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Combining finances (mitchjlee.com)
112 points by dontmitch 23 days ago | hide | past | web | favorite | 105 comments

We pretty much do this, although it's a little subject to the same thing that "unlimited PTO" is - one person may feel guiltier about spending money than the other and it may crop up in various ways.

The only thing we haven't quite figured out how to account for yet is that we are occupying pretty 'conventional' roles by choice and by practicality. I can make a lot more money for many reasons, most of them have nothing to do with me, and they certainly don't have /anything/ to do with me working harder or being more valuable than my wife. It is what it is, and we mostly are okay with it.

However, because a ton of my wife's work is still unseen and undervalued (by society, and sometimes by me) and even though we have both agreed that she shouldn't work a low paying job she hates just for the sake of working, and even though we both see that much of her labor is in the traditionally feminine realm of home-making, emotional support, maintaining social connections, etc (which are all very valuable! They make my life immeasurably better! I couldn't afford to pay for them at market rates!)

So our arrangement works well for us if we stay married of course, yet if we don't, I am arguably in a much stronger position of being able to make money, still have an intact work history, etc etc. Yes historically this is where alimony comes in, but it is still hard to grapple with. You never want to think about your relationship ending, yet you also want to work together to make sure that the choices that you have both made that work best for you while you are together don't become something far worse in retrospect if you choose to part.

It’s a very real concern that really comes to a peak when you get older. My mom, as well as my wife’s mom and step mom really felt the pressure of being financially dependent on their husband once they got to their 50s and 60s. It’s not only the lost earning power—even social security forces you into dependency, since your benefits are keyed to what you earned while working. The one with the most peace of mind now seems to be my wife’s ex step mom, who never had her own kids and maintained her career the whole time.

I think this skips the biggest source of tension in my household with regards to money. The only way I know to describe that is 'it's worth less to you than to me'.

For instance, I would tomorrow gladly outsource the entirety of our laundry work to a service. It would be much cheaper than other monthly expenses we have that I value much less highly. But my wife has shot that down. She has all manner of reasons why its not a good idea and none of them are related to the bare economics of the problem.

As academic economics has found, so does my family, the models need to be sensitive to lots of data that is not captured in price to make reasoning about these things workable.

Have you considered something like asking for laundry service as a birthday gift?

My wife and I have similar spending patterns, but if we had different valuations on something, I would want to be able to talk about it (express my desire), show a willingness to compromise (in exchange of a birthday gift) but in a way that respected her valuation.

Different utility functions. However ability to compromise, organize, and communicate can smooth over differences.

The flows are the easy part, the stocks are much harder.

1 partner enters the marriage with a $500K paid off house, the other enters with nothing. They divorce 20 years later and the house is appraised at $2.5M, should:

A: partner 1 receive $2.5M, partner 2 receive $0?

B: partner 1 receive $1.25M, partner 2 receive $1.25M?

C: partner 1 receive $1.5M, partner 2 receive $1M? D: other?

How does this answer change if the house can be sold vs can’t be sold? How does this answer change if partner 1 comes into the marriage with a partially paid off mortgage and both contribute to mortgage payments afterwards? How does it change if the house is underwater instead?

The problem is all of the above models are legitimate models of how to split ownership, but they’re incompatible views. So you need to reach alignment at the start of the relationship over which model to use, otherwise what could have been an amicable parting ends in bitter recrimination.

The general rule is that property owned prior to a marriage remains the separate property of that owner. So the answer to your first question is generally A.

The answers to your other questions will depend on whether the couple is in a marital property state or a community property state, because the default rules regarding marital income are different.

Yet if you take that view then by sharing in the mortgage payments partner A may have become landlord to partner B and renter’s protection might apply to partner B.

> The general rule is that property owned prior to a marriage remains the separate property of that owner.

Well, that's one possible rule; it's not the only/universal one.

(As a traditional ceremony might say, "with all my worldly goods I thee endow". That doesn't sound much like maintaining separate property...)

Traditional ceremonies aren't contracts.

Not sure why you've been downvoted. This is how it works in my country and I think this makes sense.

Because the topic is not "what's the default legal situation".

But if you don't discuss beforehand and come to an agreement, the default legal situation applies.

If three was a mortgage on the property the payments on the principal are presumably community property, and the appreciation of that post of the value.

similarly, consider one partner entering with $100k of student loans, or $20k of credit card debt.

This is what my SO and me have been doing for 8 ish years now and it's great. We call it "pocket money". I can't complain when she spends it all on shoes and bags, she can't complain when I spend it all on beer and hamburgers.

