Friday, June 11, 2010

Money Matters

I'm almost 100% sure that you and I have had this conversation before. It seems vaguely familiar. Only, I can't seem to find evidence of it so that means... we get to have it again.

The Money Talk

More specifically, what works for you?

As you have all probably figured out Jim and I are getting closer and closer to making that big jump into sharing a living space. And out of all of the things that come with that, having someone in your space, having their mess, sharing chores, sharing TV time, etc. Nothing... and I mean nothing... comes close to terrifying me as much as the money talk.

When FOtB and I moved in together all of our expenses were simply that... our expenses. He signed his checks over to me and I paid bills and doled him out an "allowance" of sorts. In terms of the one checking account and paying all of our bills together aspect this idea worked fine. In terms of the "allowance" aspect I hated every part of it.

I refuse to become the parent in a relationship again. I don't want to be the dolor out of funds. Jim is working, I am working... we should be making financial decisions together. And to our credit, after oh.... 5 hours of talking about this... I think we have figured out that when we are married there will be a yours, mine and an ours account. All of our checks will go into the ours account. Then a certain amount will go into each of the yours and mine accounts to be spent however we see fit. No accountability money. This removes the "allowance" feeling and brings my blood pressure down about 20 notches.

However, there are still a few parts of this that give me slight heart palpitations. And please, go into this understanding that I am a classic worrier/over thinker. But here are my questions/thoughts.

Please dear Internet tell me what works for your family.

- Do you have a yours, mine and an ours account? If so, how does it work? Just a house account or is all of the money in one account and just fun money moved to the separate accounts?

- What about expenses before the marriage/relationship? Did your spouse/significant other take on your credit card debt or leave you to pay that on your own?

- What about children? Jim says that once he moves in Zack is 100% his son. No questions asked. Yet, I still feel slightly odd asking him to pitch in for daycare. Should I just get over it or should that be something I keep on my side of the tote board for awhile?

- What about Bonuses/Tax Refunds/Side Jobs/Extra Money, etc.? I've seen this tear some couples apart. I've had to do analysis's to tell people how much of their refund goes to which spouse and I know couples who have had fights about if it is the husband's bonus to spend on his fishing trip or their joint money to pay for the landscaping. My thoughts on this.... all of this is joint money. Every dime earned or refunded to a couple when they are married belongs equally to both people and should be put in the joint account and a decision should be made jointly about how it is spent. If I get a bonus at work, it is extra income for our family. Maybe we have a bill that needs paid, maybe we decide that we want to do something fun with it but the point is it is not my money to go spend however I want. Yes it is extra, but it is not MY extra. Your thoughts??

- What about big purchases? Is there a dollar threshold at which you must talk to your spouse about a purchase? Does it matter if you have separate accounts or if you share an account? If you share an account but have fun money accounts and you save your fun money for a year for a new set of golf clubs is it your fun money to do with as you want or you need to still discuss it?

If you and your significant other/spouse keep separate accounts: What about these things??

- When you go out to eat who pays? Do you split it? Do you do every other person?

- How do you do groceries? Every other time someone buys? You spit them down the middle each time? Does one pay more because they have children that they brought into the relationship?

- What about other stuff? Household items, bathroom items, etc. Do you buy our own? Do you make a joint fund for those items or one person pays the other person back for them?

-What about home repairs, appliance fixes, major home purchases, etc.?

As you can see, I have more questions than answers. I know that no one strategy works for every couple, and I know that Jim and I will have to figure out what works best for us but my little CPA mind would feel much better if I could at least hear what works/doesn't work for other people out there.

So... spill.... Please and thank you!! :-)


Bree said...

My husband and I have only an "ours" account. He works full-time and I stay home, and work a couple of days at Potterybarn. So all in all I don't contribute a lot of money into the account, maybe $500 a month. His checks and bonuses are directly deposited into the bank and then I pay all the bills. I'm pretty sure if you asked him how much money we have in the bank, he would say he doesn't have a clue.
If I go out shopping, he rarely complains, and if he does he only says "I see you went shopping again." At the same time I would never spend over $300 on something without discussing it with him first. He trusts my judgement on spending just as I trust his.
This is how its been with us every since we moved in together, and for whatever reason it works. I wouldn't have it any other way.

