How do you have a joint account when one person makes more?

[tberube]

My fiance and I just bought a house together, and to make paying bills easier, we joined our accounts. The only problem is, I make a lot more money than he does, and since our bills got higher since we moved, the joint account is really only helping him out (the extra cash I make pays more bills). At first I thought we''d be okay, but he''s terrible at math and uses the account way differently than I do. It''s lead to a confusing mess, where we are scrutinizing each others spending. Worst is, he''s doing most of the scrutinizing! Before we had joint accounts, I would go out and do most of the grocery shopping, and pay for it, because I had time and he didn''t. Now that the groceries are coming out of the joint account, he sees how much it is and thinks the spending is out of control! If only he knew how much of that used to come out of MY money!!

Ugh...what to DO?!

 

[CaptAubrey]

In a word: budget.

Sit down and figure out what your monthly joint expenses are, and what the joint account will be used for (just groceries or other stuff like gas and home maintenance). Then decide what you will each contribute based on your respective incomes. If you can both follow the plan, things should settle down.

 

[tberube]

Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

 

[CaptAubrey]

Date: 2/27/2008 3:09:28 PM
Author: tberube
Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

I don''t know what most people do, but that''s exactly what Mrs. Aubrey and I have done for 15+ years.

 

[allycat0303]

Our plan is that when I make money (in LOOOOONNNNG time) we will put the same percentage of our salary for household stuff and fun stuff we do as a couple, and a couple''s retirement savings, and have our own personal accounts which we can spend as we please

At this moment though I make zip X zip so it''s not an issue. It''s basically all his money with a tiny bit I have left.

Good luck!

 

[TravelingGal]

Well, I would not do it before marriage because for me personally, there was a mental shift when we got married and I no longer thought of anything as MY money, but OUR money. I think this mindshift is very important if you want to have a joint account.

Spending habits are another thing altogether. I watched TGuy carefully throughout our courtship and did not see any red flags. Finances are a big issue so I needed to know if there were any dealbreakers, and there were not. So joining our accounts was not a problem because we figured out our financial habits before we got married.

We have a joint account where all of our paycheck goes in, minus one hundred bucks for each of us to keep in a separate account as "fun money." We end up saving the fun money for gifts or whatever because we really do spend everything out of our joint account. What has also helped is that we have very little expenses (low rent), no debt and just are not crazy spenders in general. TGuy is not going to yell at me for spending too much on groceries...especially since I am the one putting his dinner on the table. Hehehe.


ETA also wanted to add that what I mean by a "joint account" is one where it is the main account for the couple with all of the paycheck going into it. If you have your own accounts and put in money for just the bills to the shared account, that to me is just a bill paying account and not really a joint account since the money you put in the joint account is already all spoken for.

 

[NewEnglandLady]

This is the breakdown in our household:

DH makes about 2x as much as I do.
We each have our own checking account
We have a joint checking account for BILLS only (house, utilities, groceries, gas, dog-related expenses) which is based on a budget we set and we each contribute EQUALLY to that account (not based on who makes what).

I save my extra money, he saves lots o'' extra money and a good chunk of that goes into investments in both of our names. Retirement, house downpayment, etc.

I feel very strongly about contributing 50% to all of our household bills, though I know DH makes more and we''ve found that it works for us. I like having my own accounts, but also trust DH 100% with joint accounts because he''s even cheaper than I am. In your case it sounds like your FI is using the joint account for personal expenses. I''d probably scale it back and say that the joint account is only for joint expenses and how you want to contribute to that account as a couple is up to you.

 

[Angel7]

Date: 2/27/2008 3:09:28 PM
Author: tberube
Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

Tbe - That is exactly what we do. In the joint goes money for stuff we pay for together. Mortgage, bills, joint mileage credit card. Since my bf makes considerably more than me, he puts a little more in the joint which is ok with him. Plus, we still have our own checking and savings accounts to spend what we would like. It''s a balance also. I know if I put $500 on the joint credit card, I should put that much into the joint checking account. If it ever raised an issue of him putting more in and feeling that its unfair, I know he would tell me and we would work something out accordingly.
It''s just there to pay bills and nothing us. We do not save in that account, just spend.