When we were poor, we both only got a little pocket money each month. Now that we're richer, we both get more. I buy hotel breakfasts now sometimes (the buffet ones), on normal work days, in my home town. It's terribly decadent but hey, it's my money. Other people buy iPhones. I have nobody to answer to but me. It's lovely.

I warmly recommend pocket money.

>I buy hotel breakfasts now sometimes (the buffet ones), on normal work days, in my home town.

Where do you find the time to clean all your monocles?

I usually ask the maid to do it.

You need to upgrade to a valet.

Does it lead to overspending? Since you have your pocket money - then you need to spend it?

If budgeted for properly, this should in their reduce overspending because the amount you can freely spend is one you've previously accounted for as "an appropriate amount."

My wife and I use the same system, and I would say no. We both tend to save ours and then spend more some months than others.

I think I get too little of it for that :-)

What happens if you spend your pocket money on end-of-life care, and then your SO wants some too?

End-of-life care has nothing to do with pocket money.

My wife and I do the share model. However money is a very emotional thing.

The only thing I’m strict about is big picture. IE, Do we have enough savings? Are we on track of retirement?

If I focused on keeping a fun money budget things would get stressful. IE is her hair, nails from fun money? When I take the kids to laser quest is that my fun money? Did we really need new placemats? Should that be fun money?

When there are no kids and both work full time it’s simple enough I guess. But when you are a parents it just gets too complicated.

We've had separate finances for 12 years and it's seemed to work well for us. We combine the "I've got it" approach for little things and "Let's split it" for large shared purchases. It leads to healthy communication and negotiation on large purchases, plus personal responsibility of our own incomes, expenses and savings. Large purchases that are not shared can be subject to opinion, but never control. Of course, there's no substitute for financial compatibility.

#4 misses some other cases. My spouse and I are firmly in this category, but we also have different spending habits for sure! They buy a lot of little stuff that I don't see as particularly useful, while I don't buy anything at all for months on end, until I spend a whole hell of a lot all at once.

Should be a recipe for disaster, right?

Except it isn't. We just accept that this is who we are, and we're comfortable with that.

The author correctly notes that things can change over time, but they seem to ignore the most important thing to this entire process working: we use our words and talk about things before they become an actual problem.

Since my spouse and I have accepted this scenario as being perfectly fine for us now, our normal doesn't frustrate either of us, even though we are wildly different in our spending approaches. And when things change, we're both comfortable making changes to accommodate those changes.

Some of you might be saying "but yes, averaged out over the year you probably spend the same", and the answer is no. Not even close. I may spend 600$ on a gaming monitor with a 6 month gap on either side, but my spouse ends up spending more like 4000$ on little bits and bobs throughout that same year period. Guess what? This inequality doesn't bother either of us. Why should it? We're in this together and both of us need to be happy with what we're doing. I don't need 6.6667 gaming monitors, and the point isn't to try to equalize our expenditures. Buy what you need to make your life better, and then buy no more.

Or, at least, that has worked for us for the last 15 years. Things could change! Things can always change. But I'm not even remotely worried about that; because that's when we make dinner and sit in front of a couple laptops with a bottle of wine and work out a much more strict budget and emphasize a more restrained approach toward both of our spending patterns. It's happened before, it may happen again, but we'll be fine because we come to a consensus on our financial goals and priorities and neither of us have ever acted in bad faith with regards to achieving those goals and priorities. And if that changes? Well, a more fundamental thing has changed, and maybe we SHOULD have marital strife. And that's okay too.

The case #4 missed is "yay we have so much disposable income that really it doesn't matter, and this entire article is academic". That might be common on Bay Area-dominated HN, but not in most of the world, where I suppose this article is targeted at. I guess wealthy people don't need advice on how to combine finances :-)

Personally I find "she spends $4000 a year on stuff I don't see the value of but I'm fine with that" nearly unimaginable. I could only see myself have that attitude if we really had thousands of dollars (or euros, in our case) of net disposable income every month, after retirement savings and everything.

I don't think that's particularly fair; I think you just have to scale it to your own situation to see how you feel about it. For you, jointly spending $4600 a year on fun stuff sounds ridiculous. That's totally fine, but it's missing the point. (The parent might be ok with $4k a year but not $8k a year. Everyone has limits, and it could be a source of conflict if his spouse wants to expand her spending.)

$4000/$600 is 6.67. Let's say you spend $50 a year on your own fun purchases. Would you be ok (both financially and emotionally) with your spouse spending $333 a year on their own fun purchases? I'm of course making up the $50 number, so set that to whatever's reality for you, do the math, and see how you feel.

