X = all your shared expenses (monthly average) + a little extra for unforseen expenses or savings
Y = the exact same % from both your incomes that would cover X
Auto draft from your paychecks Y to the joint.
And everything that is left in each of your own accounts is your money to spend (free from judgement) of your spouse.
This drives 3 things:
-Reduced fighting over purchases.
-If you cannot live within your lifestyle of your own income, this will drive you to make more income.
-Each of you can save up your own money for big purchases.
This isn’t a perfect solution—and it may not work for couples with significantly different incomes—but it can go a long way in keeping the peace when it comes to everyday spending.
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This works until you have kids and are on one income. Then you’ll have to switch to everything goes in the joint account, and we each get our own spending money.
If you still have this, my earnings are mine attitude. You’ll have some very tough conversations about how your career option is worth more than being a SAHM/D.
Me and my wife have been doing this for about 20 years. Works beautifully.
That’s exactly how my wife and me do it, and in 22 years of marriage we’ve never (not once) faught over spending issues.
And whenever a relevant sum is left over on the joint account, it goes into a joint savings account. That one is being used to top the joint account off when required and we also use it to invest into stocks when the savings account reaches a certain threshold.
this doesn’t solve anything if you’re already in disagreement. it just pushes the disagreement toward what exactly is a “shared” expense.
and yikes, heaven forbid you run this calculation on a couple with one partner on ssi/ssdi
This is nice… My friend and his wife do exactly this put it in a joint account and spend the rest however you want, but his wife always gets mad when he spends money from his personal account especially on prostitutes… That makes me wonder if this method is not for everyone.
Why the percentage? This would mean if we are putting 30% of our salaries and spouse A earns $100 and spouse B earns $1 then spouse A is contributing $30 while spouse B is contributing $0.3
Isn’t this partiality? This is not income tax. It’s like spouse A being penalized for earning more.
The correct approach would be to contribute a mutually agreed fixed amount. For e.g. spouse A and B both contribute $40, regardless of their salaries. If one of them earns less, lower down the contribution until both agree. The rest can be used for their personal expenses.
We have been happily following this for 10 years.
I just seen “Sharing a Joint”
This is exactly what we do. We used to fight about money all the time; now we barely ever have to talk about it. Works beautifully. Just like OP said it’s not perfect and not for everyone, but for many people it’s a great solution.
Married 35 years, we’ve always done this: my “allowance” goes from my direct deposit into a separate account I maintain. The rest of my paycheck and all of hers go into the joint account. Whatever is left after bills and savings is her spending money.
I don’t get this yours and mine stuff. All our finances are pooled. It doesn’t matter who earns what, we’re in it together
We’ve done almost this for 35 years and never argued about money.
The only thing we’ve done differently is to not do it on percentages, but on a 50:50 split. So if our houshold expenses (kids, food, house, maintenance) are £1,600 a month, for example, we each put £800 in the joint.
The idea is that if (just in case) we separate, we can simply split everything 50:50 and won’t need to argue about percentages and who earned what when.
Keeping the peace should be easy when sharing joint.
I‘ll see myself out.
LPT: Sharing a Joint
Or you can just have a conversation about each non-essential purchase you make and have one joint account. Communication is good. My wife texts me when she picks up Starbucks and I do the same.
LPT:
Have an earnest discussion about finances with your partner and determine the way that works best for both of you as a team.
And all of those solutions are entirely ok, as long as it’s equitably discussed within your partnership to make sure it’s what works for both people.
My wife and I keep separate accounts, and have a joint account specifically for very big things. She Venmo’s me for bills, and I Venmo her back for incidental “bigger” stuff that comes up. However we don’t sweat the small stuff and we see it as “our money,” it’s just what has always worked for us.
And that’s ok.
My wife and I work like this. She’s not good at saving money. We’ve been talking about pitching for a reno for the last year, I’ve put aside 13k for it and I asked her the other day… $0. Looks like no reno but maybe a new computer for me!
Totally agree that this method can be a perfect fit for some situations. When my partner and I first started living together, she made a significant amount more than me. When we split shared expenses exactly 50:50 she had a fair amount of money leftover, and my paychecks were basically gone. After a while we switched to contributing a similar percent of our income and it was more fair.