 

[applequeen]

I am in a similar situation with my husband who has gone back to school so I understand a little of where you're coming from (Ok I understand A LOT of where you are coming from). My husband and I actually got married when we did so that I could help him out financially while he was in school. He does have $ coming in... just not as much as he had when he was working full time. I do want to make clear that we DID NOT get married because he needed my help (we'd been discussing it for months) but got married when we did so I could help (we only had a 2 month engagement). We were not living together at the time we got engaged and by going ahead and getting married I was able to absorb him in to my budget without really noticing much change. Considering that we were already planning to get married it just seemed silly to wait. I pay a little more for health insurance and that sort of thing but it's not a big deal. My husband is still able to pay his car payment, his gym membership, and continue to invest for retirement.

Even though it's technically MY paycheck that pays for everything I look at it as OUR money. We have a budget that we both had input into and do a pretty good job at sticking to it. We currently have seperate accounts but will be opening a joint account soon... at which time i will be in your situation. We have very similar spending styles so I think that helps us a lot. We are most likely going to have one account for everything (household and personal) because we think that will help us to understand our overall financial situation. I think this will work for us but it certainly doesn't work for everyone. I think that the 3 account (his, hers, and theirs) is a great option... seriously if all the household needs are met then I see no problems with it. The important thing is to communicate about finances. I certainly don't think that I should have to ask my husband if I can buy a new pair of shoes or that he should have to ask me to buy something he wants. We have a common goal for where we want to be financially and trust each other to do their part to achieve that goal. Currently I am paying for everything but I know there will likely come a day when he is making more than me.... I can't wait for that day.. .WE will be in great shape. I should say though that we have totally seperate retirement/ investment accounts... our bank account would be for more short term expenses. Hopefully we'll be living happily together and reaping the fruits of these investments but it's just safer to keep that seperate (never know what could happen). We look at as "our retirement/ our investments" but it's in either my name or his name. For example... we both have ROTH IRAs.... one for me and one for him.

My advice (with all the "wisdom" of someone who is soon to celebrate their one year anniversary... March 10...yey) is to work out a budget that you can both agree to follow and to look into the seperate account option and most of all.....remember that you're in this together.

 

[musey]

Date: 2/27/2008 3:09:28 PM
Author: tberube
Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

You can do it however you want, and you really have to sit down and figure out what works for you.

Right now, we have our own primary separate accounts and make equal deposits to our joint account. We pull from that account to pay for rent, decor, groceries, etc. FI pays the utility bills himself, as he makes more. This is the system that works for us, and has for almost 2 years.

My cousin and her husband have a joint account that is their primary bank account which they dump all their joint earnings into. They also have separate spending accounts that they pull money from their joint account to bolster, based on their budget (kind of the opposite of what FI and I do). This is the system that works for them, and has for 10 years.

My dad is lucky to have a job that provides them with more money than they need, and my mom isn''t a big shopper. My parents just throw all their money into a joint account, and both spend from it without questioning one another. This is the system that works for them, and has for 30+ years.

 

[Independent Gal]

We make very similar salaries, but spend very differently, so what we have done is that we keep our accounts separate, and he automatically transfers $X into my account at the beginning of the month, which I then use to pay bills, mortgage, etc. We share the expenses equally. We each save another amount $Y in our savings accounts (and invest $Z into our retirement accounts) and then whatever is left we spend at our discretion out of our own accounts.

Then, periodically, I sit down with him and show him where the money has gone that month.

Once we're married, we'll probably open a join account and each put our share of the month's expenses in. But I'm not someone who is EVER going to want to mingle all of my money with his. I will always maintain my own savings and my own accounts. That's how I was raised, and I see a lot of wisdom in it. A woman should have her own safety net. Plus, I love that when I buy him presents, it is with 'my' money not 'our' money.

This is what works for us. But as Musey says, find out what works for you guys. There are dozens of options. Just pick the one that fits you two!

 

[Sparkster]

I have my own account. My pay goes directly into my account and then our mortgage and health insurance repayments come directly from my account.

FI earns 4x the amount I do. My FI has an account in which his pay goes directly into. Besides the mortgage and health insurance, he pays most other living costs. Whatever is left over is then transferred into a our mortgage offset account.

