Marrying Budgets When You Marry?

budgetguyI’ve been tracking every single penny that I earn and spend since 2010 and I’ve been doing so publicly since this blog went live in March 2011.

I do this because I believe that it’s imperative to know exactly where all of your money comes from and where it’s going if you have any hope to become financially independent. After all, if you don’t know where your money is going, how can you possibly know where to cut expenses and save?

So the budgets that you see here are my half of the picture. That’s what I earn and what I spend. My significant other, Claudia, earns and spends her own money. We split most household expenses – rent, utilities, internet, groceries – but we also have our own personal expenditures. For instance, her son Aaron accounts for a substantial portion of her expenses, including clothing, school supplies, and hobbies for him. And anything that I want or need comes out of my pocket. Meanwhile, I usually pay when we hit the town and go out to eat or otherwise entertain ourselves.

This has worked incredibly well for us. It’s allowed us both a lot of latitude as far as how we go about spending our money and it’s also given me the freedom and time necessary to focus on investing and building up the passive dividend income.

But now that we’re engaged, we had to sit down and have a discussion on whether we were going to continue this system or not. We’ll go over the pros and cons of sharing one budget or continuing on with separate budgets and then conclude with what we decided to do.

Separate Budgets

Pros:

  • Complete freedom of spending with minimal/ no interference or input from the other partner.
  • Easier to track income and expenses for just one person for each person.
  • Avoids fighting or drama, especially if one partner is a spender and the other is a saver.
  • Each partner is on equal footing when it comes to household decisions/spending.

Cons:

  • It requires a heightened level of personal responsibility, especially if one partner is a spender. They have to make sure they can continue to contribute their designated amount of income to the shared household expenses.
  • There may be feelings of jealousy/inadequacy if one person makes substantially more income and is thus able to spend much more money with impunity.
  • The relationship may lack financial cohesiveness because there’s a sense of individualism there.

Combined Budgets

Pros:

  • If there’s a significant difference in income between the two partners, there’s no hierarchy because the money is completely pooled.
  • One person can adopt a “CFO” title to run the household budget, which allows everything financially related to flow through that one person.
  • There’s a sense of togetherness because everything is shared.
  • If there is a saver and spender in the relationship, a shared budget can even the two out.

Cons:

  • There’s a lack of independence, which could present feelings of resentment if either partner craves that.
  • There could be more input from one partner than is really wanted.
  • Fighting could present itself if the two partners aren’t on the same page in regards to spending/saving.

What We Decided To Do

So we had a few discussions on what we would do and how we’d go about it. To be honest, I actually implored Claudia to just go ahead and share her budget with me. But after some back and forth on it, we mutually agreed to keep our budgets separate for the foreseeable future.

For a little background on this, Claudia works in early education. As you can probably imagine, the amount of income one can make in this field is somewhat limited. So she’s never had a high savings rate and that’s never really concerned her very much. She loves what she does and plans to do it for as long as she possibly can.

Now, we may differ a bit in regards to our views on financial independence and the value of what we do. However, we do not differ much when it comes to spending and frugality. Although Claudia has never had a high income, or perhaps because of this fact, she’s always been fairly frugal. And since meeting me this behavior has probably exacerbated itself. She takes the bus to work, packs a can of tuna or soup for lunch, and spends very little money. In fact, I had her sign up for a Mint account a while back to help her with tracking her budget and it’s become obvious that most of her limited spending is on rent, food, and her son.

While we mutually agreed to keep our income and spending separate, Claudia really preferred this outcome more than I did. And the reasoning behind this is simply because Claudia has different priorities. Her son is by far and away her first priority and any spending related to her son is really non-negotiable in her mind. So she basically doesn’t want any input from me in that department. If she can save, then that’s great. But it’s simply not a priority for her. My priority is obviously achieving financial independence and so my spending (and saving) is prioritized toward that. Whereas I “spend” a lot of my disposable income on stocks, Claudia spends a good portion of her disposable income on her son. For instance, her son needed braces a while back. That was expensive. He also has field trips, opera, and events with friends that all cost money.

We have, however, had some discussions on where we see ourselves a few years from now. I obviously see myself as living completely off of passive dividend income by the time I’m 40. Claudia will be 57 at this time. Now she’s more of a day-to-day type of person, but she’s entertained the possibility of scaling back work a few years from now, which would involve teaching part-time or perhaps just tutoring a few children on a freelance/contract basis. This would lead to reduced income, although her son will almost certainly be independent and no longer living with us by this time. We’ve agreed that if her income is reduced below what she needs to cover her half of the bills, I’ll cover her. So I would either develop a new budget line titled “Claudia”, which would require some additional spending on my part, or we would perhaps just combine budgets at that point in time since her son will no longer be with us.

Conclusion

I don’t think there’s any right or wrong way to go about household budgeting. Some people find it natural to share everything. For others, splitting household expenses 50/50 while allowing each other a lot of freedom in regards to personal spending is easier. I don’t think it really matters how a couple goes about it as long as it works for them and leads to the least amount of friction possible. It’s common knowledge that financial disagreements can lead to relationship problems, so minimizing these financial differences can make for a much happier partnership with one another.

It should go without saying that it’s extremely important to seek out a partner that is on the same page financially right from the start. This means that it probably won’t matter much if you combine or split budgets. If you’re a hardcore saver and you marry a spendthrift, you have an uphill battle regardless of the way you each budget. So although Claudia and I aren’t both seeking financial independence, our views on happiness, frugality, minimalism, and life are largely aligned. However, we do have different priorities with where our money goes, and so we both agreed that it would be better if we continue operating separate budgets. If it’s worked for five years, we see no reason to change things now.

What are your thoughts? Do you combine budgets? Operate separately? Why? 

Thanks for reading.

Photo Credit: Ppiboon/FreeDigitalPhotos.net

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133 Comments

  1. My wife and I got married in October and we decided to combine budgets. For us, though, it was easy – we both work, but we are also devoting her entire salary into our investment portfolio and living entirely off of mine. This is rapidly helping our FI date to get closer and closer and simplifies how we look at our money. Basically, we consider both of us to be living off of a single salary.

    It’s simple, straight forward and a darn good way to watch our investment portfolio build pretty rapidly.

  2. Hi DM,

    This is a fairly sensitive subject for most people. In my case, even though I am not married, I prefer to keep the budgets separate. It allows me to save as much as I want without having to take into account the other person’s wishes, and allows the other person to manage and save her money in whatever way she sees fit. Although, what we do might be considered a hybrid, because while we have separate budgets, we share our budgeting plans with each other and advise each other on what would be the most sensible way to make the most out of our given budgets, but there is no need to have a consensus, each one, does whatever he/she wants.

    We also cover each other in times of need, and work as a safety net for each other. It has worked out very well so far, but like you mentioned we really are on the same page in this aspect.

    Best wishes!
    DividendVenture

  3. DM,

    Another great post!
    I totally agree with you how important it is to be on same page financially with your partner/spouse. Me and my husband are not big spenders at all and have always lived below our means. We have separate bank accounts ( but both in our names) for our direct work check deposits. My husband always paid the mortgage and other big expenses. I always covered groceries, utilities, clothes and other small bills. We split house property tax. This arrangement has worked great for us for the last 10 years. To me the most important thing is, that neither I nor my husband has any expensive hobby or habits of any kind ( like gambling, owning a boat etc.). We also hate debt of any kind and have never been late with any type of payment. This gives me peace of mind that my spouse is as responsible as I am.

  4. Well it had to happen buddy. I would have a really hard time having separate accounts and separate budgets, but it works well for some folks. In fact, I think several of our financial bloggers have separate accounts and budgets. Best of luck to you guys. I look forward to hearing how it goes in a year or two.

