There has been many a debate waged during this recession of the benefits and pitfalls for how to handle your money once you become part of a couple. I’ve watched friends wrestle with what to do as they move in together, become engaged, and even contemplate making big (think a house) purchases together. Since I’ve been asked before what Alex and I do, I thought I’d share in more detail than I have in previous posts. I don’t think I have the answers by any means, but Alex and I have managed to find a good system that works for US. (Every couple is different don’t let anyone tell you different.)
Alex and I decided back when we got engaged to have joint accounts. Why?
Well we’re old-fashioned and that’s what our parents did is a big reason. But also because there is an income discrepancy in our family and it seemed silly to constantly half to ask each other to “write me a check for…” so we just dumped it all in the same pot. When we did that though, we agreed it was 100% shared. Savings, bills, debt…you name it. All or nothing. Which meant when we went to get married, we paid off about $7000 worth of Alex’s bills that he had prior to meeting me. It also meant that the car I bought before we got engaged, he now had to take responsibility for as well.
How paying the bills works…well in short. I pay them. Basically, I pay them because I have access to a computer and am more computer proficient. I’m also better at money. HOWEVER, Alex and I manage to stay on the same page by having a weekly “finance” meeting. This ensures all of our bills are paid by making 1 person fully responsible for keeping track of stuff thus freeing up the “I thought you handled it!” confusion while ensuring the other person does not remain clueless. He also has full access and knowledge of all of our passwords so he can access the info any ol’ time he wants.
The weekly meeting thing may not be for everyone. I get that, but it’s the system that works for us because he’s a visual learner. So once a week we sit down and I read off our balance, then we literally go through the process of him writing down every bill that is coming out and check that is coming in for the next month in sequence. This puts him on the same level as me.
Lastly, (and this is the one that took the most work) we have an agreement. Anything over $50 we talk about first spending wise, everything else we are free to shop so long as we don’t break the bank without notifying each other. Oh and cash can be withdrawn for gift purchases with no questions asked so long as it’s worked into our budget. That typically goes “I need X amount of dollars for your birthday.” And then we figure out when and how to start removing the cash. This doesn’t always work. Sometimes we (mostly me) has a freak out about some innocuous purchase, but this is the plan we TRY to stick too.
Again, our system is by no means perfect and has definitely had some moments where we are both frustrated with each other. However, it’s a lot less frustrating for us as a couple to know exactly where we both stand financially than to hope the other person remembers to pay the electric bill or argue over who is going to handle the grocery bill this week. I also know that a lot of people choose to do separate accounts for the exact reasons above Alex and I choose not to.
Which are you, joint or separate, and why?