Whenever I get my credit card statement, I give it straight to FI and he draws a cheque (he's very old fashioned in the fact that he uses cheques). He does not scrutinise or even look at what I have spent. He doesn't care.

When I need cash to spend, I withdraw the money in our mortgage offset account.

 

[vespergirl]

Hi the rube,

My husband and I have a joint acocunt for bills, and individual accounts for "fun stuff." The money in our joint account only covers our joint bills, so no one can spend money on, I dont know, micropave rings or golf clubs out of it

 

[LitigatorChick]

My hubby and I have a joint account. That''s it. I make about double what he makes, but he made more than me when we first finished school. Doesn''t matter - it''s OUR money. We go through finances on about a quarterly basis, discuss where the money goes, decide on big purchases, make goals for the next fiscal year, etc. It works for you. You just need to find the system that works for you.

 

[bee*]

Date: 2/27/2008 3:09:28 PM
Author: tberube
Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

D and I are moving in together in May and this is what we''re planning to do. That way he can''t give out when I buy Manolos and I can''t give out when he buys guitars or fishing things!!

 

[Elmorton]

We have each have personal checking, a personal savings, one joint checking and one joint savings. It''s a lot of accounts, but we''re very different spenders. Right now, it doesn''t make a lot of sense - my entire paycheck goes to joint (we need it) and so does DH''s, so both of us have ohhh about $15 total between our personal accounts.

When we met with our priest prior to the wedding, he highly recommended we make separate and joint accounts - and one of his reasons was that when you have separate accounts, you can also surprise your spouse with gifts, and you can choose to buy things for yourself without feeling like you should ask your spouse (thus maintaining some degree of independence, within reason).

I agree that the trick to having two joint and two separate accounts is that each person puts that SAME amount into their personal account, and all expenses that you''ve decided to share are deducted from the joint account - AND that you''re fair about what is a personal expense vs. joint. (Remember that scene from The Joy Luck Club where they split the grocery bill, down to the cat food? Ugh..) So, if one person has debt, it''s not fair for each person to have $1000 a month for fun money, but $975 of one person''s goes to paying off school.

When we first started with our different accounts, DH was doing a lot of "taking one for the team" from his personal account (and I tend to do this too for things around the house and groceries) until we realized that we weren''t using our personal accounts the way they were intended and that only a small minority of our purchases should be from our personal accounts. Things are running a LOT smoother now.

 

[neatfreak]

It's complicated and only something that YOU can figure out for yourselves.

But this is what we do.

I have a budget set up for the household. This includes rent, utilities, dog food, people food, savings, decor, car stuff, phones, etc. Basically anything that is a necessity or for the house. We each contribute the same PERCENT of our income into this account. I worked out the percent we needed to put in based on the budget I outlined.

We then each get to keep the remaining percent in our personal accounts for spending on discretionary items.

As for the joint account, we talk to each other if we're going to spend more than $50 on something that isn't necessary (i.e., not a bill or groceries). Everyone's amount is different, but this is what we're comfortable with because we're in graduate school. I'm sure once we're out and making a lot more $, we'll be comfortable making bigger purchases without consulting each other, but for now $50 is the limit.

So for an example, if our monthly budget is $2200 per se, and he makes $1400 a month, and I make $1200 a month, we have $2600 to play with. So in order to meet our budget, we would each contribute 87% of our $ into the joint account, with him paying $1218 and I would contribute $1044. This way the person who earns more gets to keep more as a "reward" for earning more, but they also are contributing more overall to the household.

This works really well for us, but everyone has to figure out a system that works for them. The FIRST thing that needs to happen for you guys is to talk it out, work out a budget, and stop harassing each other about spending! Otherwise you'll fight about money forever IMO...

 

[Mara]

hee hee we never went to joint accounts, thank god. greg keeps making noises about it but until he understands that WAXING is a necessity and not a just nice to have...it ain't gonna happen!!

 

[Haven]

This has been a really interested thread, and I thank everyone who shared their personal situations, I feel like your experience will help us make a decision when the time comes.