Or you know, discuss expenditure on a joint account. Most people I know also maintain personal accounts.
Wife has her own bank account
I have my own bank account
We both share a joint savings account that we put a percentage of our paychecks in.
Everything is happy.
This is the wrong idea. Don’t do it.
My bf and I take turns on the fortnightly groceries. And we go halves in shared things and use an app to instant transfer the halves to each other.
Doesn’t work for me, my wife’s paycheck is gone before the bills are even paid.
We each pay the percentage of our gross household income we each make. If I make 60% of our GHI, then I will pay 60% of the bills and vice versa.
Me and my fiance of 10 years just throw everything into a joint and keep 100$ in our individual savings for “oh no” moments, we consider both incomes as each other’s regardless of who’s been the bread winner. Large purchases and debt mitigation are treated like a month end meeting where we discuss, where we are, where we’d like to be, and things we suspect will be needed the next month. Our finances are one of the most stress free parts of our relationship but we’re pretty solidly low middle class in very rural area with no kids or pets, so our situation is pretty free of variables.
We do OP’s approach and get on really well with each other when it comes to money. Both feel like it’s fair and each gets to do what they like with their own money. A pay increase for one benefits both, and it’s nice to buy each other little treats which I imagine works a bit differently when it’s one shared pot.
It’s never a one size fits all. Yes, equal % sounds equal. But when income is really skewed, it still leaves one person feeling more free than the other.
This works unless your big purchases are together. We travel a lot, it’s hard to be like oh save your part for your ticket or you want first class? That’s your money, etc
Is there a way to do this with vastly different incomes? I don’t want my partner to need to like ask for spending money or something, just seems degrading like asking your parents for cash.
My wife and I initially wanted to do this, but found it not worth the effort. The averaging just didn’t work well, as our bills are very front-loaded on the month.
Instead, we both have our direct deposit is setup to send all but 5% into the joint account. That extra 5% is no questions asked, at our own discretion money. All “necessary” purchases (food, gas, clothing (within reason), etc) are made from joint, and the 5% is purely to use on ourselves. Any purchases too big to be covered by that we discuss with one another. It’s not asking permission, but just working together as a team. This also incentivizes saving up for larger purchases (which has the benefit of making sure you KNOW you want it)- I bought my $2500 mountain bike by saving up.
This system works very well for us, and is kept flexible to fit our needs. There have been tight months where we have to use it all on bills (especially early on), and great months where we get extra. Of course, we got married quite young and didn’t have any significant pre-existing assets or accounts to factor in, so this was a clean & easy solution.
This is almost exactly our set up, and the same advice we have been giving our friends and peers for 20+ years. One of us pays $100/bw more than the other but also makes significantly more income. We have rarely fought about money in 20 years. It’s awesome advice and worked for us.
Also bonus advice:
First, try not to go to bed angry with eachother. And, honestly and communication are of the utmost importance in any relationship.
This is how me and the wife do it as well. Because i make quite a bit more we do a weighted average of contribution to the monthly expenses
Base it on trust. I make the most money, my wife manages the income. I trust her. We talk about pretty much any purchase we want to make. Its actually easy. Trick is to remove ego… a big trick I get it, but this approach has provided a blissful 29 years of marriage.
We use 1 joint account. I make significantly more than my wife, but we are a team. I don’t feel she should have less to spend than me. If I did, I wouldn’t have married her.
A real tip in this sub? I am shocked. It is actually a good one and is how I did it for over 25 years. We did have a third fund for vacations we would both contribute to also but many years it was just our tax refund.
Add your incomes together = Total Income
Your Income / Total Income = Your Income Ratio (unitless # btw 0-1)
Their Income / Total Income = Their Income Ratio (unitless # btw 0-1)
Your Income Ratio x Total Expenses = Your Share Expenses
Their Income Ratio x Shared Expenses = Their Share Expenses
Your Share Expenses / Your Income = Their Share Expenses / Their Income = Y
You don’t need Y to calculate anything, I guess it’s just useful to prove you’re both contributing equally.
A different way to describe the variable Y that seemed more intuitive to me:
Y = X divided by the sum of your incomes (monthly)
Y is thus the % to save.
