Money Management With Spouses

[YouNeverKnow25]

I think we moved past divorce and were back to people's opinions on optimal money utilization in a marriage

if we were still on divorce you're right and I'm sorry

[YouNeverKnow25]

it speaks to a larger issue though, which is that if you are planning for a divorce vis-a-vis your finances maybe the better route is to avoid marriage in the first place??

[Climb2safety]

Originally Posted by YouNeverKnow25

it speaks to a larger issue though, which is that if you are planning for a divorce vis-a-vis your finances maybe the better route is to avoid marriage in the first place??

Here in Colorado at least, come 11 years it’s a good idea to make sure it’s still going strong ecause after 12 you pay for 1/2 the term of the marriage verses a lot less time.

[laura22]

i feel bad for my future husband

im frugal in the sense that i feel guilty about spending money
like buying a coffee out?? that's only for a special occasion

[rconverse]

Originally Posted by cazzie34

Why did you start having your sister take over your finances?

Well, before you altered this post, your two original questions are answered in my initial post.

After that, there's really been no reason to change just because both of us are too lazy to turn off auto pay or change account settings. I still know exactly how much money I have and have 100% access to all of it at any time. It's like having a personal driver. How is that bad? It's like, yeah, I know how to drive but it's kind of annoying and I'd rather watch Netflix on my phone than deal with traffic.

Oh, and if you look at my initial post and see how this all started, I'll tell you how things got back on track....I reduced spending on dumb shit, like CC/loan debt. Just doing that, can alleviate massive amounts of your expenses. A couple of other cuts here and there and you can reduce your spending 50% but gain a lot of wealth in the process. I'm kind of a fan of that idea. Needs to expand to a lot of other areas, especially federal taxation but I don't want to make this thread political by citing real world examples of how to pay down debt and build wealth. Facts never go over well when it comes to politics.

[cazzie34]

Originally Posted by rconverse

Well, before you altered this post, your two original questions are answered in my initial post.

After that, there's really been no reason to change just because both of us are too lazy to turn off auto pay or change account settings. I still know exactly how much money I have and have 100% access to all of it at any time. It's like having a personal driver. How is that bad? It's like, yeah, I know how to drive but it's kind of annoying and I'd rather watch Netflix on my phone than deal with traffic.

Oh, and if you look at my initial post and see how this all started, I'll tell you how things got back on track....I reduced spending on dumb shit, like CC/loan debt. Just doing that, can alleviate massive amounts of your expenses. A couple of other cuts here and there and you can reduce your spending 50% but gain a lot of wealth in the process. I'm kind of a fan of that idea. Needs to expand to a lot of other areas, especially federal taxation but I don't want to make this thread political by citing real world examples of how to pay down debt and build wealth. Facts never go over well when it comes to politics.

Sorry, the reason why I eliminated the first question was because I saw that it was in your original response.

With regards to they why, it looks like it was because you had some debt problems. Who approached who? Were you missing payments and needed someone to help? What was the debt? 4 figures? 5 figures?

[Noles20]

Originally Posted by YouNeverKnow25

again, putting the money in one pile versus two separate ones is not what's causing anyone to "have to account for every dollar to the other person." that's a whole personality issue that has nothing to do with where you put the money that comes in

I was only speaking about my wife and I, no one else.

[rconverse]

Originally Posted by cazzie34

Sorry, the reason why I eliminated the first question was because I saw that it was in your original response.

With regards to they why, it looks like it was because you had some debt problems. Who approached who? Were you missing payments and needed someone to help? What was the debt? 4 figures? 5 figures?

It was about $18k. It started out as a conversation and ended with her just kind of taking things over while I was in debt. Initially it was only supposed to last about 2 years, which is how long we figured it would take me to get out of debt. It actually took less than that, so I was kind of like "let's keep this going, if you don't mind" and she didn't and it's been that way since. No real reason to change it back. Like I said, until something changes, it's not worth the time to go through the accounts and remove her from them.