My FI and I were just talking about this the other day, however our situation is the opposite of therube''s--FI is the one who makes more than twice what I make. We haven''t reached a conclusion about the finances or whether we''re going to pool our money into one account, but we DO know that I am going to be the one in charge of all the finances and paying the bills.

It''s interesting, because even though we''re not married and we haven''t really discussed it, by our actions it''s clear that we pretty much already consider the money we make as "our" money. For example, my FI just bought a new laptop, but I''m the one who wrote the check for it, as I often write checks because FI gets paid in cash and therefore pays for nearly everything in cash and I collect a normal salary and pay for most things out of my checking account. I never even thought about it as "my" money paying for "his" laptop--how strange that this just happened over time, this shift in how we view our money. And we''ve only been together for three and a half years. Or on Sunday night we stopped at a bookstore and I picked out several books to buy, and FI paid for them in cash. I didn''t even think about it, it''s just the way we do things.

ANYWAY, I imagine we''ll keep our existing separate accounts and set up a join account for monthly expenses, although that seems like a lot more to manage for me. Perhaps we''ll just keep our separate accounts and I''ll pay for all the fixed expenses out of mine and FI will pay for the other things, or we''ll . . . figure it out when the time comes.

Thanks again for sharing, everyone!

 

[CaptAubrey]

Date: 2/27/2008 6:11:00 PM
Author: Mara
hee hee we never went to joint accounts, thank god. greg keeps making noises about it but until he understands that WAXING is a necessity and not a just nice to have...it ain''t gonna happen!!

Stop doing it for a while and maybe he will.

 

[Sha]

I''m glad you posted this topic - since DH and I are thinking about the same thing. We''ve been married for about three months but haven''t merged accounts as yet. I thought it was a good idea - but over the weekend I started wondering whether it wouldn''t be better if we kept our separate accounts.

I make more than DH - so contribute more to the groceries, bills etc. Which is fine - we consider everything to be ''our money'' anyway. But I''m wondering how we communicate about transactions. Right now I''m the only with a chequing account - so I write the cheque for the rent, bills etc. It''s good that way because I can keep track of all the cheques I''ve written and make sure I''m not going overboard on spending. He does the same thing with his account. If we have a joint account though - I feel like we won''t be able to keep track of each other''s spending, or at least I feel we''ll have to be asking each other, "Hon, did you write any cheques today? What transactions did you do at the bank today? etc. etc". It just seems like it''ll involve so much more communication about expenses. I don''t want to be talking about money all the time - who did this, who did that- and I wonder what would happen if one of us forgets to inform the other of an expense, and we end up overdrawing our account or bouncing a cheque. We have enough money to take us from month to month - with just a few hundred dollars to spare - so we can''t afford to go overboard. Dh is pretty good about finances but he loves to grocery shop and tends to go overboad there. I just feel we won''t be able to keep track of it all.

 

[iheartscience]

Date: 2/27/2008 6:34:09 PM
Author: CaptAubrey

Date: 2/27/2008 6:11:00 PM
Author: Mara
hee hee we never went to joint accounts, thank god. greg keeps making noises about it but until he understands that WAXING is a necessity and not a just nice to have...it ain''t gonna happen!!

Stop doing it for a while and maybe he will.

Ha! Good one!

 

[iheartscience]

Right now my fiance and I live together but we each have completely separate checking and savings accounts. We split all the bills 50/50 even though he makes a fair amount more than me. He tends to pay for most of the groceries because of this...plus I''m lazy and I don''t cook or grocery shop, so that''s his thing! We can transfer money back and forth online easily, so we do that pretty often is one of us is going to pay a bill.

After we get married, we''re going to keep our personal accounts and set up a joint checking and savings. We''re going to do what neatfreak does, and contribute a percentage of our income to the joint account, so if I''m still making less than him, my percentage will obviously be a smaller amount, and vice versa.

I''m a big spender and he''s a big saver, so we''re definitely better off having separate accounts. Plus I could just never give up my financial independence completely. I actually have friends who have no idea how much money they make because they just hand over their paychecks to their husbands or wives. I could never do that!