Maybe it works out that you're only comfortable with your spouse spending 4x what you do, or 3x, or 2x. Or maybe it's the reverse, and you're the bigger spender, and you need to find out what your spouse is comfortable with That's fine. The point of this is to negotiate with your spouse to get to a point where you're not anxious or constantly arguing about spending levels.

No, my whole argument is that that factor (your 4x, 3x, 2x) example becomes irrelevant once you're wealthy enough. Other stuff starts to matter more. My theory is that the GGP is in this position.

But when her buying 2000 euros worth of shoes means I can't get a new pair of jeans anymore then we have a problem.

I'm sorry if my intention wasn't clear enough!

You're absolutely right that right now, we are wealthy enough to be able to spend 4600$ on various "things" without either of us really batting an eye. That isn't really the important bit; when we first got started, I was making 42k USD in total comp, and she was making 26k in total comp. Our first house was 54,000 USD and our mortgage was 456$ per month.

We were not wealthy, but we were _okay_. And at that point in our lives, we still had a joint account as our only account. We didn't buy fun stuff or convenience stuff without a discussion first, and we had to discuss these things pretty much every week. That worked for us, because we still communicated, and the important thing - the thing most vital to my previous comment even working - is that we put our family first and ourselves second.

Now that my new home cost me 12 times what my previous cost me, and now that I'm bringing in about a quarter million USD a year, you're absolutely right that we are wealthy and the 4600$ isn't a major problem to us. But if for some reason it ever did happen - say, I lost my job and we relied only on my spouse's income, neither of us would be spending any money at all that wasn't absolutely required.

What I was trying to drive home with #4 is that if you and your spouse are always on the same page about what comes first; your personal desires - or your family's needs, goals, and then desires (in that order), then it works really well.

I know plenty of couples where one or more of the spouses is an incredibly selfish person by nature. Perhaps one of the other bullets in this article would accommodate that well enough, and I doubt #4 would even remotely work for them.

But for my family unit, a single joint account with both incomes going into it still works for us, even if we have very different spending habits between us - and it works for both of us really well. From our early days straight out of college making relatively low income until now where we make entirely too much, this way has worked solely since both of us are able to modulate and restrain our spending when times require it, especially since we put our family before ourselves. #4, as in the article, didn't allow for any wiggle room like that. That's okay, though, since it was hardly purporting to be an exhaustive listing and description of income:spending strategies! I just wanted to share that #4 can absolutely work even for couples without the same spending patterns, as long as they're willing to put family over self.

Maybe another way to put it: #4 works as long as neither party is overly selfish. That doesn't mean that both will spend the same, though. Equality of expenditure isn't as important as equality of happiness/contentedness. Prizing the latter more than the former is the real goal, so really - however you get there? As long as it works for you and your family, go with it!

Think of it as an investment, think of what you get in return. If you didn't have her how would your evenings and weekends be? What would you be willing to pay for that?

If the answer isn't "whooo, a whole lot more than $4k" then you have massive problems with your relationship.

Pretty much every sentence of your comment is true for my wife and I. What's "fair" is whatever everyone is happy with. I can't imagine being upset because my wife spent more money than me in the abstract.

Personally, I feel like trying to keep track of every last expenditure would just cause more and more strife between us.

As long as all our long term financial goals are being met, I'm content with what we're doing. And since they are, I am very much so content.

The article, and comments so far, focus on income only. This is the easy part. A lot of people have savings or investments going in. Perhaps one is renting and the other owns a house. This is where it gets tricky. Especially considering it would be prudent to lay plans that also work well in the event of a divorce.

My partner is what some might call a trust fund baby. Her family is fortunate enough that she need not work. She will likely receive a sizable inheritance. Her parents have shielded her from their wealth, while making sure she always has enough to be comfortable. Neither of us knows how much wealth her family holds. They are very discrete.

I come from a middle class family that spent their money and saved poorly. I took loans out to go to college. I’ve worked my way up in my career in tech and now make a comfortable salary.

This puts us in a situation I feel like this article doesn’t really cover. She doesn’t have a “salary”, but she “makes” more money than I do - however much she needs. I do not plan around her family’s wealth. That is her family’s money, and if/until we ever decide to start our own family, I do not involve myself in their affairs.

What we’ve found works for us, is simply a joint credit card. We put shared expenses on it and split it at the end of the month. We use our shared points on vacations we spend together. It is a way of treating each other as equals, and helps prevent either of us feeling taking advantage of. I maintain my own savings and retirement account. She maintains her own investments. I spend my money however I want and have my own personal card, and her the same.

If I was out a job, she would support me. If her investments tank or her money were cut off, I would support her. It’s rather simple.