    Hope you had an outstanding weekend. We took the Little Man for his first mini hike today. The weather was awesome! Have a great week, and happy (value) hunting!
    -Bryan

  5. Certainly a tough call given the complications that bringing a son into the relationship provides. At this point, if it ain’t broke…

    My wife and I combined finances, and that works well for us. We are both on the same page as far as frugality, and while my investment risk tolerance is higher than hers, she supports the overall vision of where we are going and allows me to handle the finances and investments. Prior to even getting engaged, I was aware of our differences in regards to investing, and made it clear that we’d need to find a compromise, otherwise I wasn’t comfortable moving forward in the relationship. After several discussions, we came to our compromise (keeping a fairly large dollar amount in cash), and haven’t had a single issue since.

    I do have experience with the spender/saver scenario, given my ex-wife was a huge spender. Needless to say, this caused a ton of problems, and long-term, didn’t bode well for the success of the relationship. Wasn’t the only reason for it ending, but certainly didn’t help.

    Prioritizing the communication and understanding, regardless of what is agreed upon, is key. Doesn’t matter what it looks like or how others handle it, it matters if it works for you two and everyone is comfortable with the decision/process. As time goes on, things are likely to change, but as long as you are able to communicate and articulate your feelings about money with one another, it should work out in the end.

  6. First, congratulations on your engagement and your upcoming wedding!
    From start my wife and I only split household expenses, mainly because of different upbringing and financial awereness. Today after 29 years we combine budget, but it’s a “working progress”, we always talk about changes to avoid money becomes a problem. As you say in your conclusion “there’s any right or wrong way to go about household budgeting.” You have in my opinion, started right, talk to each other is the most important thing to do.

    Greetings from Micael in Sweden

  7. Steve,

    That sounds like a good plan there. Easy and no-fuss. And that’s really what it’s all about. Plus, you’re able to put away an entire salary. That’s awesome! 🙂

    Keep up the great work.

    Best wishes.

  8. DV,

    Right. We operate in a very similar way. We certainly advise each other on some things, but we ultimately have “veto” power. It’s like we’re each the President of our own budget, but we allow each other as a member of council. 🙂

    Thanks for sharing. Sounds like you two have a great plan over there. And it works, which is what matters most!

    Cheers.

  9. Jollie,

    Glad you enjoyed the post. I try to mix it up and always cover something appropriate for the journey along the way. Life changes and so do finances, right? 🙂

    That sounds like a unique and great arrangement over there. I think as long as you guys understand it, it works, and there’s no friction, then it’s a winner.

    And I totally agree with you there. It’s important to find someone financially like-minded, even if the goals/priorities aren’t totally the same. If Claudia were, for example, a gambler or $100k in consumer debt, it probably just wouldn’t work. That would just be a fundamental difference in how we view money, life, and what’s important.

    Thanks for sharing. Really appreciate it!

    Best regards.

  10. Bryan,

    Yeah, I see a lot of separate budgets out there. It works pretty well for us. If the time comes where we have to combine budgets, then so be it. I’m actually the one who was pressing the issue, but Claudia stayed pretty firm on keeping separate budgets. It’s worked for five years, so I imagine it’ll work for another five. 🙂

    The weather has been AMAZING down here lately. You guys couldn’t have picked a better time to hike it out. Hope you had fun. We live in paradise!

    Cheers.

  11. W2R,

    Sorry to hear about the past relationship there, but everything works out for a reason. Sounds like you’re with the right woman now. And that’s awesome. 🙂

    I completely agree on communicating. Just assuming someone is on the same page or knows what you’re thinking in your own head is a big mistake. I’m sometimes guilty of this myself. I sometimes will have “a conversation” with Claudia all in my own mind. So it may be something I mean to talk to her about, but for some reason I end up never bridging that gap from my own head to reality. Then I think the conversation happened when it didn’t. It’s just a mental block I’m improving all the time. We’re pretty good at communicating these days, and the conversation on the budget was pretty easy.

    Glad you and your wife are on the same page there. That’s what matters most. You may have slightly different visions of the future or risk profiles, but walking the same general path together and being supportive of one another is important.

    Appreciate you stopping by and sharing!

    Best wishes.

  12. Micael,

    Thanks for stopping by from Sweden! 🙂

    Appreciate the warm congrats. Life is good. I hope the same for you!

    That’s really great that you guys are combining the budget after 29 years. That’ll be interesting to see how that works out. I imagine there’ll be some kinks in the beginning, as it’s sometimes difficult to change that late in the game. But I’m sure you guys will figure out what works best.

    Best of luck in finding the right balance and making a successful change over to a combined budget.

    Cheers!

  13. Henry,

    Well, as I stated in the post Claudia is pretty frugal. She just doesn’t have a particularly high income. But right about the time I’ll be living off of my dividend income she’ll only be a few years away from her SS income. However, we’ve talked about her possibly working part-time or on a contract basis once the dividend income is coming in pretty heavily. And that way we could both enjoy some of the benefits. Really just depends on how much passive and active income is coming in at the time, but I suspect we’ll be able to one day get to the point to where we’re both at home a lot more. 🙂

    Thanks for dropping by!

    Cheers.

  14. DM,
    Sounds like the right decision for your situation. Since you are so meticulous about tracking everything, it will make your life and relationship easier.

    My wife and I combined after we married and it’s the right for our lifestyle. She stays at home with our kids and doesn’t work anymore. Sometimes I have to nag her about receipts. Not because I’m upset about her spending, but to split them out and categorize things. Target is the worst because she buys so many categories of items there.

    She and I are mostly on the same page frugality wise. One positive thing I noted when we were dating was that she didn’t have any expensive hobbies. My best man joked about that in his speech and it brought down the house!
    -RBD

  15. DM,

    Bless your fiancee. My mom works for early education (Head start). It’s a lot of work for minimum wage.

  16. Aww, a new budget line called “Claudia”! That’s so sweet! 🙂

    I am enjoying the single life and have vowed never to get married. (Oh wait, where have I heard that before?!) So, I’m probably not the best person to be offering my opinion on this…but hey, if it ain’t broke, then don’t fix it!

    I do think, however, that good communication is key. Maybe you and Claudia will have to merge budgets later on in life, or maybe you won’t. The decision you’re making now isn’t set in stone. Being able to have that conversation at the right time is what’s important.

  17. DM

    When I was first married we had a single account and just cash flowed life for the most part. Neither one of us are spenders. After we finished college and both were employed, we lived off the higher income for day to day expenses and put the lesser in a brokerage account. The brokerage account was used to pay off house debt and student loan debt. After 5-6 years all debt was paid and now the brokerage account dividends easily cover the kids college costs. This has worked out well, we are still making great headway growing our net worth and cash flow , while not stressing over college costs.

    We have biweekly budget meetings, so we don’t suprise each other with a purchase.

    Every couple is different, it is just important to communicate and figure out how both parties can be an active participant in the financial situation of the family.

  18. Very interesting discussion Jason. I understand your point about budgets pretty well – it is nice to have some latitude and independence in each individuals’ financial decisions given their priorities.

    However, I was wondering, have you thought at all about ..protecting your assets in the unlikely case where it doesn’t work out. I certainly do not wish that to happen, and wish you long and happy decades in the future.. But still.. 50% of marriages end in divorce (whether we can trust the statistic or not). If you make it to FI status by say 2020, but then a little later you end up divorced, you will have to part 50% of your money and 50% of your Dividend Mantra blog. That would set up back a few more years..

    It would be interesting to hear your perspective on the topic.

    Best Regards,

    Dividend Growth Investor

  19. Good Article. My wife and I sort of had the discussion, but since I am a CFO she sort of deferred to me. We still have separate checking accounts, but I move money around to make sure we both have funds to pay for things. Almost all of the budgeted spending for the household comes out of my account though.