 

[elle_chris]

Date: 2/27/2008 3:09:28 PM
Author: tberube
Should we each have our own accounts for our own stuff, and then a joint account JUST for shared expenses? Is that what most people do? I''m very curious as to how people make this work. It has only been a couple weeks for us, but I don''t want this to be a sticking point in our whole marriage.

My husband and I have a total of three accounts. His, Mine and Ours through 3 different banks. (it gets annoying).

Our joint is for the montly bills, food and anything extra we want for our home. We each put in the SAME amount every month to cover our living expenses and make sure there''s a little extra left just in case.

We did add eachother to our personal accounts just in case something happened to one of us, the other wouldn''t have any problems.

It works out great for us in the sense that we don''t need to "discuss" every purchase we make with eachother.

We also contribute to our savings once a year from our bonuses, and have a portfoilio which consists of various stocks/funds. Since i know nothing about stocks/funds and we''re actually limited in what we''re allowed to buy (he''s in finance and there''s some weird SSC regulations he needs to follow) he takes care of it.
We''ve been married for four years and i''m totally loving this arrangement.

Just realized i pretty much laid out how we work our finances but to be honest, it accounts for pretty much everything.

 

[Mara]

Date: 2/27/2008 6:34:09 PM
Author: CaptAubrey

Date: 2/27/2008 6:11:00 PM
Author: Mara
hee hee we never went to joint accounts, thank god. greg keeps making noises about it but until he understands that WAXING is a necessity and not a just nice to have...it ain''t gonna happen!!

Stop doing it for a while and maybe he will.

Ooooh nice.

 

[brazen_irish_hussy]

My FI and I switch, but one of us is usually making a good amount more than the other. Our solution is to put our paychecks into our personal accounts. Then half the smaller pacheck amount from each goes into the savings. The bills are split evenly and come from our personal account. Any other bills like groceries or eating out is covered from the personal account of whoever is making more. It leaves us both happy and we never fight about it because he doesn''t know how much I spend on my things and I don''t want to know what he spends on his things.

 

[Fly Girl]

We were married right after college at age 22 and immediately moved to a different city and set up one joint checking account. Our paychecks are deposited there, and all the bills are paid from there. Eventually, we set up separte savings accounts, and periodically deposit funds there for other projects. We discuss all major expenditures, even 32 years later.

I don't think it makes any difference at all how much each of you make. It simply doesn't matter. The money that is made belongs to the household, not to the person that earned it. Once you make that mental shift, a lot of the saving and spending decisions sort themselves out. You are in this marriage together, and you need to work out your finances as a team.

Edited to add: I highly recommend personal financial software, such as Quicken, to keep track of your accounts. As a friend of mine put it when faced with problems keeping track of their $$$, "It saved our financial lives!"

 

[Logan Sapphire]

We kept separate accounts until we got married. Now we each have one small "fun" fund and the rest of the accounts are joint. My husband makes $10k more than I do. Even though we have our fun money, technically it''s both of our money since otherwise it would''ve gone into the joint account. The money is both ours equally, and will be whether he stays home with our kids or I do.

 

[lyra]

Just a couple of points to consider, obviously start with a working budget for expenses and saving first:
1. Have it all available online. This is a wonderful service. It's absolutely up-to-date 24/7. Couldn't live without this.
2. Decide at what level of discretionary spending a mutual agreement needs to be made. Example: any purchase over $100, $200, $500, whatever you're comfortable with. Stick to this!
3. Have separate mad money accounts within your budget. You put in so many $$ per month into each, and then each of you can save up for major or smaller personal purchases/gifts, whatever.

 

[AmberWaves]

We do it pretty much like Musey. A month before the wedding we got a joint checking and savings accounts set up- mostly because we knew we needed the money for the wedding all in one place for the final payments and everything. We kept our private checking and savings account, for all the secret gifts we buy for birthdays and holidays and stuff- that was actually HIS insistence (he "claims" I''m nosy and wouldn''t be able to stop snooping

). I have one job and one bi-weekly paycheck to deposit, I usually deposit it to the joint, and then transfer amounts to our personal and savings accounts. He has two jobs and will deposit to whichever account number he remembers.

So far so good, although it IS an awful lot of ATM cards and accounts to keep track of.