The tension we face actually comes from her wealth rather than our lack of it. There are times where she would happily use her wealth as an expression of love. I would never be ok with her father buying us a home. She doesn't understand why not - I was raised to value my own financial independence. I would never feel comfortable living in a home that I did not earn.

How do couples in other similar situations handle this?

My uncle is in a similar situation. Currently he's out of a job and he's being supported by her. He told me he had difficulties with the wealth of his wife when he was younger but the older he got, the more he got comfortable with it. He made me realize how much perspective switching there has to be involved in a situation like his since they both value money differently.

Effectively you're under their families power, being "discreet" and doling out money adhoc I wouldn't view as positive, it's them maintaining permanent control. I've long thought that the approach taken by my parents with far less money was pretty good- you get an allocation at 18, more if you're using to to go to uni. If there's any left over at 21 you get the remainder but after that there's nothing more and no expectation of inheritance. I'd try to follow something like this regardless of scale, if it's a couple of million maybe set up a fund that stops at 25

I think tax might complicate this.

But, remember, familial power tapers with time, no matter what. And in time you might value the power and leverage that you have to deal with children who display a shocking lack of sense.

I see lots of choices out there, and different things work for different people... and sometimes things evolve, and like relationships the finances should / will too, even when you don't want them to.

It became clear that when my wife went back to school we couldn't sit and do math or rearrange everything all the time. We just put it altogether.

Nothing is easier when married than just putting it into one pot and it is all "our" money. It's not about who does what (maybe one day someone does more dishes, makes more money) and it's all "ours".

But even than if you have a couple with very different spending and someone is more responsible, I don't think it is bad to establish an "allowance" for everyone for as the article describes "splurges".

The important thing is to always be communicating about it.

This sounds basically like have one pot of money, but allow both people to blow some of it every month on unnecessary stuff. Which is the opposite of what a saver personality would like to do. I don't see how it would work in a relationship where one person is blowing the "fun money" every month while the other person saves it. There would still be resentment.

My wife and I do this, and while we're both savers by nature, I'm more of a saver, so I end up piling up the fun money while she tends to spend hers (I think. Mostly. I don't actually know how much she has in her personal account because I don't care)

There's no resentment because we already agreed that fun money isn't part of savings or long-term planning. And the fun money is a small enough part of our overall budget that it doesn't impact important goals.

From a "resentment" point of view, it's much better for me to have pre-agreed on $x a month that's going to be spent frivolously than it is to have a conversation about each frivolous purchase as it comes.

And I do still spend my fun money, I just spend it in larger chunks. She's more likely to spend regularly on things like lunch and events with friends, I'm more likely to save up for a while then buy a new power tool, or rent a cabin for a weekend ski trip.

> I don't actually know how much she has in her personal account because I don't care

I feel like this is a useful thing to do for people who feel like they might feel resentment (or guilt) at their partner for spending too much (or for spending more than their partner) on fun stuff. As long as neither partner goes over the fun-stuff spending limits, it just doesn't matter, and there's no reason to even know.

> And I do still spend my fun money, I just spend it in larger chunks. ... I'm more likely to save up for a while then ... rent a cabin for a weekend ski trip.

Out of curiosity, what happens if your wife wants to come with you on the ski trip, but because she spends her fun money regularly and doesn't save for larger purchases, she doesn't have enough to cover her share of the cost? Or is that just not an issue, because you'd plan it far enough in advance that she'd have time to save? Or would you just say screw it, and call it a gift to her?

Not the GP but in my relationship if both of us are doing a thing and it isn’t already a gift of some sort it’s going through the joint accounts, not the fun money accounts.

> Mostly. I don't actually know how much she has in her personal account because I don't care

If you divorce you will, since she will be taking half of yours if she didn't save anything.

The point of 'fun money' is that it isn't money that goes into savings. There's money allocated into savings before any 'fun money' allocations. Anything you have in your 'fun money' account isn't part of your savings, and can (and should) be spent guilt free.

This works as an individual as well, and is the mechanism I used to get myself out of debt. The vast majority of my remaining income after essentials went into paying down debt, or into my savings account. A small amount went into a discretionary spending ('fun money') account. Anything I didn't spend that month simply rolled over to the next month. It never went into my savings, and eventually got spent (usually after several months of 'saving' in the 'fun money' account, in order to buy a new phone / other gadget)

> The point of 'fun money' is that it isn't money that goes into savings.

This is wrong since they specifically talked about saving their fun money.

> > > > And I do still spend my fun money, I just spend it in larger chunks. She's more likely to spend regularly on things like lunch and events with friends, I'm more likely to save up for a while then buy a new power tool, or rent a cabin for a weekend ski trip.