As to how I got myself into that type of debt, a lot of bad decisions. Some were bad decisions on purchases or using credit and some bad decisions ended up having financial consequences. Basically being stupid with my own money, thinking it was an unlimited source and I was free from any consequences of overspending. Because I was an adult and working, I felt entitled to everything right then as opposed to being patient and paying for things as I go.

Also, if you're still struggling with the idea that I'm "not in control of my money", keep in mind that I'm still in control of my money. I think of it the same way I help people on the Excel message boards that I used to frequent. When someone asked me recently if there was a way to remove non-numeric numbers from a cell. I wrote this function...

Function GetNumbers(S As String) As String
Dim i As Long
For i = 1 To Len(S)
    If Mid(S, i, 1) Like "[1-9]" Then GetNumbers = GetNumbers & Mid(S, i, 1)
Next i
End Function

...and then said you can reference the function in a cell, like this:

=GetNumbers(A2)

The person who asked for that doesn't care how the function works, they just care that it works. Who created it literally doesn't matter. The owner of the workbook is still in control of the workbook and all the data in the workbook.

[Benny003]

Originally Posted by scrock25

It fundamentally changes that.

Originally Posted by harryhoudini

To be fair, legally isn't that the case? I don't have much insight into divorce proceedings, so correct me if I'm wrong.

I'm talking about the state of mind, not the legal obligations. Obviously, if we get divorced, then that's an entirely different thing. While we're married, we can arrange our bank accounts however we want.

[Route_2]

Originally Posted by Benny003

I'm talking about the state of mind, not the legal obligations. Obviously, if we get divorced, then that's an entirely different thing. While we're married, we can arrange our bank accounts however we want.

I subscribe to the r/personalfinance forum on Reddit and the topic of how to arrange finances when married is a constant topic of discussion and inevitably the same people always flood in to defend their own arrangement, whatever it may be, and to proclaim that it is the best way.

[Benny003]

Originally Posted by Route_2

I subscribe to the r/personalfinance forum on Reddit and the topic of how to arrange finances when married is a constant topic of discussion and inevitably the same people always flood in to defend their own arrangement, whatever it may be, and to proclaim that it is the best way.

It all depends on the people in the marriage. Different things work for different people. I would have likely never married anyone who required that all of our money be pooled into one account. The person I did marry liked the idea of separate accounts like me and we're happily married.

[scrock25]

Required?

[Mickey Carson]

I've been married for 11 years, and my wife and I never have arguments about money. FWIW, here's how we handle our finances...

We have a joint checking account where our paychecks are deposited. This account is what pays all of our bills, funds 529 plans for the kids, and almost all of the items in our monthly budget. We have a money market account, which serves as our emergency fund/savings.

We also have separate checking accounts as well, which is our "fun money." Each month $175 goes into each of our spending accounts that we can spend on whatever we want. For my wife, it's mostly clothes and coffee. For me, it's concert tickets, home theatre stuff, etc.

I keep a monthly budget with over 30 line items, so I'm pretty anal about it. I'm a big fan of having separate checking accounts where a monthly "allowance" goes in that you and your spouse can spend on whatever you want. That way we avoid any potential argument when she spends $300 on clothes or I buy DMB tickets for the Gorge

[scrock25]

But what’s the difference between spending the $$ out of account x1234 or spending that money out of account x5678?

What changes?

[Route_2]

Originally Posted by Benny003

It all depends on the people in the marriage. Different things work for different people. I would have likely never married anyone who required that all of our money be pooled into one account. The person I did marry liked the idea of separate accounts like me and we're happily married.

Very true. We got married in our middle thirties and were both used to having things a certain way. But, I trust her and she trusts me (isn't that what marriage is all about?) so we've never felt a strong urge to mix everything. The compromise is that we each have access to the others Mint.com account. I don't think she ever looks at mine, but I go check hers once a month so I can aggregate all of our accounts to know where we stand in the big picture. I work in finance and have a big worksheet I update with our budget, investments, net worth, etc. I enjoy doing that type of stuff so its fun for me but she couldn't care less.

