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Subj: Re: Seperate accounts - wise financial move, or admitting defeat ahead of time?
Posted: Thu Dec 13, 2007 at 04:53:52 am EST
Reply Subj: Seperate accounts - wise financial move, or admitting defeat ahead of time?
Posted: Wed Dec 12, 2007 at 10:55:23 pm EST
> My wife and I have joint everything. For us though, it was an easy
> choice - we started our marriage just out of college and neither of
> us had any separate assets to begin with, so it didn't seem like a
> monumental choice.
> Some people describe a prenup as 'the first motion in a divorce yet
> to be filed'. I guess I feel sort of the same about separate bank
> accounts. Some friends of mine do the separate thing and seem to be
> very happy about it - though there is some occasional friction about
> who will pay for something. But the whole idea of it seems strange to
> me. If you're in a marriage with someone, why would you have divided
> accounts? Why would there be 'your' money and 'their' money. Isn't
> the whole point to partner together through life?
> So what's your take? If you were getting married (or are married),
> which would your choice be?
There are really pitfalls to any method, but as long as the two parties mature about things, any method can work. I wouldn't suggest one method over another to anyone else, but I do have a preference.
Having a joint account can often lead to power struggles, plus quite often, couples enter a marriage with disparate financial histories, which can lead to trouble. However, having a joint account is by far the simplest action. If one half of the couple is bad at keeping track of expenses, it's probably best that they have a joint account with the more proficient member taking care of the finances. This is also probably the best choice for younger couples to get them used to thinking in a communal way.
On the other hand, having separate acounts gives both a reasonable measure of autonomy. Some planning needs to be done when it comes to expenses, but if both people are mature when it comes to money (and their relationship), then there's nothing wrong with this. There are many shades of what plan will work for a couple, based on individual incomes and individual and joint expenses. Get this ironed out, and get it ironed out quickly in a way that doesn't put too much burden on one person.
Third option: Have separate accounts, plus a joint account (also known as the One-Two Method). This is what my wife and I have. It's what makes the best sense to us. It combines the best of both worlds. We have a "community chest" that is ours, but we also have individual pots that give us some autonomy. We each contribute (a previously agreed-to amount) to the joint account in equal ways based on a percentage of our income, while keeping separate accounts for our personal expenses. Personal expenses are also previously agreed-to. My car is my car, and my wife's is hers. We pay the insurance on both together from the joint account, but if my car needs a brake job, it comes out of my personal account. When I buy my weekly comic books, I pay for them out of my personal account, but if the family is going to the theatre together, it tends to come out of the joint account. We buy our own clothes from our own personal accounts, but if the kid needs clothes, it comes from the joint account. The kid's allowance comes from the joint account. Etc. If one of us has to dip into our personal accounts for the family, then it's really no big deal to us, but we don't make a habit of it. Neither of us will ever dip into the joint account for personal things without serious discussion about it.
Yes, the whole point of marriage is to partner together through life. We've never bought into the idea of marriage uniting us as one. We're a combination of two. Like in a business, partners do keep their individual accounts separate.
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