20-forty.comBecause love isn't always 20/20!
Should Couples Keep Their Finances Separate?
Beyond sex and companionship, one of the benefits of being half of a couple is having a dual income. It can make the house payment and the utility payments easier to afford and potentially create more discretionary income. But can combining incomes also cause undue stress on a relationship?
Let’s think about this. Your husband pulls into the driveway one day and, surprise, he has bought a brand new truck without telling you. Most would be upset over this sort of situation and rightfully so. A purchase that costs thousands of dollars of both of your money should be a joint decision. Now imagine the same scenario with one significant change- you and your husband keep separate finances. This means that the money he spent on the truck was his, leaving you little room to be upset with his impulse buy.
How it works
Have you ever had your husband write a check and forget to let you know about it, thereby causing problems with your bank account balance? Or get upset with your wife for buying a new pair of shoes when you know the other 100 pairs she has are perfectly fine? Keeping separate finances can help alleviate such headaches.
First, do a budget. Sit down together and figure all of your expenses- this includes everything from the house payment to groceries to utility payments. Next, determine your income. If you bring home 60% of the household income and your spouse brings home 40%, split the bills accordingly. This way, all bills get paid and what is left over out of each paycheck is each individual’s money to save or spend how they see fit.
Another way, is to put an allotted amount of each paycheck into a joint account each month. For example, each of you puts 2/3 of your paycheck, or whatever fraction your budget allows, into a joint account out of which to pay bills, to pay for shared expenses such as children’s schooling, and to put toward savings. Each of you keeps your remaining 1/3 to spend or save how you see fit.
Why it works
Did you know that money is the number one cause for divorce? Severing your financial ties and boundaries helps to aleveiate financial stress among couples. So assuming all of the bills are paid and regular expenses are accounted for, why should you care how someone else spends or doesn’t spend their money? Keeping finances separate allows for financial freedom on each person’s part and allows couples to focus on more important issues than money, such as each other and their children.
In his article The Rise of Financial Divorce, Yaran Noti gives several examples of couples that hold financially independent partnerships and that don’t have the stress of money arguments looming like a dark cloud over their relationship.
Fight over money all the time? Perhaps a bit of separation, of the financial sort of course, is exactly what you need. Thoughts?
Related posts:
- Relationships And The People In Them There are oodles of things I don’t understand about...
- Are You in a Relationship With a Narcissist? Many of you have probably been lucky enough to...
Related posts brought to you by Yet Another Related Posts Plugin.
Certified Diva March 5th, 2009, 8:05 am
I believe whatever the couple decides there has to be an open line of communication period. And please allow me to correct myself- MARRIED Couples. I believe if you are not legally married you should not combine your finances or have a joint bank account, even if you are engaged do not do it keep it seperate.
Before you choose to share an account get a feel of your partners spending habits, so that you know what to expect and are able to talk to your S.O. about it.
My husband and I have 3 accounts he has his own, my own, and a joint account, our paychecks go into the joint account first and we divy the “recreational funds” between our two accounts.
Ultimately do what works for you two! But communicate and share financial information and decisions.
Certified Diva´s last blog post..If you’re single and you know it, clap your hands!
searchingwithin March 5th, 2009, 9:04 am
I guess I am just old school. I don’t believe you should separate your finances, although as Certified Diva stated, I agree with having a separate personal account, if you choose. I don’t believe in signing pre-nups, etc, and I no longer agree with living together.
It just seems to me, as each day passes, couples are finding more and more ways not to truly commitment to each other and the relationship. If you go into a commitment, commit. As long as you always have that thought in the back of your head that it may not work out, and have escape plans in place, I believe you are already well on your way to destroying the relationship.
Communication, communication, commitment, compassion, empathy. Did I say communication already…
searchingwithin´s last blog post..Is Your "Attraction Radar" Broken?
Honey March 5th, 2009, 4:54 pm
The BF and I are about to move into a new place…we will both be on the lease and I think we are going to open a joint checking account for expenses related to the new place. We are also going to do this because then we will be eligible to register at my work as domestic partners and he can get on my health/dental/vision insurance and qualify for reduced tuition. We will probably also open a joint savings account to start saving for a wedding. I am thinking ING for that because their savings accounts are high-yield (well, not so high right now but higher than a regular bank…)
But we are also going to keep our separate checking and savings accounts, credit cards, and student loans. There is no reason to get rid of any of those or blend them together, although we do bounce credit card debt back and forth between our cards as we try to get the best interest rate and pay them off as quickly as possible.
Regarding your reference to one person making a major person without telling the other, I would be PISSED if the BF did that and we’re not even married. And that’s because we’re not married…I have a tendency to view any major purchase he might make (like a big screen tv, an AR-15, a motorcycle, all of which he has said he wants) as him saying SHOOTING CANS IN THE DESERT IS MORE IMPORTANT THAN MARRYING YOU.
Which is NOT okay with me!
Honey´s last blog post..Top 10 Signs You’ve Become an Adult
kira March 6th, 2009, 11:10 am
This is one of those situations where it is going to be different for different people. Communication is definitely key no matter which route a couple chooses to go. I do have to disagree with Diva though. If a couple chooses to combine incomes, I don’t think it is necessary to be married in order to do so. In this day, there are many couples making the choice not to get married and simply life as domestic couples. The only difference they see between themselves and married couples is a piece of paper. They have just as much right to join or not to join finances as every married couple.
Personally, I am an advocated of separate finances or, at the minimum, a personal account for each party as Diva and Searchingwithin discussed. I work in a credit counseling agency and everyday I have to see how money tears couples apart. If part of defining your commitment to one other comes from having both of your names on a checking account, then you have a sadly misguided of what commitment is. Severing your finances isn’t about a lack of trust, it is about retaining a bit of independence. Believe it or not, you can be with someone and still maintain individuality and freedom.
Honey, I think you are so smart for keeping some things separate, especially credit cards. Just because there is only one name on a card or account doesn’t mean you can’t help each other out when it comes to money and you seem to have hit that nail on the head.
At the end of the day, all that matters is what works for the couple. But whether or not you choose to keep joint or separate finances, there has to be an open line of communication and an adequate amount of financial literacy. Don’t know much about finances? Go to http://www.nfcc.org and find a credit counseling agency in your area that offers free financial education courses. Can’t find one? Visit http://www.fined.kscccs.org and take a free online financial management course. You’ll learn something, I promise!
Honey March 6th, 2009, 2:43 pm
There are some great books out there, as well. I read Suze Orman’s Money Book for the Young, Fabulous, and Broke and was also able to download her latest book for free off of Oprah’s website. There are some other books on my wish list and of course if you’re a beginner there’s Personal Finance for Dummies (which I also have).
I also subscribe to some great personal finance blogs…Get Rich Slowly, 20SomethingFinance, and I Will Teach You To Be Rich are all good. I also enjoy Blogging Away Debt because she really personalizes her story of getting out of debt and makes you root for her. I tend to haunt the personal finance page on Yahoo! as well. Now that I have a “real job” money has become a lot more interesting. I have a TIAA-CREF retirement account and fully plan on calling and say “BUY ALL THE STOCK!”
Hey, I’m under 30 and it’s on sale.
Honey´s last blog post..10 Twitter Hotties You Should Follow