    My wife is on board with early retirement. Although she wants to go back to work in a few years, she still likes the idea of us being able to do whatever we want and spend a lot of time with family along the way.

  20. RBD,

    “Sometimes I have to nag her about receipts. Not because I’m upset about her spending, but to split them out and categorize things. Target is the worst because she buys so many categories of items there.”

    I know exactly how you feel there. That’s the situation that Claudia kind of cited as her reason to keep budgets separate. I guess she didn’t want the full force of Jason bearing down on her when it came time to reconcile where money was spent. I can’t say I blame her! 🙂

    I hear you on the expensive hobby aspect. An expensive hobby or two is like a hole in the hull of a ship. It can slowly sink you. Sounds like you scouted well! 🙂

    Best regards.

  21. Brad,

    Sounds like you have a great approach to your cash flow and budgeting over there. Communication is definitely key to the success of any strategy, be it shared or separate budgets.

    I like the biweekly meeting idea. That certainly keeps everyone abreast of where the cash is going and who’s spending what.

    Some people don’t like talking about money. But I think being open is incredibly important to building wealth and working together as a team.

    Keep up the great work!

    Cheers.

  22. DGI,

    Right. That’s a good topic there.

    I obviously hope that we never get divorced (we have to get married first), but you also have to be pragmatic about the possibility of such a circumstance. As I understand it (I’m no lawyer), Florida is one of many states where there are “separate assets” and “marital assets”. Separate assets are those you entered the marriage with and keep separate throughout the entire course of the marriage. So the 50% division of assets only applies to marital assets – those assets that were acquired, both separately and together, during the course of the marriage.

    Hope to never have to explore that further, but we’re both extremely reasonable and open people. I would hope that if such a situation were to befall us we’d be amicable and fair.

    Best wishes!

  23. Seraph,

    Haha. Yeah, it would be very easy to enter that new budget line in my Mint account. 🙂

    I hear you on the “never getting married” thing. Claudia wore me down on that and I tell her that all the time. Not something I ever wanted, but I know it’s important to her. She’s done a lot for me, so I’m okay compromising on that for her.

    Great point on communication. That sets everything in motion. Just assuming the other person is on the same page is a big mistake. It’s not fun for some people to sit down and talk about these subjects, but they’re very important. I know Claudia is very responsible with her money. She just doesn’t have much of it. But her support of everything I’ve been doing will come back around for her, as I’m confident there will eventually be enough for both of us.

    It’ll be interesting to see if you’re ever put to the test on the marriage thing and how you feel about that. It’s tough to stick it out, but I know how you feel!

    Thanks for dropping by.

    Best regards.

  24. Vawt,

    Glad you two are on the same page there. That’s the foundation for everything else. While Claudia isn’t in a hurry to stop doing what she’s doing (she does it more out of love than money), she also sees the value in financial independence and certainly hopes to benefit from some of the things I’m doing at some point. So we’ll see how that goes. I’d be happy to help her get to whatever position she’d like to be in.

    Having your wife on board with early retirement is fantastic. That makes it very easy for you to get her to kind of buy in to what you’re doing. Makes the value proposition easy to understand. Good stuff! 🙂

    Thanks for stopping by and sharing.

    Best wishes.

  25. There’s really no wrong way to do a household budget as long as both partners are on the same page. For our household we do everything joint and it has done wonder to our overall financial life. The most important thing is to make sure both partners have the same goals when it comes to finances.

  26. I think every couple needs to sit down and have the budget talk in some point of the relationship. Thank God I’m on the same page with my wife in most things :).
    We have a shared bank account where we pay all costs relating to groceries and other so called household costs. We also have a shared mortage. I’m still trying to get her realize that FI is possible even in Finland where we pay a lot of taxes on our income :).

    Enjoy the upcoming Holidays!

    -Ville

  27. One thing you should look into before you get married is the concept of “comingling” the assets. As I understand things, even if you enter the marriage with separate assets, unless you continue to keep them very clearly demarcated, they can effectively become joint assets – for example, if you have a joint bank account and transfer money to/from your brokerage account to that bank account. I’m also not a lawyer, and my wife and I decided to 100% combine everything, so I haven’t looked into the details. But, given your situation, it would seem wise.

    The other thing I would wonder about – if you are FI and retired and Claudia is still working but wants to quit, will it really be sustainable to maintain separate budgets at that point? I have one friend whose parents are retired. They have long been married but kept separate budgets – one of them can afford to take nice vacations and the other cannot – this strikes me as pretty weird and kind of contrary to the point of being married.

    I would also say that in my experience, having completely joint finances has been stressful at times, but I think really good in the long run. When one of us wanted to do something with a big financial impact (e.g., quitting a job to start a company), that had a big impact on our budget. However, even with separate finances, the impact would have been there, but perhaps we would not have had such clear conversations about pros/cons/decision points/etc. I think that if you are married, it is hard to really avoid joint finances (you’re not going to let your spouse go bankrupt), so there are some real advantages to being explicit about the joint nature of things. Maybe it would be different if you were both in your 50’s or 60’s, both had children, and both had significant assets, but that doesn’t seem like the case here.

  28. It’s awesome that you two discussed this so carefully and made the decision together. I think so many people don’t really talk about what joint or non-joint finances really means for their relationship and their future. And, per usual, you hit the nail on the head with the importance of finding a partner who is on the same financial page. I could not agree more! Mr. FW and I combined our finances when we got married 6 years ago, mostly because we were young and had very few assets (and no debt). So, it was an easy decision at the time and it has worked well for us–mostly because we have the same goals and we communicate openly about our spending and savings.

  29. Hi Jason,

    I tried both… I myself prefer separate budgets now. In my two last relationship it had created frictions between her and me to have common budgets.

    These frictions mainly came from the fact that we didn’t have the same views about work, financial freedom and frugality. In fact we never had these conversations. She had a master in finance so I was expecting that she would spend less than we earn, save for retirement and emergencies and be frugal… she was expecting the complete opposite

    Now I don’t want to take any chance because I’m getting older and I have a plan to retire early. So I need to save a lot. I don’t want anyone to prevent me from reaching my goal. Freedom is of most importance for me.

    So like you said, there are no good or bad decisions to take here, as long as expectations are set and met and that both are happy with the way it works.

    I wasn’t with the right person to reach financial freedom. Her motto was that “money comes and goes…” but with her it used to go faster faster than it came in! She was overspending and expected me to pass current “happiness” before future hapiness. I don’t need to spend to be happy. I like simple things… but she needed us to spend… all the time.

    In the end, marriage and putting budgets in common can be an extraordinary lever to reach financial freedom… but a lever can work in both ways…

    Cheers

  30. Hi Jason

    My Wife and I combine income and budgets, everything goes into a joint account and then all the bills come out of that account, we even have a joint credit card which is used for pretty much all our purchases (gives us discount of our grocery shopping), and pay it off every month.

    It is a totally personal choice, but I just couldn’t be bothered with trying to work out who pays what and in what proportion as I feel that would create friction between us.

    For us it works perfectly (been together for 27 years), and we have always managed our finances this way and we never disagree about money (although there are times when Mrs FI wants a new handbag and I don’t think she really needs one), but in the scheme of things its pretty insignificant.

    Mrs FI is onboard and supportive of my plans for FI, and in fact the real plan is for both of us to achieve FI as a couple, so we can both enjoy doing things together when we want (if one person was FI but not the other then I think you still don’t have total control over your time as you may not be able to just do something if your wife is still working).

    Best Wishes
    FI UK

  31. Congrats on good communication between you both……..keep it up and all the other matters will work out…….along with loyalty, love and trust…….sounds like you are on the right path!!!
    Wishing you both continued happiness 🙂

  32. Our budget and all of our earnings are combined 100%. That happened naturally for us because we were very, very poor when we started dating. I like having everything combined because I believe it simplifies our lives and brings us closer.