E.g. Have $2000/mo of expenses? Spouse A makes $3000/mo and Spouse B makes $1000/mo, that’s $4000/mo between you. So $2000/$4000 = 50% is how much should go to joint from each spouse; A contributes $1500 and B contributes $500. (As opposed to A covering all the joint expenses and having $1000 personal funds and B having $1000 personal funds.)
I’m the primary earner in our house. My wife and I don’t have her/ me money it’s all ours. We do have spending budgets where we can buy stuff that we want, without asking each other. Above that amount we talk it out. Paying the bills comes first of course. Been married almost 10 years. Really it just comes down to communication, and being reasonable on expectations.
I’d adjust it a little. I just apply the 50/30/20 rule to the pool of income we have, except it’s more like 50/30/10/10 where we keep 10% for our own spending and gifts and 10% goes to a shared vacation fund.
You might as well just not get married and avoid your inevitable planned divorce.
been married for 15 years. We have one joint account that both of our paychecks go into. my wife makes maybe 20% more than I do, but that was not always the case. mortgage, all bills, groceries, things we do together, etc… all comes from the joint account.
from the joint account, we have our “fun money” accounts for each of us. each month, an automatic deposit goes from the joint account to each fun money account. we can do whatever we want with that money. buy clothes. go out for drinks with a friend. buy stuff for hobbies (mountain bike or hiking stuff), etc… we’ve had almost no fights about money since being married.
that said, I have a friend couple who has a similar system. but they fight about money all the time because she seems to disregard the rules they set in place kind of whenever she feels like it which seems super shitty to me, but its not my marriage so…. so it only works if you both follow it.
It really depends on a lot more factors. How does each of you treat money? How
much do you each have and earn? If you’re both minimum wage earners this won’t help. If you’re both six figure earners with little to no debt it might. If one of you has excellent credit and the other struggles or has poor financial literacy it will be a big challenge.
True you acknowledged that it wouldn’t work for everybody. First thing any couple must do is to either get on the same page financially or learn one another’s positions.
I disagree with this approach for a few reasons. One is that there shouldn’t be that much unaccounted for money in your budget, another is that just because you earn more at your job does not mean you should have more of the family’s resources. These plan are almost always designed by the person who earns more money and sees their partner as an expense.
My girlfriend makes ~400-500k per year, I make around 100-130k. Am I supposed to just be poorer than my wife for the rest of my life? If we get married, I want an occasional Rolex too.
For a team, everything goes into the pool, then we get equal discretionary amounts out.
Do y’all not live in community-property states? All this talk about “each getting our own” and what-not.
Where I live, there is no such thing as “mine,” there is only “ours,” which either person can legally consider “entirely his or hers.”
Which basically means, any agreement on how money should be managed is just blowing smoke, because either partner could literally bet the farm on a hand of blackjack at any time and the other can’t do a thing about it. It matters not who earns what.
we dont call it the joint account, its the house account, with the houses money in it. when we sell the house, we each take our individual input to the down-payment, then we split whats left, since we split everything 50/50
My wife stopped working to raise our kids. We merged our checking and savings, but we still contribute to her old IRA so she has some confidence she would not be destitute if our marriage dissolved. We generally check in on personal purchases over $20 or so, “i’m going to buy X” but rarely have any comments other than advice, “we could do that with something we already have”, etc.
Commenting to save
My spouse and I pool all of our money into one account, and have done so since we got married 30+ years ago. Well, technically we live on my earnings, and all of her’s goes into a savings account that we use for big irregular purchases like new appliances, vacations, car repairs, etc.
As others have said, having the same or similar spending habits, ideas about spending and saving and money in general, and most important, constant communication about it the best way to go, in my opinion, whether your accounts are commingled or kept separate. Both of us have access to all of our accounts, and we both know where all of our money is going, and in what amounts.
This works in semi balanced dual income houses. Which apply to some. But not all
LPT: when you enter in a partnership/marriage with someone, you can free your mind for the headache of keeping track of this stuff and pool your money together regardless. Your wife might make less money but does much more around the house and with the kids. She doesn’t deserve “less” in the joint account
Oh yeah? What happens when you both retire and the other person has no money because they didn’t save/invest? You just going to let them die? I bet not and you’ll end up covering their costs. How’s that fair? The same goes for a very expensive unexpected expense like getting cancer or something. You probably wouldn’t say “tough break you should have saved more.”