[Mickey Carson]

Originally Posted by scrock25

But what’s the difference between spending the $$ out of account x1234 or spending that money out of account x5678?

What changes?

Well, it definitely makes maintaining a monthly budget easier because it eliminates any variability if large purchases are made by either of us. Plus, it eliminates either of us spending too much money on frivolous items. If my wife wants to go on a shopping spree, she knows she can spend whatever is in her personal checking account and not more than that.

If I want to purchase a bunch of concert tickets, I know I'm limited to what's in my personal checking account. Spending is controlled but we still have the independence to purchase what we want. For example, I just spent nearly $100 to buy Luther College on vinyl this morning. She doesn't totally understand my obsession, but we never argue about the thousands of bucks I've spent on DMB-related items over the years because I'm just spending my own monthly "allowance."

[scrock25]

I guess the question remains, why is it different because it’s coming out of a different account?

[Route_2]

Originally Posted by scrock25

I guess the question remains, why is it different because it’s coming out of a different account?

That question works both ways, though. It's not different if it's all shared money if it's in one account or many. So, whatever makes each couple feel most comfortable.

[Mickey Carson]

Originally Posted by scrock25

I guess the question remains, why is it different because it’s coming out of a different account?

Well, obviously in the grand scheme of things it's not any "different." The reason I like having separate small checking accounts though is neither of us has to get permission from the other for small spending purchases.

If she wants to spend a few hundred bucks on clothes, she can and it has no effect on our joint checking account/our ability to pay monthly bills. I don't want either of us to be in a position of having to get permission or ask if a relatively small purchase can be made or not.

[scrock25]

So you guys would have to ask permission to spend money but only if it’s in one account?

Just trying to understand...

[Mickey Carson]

Originally Posted by scrock25

So you guys would have to ask permission to spend money but only if it’s in one account?

Just trying to understand...

Well, let's say we only had one joint checking account for all monthly expenditures, and I wanted to spend $700 on concert tickets. It's the end of the month and we're down to $2500 in our joint checking account but our mortgage and Roth IRA contributions are about to come out, which would reduce our joint checking account to $500. My $700 in concert tickets would put us in the red if I took the money from joint checking, so I have to take the money from our money market account (which is our emergency fund). This is something I'd obviously need to clear with my wife before I just deplete our savings.

But since I have a separate checking account that I control for my own frivolous purchases, I can spend the $700 (if I have that much in my account) without clearing it with my wife. Because this account is not tied to any monthly bills, my concert ticket purchase has zero impact on our monthly bills being paid on time, so it's not a financial conversation/argument that my wife and I need to have. Could my spending money be pooled into our joint checking account? Sure, but then it'd be harder to track our individual spending habits and could lead to inequity (or arguments) if one of us starts spending way more each month than the other. Since our fun accounts are separate and receive the exact same amount deposited in them each month, we don't have to police each other's spending habits.

[ExistenceNow]

I'm not sure where this notion that married couples who share accounts have to ask each other for permission to buy things they want comes from.

[Mickey Carson]

Originally Posted by ExistenceNow

I'm not sure where this notion that married couples who share accounts have to ask each other for permission to buy things they want comes from.

Maybe it's a little dependent on how much money a married couple makes each month?

If a couple's financial situation has them living paycheck-to-paycheck, a random purchase could put them into debt or leave them without enough money to pay bills. It'd obviously be more important in that scenario to run a purchase by your spouse.

Since many married couples start their relationships without a huge nest egg, it's probably a habit they've develop that started when their bank accounts were much smaller.

[scrock25]

Originally Posted by ExistenceNow

I'm not sure where this notion that married couples who share accounts have to ask each other for permission to buy things they want comes from.

Neither do I, it’s odd.

[M. Steng]

Originally Posted by Mickey Carson

Maybe it's a little dependent on how much money a married couple makes each month?

If a couple's financial situation has them living paycheck-to-paycheck, a random purchase could put them into debt or leave them without enough money to pay bills. It'd obviously be more important in that scenario to run a purchase by your spouse.

Since many married couples start their relationships without a huge nest egg, it's probably a habit they've develop that started when their bank accounts were much smaller.