  33. My wife and I have a system thats works pretty well. We have one joint bank account that we pay our mortgage out of, and then we have our own separate bank accounts and split the household bills 50/50. My wife is much more of a spender than I am (although she’s better than she used to be) and combining everything would probably cause problems. Thankfully, she makes good money and has a stable job where she cannot easily be replaced.

    DM, it is great that you found a woman who is cool with your frugal lifesystle. In this country, there are very few women (and men too) that would be okay with that.

  34. I understand your situation completely. My wife is 10 years older than me. When we married, her son was 13. We decided to run split budgets also. It has worked for us and we have little strife about finances over the last 20 years of marriage come April 2015.

    I will say that the contributions to the joint household expenses has changed over time. It has gone from a 50/50 split to a split based on income percentage. It still works.

    May God bless your marriage.

  35. I’m not married, but if I did marry my current partner, we’d keep our finances separate the way they are now, but we’d add each other’s names to our accounts so we’d have good access. Note also that you’ll have to do your taxes together (or at least you generally pay less in income taxes when you file jointly than when you file separately).

    The reason I’d want to keep things separate with this partner is that we have such different strategies for both earning and spending. He likes to earn a lot of money so he can spend a lot of money. He also likes working. I, like Claudia, am the lower earner and I like it that way. I like having less stress and more time. Plus I’ll be retired in 7 weeks, and I don’t want to ever have to work for money again. I can buy everything I need and anything I want (if not everything I want) on my current income. But if we combined incomes it would seem unfair that I am contributing less.

    As far as spending goes, he likes to remove a certain amount for savings with each paycheck and then just spend the rest. Or more–and then borrow the savings back. Ugh. I don’t want to be stressed about his spending.

    Currently we live in my small, paid-off house. Obviously we both enjoy having low housing costs. But if he wants to move to a bigger place where he can fit in all of the piles of stuff he likes to buy, I don’t want to pay for that. So I’d still pay half the cost of the current place, and he’d have to subsidize the rest. Or if we do renovations, right now I pay for all of them since it’s my house and we’re single. But if I do some for just him that I wouldn’t even want otherwise, then he’d have to pay.

    Oh, we also invest differently. I really like that we each make decisions about our own investments. He’s much more of a risk taker, and I’m more risk averse–so right there you have diversification! Obviously if one person does way better than the other, we can “help” each other. I think having separate finances motivates each of us to do a better job at earning and saving than if we had an officially more communal method.

    **

    Another system I like (and would probably choose with most possible partners) is when you combine most of your finances, but you each also have your own separate accounts. You each get an “allowance” that you can spend no questions asked. That allowance can be small or large, and they can be equal, or different sizes based on income, or different sizes based on need (or in Claudia’s case, she could have two allowances, one for her and one for her son). It makes it a little less weird when you buy presents for your spouse using the family money and using an account where the spouse can see the evidence of what you bought before the holiday.

  36. It is difficult to say if separate accounts was a blessing or a curse. We married in the 80’s and came from two very different financial upbringings. Her family were extremely wealthy and mine was low/ middle class, but we lived life like money was a bottomless pit, because, for her it was. Stupidly, Prior to getting married I suggested signing a prenup to show her I loved her and was not marrying her for the money. Even though we kept separate accounts, I got caught up in her families lifestyle and thought it would never end so spent freely as well. In the 12 years we were together, we went on literally dozens of trips, both drove expensive cars, wardrobes that a movie star would be jealous of and even bought a couple horses, just because she could. I can assure you that after the divorce and the meagre goodbye present, thanks to the prenup ( can only laugh about it now), it took years for me to severely cut my spending down, and stop living like a Kardashian. As you know, I spend most of the year now in Puerto Vallarta but more for the cheaper cost of living and the sunshine, not because of any jetset lifestyle. Everything worked out because I had to adjust my lifestyle, live within my means, not her means. I actually don’t know what exactly, if anything, you or your readers will take out of this, maybe separate accounts, joint accounts, frugal living vs over the top or just never sign a prenup if your new wife is worth millions…. lol

  37. Jason,
    I have a biased view on marriage and combining budgets. The reasoning is I have witnessed on 3 separate occasions where a family member (male) has lost pretty much everything due to a divorce or bad financial decisions on there female counterpart. If you are ever worried about divorce, I would recommend a prenup. I am not sure how accurate the divorce rate is but I have personally witnessed 7/10 marriages fail. Even though I am in a healthy 2 year relationship, I am far from trusting anyone with my assets. It only takes one financially bad decision to lose everything. I do wish you the best of luck to you and your family. Can’t wait to see what your next investment is.

  38. It sounds like you are taking a very reasonable approach. Keeping things separate essentially maintains the status quo which you’ve both been used to for some time. There’s always the possibility of combining finances in the future, either gradually or all at once. I’m sure after a few years you’ll have a clearer picture of what works and what doesn’t and changes can always be made.

    I’ve been married nearly eight years and our finances have always been joined. We never really considered any other arrangements, in part because she was a grad student at the time with no meaningful income. We also don’t budget, which sounds horrible but really isn’t. Our strategy is to set all our savings on autopilot (currently just over 40% of our gross income) and then spend what we need from the rest. There is almost always leftover money, which we plow it into investment accounts. Any major change in spending would require the conscious effort to change an automatic contribution to one of our accounts and thus would prompt a serious discussion. Since we are both frugal by nature, I can’t recall this ever happening…yet. And we’ve not really had any serious disagreements about money thus far either.

    Best of luck with your upcoming marriage! Finances are obviously an important part and the fact that you both communicate so openly will no doubt serve you well.

  39. Being on the same page with expectations and habits is key. I remember my now-husband asking me (in horror, after he’d seen the prices) if I wanted him to buy me a diamond ring for his proposal and I laughed and told him that if he did, I’d say no!

    We’ve been living together for 7 years, married for 1, and always kept separate budgets despite a wide income disparity. I don’t foresee changing it. As long as you keep flexibility for negotiation and communication open, it’ll work. I might pay for groceries on a month when he’s pushing his credit limit from reimbursable work expenses, and he usually puts in 100% of large projects like home and auto repairs.

    Investments are more contentious; he’s lost a lot in stocks and wants to amass a gigantic down payment instead of putting more money into the markets. I invest all my “spending” money and tend risky, so here separate accounts allow me to do that. If everything was shared, I’d theoretically have more money to invest, but he’d never be OK with it–so I think more actually gets invested this way.

    I also like the independence that comes with separate accounts. Each of us has one or two purchases each year the other one thinks is stupid: a workshop or 3-day vacation for me, a new gadget or tool for him. Separate budgets make it easy to say, “Whatever, it’s your money.” If those “stupid” purchases were a regular thing, though, there’d be a deeper gulf in our philosophies than separate budgets could bridge.

  40. Jason,
    I heartily believe most married couples would do better to combine income and have one person be the CFO in charge of paying bills, but still talking with each other about large purchases/bills and available income vs bills/expenses to account for overages, saving, shortfalls, etc.
    However, in your case, I can not imagine how hard it would be for you to continue your very detailed accounting and financial life mission while blogging and accounting for every penny of it if you both co-mingled funds.
    I am glad you discussed it and I think as long as the two of you agree, then no problems. You both do appear to have different spending/accounting methods and your goals are drastically different (building a war chest vs anything for my son) No matter how had you both tried, one would always take the lion’s share from the other and resentment would slowly start building up over time. You reached the conclusion I would have selected for the two of you considering your unique circumstances. Good job.