My partner and I have a shared account for about 5 months
We worked out a weekly spending allowance for each of us that we agreed on $200 aweek, this cover things we do with out each other eg vapes after work beers lunch if going out with out each other, if we are both out with friends we use the shared account
Even tho we have different pays im on 80,000 and she’s on 65,000 both transfer all apart from 200 a week in to joint account all the bills rent food shopping ect that is life needs is all from the shared spending accounts is extras eg tattoo tech so if I need a new pc I need to save from my spending account
To me, keeping a separate account is a lack of trust. Are you really not going to discuss big purchases with each other? Are you really worried about commingled assets if you get a divorce? Do you really think that the spouse who makes more money should get to spend more on themselves, when women typically have to take more time when starting a family?
If one of you loses your job for a while, your individual income goes to zero, what happens then? What if you have a kid? You make major purchases like the house together, and now you can’t cover “your part” of the mortgage. What now?
Putting this level of transactionality on a marriage is just so stupid. Don’t get married if this seems like a good idea to you. You’re financially dating, so just keep it that way everywhere else until you’re ready to get married.
The fact that you keep money in different accounts doesn’t make it more or less yours. It’s your agreement with your spouse that does that. So just have that agreement and leave the bank out of it.
My husband and I use our joint account for mortgage and utilities, car payment and insurance, groceries, shared debt, and daycare. I worked our contributions based on ratio since we don’t have equal income.
Money leftover after our joint contributions is our own individual funding for debt and general spending for the month.
It’s worked for us since getting married 4 years ago, and I don’t see us moving away from it anytime soon.
Or, go to couples therapy and treat your money like you chose to treat your life, as a partnership. If your partner can’t control spending, or you feel the need to keep tabs on who earns more, and you can’t set reasonable monthly allowances for personal spending in your budget, those are relationship issues as much as financial ones.
Negative get a separate account and use it for bill pay
Couldn’t agree more my wife and I have been happily married for 10 years and we joint our bank accounts right after we got married.. complete transparency and forces you to communicate when spending above average amount. Really recommend!
Myself and my wife decided to do a similar thing, but a nice twist on it.
We have a “Bills” account, shared. Of course, for set bills and overages for fluctuating ones. All deposits go directly to here first.
This is the <Needs First> account.
We share a “Primary” account as well. After bills are calculated, we deposit the allowance to this.
It has been a monthly routine with my salary, so we’ve got a great thing planned out. It covers gas, groceries, wants, and all the other stuff.
We also pay for appointments and medicine with this.
2(b). A monthly pay needs strong budgeting, of which I lack. Sooo, we use Google Sheets.
Input the pay at the top, input the bills, output is the allowance. Then we divide up across the weeks leading up to the next paycheck and set aside a portion for savings as a bill.
This helps us visualize what we have left. Yes, a mobile banking app does this, but we don’t have control of our money unless we see and interact with it. $200 a week to cover gas, food, and saving up some for meds, unexpected expenses, and appts. Didn’t know my car needed new tires, I included that plus whatever I needed from savings.
200 a week is not set in stone. Sometimes I’ll go in and include 3 dollars into week 3, with 3 dollars left, and the other 20 dollars in week 4.
We include savings as a bill in our Sheets. It’s paying our future selves as insurance, pre-calamity.
Once factored in, the amount for savings is transferred to the account through our banking app.
Now we have our bills covered in one account (no card usage, but we have cards), savings account with it’s monthly tranfer, and the groceries account for all that jazz.
We dont fight about money, because we grew up poor and in desolate positions. We always communicate with each other about who’s paying for what. We pay, put that info in the budget, then have a nice balanced budget.
We put all our money into the same account and just pay our bills and share it. No need to have a separate account.
Additionally…split X according to the ratio between your two salaries!
We split with three accounts 75% goes to joint. We each have our own 25% go to our account for fun money. 90% of that is invest into our own brokerages