Finances: Two Become One?

Is it our money or my money? Do you pay the bills together, or do you owe each other? One of our first fights as a newly engaged couple set the groundwork for this exact issue.

We were leaving for a road trip together, and I suggested if he fills up the gas tank before leaving, then I'll fill it up the next time we need it (the way I always have shared gas expenses with my peers on a trip). Like so many of our early arguments, I had no idea I just stepped on a landmine. To me, we weren't married yet, and we still had separate accounts. I thought it generous to offer to split the gas instead of assuming he would pay to fill his vehicle. To him, I was suggesting that my money was my money, and I was selfish only to offer it at my will. Or perhaps he was offended at the idea that his money was only his money. Regardless, we dove into a massive argument, grossly exaggerated by the lack of communication skills we have today. When we finally tired out and got down to the argument basis, I realized what was so upsetting to my future husband. We agreed to spend our lives together. We were starting to save up for a wedding and a house together. We were joining our lives and, therefore, our bank accounts. The instant he and I became "we," he saw our finances as "ours." From that day on, financial decisions were something we discussed together.  

Not many couples openly discuss their bank accounts in casual conversations with their peers. However, the more we became friends with other married couples, the more we would hear of couples with entirely different arrangements than ours. It sounded so foreign to me. Now that we are married with one joint bank account, our money is entirely ours without any gray area. It never occurred to me that other couples might do things differently when, in fact, there are generally three different ways couples handle their bank accounts.

Joint account

As I have already spoiled, this is the set-up my husband and I have. I initially wanted to keep my personal account. However, it wasn't long before having an account separate from our joint became too messy for us. In which account is my paycheck deposited? Which account do I use for personal spending? Does the money in my account become my money? If so, what is his money? We decided to drop my account and keep everything all together in one. This method works beautifully for us. We have never had an issue over who's money it is. It is ours.  For that reason, we have a general respect for each other when it comes to spending. We might make a $20 purchase here and there and forget to mention it, but for the most part, large expenses are always discussed beforehand.  

One addition we made early in our marriage was the need for spending money. At the time, I had a regular babysitting gig, and my husband, to this day, will do side jobs from time to time. Those jobs pay in cash, and it never made sense to deposit it into our account. Over time, the cash in our wallets ended up being spent on silly little things since it was not accounted for in our budget. We finally agreed the money earned doing our side jobs would be our spend money. This side money is the only area of our finances that we have "his" and "hers." It works wonderfully for us, but it might not for others.

Joint account + separate accounts

One of the first arrangements I've heard of different from ours was the idea of having one joint account to finance all the monthly expenses. Meanwhile, each has separate personal accounts. 

Each partner deposits their share of the joint account's monthly expenses, and whatever remains is theirs to spend. While this arrangement seems to work just fine for those who follow it, I will forewarn it takes trust in your partner. Having separate accounts will allow room for the "my money" feeling, but as long as those feelings do not get in the way of sharing financial responsibilities, it might work for you.  

One arrangement I've heard of similar to both this and the first one is to have one joint account and each their own credit card. This way, all the money is deposited into one account, but each has the financial freedom to spend as they wish. Again, this arrangement takes trust in the spending habits of your partner. It is also critical you fully intend on paying off the credit card each month. Many credit cards offer cashback for money spent. Using such a card for everyday expenses while paying it off each month gives you all the benefits with none of the interest. All the while, your credit score is skyrocketing. My word of caution with this method is this; be aware of your account! The trick to credit is never to spend money you do not have in your account. I recommend having a maximum dollar amount for each of you never to exceed. This maximum amount should be budgeted into your monthly income and included in monthly expenses to ensure you will always have enough to pay the bill. 

Over time, you will become comfortable with your finances and know your limits naturally. Until then, be cautious.

Separate accounts

Assuming you have figured out how to split your bills in a fair way to both of you, this type of financial arrangement is still tricky. 

I feel it necessary to say that this arrangement is not what I would recommend; however, every couple is different, and it may work best for you! To make this set up work, it is crucial to have shared goals and trust. Yes, my favorite marriage quality: trust. You need to trust your partner with anything in marriage but to be blind to each other's bank accounts (on which you rely to pay your bills) is not easy for some couples. This arrangement may also encourage the "my money" mentality that could trigger arguments when life gets messy, or finances get tight. I have heard couples say it was actually necessary to eliminate arguments. You may prefer to stay ignorant to how your spouse spends his extra cash. As long as the proper amount of money goes to the bills and savings or whatever else you agreed upon each month, how each spouse spends their money might be better kept to themselves.

Shared Goals? 

There are two types of goals: short-term and long-term. 

To consider your goals "shared," you must agree upon both. Long-term goals such as buying a bigger house or reaching a point in the savings account take time and dedication. They also can be hindered by short term goals. 

Short-term goals like buying that flat-screen TV or the designer bag that's "on-sale" may be tempting considering you can easily afford it, but it may also be delaying your long-term goal. You must decide how much you want to live your life in the present versus in the long-term.  

There is no right or wrong answer here. Do you buy whatever makes you happy in the short-term? Or do you save to enjoy life more in the long-term? More than likely, you will find couples who have one of each mentality. You have to find a balance with which both partners will be satisfied.  

No one person in the relationship should be dictating where the money goes. Regardless of the financial set up you chose, it would be a good idea to discuss your long-term goals together and decide what short-term goals you will allow before joining financial responsibilities. Do this along with finding which goals mentioned above fits your relationship, and you will be on the right track to managing your money together!