> > It never went into my savings, and eventually got spent (usually after several months of 'saving' in the 'fun money' account, in order to buy a new phone / other gadget)

> This is wrong since they specifically talked about saving their fun money.

Saving multiple months of fun money to blow on something frivolous should probably not be the same as a savings account. That's not what the article (nor myself, nor I suspect the GGGGP) was talking about. Savings are for long term planning, for long term investments, for large scale purchases. If you need to save >12 months of 'fun money' for a purchase, then this might not be the correct approach for you, as you're right, and that's effectively a savings account at that point.

>That's not what the article (nor myself, nor I suspect the GGGGP) was talking about.

It was exactly what I was talking about actually. I'm not going to blow money period, so I'd end up saving the >12 months of 'fun money' not for a purchase at all.

Actually, I suspect oarsinsync was referring to this comment: https://news.ycombinator.com/user?id=ianferrel

Although I could be wrong. GGGGP would point to your comment, while the statement makes more sense applied to the other.

And you are going to be spending the money on a purchase, just not right now.

>And you are going to be spending the money on a purchase, just not right now.

How do you figure?

Why would anyone save money, if not to eventually spend it as the need arises?

You are wrong because fun money is to be used however you want, whenever you want by the one person. Savings here referring to the couples savings.

If you taint everything in your relationship with "if we divorce", that is not a good sign, nor is it a healthy thing for a marriage.

> blow some of it every month on unnecessary stuff.

Sounds like you are a saver. I'd like to point out that resentment can go both ways.

They addressed this in the article. A conversation needs to be had to decide as a couple how much (non-zero amount of) money is to be spent. It can easily be a low number, if that's what the couple agrees on. As long as the couple comes together in that conversation, there should not be any resentment.

If there is resentment after that conversation (as long as the agreement is followed), the "resenter" is in the wrong.

There's no way to create a budget the solves the problem of partners fundamentally disagreeing about the economic model of their shared life.

The best system seems to be to communicate honestly and openly, to be accepting of your partner's differences, to establish and allow personal boundaries, and to negotiate when boundaries seem to interfere with each other. So basically to have a healthy relationship.

I guess it depends on what happens with the saver's extra saved money. If it just gets used for larger fun purchases less frequently, there's no problem. If the saver uses the extra cash to invest and it's understood that it's still the saver's fun money, even when it comes time to withdraw that money during retirement, that's fine.

If it goes into the shared retirement accounts, then that might cause problems.

Then again, it just depends on attitudes. If you're a saver, but recognize that your partner's happiness in part depends on spending more, then perhaps you just won't care.

At the end of the day, you've jointly agreed on what the monthly allowance of fun money is, so there shouldn't be resentment. If there is, then you agreed to something you shouldn't have. If your partner can't agree to a lower amount, then you just have to accept that your financial/spending compatibility is low, and decide that the rest of the relationship overcomes that incompatibility. Or not, and then you break up.

That's the beauty of the system...each one should not care what the other does with their 'allowance'. If one wants to save, or invest, or what have you, while the other one buys gifts for your neighbor's aunt because they like giving gifts to everyone...well, so be it. It is not from the centrally held account so it is perfectly fine.

Meanwhile, that central account and the rules of expenditure are rock solid and it will remain unmolested with wild gift giving, or extravagant lunches, or a risky investment, or the burning desire to save every penny under a mattress.It is resentment free.

> each one should not care what the other does with their 'allowance'.

This is impossible in any legal system where all money saved are seen as a joint asset. This means that if one person saves their allowance and the other spends it, then in the case of a divorce all of that money will be split.

Simple. Don't divorce.

Choose someone to commit to for life and stick to them.

All this ugly divorce talk while still married is ridiculous! Poison

An easy hack around this is to not know what the balance is in the other persons fun money account. If you treat the 'fun money' as gone as soon as it is paid out, then there is no resentment.

We save some of our “fun money” for things like buying gadgets or that extra monitor I might not “really” need, don’t see why there would be resentment?

My biggest challenge, not discussed here at all, is how to force my wife into taking financial decisions. Numerous times I’ve tried to walk her through our finances, trying to make our life choices and trade offs more explicit. Yes we could move to a nicer place but we’ll have to cut down on kids activities. I feel I’m taking all the decisions myself.

Can't really force anyone to do anything. For awhile my spouse and I did a monthly "money talk" where we walked through the monthly income and expenses and talked about things coming up. Eventually they decided they'd rather just not pay attention.

This was the least surprising result. I thought "combined finances, with an allowance" was basically the default for married couples who have been together a long time and/or since they were fairly young.

