get the same 'allowance' every month, even though our incomes are very different.

We have done this forever (15 years of marriage). Everything goes into the joint accounts except we each get $200 a week direct deposited into our individual accounts. That money is used for "walking around"--dry cleaners, gas, lunches during the week--plus personal spending on hobbies, books, music, concert tickets, whatever. For us, that amount has always worked so that we feel we have some autonomy over our own spending but basically anything for the household is a joint effort. We have sometimes made very different amounts and sometimes made the same.

You have $1600 a month that doesn't enter into your financial planning? You must make high six figures or more. Wow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We merge 100%. But we each get an allowance that we use for our own personal stuff--social stuff with friends, my hair, clothes shopping, his golf trips, etc.

So sort of the opposite of your idea, but in a way we have joint and individual monies.

This is what we do too. Essentially we're paying into the family first, and then getting individual shares of the disposable income to spend/save as we please. We each get the same 'allowance' every month, even though our incomes are very different.

We have done this forever (15 years of marriage). Everything goes into the joint accounts except we each get $200 a week direct deposited into our individual accounts. That money is used for "walking around"--dry cleaners, gas, lunches during the week--plus personal spending on hobbies, books, music, concert tickets, whatever. For us, that amount has always worked so that we feel we have some autonomy over our own spending but basically anything for the household is a joint effort. We have sometimes made very different amounts and sometimes made the same.

You have $1600 a month that doesn't enter into your financial planning? You must make high six figures or more. Wow.

Hmm. I was the one that posted this. We've each gotten this allowance since we got married and our HHI was $80K, but we didn't have kids then and rent was $600 a month

I guess other people budget for things like lunches, dry cleaning, haircuts, gas, and clothes…part of the reason we've kept this system is because that amount has always covered each of us for all of those little purchases, so we don't need to factor them into the household budget. If we were buying expensive clothes for some reason, like a new coat or a new suit, or if we had a major car repair that would come out of the joint account but mostly any spending on ourselves comes out of our personal accounts.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ignoring the wacko judgmental "WE ARE ONE AND TRUE" bunch....

We basically looked at all our monthly bills and came up with a number to cover that plus a decent cushion. And even though our incomes aren't exactly the same, we put in the same amount. (On a HHI of about $230k, we each put in $3k a month)

So if one spouse feels the house needs to be painted, but the other disagrees, who pays or does it come out of the joint money?

They probably do the exact same thing that joint funds people do. Discuss it and come to a compromise (ok, we can paint but we keep the refrigerator a few more years or don't get that new TV we were talking about.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:Ignoring the wacko judgmental "WE ARE ONE AND TRUE" bunch....

We basically looked at all our monthly bills and came up with a number to cover that plus a decent cushion. And even though our incomes aren't exactly the same, we put in the same amount. (On a HHI of about $230k, we each put in $3k a month)

So if one spouse feels the house needs to be painted, but the other disagrees, who pays or does it come out of the joint money?

I'm the PP. In our household, if that came up, I imagine that the house wouldn't get painted if one disagreed. Or, if the one who wanted it painted argued so strongly and the one who didn't didn't really care, it'd end up getting paid for out of the joint account. Or the HELOC.

Now that I think about it, this scenario has actually come up--DH wanted new floors, and I was pretty ambivalent (cost, hassle, etc). Even moreso when we went looking and to get it done with the hardwoods we wanted was priced at about $14k. I gave in, since he wanted it so much, and we put it on the HELOC--and it completely changed our house. Fabulous. (So glad we did it when we still plan to be there for a while instead of waiting until we're about to move. How great to get to enjoy them.)

But when I wanted a new car to replace my 9-year-old one, that was my money. I would never think to try to make that a joint expense, since we each have our own cars. And in a case like that, it's on me to determine if I can afford the monthly payments while still honoring the household obligations, etc. I talked it through with him--not like I just ran off and did it--but in the end it's my responsibility. Just as his car is his responsibility.

I think income and net worth do play into this--it could be wildly different if the decision to paint the house (or get new floors) would wipe out savings, make us cut cable, stop eating out, etc.

It also helps to have similar spending patterns and approaches to money. We both max out our 401ks, put away extra in our own small brokerage accounts, pay our personal credit cards in full every month (in addition to the joint cards), and live a comfortable life.

We've done it like this for nearly 20 years, and I can't think of a single argument about money. (We also have no kids.)