  41. You and Claudia made the right decision there, IMHO. Keeping separate budgets helps to maintain independence and personal responsibility and minimize arguments revolving around money (a major factor contributing to marital discord). Combining assets works best in traditional marriages where the wife is a stay at home mom with no income. When both earn their own income, it is only fair to decide what to do with it individually.

  42. Tawcan,

    Agreed. No right or wrong way to do it; only what’s best for your relationship.

    As long as there’s support there and both partners have some general agreement as far as where the relationship is going financially, there should be minimal stress over finances.

    Thanks for stopping by!

    Best regards.

  43. Ville,

    It’s great that you two are on the same page. That’s fairly critical to something like financial independence. You certainly don’t want someone undermining you at every turn, which would only present a huge headwind to your journey. I’m lucky in that Claudia is very supportive.

    I hope you’re able to get your wife to realize that FI is possible over there. Takes time for someone to come around to the idea, but the fire, once lit, burns bright.

    Take care!

  44. Tad,

    You’re right. Commingling assets would then turn separate assets into marital assets. Claudia and I maintain completely separate finances, however. I thought I was fairly clear with that in the post, but my apologies if I wasn’t.

    Yeah, one of the drawbacks of separate budgets is a the possibility of a vastly different lifestyle if there’s a big difference in income. If you have one person earning $10,000 per month and the other one making $2,000 per month, there could be some resentment there if you see the spouse really living it up. But Claudia and I are on fairly equal terms. She does what she loves – teaching. And I do what I love – writing.

    Joint finances certainly has its benefits and drawbacks as well. But you really have to find what works for your relationship. It sounds like you guys have done really well with the combined budget, so that’s obviously the right way to go for you guys. 🙂

    Thanks for sharing!

    Cheers.

  45. Just my two cents… my wife and I have been married for 16 years and everything goes into 1 bucket. I’m lucky because we tend to agree on big purchases and she tends to be pretty frugal. We normally talk about any purchases that are out of the norm but pretty much never veto them. The combined arrangement seems to work out great for us but I think that solid communication is the biggest key to success! Good luck!

  46. Mrs. FW,

    It’s unfortunate, but I believe you’re right there. I’m not sure if it’s just a subject people don’t want to talk about at all, or if it just seems too complicated to take on. Of course, the stats would imply that a lot of people don’t have their finances in order anyhow. This is just one piece of the puzzle.

    Glad you and Mr. FW are on the same page. That’s imperative to financial success, as you’re working as a team. Awesome! 🙂

    Best wishes.

  47. faiscommelesriches,

    Sorry to hear about the bumps in the road there. I think sometimes we assume a lot about a person, but communication is key. Expectations definitely need to be set and then there needs to be a clear plan on how to reach those expectations. Otherwise, it’s like driving without knowing where you’re going.

    But I’m glad you know what works for you now. There’s a lot of people on both sides of the fence there. No right or wrong way to go about it, as long as you’re doing what works for you and your relationship. We like separate budgets and it works for us. Some prefer a combined budget. What really matters most is that you’re both striving toward whatever goals you may have, you’re supportive of one another, and the relationship is healthy. 🙂

    Thanks for sharing!

    Best wishes.

  48. FI UK,

    Sounds like you guys have a great thing worked out together there. Friction can be created with either a combined or separate budget, but if you guys are doing what minimizes that friction, then that’s what matters most.

    It’s important right from the start to choose a partner that has some semblance of a similar financial outlook. I think that saves a lot of headaches down the road. Tough/impossible to find a “perfect” financial match, but picking the right aspects will make the journey a lot easier. Claudia may not be interested in financial independence in the same way I am, but her frugality and supportive nature are both attractive to me. Living with a spendthrift would probably lead to irritation and friction that could be easily avoided.

    Glad you guys are on the same page over there! 🙂

    Cheers.

  49. Christine,

    Thank you. Appreciate the support very much. 🙂

    Communication is very important. Not always fun to break down the finances and what not, but it’s important to get it out of the way.

    Thanks for dropping by!

    Best wishes.

  50. My GF (spender) and I (saver) have kept our finances separate and just split the shared bills each month. I track/pay everything and then she pays me her half in one lump sum each month. I couldn’t even imagine tracking a pool of money and seeing it disappear on things I find wasteful and irrelevant (even if they’re important for her). The result is less stress for me & more financial freedom for her!

  51. Holly,

    I hear that a lot – combined budgets – from couples that were both poor when they first met. I wonder if the stats are any different for couples where one is entering the relationship/marriage with substantially more assets than the other. It’s very interesting.

    Simple is nice. We find separate budgets very simple as well (just split the major household stuff 50/50), but you definitely don’t want to complicate things when it can be avoided. 🙂

    Thanks for dropping by!

    Best regards.

  52. EWB,

    I know I’m lucky. She’s a great woman from head to toe. She was frugal when I met her, but I think I’ve rubbed off on her, for better or worse. 🙂

    Sounds like a good plan over there. I’ve heard that a few times from others. You guys are basically doing the same thing as us. Although we don’t share a bank account from which the funds are drawn from, we split the major household bills 50/50. The rest of our bills are handled separately. This allows us each to focus on what’s important to us, while minimizing any issues.

    Thanks for sharing!

    Best wishes.

  53. Aiki,

    Very similar situation there, both with the relationship and the budgeting. Her son is even around that same age. 🙂

    Congrats on 20 years of marriage coming up. That’s fantastic! I hope you guys have another successful 20!

    Thanks for dropping by.

    Cheers.

  54. Debbie M,

    Sounds like you guys have the right system for your relationship. I can imagine it would be much more stressful if everything were combined, especially when you have one person that’s more of a spender. I’m lucky in that Claudia is fairly frugal.

    An allowance is an interesting point. I think when you separate budgets it creates a natural allowance. You run your own ship. You’re kind of taking charge of your own destiny. So if you want to spend $500, do it. You just have to make sure you can pay your half of the household bills. But you could easily replicate this by creating an allowance in a combined budget as well. I just wonder if there might be some resentment if the allowances are somehow different by being tied to the income level of each person. Not sure how that would work. In the end, you just really have to do what works for the relationship. Everyone is different.

    Thanks for sharing!

    Best regards.

  55. Brian,

    “…never sign a prenup if your new wife is worth millions.”

    You can take that to the bank! 🙂

    Well, it was fun while it lasted, my friend. But it ended pretty solidly for you. PV sounds like a fantastic place to be, even if you’re not living like a total rock star down there. I personally love a simple life in a veritable paradise. We have a simple place, a simple car, and very little stuff. But we have plenty of sunshine and the ocean isn’t far. Life could be worse.

    Thanks for sharing. I’m sure you’re in the right spot now.

    Take care!

  56. When we got married, we combined our finances. It made sense to us at the time.

    I was someone who had tracked every penny. He was someone who had no idea where his money went.

    Over the years we’ve tried tracking things in lots of different ways. I’m excited to be going back to tracking every penny in the new year.

    We both have our own spending priorities and we try to work both into the combined budget.

    That’s what’s worked best for us. Of course, everyone is different, so it’s not for everyone. It sounds like you two have figured out a way to deal with finances that will work best for your upcoming marriage.

  57. My friends who I know do this both have the same allowance. In their case, one person spends hers pretty much every month on multiple low-cost things and the other saves it up to buy the occasional high-cost thing. I’ve also heard of cases where they agree on an amount of saving the family should, and then one person spends most of their allowance but the other one saves theirs for additional savings.

  58. Brian,

    The stats say the divorce rate is around 50%. Seems to be higher for those that remarry. It is partially because of these stats that I’ve never had an interest in getting married in the first place. I’m a pragmatic person, and so I’m honest in the belief that people change over time. Sometimes you grow in different directions, sometimes not. There are a lot of divorces out there, but there are also a lot of marriages that last 20 or 30 (or more) years. Just depends on the people involved. Finding someone who’s on the right page right from the beginning is very important.