Currently my wife and I just contribute an equal amount to a joint account for the mortgage and car, and the rest is basically "I've got it" in a proportional sense. It basically works because we spend less than we make, so we have savings. I'm currently out a TON of money for an upcoming vacation, but I kind of have the sense that it all works out in the end, because I am not (yet) out of money, and if I have to dip into "my" savings to pay the bills from the trip, well, from a net perspective "we" still have the same amount of money as if I asked her to pony up some to pay my credit card this month.

But of course, this fails plenty of tests, and will have to be re-thought if one of us ends up out of work.

Amongst my social group your approach is relatively unusual. A sizable fraction of adults can’t be bothered to form a budget and do bookkeeping. This always surprises me, but it seems to be true. You can’t really have an allowance system without some amount of tracking/budgeting.

Of course, most couples in my social circle are extremely wealthy by non-Bay Area standards, so that gives people a lot less direct incentive to be especially thrifty.

My parents, and my marriage, have a different system: we ask ourselves about every purchase if it’s likely to bring us as much joy as we feel the money is worth, and just don’t buy that much stuff because most things don’t seem like they’d bring us enough joy to be worth the outlay.

Then, when we want something expensive, and say “yes, a new couch will bring me joy even if it doesn’t bring you much joy”, we don’t worry about the cost all that much.

But having a non-scarcity mentality about this sort of thing is obviously a super privileged position to be in. When my father remarried, he tried this system with my stepmother and she... spent all their money on frivolities they couldn’t afford, and now he’s retired and barely has any savings.

So I don’t really recommend this system unless you and your partner have reasonably similar utility functions.

"My" approach is just the chip-in. The allowance system is what I ASSUME most people use (the one the article is advocating). I'm surprised the author thinks it's novel.

I agree on budgeting and bookkeeping. Frankly, we do neither. I buy a bigass TV because I want it, my wife buys some awesome workout gear because she wants it. It just works. But yes, it's a position of luxury to not have to budget.

FWIW My SO and me are the only people I know who do the allowance thing. My friends routinely talk about "he/she spent so and so much on $USELESS_ITEM, grumble grumble". I say "pocket money!" and they nod and laugh and don't do it because it makes them feel like children.

Doesn't that encourage waste? You seem to have decided that a certain portion of income will just be blown on random stuff.

I go with double-approval. You could call it a veto system. Both must agree before spending.

There is pre-approval for unavoidable expenses like bills, groceries, fuel, emergencies, and tolls.

You have to decide on your priorities. Accepting a certain amount of “waste” in exchange for happy spouses is a worthwhile trade for many couples, including my wife and me.

What if one spouse makes seven figures and the other is unemployed and takes care of the household? The income disparity then is too high for this, it seems to me, but maybe it's just me.

My spouse and I have a simple plan. I make the money, and my spouse spends it. :)

When money was tighter, we would coordinate more closely and more frequently about expenses and timing. Now I just maintain a certain balance in checking and we coordinate over large payments to make sure they don't hit checking all at once.

If you or your spouse is making seven figures, you shouldn't have actual money problems -- even if taxes take half, you can save half and still have 250k/year to spend; spend half of that on a $5M mortgage, and you've still got more spending money than US median income. Your money management priorities should be around limiting the time it takes to manage, unless you get enjoyment out of micro managing it.

My relationship is the same. I make a lot of money, and there's not much I want. I get a lot of joy out of watching my wife get things she wants though (which almost always makes my life better in ways I don't always expect).

Certainly when we made less money we had to coordinate much more.

Yeah, I guess you're right. I was thinking of a situation where one spouse has a high income and the other one is very spendy, but that's a pathological case, and not what's happening with me personally, so what you say makes sense, thank you.

I don't think there's any income disparity that can't be handled by the last method, where each person gets a monthly allowance for whatever, and other expenses are jointly decided on?

Mathematically there's no reason the pocket money system wouldn't work with an arbitrarily high income disparity. Is there an interpersonal issue that you see arising?

At seven figures, you shouldn't have any money problems.

I am reminded of the statistics on lottery winners...

Lottery winners have a much harder problem than those with seven figure income. A lottery winner is usually getting a single big lump sum; if you spend too much, you don't get a second chance.

Someone with a large income probably grew their income over several years (although, if you know of any career paths with seven figure starting salaries...), and have had a chance to learn that even though it's a huge amount of money, it's not infinite money. But if you do overspend one year, you're likely getting a bunch of money the next year, so you can probably work it out.

You mean the actual statistics that show that lottery winners’ happiness is enormously improved by their windfall over the long term, and they make sensible investments in their future?

Or the outliers who blow all the money on silly things and make the news but aren’t actually at all representative?