Lindsay said...

Wow, the word of the day is TRUST!!! You must start to learn the meaning of it. We have one bank account and have since we got married. When I was still in school basically it was Tim paying for everything but we were both okay with it. He pays all the bills out of that account. I trust him to keep it balanced. I only know the balance when I get money out of the ATM and get a receipt. We don't live anywhere close to paycheck to paycheck so I never have to worry that what I am spending is going to break the bank, unless I went and paid cash for a new SUV. I still have my own credit card (we both don't carry credit card debt) and I keep my own credit card so that I can make purchases with it if I need to that I don't want him to know about first before he gets them like his presents but the balance of the credit card is payed off each month from our joint account. He has his own credit card also. He never questions the bill whether it is 200 to 1500 per month because he trusts me that I don't blow the money and what I spent that month was on necessary things. We have an agreement that any one purchase over $100 we will discuss with eachother but there usually is really no discussion, it is always "I don't really care, if you want it" If we spend $300 total on supplies and food at wal-mart, we don't discuss that. My opinion would not be to do a yours mine and ours account because then it is still like you are giving each other "allowances" There are some guys out there that know how to save money and spend reasonably. I think he has lived this long on his own and as long as he is not in massive amounts of debt, I think he has proven that he can manage money appropriately

kbreints said...

When Dan and I moved in together we both still had our separate accounts. I had a TON of Debt and we worked together to get rid of it. We knew that we were working towards a common goal of being debt free.

We each had our own credit card that had a lowish limit that we used too.

When we got married we got our joint account. One account. I have always been the bill payer-- but he always knows what is there. I simply pay the bills.

Of course things are different now that he has business accounts.

The main thing is, don't over think it. I know that will be hard for you. But if you trust him, and he trusts you-- then weather you pay MORE then he does in a month for groceries does not matter.

Don't put 'pre' set rules on things... go into it with an open mind... I know this will be hard for you.. but really... if you love him and trust him-- then the money part will work itself out.

You are all working for a common cause...your family.... then you should both be responsible enough to realize this before buying something that the other MAY not approve of.

Breath Heather....this is a different Man. You are a different Woman.

KimN said...

We have and have always had one account. All money earned is "ours" both when I was working and now that I am not. I pay the bills and run the budget but that is because I want to, but I always tell Ben where we stand. We would both consult each other on big purchases but we don't really make many of those. Truthfully, money has never caused an issue between the two of us. Just as these are "our" children and "our" house and "our" possessions. The money is "ours". The whole yours, mine, ours split sounds waaaaaayyyy to complicated to me and has the potential to become a sticking point. However, given your history, I can totally see why this would freak you out and clearly there is no "right" way for everyone.

Anonymous said...

our home is an "us" home. If you have a joint account,,,,,,,if you both put in your checks, then how can you tell who pays for dinner? who pays for daycare? Who pays more of this or that. It's so much easier. No wondering about how sidejobs, or bonuses are divided up. Give this a chance to be a real union. Based on trust and togetherness. The one rule we have at our home, that I can't stand to do without is,,,,,,if you're gonna spend over 100 bucks, discuss it even briefly with the other. Not so that you can be told yes or no, but with a joint account, and in our case, two separate debit cards attached to that one account, it helps to know. Unlike Lindsay, we DO live paycheck to paycheck LOL. We live carefully and very planned. I say, "Let it be good", Heather. Just let it be good. Then wallow in it.

Anonymous said...

I agree 100% with Lindsey. It is a matter of trust. If you trust your spouse to make responsible decisions there should be no issue with keeping all of your money together. You are one team working toward a common goal and if you are going to enter into that relationship you should trust your partner not to 'sabotage' your financial plan.

I have never once questioned my husband about money he spends and he has never questioned any of my purchases. We both know that we aren't irresponsible with money and don't buy things we can't afford.