    Claudia would be willing to do a prenup. That’s just the type of person she is. But if something were to happen down the road, I’d want to make sure she was financially taken care of. So we’ve already talked about that as well. A prenup could easily separate out what we both already have, but as long as one avoids commingling, that should take care of itself. I certainly hope to never find out. 🙂

    Thanks for sharing that. Tough road for some people. I certainly don’t wish that upon myself or anyone else.

    Cheers!

  59. Chris,

    Indeed. The status quo is easy for us. It’s what we know and it’s easy for us. Allows her to spend on her son with no input from me, and it allows me to invest with impunity. But this should benefit us both in the long run. I’m confident that I’ll be able to generate enough dividend income within eight years or so to live off of, and I think there will be some excess income (either passive or active on my part) which can be passed along to Claudia, which will free her to work as much or little as she wants. Should work out great for both of us.

    That’s great that the system you guys are using works so well. It obviously leads to a very high savings rate, no financial friction, and you’re meeting your goals. Why change what works so well? 🙂

    Appreciate the support very much. Wishing you guys continued success as well.

    Best regards.

  60. Jana,

    I also like the independence that separate budgets allow. Though I “waste” very little money, I also don’t have to worry about anyone looking over my shoulder when it comes to investing or anything else. And Claudia can take care of her son in whatever way she feels fit. Works great for us. It obviously works great for you two as well.

    That’s an interesting point on two different investment strategies there. I hadn’t actually thought of that. But you’re right in that maintaining separate accounts can allow each person to invest as they see fit. I could, however, see problems arising if one person is overly risky and ends up losing a substantial portion of their net worth. But I suppose if that issue doesn’t spill over to the other partner’s finances, then that’s a fire that can be contained. Losing a chunk someone else’s net worth because the other partner enjoyed risk may lead to bigger issues. Claudia has no interest in investing whatsoever, so we’d never have to worry about that.

    “If those “stupid” purchases were a regular thing, though, there’d be a deeper gulf in our philosophies than separate budgets could bridge.”

    That’s a good point. I suppose one of the benefits of separate budgets is that it allows each person to spend as they see fit, or up to the level that they can without impacting the other partner. But being with someone completely wasteful may lead to issues anyhow, even if there’s no financial damage. I guess that depends on how serious you take your views on life, money, happiness, the environment, philanthropy, and everything else. This is why it’s important to pick a like-minded partner from the beginning.

    Thanks for sharing!

    Best wishes.

  61. Zwieback,

    I think the household CFO strategy could work well for a lot of people. I don’t think it’s the “right” way to go about it, though, as I don’t think there’s a right or wrong way to approach household finances. There’s too many different scenarios and personalities to think that one strategy would rule them all.

    But I agree that running combined budgets would be difficult with the way I account for every penny. I think my intensity in that regard would wear her down over time and probably lead to more harm than good. I signed her up for a Mint account a while back, and I now realize how difficult it is for some people to track every single penny. It just comes somewhat naturally to me.

    And we definitely have different priorities. I think those priorities will serve us well over the long term, however. Her desire to take care of her son will provide them both a lot of happiness, and my concentration on the finances will probably bleed over into her financial life as well, allowing her to work less down the road. Should be a win-win, but we’ll see. 🙂

    Thanks for the support!

    Cheers.

  62. JTF,

    Thanks. I’m glad you agree with our approach here.

    It’s certainly not for everyone, and I think you’re right in that a stay-at-home mom would obviously have no use with a separate budget. That’s a call for each individual relationship to make. But Claudia and I both earn and spend money as we please on that which is aligned with our priorities and goals. If it ain’t broke, don’t fix it. 🙂

    Thanks for dropping by! I hope the post provided some value your way.

    Best wishes.

  63. My wife and I come at it from a very spiritual viewpoint, in that when we were married the “two became one”. This took place when we made our vows, that included all aspects of our life, including finances. We are both first time married people and have been married for the last 15 years, with 3 kids in the mix now. We sit down once a month and do a budget, we talk about who needs money and budget our combined income together. Neither of us feels like we are shortchanged for not having our own “private” spending account. This is taken care of when we both sit to talk about our needs each month.

    Now, with other children and second marriages in the mix, different needs may require different ways to do things that will work for you. No two married couples act the same, they each have ways of doing things that work for that relationship. The main thing to remember is to be open about everything (not just money, but emotions, sex, friends, time, etc.), the hint of mistrust and the ability to hide things from the other person is a the start of a relationship going downhill. I wish you both the best.

    Maybe as a starter, “personal spending account”, set her up with a basket of super major oil company stocks. The low price and rising dividends, should give each of you ample spending money each quarter!

  64. Michael,

    That approach seems to work pretty well for a lot of people. As you point out, however, communication is definitely even more important when you’re sharing everything. One partner going rogue can lead to a lot of problems. But if you’re on the same page, I suspect that makes for an easy financial life.

    I wonder if I’m too intense to share a budget with someone else. I have to know where every penny goes, and that’s just too much for even Claudia. And she’s very supportive and laid back. Haha! 🙂

    Thanks for sharing. Keep up the great work.

    Best regards.

  65. Tommy,

    Sounds like a very similar situation to our own. Though Claudia isn’t a spender, we just split the shared household expenses. So we figure out the total, split it down the middle, and contribute our half. Works pretty well for us. Less stress is the name of the game! 🙂

    Thanks for sharing.

    Cheers!

  66. Hi DM,

    I think your budgeting makes perfect sense. There are some similarities with my own situation.

    Me and Miss FFBF run our own budgets. When we first got together, I was in a lot of debt, and it would have been unfair to share a budget at the time. Miss FFBF also owns a house in Cambridge which she pays for, this isn’t cheap to run but it doesn’t have anything to do with me. Similarly to you, I’m very driven to save a large percentage of my salary to work towards FI. As my partner has a house, which will pretty much fund her retirement, she’s less concerned and motivated to save vast amount. We’ve agreed to keep things separate for the foreseeable future.

    We have two separate joint food and mortgage/house accounts, which we fund each month. These payments cover the cost of our expenses, but we save independently.

    The key is for both parties to be comfortable with the situation. I think both methods have valid pro’s and con’s.

    Cheers
    Huw

  67. Emily,

    That’s great that you two entered the marriage with different approaches to budgeting, but it sounds like it worked out pretty well for you guys. 🙂

    I think there’s always a learning curve there. The more like-minded and similar you are, the smaller the curve. That’s not to say a wide curve can’t be overcome. Rather, it can just add a degree of difficulty.

    Glad that you figured out what works for you two and you’re sticking with it. That’s really what ultimately matters the most in the end.

    Thanks for dropping by!

    Best wishes.

  68. David,

    That sounds like a great strategy there. Sitting down every single month and running a budget makes sure everyone is on the same page as far as the household finances are concerned. I actually run my budget as a “zero budget”, where every dollar I spend is one less dollar I can invest and compound. So I don’t necessarily “target” certain amounts on certain categories. I simply enter in amounts on my Mint software so as not to get emails all the time. 🙂

    That’s a great suggestion there at the end. I do hope to get an account rolling for Claudia at some point. But that would probably have to come after her son is older and/or moved out. In the meanwhile, she lacks the will and resources to really get anything rolling right now. Although, I don’t think it will be a problem either way, as I suspect that I’ll be able to create a new budget line for her and her needs down the road anyhow.

    Thanks for sharing. Seems like you have a great system over there for you and your family. Keep it up! 🙂

    Take care.

