Tuesday, December 16, 2008

#459: money honey.

maybe it's because it's almost time to start thinking about resolutions.

maybe it's because we're going to need another car in less than 2 months.

maybe it's because we're soon going to be legally responsible for each other's financial well being.

...but i'm super motivated to review all of our savings, retirement plans, credit cards, student loans, etc. i'm planning to discuss with the fiance tonight and i'm actually really looking forward to it.

during our annual christmas dinner last week, a friend shared that she and her husband use separate checking accounts along with a joint savings account. the husband is responsible for the major bills like rent and utilities. they are each responsible for their own car and insurance bills. and then they both contribute any excess to the joint savings account.

back when i was actually making money, we were headed down a similar path. we both contributed to a joint checking and paid all of our joint expenditures (meals, vacations, etc) through that account. we each paid for our own cars and insurance and also had our own separate retirement, investment, and savings accounts.

i thought that's how we would keep things. but not so.

because now that my income structure has changed (as in, been whittled down closer to zero), that process no longer works. we now deposit both of our incomes to a joint checking and disperse funds to a joint savings twice monthly. all of our bills (his, mine, ours) are now jointly paid out of the...joint checking.

i no longer have a 401k to contribute to...so we'll have to talk about setting up a separate IRA for me.

we have slightly different philosophies when it comes to the market (i'm fairly aggressive and like to experiment...he's conservative) so it might be in our best interest to keep building our investment accounts separately.

ok, now i'm just babbling. too much sugar.

at the end of the day, no matter what we decide to do with all of our accounts, i'm glad the fiance and i can talk very openly about money. we have different strengths and weaknesses when it comes to managing finances and i think (AND I HOPE AND I PRAY) that with continued transparency, we will always be able to resolve money issues logically and adeptly.

i keep hearing that MONEY (especially after buying a house, having kids, [insert additional financial burdens here]) creates all sorts of problems in relationships...so i'm banking on our open communication (pun anyone?) to keep us from falling into that trap.

9 comments:

Kristen said...

It's good that you two can talk money. My husband and I each have separate accounts that we transfer a set amount to each paycheck and the rest goes into a joint account from which we pay all our joint bills (which is most of them). We decided to do a set sum rather than a % because he's a grad student and makes waaaayyy less with his work study job than I do at my full time job, but we each wanted to be able to do our own thing. It works really well for us to do it that way.

I will say this though, even with open communication you'll probably still argue about money at least every once in a while. Just make sure that when you do argue, the problem actually gets resolved. :)

so alaurable said...

I strongly believe open communication about money is one of the best things you can do for your marriage. Looks like you have a system that works for you!

east side bride said...

um, did you say you're looking *forward* to talking about money?

maggie said...

I really think this is one of the most important things that couples should figure out before marriage!

On a separate note, I don't really get savings accounts. Either money should be accessible, or it should be invested. Though maybe these last few months scared that opinion out of me...

AmyJean said...

money is not the most important thing in the world. but when you don't have any or it becomes tight, it can definitely feel like it. i think its good you are thinking of this now. the brokeassbride turned me onto mint.com. i'm obsessed! hoping it'll let me visually see where i'm spending that i shouldnt' be :)

ThickChick said...

Yes - I've read that money is the cause of so many marital problems. Whenever I mention that to the Cub he just laughs and thinks it's silly that we'd ever fight over money. Anyway, though we have frank discussions about our debts, assets, investments, etc. all the time, I still want to get some sort of structure for our future financial decisions in place. Thanks for the reminder. Now maybe I should go return some pants to Anthro that I don't really need.....

Meg said...

I'm with Kristen. We'll have a joint account for all bills, but we will transfer a set amount (regardless of what each person is making) into seperate accounts. Allegidly those accounts are so that we can buy each other gifts, etc, secretly, but on a more practical basis they will give us personal spending money. That way if he wants a fancy new tech gadget or I want clothes, we don't need each others approval. We save for it out of our own accounts, and ta-dah, it's ours.
Also, worth thinking about: I've read that each person should keep one credit card in their own name (not joint). That way in the case of death or divorce, you still have an indivdual credit history, which is a god send.

feminist finance said...

maggie--

Savings accounts are extremely important because they give you a place to segregate and park money to be used in the short or midterm (or possibly in the short to midterm, as with an emergency account that would cover living expenses in the event of job loss or illness) that gives you a better interest rate than a checking account. Because they are inherently risky, money should only be invested in equities for longterm goals (10 yrs+), like retirement, a child's college portfolio, or for other distant goals or general wealth building. And keeping that money in a checking account will generally get you a crappy interest rate that comes nowhere near keeping pace wit inflation, and the easy access to it by check, atm or debit card can tempt a lot of people to spend it rather than save it.

10k only, you might be eligible for a spousal IRA, which lets spouses without income have accounts in their name that are funded by the earnings of the other spouse. If not, then a Roth IRA would be another great option for you. They are really easy to set up.

I blog *a lot* about relationships and money, if you couldn't tell.

Annalisa said...

Hi There! Love your blog. My fiance and I have been sharing finances for a while since I started grad school more than a year ago. We were both very "separate but equal" people but now we are down to one income. We use mint.com to track bills & spending, ALL of our spending goes on one CC (Amex has great rewards) we pay off each month, and we use google docs for an ongoing tally of spending. We also sit down 1 - 3x a month to see what's going on. It took us a good year to find the best solution since we calculate finances differently.

Oh -- we also check our credit reports together every 3-5 months. It's good for financial health but also leaves out the possibility of any financial infidelity.

Good luck!