I think putting your money in separate accounts has the opportunity to devalue one spouse. If you decide as a family that it is best for one parent to stay home with the kids, they will have no income. Does that mean they are 'less valuable'. Should the other spouse 'pay them a salary' for providing childcare & maintaining the home? What if one spouse makes considerably more money than the other, does that mean they are 'worth more'? It also says, "This is my money and I can take it and leave at any time if this doesn't work out."

That is just my humble opinion. I would NOT advocate pooling all assets with someone I was not married too, even if we were living together. But if you are married. Forever mine, forever thine, forever ours.

:-) Amy

Kaycee said...

We only have an "ours" account but it is subdivided for specific things too. All money we earn deposits into checking. From there some auto-transfers to different savings accounts. We have one for our mortgage (which our payment auto-transfers out of too), one for our daughter's college savings, one where we save up for large yearly expenses (car insurance, Christmas, etc). We also have one where an allowance of sorts is auto-transferred. We 'give' ourselves an allowance every Friday that is totally spent however we want throughout the week (spend it, save it, offer to buy pizza for the family one night, whatever). As for the main checking and the rest of the bills we run a budget spreadsheet in Excel. We each know the monthly allotment that way for each category (grocery, repair, gas, fun, etc). We try to pay attention to that and let each other know about major purchases (ex. my husband has to repair our lawn mower, he let's me know how much so I don't buy something not 'necessary' out of repair that month that we could wait on). Pretty much any major purchase is discussed before either of us buys it. Even just a casual - I was thinking I would buy some new shoes since mine are worn out. That way if someone knows something about the budget expenses for that month we can make sure we dont' go over the budget. Bonuses, tax-returns, etc all go into the "ours" checking account too. We catch up our budget first (we habitually go over in groceries - it's so frustrating!) and then discuss what we want to spend the rest on (vacation, a fence for our yard, new clothes for the family, etc).

We definitely share everything overall and don't make budget decisions based on who earned the money or how much. It all goes in one big pot to support our family and we decide together how best to use it. Once in awhile we'll take a bonus and just split it and use it however we want individually - but even then it doesn't matter who earned the bonus or where it came from, we split equally.

I hope that helps you a little! I think it is really smart to think about these things ahead and just make sure to keep talking to each other to figure out what works best for you guys! Good luck!! :)

Kaycee said...

Oh and in my super long comment (sorry!) I forgot to say that we just absorbed any debt either of us brought in (which in our case only my husband had debt) and worked to pay it off together. It never bothered me that he brought debt with him, the choices he made were smart and necessary - and even if they weren't I love him. I don't mind working together to make our life better and debt free. Just made sense to me to put all resources together and go from there.

Wolvers said...

All great questions and concerns. I'm kind of in the same boat as you but more unexpectedly. My boyfriend's house got broken into for the second time in 5 years, and it made him sick so he moved in with me. He still has a house payment and bills, and so do I. So far we are keeping everything separate. He's also going to school and will have that debt, where my college is paid for. So far we've been splitting groceries, trips and gas (he drives to his family functions, I drive to mine) etc. We don't have the kid factor yet. He's in the process of fixing up and selling his house. When that happens he doesn't want to pay rent, but does want to help out. You were both making it separately on your own, so have him help out with whatever he was paying before on his own, and you use that to pay down the morgage on the house. That's what we are going to do and it seems to be working so far.

Anonymous said...

We have several "ours" accounts. 1 main checking account where our paychecks are deposted. One savings account specifically for the mortage, every paycheck a 1/4 of the mortgage is automatically moved to that account and then there the mortgage gets paid from it. We have another general savings account that gets 25 dollars a paycheck moved into it. Each of the kids of a savings account that gets money automatically moved to it. Our stock brokerage account automatically gets money moved to it.
Everything is ours. I'm the main bill payer, but he does analysis every month on what came in and what went out and where it went. We talk to each other about all "big" purchases, and what is "big" depends on where we are in the month or if we've had any unexpected expenses lately.
You guys need to find what works for you two/three as a family. Every family is different based on the "money personalities" of each person involved. What sounds great for me, or for another person may cause huge issues or fights or tension for you guys. This is a conversation you need to be having with Jim...