  69. When I got married we openly talked about money beforehand to make sure we were both on the same page, and then eventually combined both our finances into one joint account. It allowed us to save time and efforts by both being able to see what was being spent and what income was coming in. To make it even more clear we maintained a monthly budget showing all income and expenses, and then compare the actuals to these amounts. It’s pretty simple but it works. I think couples need to be on the same page when it comes to finances in order for it to work. I know of couples who keep their accounts completely separate but sometimes there is an element of secrecy there with not wanting the other person to know what is going on with their portion of the income

  70. You do raise quite an interesting issue. Normally, the conversation between separate/joint finances in a relationship devolves into an argument of how good the relationship is and that joint finances are a testament to that… not quite.

    It’s logical when two partners are on relatively equal footing (income, pre-marital wealth, and spending habits) that joining finances is relatively painless. Changing any one of those variables makes things more complicated.

    One spouse with significantly:
    – more/less income
    – more/less pre-marital net assets
    – more/less luxurious lifestyle

    Any change can complicate that. I’ll admit that I am predisposed to thinking that joint finances are the way to go, but I’ll admit that it’s mostly because that’s how my parents did it so I really have no exposure to how separate finances work in the context of a marriage.

    It’s an interesting question for the future, however, if/when I do decide to partner with a spouse. By age 30, it’s not out of the ballpark to estimate a personal net worth/net assets of 400k+, so I can say with certainty that it is unlikely I will find a spouse with equal or greater personal wealth or similar earning potential.

    At the end of the day, the goal in how to handle finances is really a question of how to lead a life without stressing about money, so I do hope to learn more about the subject to find a good solution in the future.

    I’m glad you found one that works for your relationship!

  71. I think you made the right decision. It’ll keep things simple and drama free in the near term, then later you can revisit the topic and recalibrate. Even Spoongirl and I kept separate finances for the longest time, even though we had the same goal. We’ve integrated things a bit now, but it’s all very vanilla.

    I think it’ great that you guys are keeping an eye on the future in regards to her eventual change in work schedule. I think you guys will be fine.

  72. Dan,

    Thanks for sharing!

    Absolutely. If it’s simple and it works, then that’s the right strategy. The less friction between two people, the better. Money can cloud judgement and make people act strange sometimes, which is a shame. But if you’re both on the same page more or less, then that’s great.

    Secrecy is an interesting topic. I wonder if there’a actual sneaking around or if the other partner just thinks there is. Either way, if you really have to worry about sneaking around, that’s true regardless if you share a budget or not. And at that point, you simply have to ask yourself if you are really with the right person.

    Cheers!

  73. Ravi,

    “By age 30, it’s not out of the ballpark to estimate a personal net worth/net assets of 400k+, so I can say with certainty that it is unlikely I will find a spouse with equal or greater personal wealth or similar earning potential.”

    I would definitely agree with that. Not to many 30 year-old people walking around with $400k. You’ll be in an enviable position. That of course can lead to potential pitfalls, so it’s always important to be aware of that and make sure you’re partnering with someone that’s like-minded and on the same page.

    I’ve witnessed marriages both with combined budgets and separate budgets. Seems to work well both ways for different people and different scenarios. In the end you just have to go with what works best with your situation. And I’m sure you’ll find out what works as you go along. 🙂

    Best regards!

  74. Spoonman,

    Avoiding drama and keeping things simple is always in our best interest. 🙂

    If you’re with the right person it probably matters very little whether you share or keep separate budgets in the end. Sounds like your relationship has done just fine both ways with it. You guys being completely on the same page helps quite a bit, I’m sure.

    Appreciate all the support. Keep enjoying the good life!

    Best wishes.

  75. We have separate accounts and split the bills in relation to our income every month, currently 50/50. Then we share household expenses, fuel etc as they happen, very ad-hoc, not keeping track on who pays what. A few years ago when she did not earn so much, I payed much more of the bills. A balance comes naturally.

    This feels simple and straightforward to us and we have done more or less like this for many years. It gives us a sense of freedom to decide what we do with our money (after savings and bills) during the month. No asking permissions.

    We have auto transfers to our broker and savings accounts every month, before we pay our bills. Being much more interested in saving and investing I transfer a larger portion of my income, but recently I have convinced my wife to increase her savings rate too, and I am happy about that (she is now on 25%). I do the investing for both of us, on our separate accounts.

    Bigger and longer term financial decisions are made together.

  76. My wife and I agreed that it would be nice to have a stay-at-home mom for the girls when they were little. I thought that meant that Mrs. X would be going back to work when the youngest started 1st grade. I, unfortunately, was incorrect. Mrs. X hasn’t earned a paycheck for over 28 years now and she has not intentions of ever doing so in the future, God willing. I don’t want it to sound like she just sits on her butt, she has done several charity works over the years. Currently, Mrs. X helps make meals for the poor once or twice a week, among other things. I’m actually glad that she (and I by association) gets to give back to the community. I plan on doing some charitable work of my own after I retire next year. Anyway, long way to say that we have what used to be called a “traditional marriage”. You know, the man works and the wife spends. 😉

  77. Sensim,

    A sense of freedom, indeed. I agree with you there. Sometimes a little freedom within the relationship is nice. Helps fight any feelings of being stifled. Seems like you guys have a great thing going on there, which happens to be fairly similar to what we’re doing. 🙂

    Congrats on getting your wife to increase her savings rate. Every little boost helps!

    I’m basically doing the saving and investing for the both of us, but that’s okay. I think I’ll be able to shoulder the extra burden over the long haul, especially once the compounding trajectory starts to really take off about a decade from now.

    Thanks for sharing what you guys are doing. What’s most important is that it works and leads to minimal arguments. Seems like you succeeded there!

    Cheers.

  78. KeithX,

    That charity work is really great. Claudia has a somewhat similar view on things. She is highly educated and could be doing something that pays a lot more money, but she loves working around the kids. And she feels like she’s making the world a better place (which I agree with).

    It’d be great if you could do something like that as well after you retire. I hope to also engage in some type of philanthropy work myself down the road.

    Thanks for sharing what you guys are doing. That’s definitely more of a traditional setup, which works very well for a lot of people (including your family). 🙂

    Best wishes!

  79. we have been married for 31 years we put it all together she makes 10 x more than I bring in when I bring that up she says what I have in ours Dave Ransey (not he knows everything but has some good advice) says it goes together.In my opnion maybe you should still play house and that’s fine but my way of thinking you should share everything except underware maybe try one way for a year or so then the other way you are going to be with each other for a long time

  80. DM,

    Perfect post and always interesting. I know a few couples right now who do a 50/50 budget and I can see how that works in the beginning when living with eachother/still in the early stages of living together. Then, I think as time and togetherness grows even stronger – that it tends to just be a combined journey and spending/income/experiences are all intertwined, together in an effort to make eachother as happy as possibly can be, as that is the reason why people spend time together, right?

    I think it’ll vary person to person, but I may say the trend that overtime, as you grow together, everything related to budgeting/money becomes more intertwined and separate. I guess time will show for you and Claudia if that seems to be the case as it sounds like it may, especially once the young lad grows older.

    Should be fun for you and Claudia regardless, to see how it works out, what doesn’t work/what works and going from there. It does seem you both are striving to be on the same page and putting the best efforts forward to do that – something that is utmost key in relationships. I dig it Mantra, I dig it.

    -Lanny

  81. There is no correct answer when it comes to this subject. My personal take is that it is best to combine all budgets and bank accounts. Once married, the state and feds will combine your assets regardless of personal preference. You will both be liable for each others debts, taxes, etc., so it is helpful to have the complete picture of your better half. Congrats on your engagement.

  82. que,

    Thanks for dropping by!

    Sounds like you guys are doing what works for you. We don’t have plans to combine budgets now or at any point in the future, but I’m not opposed to the idea either. As long as bills get paid, we’re working toward our goals, and we’re happy, then that’s really what matters. The rest is just details. Separate budgets have worked pretty well for us, but that’s not to say that’ll be the case for everyone.