This is exactly the system that we use. The downsides that we have encountered so far:

- Pooling our money in a shared account makes it seem like we have money than we actually do, leading to overspending

- We each have different ideas of what is a necessary expense

To fix this, we had to start communicating a lot more about finances than we used to. We wound up creating a spreadsheet to track recurring expenses and calculate our monthly budget. We decide ahead of time what we're going to spend money on, and talk about it when unexpected expenses occur.

The benefits of this system seem to outweigh the downsides, so we'll probably keep doing this for the foreseeable future.

This is interesting. I looked around a bit for decent surveys or studies that break down statistics about couples who share finances this way versus using some other system, but I'm having a hard time finding any.

There are some surveys on why couples with joint accounts also maintain individual accounts, one of which seems to indicate independence is the biggest factor (38% of respondents). Only 16% said they did it for ease of budgeting, which to me seems to indicate that the system recommended by the article is relatively uncommon. [0]

For us, we keep it relatively simple. We have some savings from before the marriage in separate accounts that we use for stuff like surprise gifts or security when we need to pay something that requires a direct transfer online. Everything else comes from the joint account or goes through a joint credit card that we pay off every month.

Although our opinions still differ slightly on some long term goals that we won't have to decide on for a while, generally if there's a disagreement we just talk it out. We consult each other on expensive purchases, generally non-necessities over a certain amount. We've both supported each other through periods of temporary unemployment or income differences. Admittedly, having similar values and living in a low cost of living area helps a lot with this.

I'm not sure the system in the article would help too much for resolving expensive decisions unrelated to individual hobbies. For example, if one person wants to spend a larger portion of income on housing that requires more joint contribution, there's still a possible conflict. It does make those kind of decisions have a discussion built in by default though, which is definitely a good thing.

Overall it seems to me that the key thing is that people are having healthy discussions and making decisions together - including decisions around what to leave totally up to the other person, like the article's system does. Some conflict might be totally avoidable, but I think there's no way around just learning how to resolve disagreements respectfully.

[0] https://www.prnewswire.com/news-releases/td-bank-survey-find...

Our system: I make more, and I pay for the biggest expenses (mortgage, and previously cars and student loans before we paid those off) and have healthcare and whatnot taken from my paycheck.

She makes less but still a decent amount and pay for the smaller bills.

Every once in a while, she'll pay for a big-ticket item (like a vacation or a large house repair) out of her savings, which accumulate faster than mine, to catch up.

It works because we started together with next to nothing, so we're both big savers: Our combined income our first year together after college a little over ten years ago was probably a quarter of what we'll make this year. We both max out (or come very close to maxing out) retirement now. She has more cash on hand because I'm paid proportionately more in various types of stock incentives, so when my incentives vest I tend to sell the company stock to diversify but keep the money in investments).

We live in a small house, no kids, reasonably cheap cars, vacations are often tacked on to work trips to save money, no expensive hobbies.

I doubt I'll "retire" early but our savings mean if I decide to leave tech in a decade and become a woodworker or park ranger, I can with no monetary consequences.

Betting the OP doesn’t have kids. Until you have kids you are playing the game on easy mode

The biggest problem with the approach is large, optional purchases that effect quality of life. Things that are too big for “fun money”

Remodeling or Upgrading a house Private school for kids Vacations Vacation property Nice cars College savings Rainy day funds

One way to handle such is for both partners to agree on % saved out of the joint account and/or minimum balance

Only two of the things you mentioned (private school and college savings) are unique to people with children.

All kid-related expenses (including private school and college fund) should be considered joint expenses and come out of the shared pool of money. Parents should agree on how much to spend monthly/yearly on non-essential/fun stuff for the kids (similar to how the parents each get their own fun money allocation). If one parent wants to exceed that for a one-off thing (and the other parent disagrees), they can dip into their own fun-money allocation.

Couples without kids still have to decide what to do about home improvements, vacations, vacation property, cars, and rainy day funds. It's just that couples with kids may have less money to allocate toward those things, or have to make harsher compromises. But hey, if you decide to have kids, that's what you've signed up for.

A couple might agree that replacing the old, fraying carpets is obviously a joint expense, but the fancy car that only one spouse wants and cares about is a personal/fun-money expense. Having or not having kids doesn't change that.

> Until you have kids you are playing the game on easy mode

Ha. That reminds me of "If you want to learn to get up early, have kids." (altough more accurately the school district sets your wake times).

In Prudent, you can combine multiple journals. Your wife can maintain a separate journal while you maintain another one. This way, both parties can do whatever they want or agree to some set of rules. Most importantly, at any time, you or your wife can see the combined financial strength, or individual financial situation. Awareness of both can make a big difference in making important financial decisions. Avoid being penny wise, pound foolish. The combined report (of savings, etc.) gives both of you better insights on the financial journey that you can embark together (i.e. buying a house, having kids, moving cities, etc.)


