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It all boils down to what works for you. Some of the examples I see here I think you people are all nuts, and have no idea how to handle your finances....
But after thinking about all the different methods, It really all comes down to... What works for your situation...!
I do It my way, and it's excellant, but it may not work for everyone...
But after thinking about all the different methods, It really all comes down to... What works for your situation...!
Unfortunately, divorce statistics show that it it often doesn't work. Financial issues tear marriages apart. So maybe some of the "nuts" here should try something different.
I do like Suze Orman's suggestion in this regard. She says to divide the bills in the ratio of the earnings. For instance if the husband makes 5000 and the wife makes 3000 and the total bills are 3000 then the husband will pay (5000/8000) * 3000 or $1,875. The wife pays (3000/8000) * 3000 = $1,125. This means that each pays 37.5% of their income towards the bills so it is an equitable contribution even though the absolute numbers are different.
That is exactly what I did w/my DH when we were engaged in college and he wanted me to stay in our apartment instead of moving back w/my parents where I could have lived free and saved up for a bit.
I agreed to stay with him, but we divided the bills as above. I flat out told him I wasn't going to be broke all the time because he wanted to stay in the apartment.
It worked out very well for us.
The only thing I would add is that if one person spends more on things like groceries make sure that is included in the equation, otherwise someone will be spending their extra money disproportionately to the other...
I'm not sure what to do. As I have a job that gives a steady check twice a month. But my husband (and I) have a business, so those payments come in very sporadically. The clients pay every few months (they are sooooo slow). So I'm not sure how handle that money.
My income covers the bills, we sometimes have money leftover to put into savings from that.
But considering our incomes (and almost no debt, no mortgage yet and very little on a car left) I feel we should be saving more money. At the end of the year we put money into a sep and savings. But again it's such a small amount compared to how much we earn.
How do you do it when you have a business and the checks just come randomly throughout the year?
My DH did some self employment stuff last year. It was very annoying, as you say the checks are sporadic, esp for us w/having to pay the tax (not like regular job where they take the tax out for you)
What we ended up doing with those checks was take a percentage off the top and put it in an account to use to pay the quarterly tax.
Then we took another percentage off to put in savings.
The rest went into checking for whatever.
If you just do it that way it will not matter when the check arrives, you will know exactly what to do with it when it does.
Oh, btw, we handle things differently now, as I am staying at home with the kids. Therefore, separate finances would not be feasible.
He makes the money. It goes in checking. I pay all the bills. Transfer some of the money to savings A that he uses for spending. Transfer some of the money into savings b for taxes. Transfer some of money into Savings C for Saving.
We both spend out of checking.
His money is our money. It works for us. You just need to find out what works for you. And what works for you may change over time.
I personally wouldn't like the separate account set up, and lol it is not because I currently do not work. Even when we both worked we had a joint account, although since he was so "spendy" back then and we were on a tight budget, I did reserve the savings portion strictly for his use so he wouldn't drain the checking account on me! I don't like it because I feel if you cannot trust your spouse to have access to where you keep the money then why are you married. You can have joint accounts with multiple savings account to keep "his" money and "her" money separate, you don't need completely separate accounts.
Bottom line, you must use what method works for you so you don't end up resenting one another sometime down the line. Some people like it separate, some like to go by a percentage, some like splitting responsibilities, etc.
When you marry someone, you become one entity, so make sure that going into a marriage you have a game plan for handling money. If you plan on having separate accounts and do this ratio of earnings to bills thing, keep in mind that one or both you have debt (student loans, car payments, child support, credit card bills, etc.) and that also has to be worked into the ratio. My wife and I combined accounts on day one of our marriage and regardless of who makes what, OUR money goes to pay for the bills and WE figure out what we can afford. I had terrible credit card debt (15K) when we were married 7 years ago and my wife took the approach that she didn't marry me for my debt or future earnings, so we combined to tackle it. Seven years later, the only debt we have is our $2200/month mortgage and a $167 student loan payment. The rest goes to our investments/savings, our newborn's college fund, the principle of our debt, and the fun stuff. If we had separate accounts 7 years ago, I guarantee our marriage would have been over 5 years ago.
Great question! well, In my case my husband is a muslim millionaire so b4 I would marry him I got a non muslim lawyer for myself, confirmed my husband's networth, and through mahr my lawyer and I decided what would be "fair" for me to settle with b4 I signed a prenup. To think that If I marry this wealthy person and we have 3-4 children and we were to divorce for some reason at a later time, I am being smart enuf NOW to think long term with the possible burden of finance debt while being associated to this man. My husband covers all household finances as well as we are fortunate to not have a budget while we are married. Hope this info helps you understand what our situation IS!
When we were single and living together, we had separate checking and savings. When we got married (fifteen years ago), we combined our finances. All of our money goes into one checking account and bills are paid out of that same checking account. We have one credit card and all charges go on that card. I wouldn't buy anything I didn't need (besides lunch or some other minor thing) without discussing it with my husband (nor would he). The whole separate account thing seems strange to me, but I understand that some people have a need for their own discretionary funds. I don't really buy things (beyond groceries, gas, etc.) so it's not important to me to have a separate stash. All of our savings/investments are in both of our names (except employer 401(k)'s).
DH does all the bill paying and financial maintenance because he's a numbers guy. He'll say, "I'm going to put x amount in this or that investment" and why he thinks it's a good idea. He doesn't think it's right to assume that it's okay with me without telling me, but it always is because I trust his financial judgment completely. I also have easy access to all of our financial information as well so I'm not in the dark about where our money is and how much we do (or don't!) have at any given time.
When we were single and living together, we had separate checking and savings. When we got married (fifteen years ago), we combined our finances. All of our money goes into one checking account and bills are paid out of that same checking account. We have one credit card and all charges go on that card. I wouldn't buy anything I didn't need (besides lunch or some other minor thing) without discussing it with my husband (nor would he). The whole separate account thing seems strange to me, but I understand that some people have a need for their own discretionary funds. I don't really buy things (beyond groceries, gas, etc.) so it's not important to me to have a separate stash. All of our savings/investments are in both of our names (except employer 401(k)'s).
DH does all the bill paying and financial maintenance because he's a numbers guy. He'll say, "I'm going to put x amount in this or that investment" and why he thinks it's a good idea. He doesn't think it's right to assume that it's okay with me without telling me, but it always is because I trust his financial judgment completely. I also have easy access to all of our financial information as well so I'm not in the dark about where our money is and how much we do (or don't!) have at any given time.
WOW! This sounds like a great system you have. I like it. Having a honest marriage communication is always the key. I like the idea of using one credit card.
I would advise strongly against a joint account of any kind. You are setting yourself to be cleaned out for every penny you ever had, and then its is going to be extremely difficult to get it back. Trust me, I speak from experience. My ex-wife decided she wanted to leave, cleaned out the joint bank account over the course of a month, and the only reason I recovered any of it, was that she agreed to calculate the amount she pilfered in the divorce settlement.
Best idea on this is to split the bills based on income percents, and try to assign particuliar bills of that value to each person.
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