If you’re that tight then you also shouldn’t have separate accounts for secret spending, either.

It’s all one lump pot, no matter how you slice it or justify it. If the bills fell behind for whatever reason would you pull the $700 from your personal account instead of buying concert tickets?

[rconverse]

While I can understand people who pool everything into one account and then just keep that one account, I can absolutely understand something where you have a joint account where everything goes and then separate checking accounts with the portion of your budget that's for incidentals.

Think about it....If you have one account and everything is pulled from that account and you have an "incidental" budget of x, the only way to track x is by tracking all spending. With a separate account, you just kind of know that what's in there is there to be spent by you, regardless of what you spend it on. That doesn't mean if you want to spend more, you can't, it just kind of forces you to communicate with the other person that you'd like to spend a little extra on whatever it is. The other person could come to you with the same request. That's the benefit of having the money go to separate spending accounts. By keeping one joint account relatively unchanged, there's no need to monitor it. I'm not saying it's for everyone, I just don't see it as a confusing concept.

[rconverse]

Originally Posted by Route_2

Very true. We got married in our middle thirties and were both used to having things a certain way. But, I trust her and she trusts me (isn't that what marriage is all about?) so we've never felt a strong urge to mix everything. The compromise is that we each have access to the others Mint.com account. I don't think she ever looks at mine, but I go check hers once a month so I can aggregate all of our accounts to know where we stand in the big picture. I work in finance and have a big worksheet I update with our budget, investments, net worth, etc. I enjoy doing that type of stuff so its fun for me but she couldn't care less.

FWIW from someone who's worked with countless "budget" workbooks, Your net worth shouldn't need to be updated if your spreadsheet is set up correctly. It should just calculate. Also, not sure if you're doing it but you can import your investment returns right to Excel workbooks and use formulas to calculate those as well, so you're not manually updating it every month, quarter, etc...

[Mickey Carson]

Originally Posted by M. Steng

If you’re that tight then you also shouldn’t have separate accounts for secret spending, either.

Agreed. Someone who can barely afford to pay their bills shouldn't be allocating discretionary fun money each month.

Originally Posted by M. Steng

It’s all one lump pot, no matter how you slice it or justify it.

Never said it wasn't one lump pot.

Originally Posted by M. Steng

If the bills fell behind for whatever reason would you pull the $700 from your personal account instead of buying concert tickets?

Of course. That example I gave was a hypothetical though...not a personal example. However, I don't leave a lot of extra money in joint checking beyond what is needed for bills and expected monthly expenditures. I don't want a lot of extra money sitting around in an account that gains 0% interest.

[gocubsgo3822]

Originally Posted by dre2142

just dont see nor have the need. when we were younger we went a little crazy with credit and just avoid it now.

though i do have a company card in my name with my job that i use quite frequently for business but the company pays that off each month. (200-300k per year roughly, twice that during an election year)

How do you check into hotels on personal time?

[M. Steng]

Originally Posted by rconverse

While I can understand people who pool everything into one account and then just keep that one account, I can absolutely understand something where you have a joint account where everything goes and then separate checking accounts with the portion of your budget that's for incidentals.

Think about it....If you have one account and everything is pulled from that account and you have an "incidental" budget of x, the only way to track x is by tracking all spending. With a separate account, you just kind of know that what's in there is there to be spent by you, regardless of what you spend it on. That doesn't mean if you want to spend more, you can't, it just kind of forces you to communicate with the other person that you'd like to spend a little extra on whatever it is. The other person could come to you with the same request. That's the benefit of having the money go to separate spending accounts. By keeping one joint account relatively unchanged, there's no need to monitor it. I'm not saying it's for everyone, I just don't see it as a confusing concept.

If you need to keep track of incedentals then you probably aren’t in a position to be splitting direct deposits into 2-4 different accounts anyways.

I’m not going to give a shit if my wife buys a $5 coffee or buys herself a new pair of jeans. Keeping track of all of that is not only exhausting but it seems like a huge waste of time.