Two Income Couples - How do you handle finances?

[Megan]

I have a number of married friends who were recently discussing the struggles of merging finances, however you choose to do it. So I'm curious - for those of you in two income relationships, how do you handle your finances? Do you deposit all your money joint accounts? Do you put most of your money into joint accounts and keep small "allowances" for personal use? Do you each pay different bills? Do you deposit a percent of your income into a joint account? Do you put enough into joint accounts for the regular bills and then some and keep the rest separate?

There are so many ways for couples to make finances work, and I'm wondering what's worked for everyone here.

[yourbeginnings]

My partner and I have separate bank accounts. We each deposit our paycheck into our own account. At the end of the month, we each place $600 into the household account and all the bills are paid out of that account. We generally have money left over which we let accumulate into vacation money. The household account is just for mortgage, utilities, etc.

We take turns buying the groceries and household necessities.

This has really worked out for us for the past 3 years.

[USCGamecocks]

Yourbeginings, sounds like a great idea. Have seperate money is probably the way to go though... not having it all lumped together.

[yourbeginnings]

USCGamecocks: Yeah and really helps keep down any arguments over money. We each just pay the $600 monthly and have our personal account to do whatever.

[Kathryn]

Our finances are largely joint. We each have separate credit card accounts, but that's largely because account history counts toward your credit score, and we each have individual cc accounts with 15-20 years of antiquity. But our primary checking and savings accounts are joint, and the separate cc's get paid out of pooled money. The income contribution split is 45/55, not that it matters, really.

We've bounced about the idea of having a small allowance each month of "play money" as a way to try to ensure that our "wants" spending is more or less balanced and equitable and does not get out of hand. We haven't actually implemented this, though. In the times when I've tracked our spending habits with enough detail to tell, over a period of a few months his "play money" spending was pretty consistent within a $50 +/- range of the target we'd probably set anyhow, and my "play money" spending was consistently about $50-100 "too low."

I personally would find separate accounts (or 3 sets of accounts--his, hers, and household) to be a huge headache, because the dividing lines between his/hers/ours expenses can be blurry.

On a more philosophical level, though, I think keeping separate accounts *can* lead to a certain "proprietary" stance that is both not good for a marriage and completely out of line with the way the legal system views your money. I've got a long tenure on a few divorce and marriage forums, and I can't tell you how often I've heard a man expressing resentment over the fact that the divorce settlement involves him "giving" his ex-wife "his money" and "his house" because he earned it. Legally, it is and always was as much hers as his, and he is no more "giving" it to her than she is "giving" him the portion of the assets that he retains.

[lucille]

When we met we were both in "starting over" phases of life so if we didn't pool our money together we wouldn't have made it. We kept that pooled finances tactic even after we got back on our feet. It seemed to smooth over the drastic income disparities we have had back and forth. It seemed like one of us was practically rolling is cash while the other one was looking to move up, in school or pursuing something meaningful that didn't pay real well.

It allowed both of us to do some things we really wanted to do creatively yet not live on ramen noodles or be resentful of the others larger income.

It also helps keep spending in check. He knows he has to be accountable to me for buying a $75 PC game and the same for me on things I tend to waste money on. It does help cut down on wasteful spending. Knowing you might have to explain your purchase to someone else makes you think twice about it being a good expense.

[rachael24]

Good information Lucille. Me and my Husband do much of the same thing. It helps us alot!

[Crispy8888]

I find it so interesting how many couples have separate accounts. My wife and I have not had separate accounts since we first started living together over 8 years ago (yikes!).

Similar to lucille, we find that it is much better to have the finances pooled, pay the bills, and then be responsible to each other as to what "extras" come out of the account. Sometimes, I find that just knowing you need to justify the purchase to someone else makes you stop and think "Do I REALLY need this item?"

I think this is especially true for households where there is a significant disparity in income levels. It boggles my mind that I am paid much more to twiddle bits in an IT field, than is my wife who is a teacher and is forming and shaping the minds of the next generation. Why should we not collectively benefit from the money that we both bring in, regardless of who earns more?

[vacationofwealth]

We each have seperate accounts and then a joint account that pays most of the household bills. She is a consultant who makes way over 6 figures and needs to pay off a lot of expenses for work so she has a seperate account for that. And I make figures from home so I need a seperate account for that to take care of my expenses.

[mtilmin]

We have separate accounts here.

But since we have kids their expenses is usually the questions that comes up the most.

What has really worked ofr us is go 50/50 on every expense period. It allows you to buy more for your money and makes both feel equally participating.

That way you don't have the old "I spend more than you do thing"