We just have joined everything. If we split, it would be 50/50 but I'd probably end up giving her most of the stuff, I already find that we have way too much stuff as it is. I like the simplicity of it all even though it might not be advantageous financially for me.

Personally, I find that "fun money" is the easy part. We both splurge from time to time but it is reasonable for the most part. The hard part is the big shared expenses which you'll never be able to cover with "fun money" or it sucks to do alone (house renovations, cars, trips, entertainment etc.) for which 1 partner doesn't see the value of the shared expense.

I'll bite it.

With nowadays lifestyle and state of Law doesn't make sense to marry in the traditional sense. Ok you can do a pre-nup but that is a huge hassle for the couple.

People value stuff differently and on the long term ignoring that is a certain path to regrets. So the best, IMHO, each one should keep legally their stuff with some joint ventures on common projects (house, etc). However I'm not saying to strictly split every expense or be stingy. I'm happy to pay most of daily expenses, holydays or extras. I just don't want to wake up one day feeling used neither legally get stuff from my partner or her family.

Me and my boyfriend are students. I have a good student job, while my boyfriend has a large amount of savings. The last system here would just amount to him giving me his savings.

Our system is that we have a shared account, and we keep track of how much money we have both put into that account. I've put in about half what he has put in, because he spent a lot of money when we bought all of the furniture etc. for our rented apartment, when we moved in. So then I just put in a bit more than him each month, until we reach the same level.

While I’m sure it works for the OP, I’m guessing most other options would work.

My take is that this approach just moves the discussion to what qualifies as “fun money” or should come out of the shared account.

Maybe it’s because we are too young yet, but me and my SO just have a shared account and contribute to it equally (she insisted, I wanted to do proportional). We make sure to put in there enough to cover the bills and some more to have some “emergency money”.

Aside from that we keep separate savings accounts and some investments.

My wife and I had split finances while we were dating and for a few years after we got married. The thing that tipped us into "everything shared" was when we were expecting our first kid and my wife left her job. At that point split finances just didn't make any sense. Now we have a system basically identical to the OP's system and everybody is happy with it.

I would be very frustrated if I explicity had less fun money than my spouse.

That is exactly the opposite of what the article suggests.

> Both partners have equal access to it, and both partners will continue to receive the same monthly allocation for fun money no matter how much each person makes.

It definitely depends on the couple. Currently, I am working and my spouse is not. During our most recent talk about budgeting a few months ago, we took this into account when figuring out appropriate amounts of fun money for each of us. Specifically, since I am out of the office/house for lunch/dinner less often, and my hobbies (programming/baking) are inexpensive, I neither need nor want as much fun money, and I would rather they have it available instead.

My wife and I have been married 7 years and we just got a joint account last year so we could deposit a check endorses to us jointly. We have two kids together, but sharing finances seems terrifying.

How do you handle joint expenses like rent/mortgage and all the kid stuff?

We split them up, roughly based on ability to pay. It reduces friction, but the downside is that I think it reduces our ability to optimize expenditures. (You don’t have two person sign off on most expenses.)

My wife and I basically do this with a joint checking account + credit card that we contribute to (somewhat unequally) every month an amount that is designed to cover 1 month's of expenses plus a little buffer.

I find it makes it a lot easier to know that $X thousand/month is my "family expense" and then everything for that is easily accounted for in a way that is totally separate from my personal finances.

I actually have two separate mint accounts, one for family expenses and one for my personal stuff.

That makes a lot of sense. We’ve been trying to set that up just for simplicity of keeping track of auto payments and whatnot, but it’s so hard to switch everything over.

Where there is a social issue, there is an engineer with analysis and a clever system to "fix" it.

Budgeting is one thing. But developing a fairness system... are you sure you should be married to this person in the first place? Might want to go and tweak that algorithm a bit.

In all seriousness, systems like this are brittle and really only work if you're on the same page anyway. In which case, you don't need the system. If your SO likes to spend, he or she may not agree that the "fun money" allocation is enough. You may think it's too much. So you come up with some middle ground. Resentment builds over time because your SO can't always afford the things they want, and you resent having too much allocated to his/her pile of fun money.

tl;dr: if you're not on the same page financially, a fancy system won't save your marriage. Fancy systems and over-analysis can also bring problems, YMMV.

I also find all this clerical nonsense funny. If your SO and you are not on the same page regarding goals and what both are willing to prioritize or sacrifice to achieve them, then it’s all moot.

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