    Take care!

  83. Jason,
    I enjoy reading your blog. I would suggest still keeping separate budgets until you are married, but at that point switching to a combined budget. Doing the budget together and planning for your future together can be a very unifying experience. I think it is hard to plan for the future together without planning the financial part which is woven through that future. Since you both have gotten used to living together with independent budgets it will take a few months to adjust. Not to be a downer, but money issues in marriage is one of the biggest causes of divorce. So however you budget, make sure to find a way to agree on how you will handle your finances together.
    -Ben

  84. Lanny,

    Right. It definitely varies from couple to couple. My brother-in-law’s parents have actually run separate budgets for decades now. Seems to work well for them. But my parents always had a combined budget. So that worked there too. Really just depends on what you’re comfortable with. Pros and cons to both sides of the coin.

    I definitely agree that people are together to be happy and to make each other happy by loving one another. I don’t think combined budgets are some kind of prerequisite for accomplishing that, however. Some of this probably depends on your background and what you’ve witnessed throughout your life. If you’ve witnessed everyone around you combining budgets, then that’s what might be normal to you. Seeing relationships thrive with separate budgets, on the other hand, might make you think that’s the natural way to go. I’ve personally witnessed successful finances both ways, so it really just depends. Obviously finding someone you’re financially aligned with is what’s most important. The budgeting will probably have a much lesser impact than that. You can budget perfectly, but being with someone at odds with your financial ideals and goals will make it an uphill battle all the way.

    Thanks for dropping by!

    Best wishes.

  85. Jason,

    I must say I think you are doing things backwards. Marrying a woman 17 years your senior is not a good idea. Statistically it just doesn’t work out. Finding a partner is no different then investing there is supply and demand, obviously you put little value on yourself, otherwise you would be looking for a more valuable partner. Anyways to each their own everyone must learn from their mistakes in this life..

  86. Hey Jason,
    My girlfirend and I use somewhat of a mixed approach. We got an online banking account when we moved in together in which we pool all the money necessary for rent, utilities, food etc. and a little extra for activities and such. It works well for us ’cause we never get the discussion of “you owe me this much” or “I paid for that last time” etc etc. We’re still pretty young so it’s what works best right now because I really couldn’t ask her to pay for half of the nights I’m out with my friends spending a little too much :p I can see us moving closer and closer to a combined budget, but I think I will always need some of my money in my own bank account for some stupid stuff I might do/buy.
    Great article, didn’t think of all those pros and cons.

  87. Hey DM,

    I was wondering since you were okay with getting BBL at the prices ~$50, if you think it’d still be a good idea to get in on it ~$40 now…I was also wondering about T and MCD, your thoughts on them at the moment? Thanks!

    -DLee

  88. My wife and I got married in Aug ’14. We each work 2 jobs, 1 FT Salary and 1 PT for Tips. So we combined all of our accounts and pooled our salaries. We each hold on to our own tip money and can use it for any daily spending we may have. At the end of each week, any cash that is leftover gets pooled and put in our safe and becomes a nice little fund for any big spend items we may want to take on (i.e. honeymoon, home repairs/modifications, etc.)

    As you discussed the pros and cons of each method, I really think we have captured the best of both worlds. Although, the major con with our system is that we work so much we barely get to see each other. But we both understand we are making up for the mistakes of our past and benefiting our future by putting in the work now.

    We have salaries that bring in about $5.5k/month and we have been paying $3k/month toward a student loan which should be paid in full in March ’15. Once that is paid off, the only debt to our name will be from our Home Mortgage, and we should be able to save $3-4k/month until we have kids.

    “The Power of Consistency” is very real and it allowed me to convince my wife that this plan really will work.

  89. frankz,

    I think you may have a lot to learn about relationships. Age is just one part of the equation, and perhaps a rather small part. I’ve been with women my own age and younger, and almost every one of these relationships offered a poor quality of life. If I wanted someone younger, I could easily have that. But age is probably somewhere around last on my list. I want someone who’s intelligent, honest, trustworthy, kind, joyful, mature, loving, supportive, like-minded, and funny. You can probably find this across the spectrum of age, but to rule out a great partner over age would be, in my opinion, a mistake.

    We’ll have to agree to disagree.

    Cheers!

  90. Ferd,

    That’s a great approach there. Though we don’t have a combined banking account, we basically do it the same way. We just figure out the total of the household expenses and then split it in half. But using an online bank account is a nice way to do it because, as you state, you have a record of everything. Definitely eases any tension in regards to who paid for what, because there’s a paper trail there. 🙂

    Thanks for sharing!

    Best wishes.

  91. DLee,

    I’d love to buy BBL here. I wish I would have known it was going this low, but I lack a crystal ball. I didn’t plan on it being a large position for me, but it’ll be tough for me to buy a little more in January if the prices are still at this level (or lower). 🙂

    I’m fairly neutral on T and MCD. I’m not a real big fan of either stock right now. I don’t believe T will offer a significant total return proposition moving forward (its yield and dividend growth rate gives you an idea), but the DTV acquisition (if approved) may offer better growth opportunities. MCD still needs to turn the ship around.

    Best regards!

  92. It was my mother and father’s advice from years ago: Always live on one salary/income, not both. Their investment of Mom’s income before she quit to raise our family funded real estate investments that propelled them into financial independence. Don’t become dependent on two incomes from the start.

  93. MM,

    Glad that you guys are working hard and making up for past mistakes. I know all to well what that involves and how that feels. It’s not fun while you’re going through the motions, but there is light at the end of the tunnel. And once you’re free, you need never re-enter the tunnel. Unless you want to, and why would you? 🙂

    Sounds like a great plan over there. The key is removing the debt and being in a position to where you can build sizable assets that are working for you. You guys are obviously hard workers, but your cash can work far harder for far longer. Keep it up!!

    Thanks for dropping by.

    Best regards.

  94. rcstewart3,

    That’s a great way to look at life and finances. If you can live on just one income (even if it’s the larger of the two) and save the other, you should be in pretty good shape over the long term. Not only that, but you can sustain a shock like a loss in income if you’re constantly used to living on less. Too many people spend what they earn or even more, leaving no margin of safety in their lifestyles.

    Thanks for dropping by!

    Take care.

  95. Jason,
    I think you guys made the right choice for now. You can always take another look at it 4-5 years down the line. If something is working well, why change it. We joined our accounts when we married because we didn’t know any other ways. I’d probably give it a bit more thought now that I know more. It is working out well for us so joining is good for us. I guess everyone has to find their own ways.

  96. Good article M and somthing all couples have to deal with. I am the CFO (mostly because my wife stays at home and has no income). We confer with each other on purchases except when I am buying her a gift. It does cause friction when she wants to buy something (usually for the kids) and I say “not this month”. It might be the lack of visibility into out budget and finances that she forgets we are rich. So if you do share my only suggestion would be to make sure the other person you at least review the budget with and income/expenses weekly or monthly. That way it limits the why don’t we have any money questions.

  97. My fiance and I have a joint chequing account for household expenses, and a joint savings account for vacations & fun together, but everything else is separate including our retirement savings, investments, etc.

    This system has been perfect for us since we moved in together, but when we get married we’re thinking of making an even bigger adjustment and living entirely off his salary and splitting mine evenly between us for savings. It’s bold, but I think it makes sense for us. Not only will we be super frugal living off one salary, we’re saving the bigger salary (mine) which will make our net worth grow faster.

  98. DM,

    Thanks for your 2 cents! I know you just decided to sell your position in ARCP…I had bought 125 shares the day before the initial drop and news. Do you think at 24 I’m better off just holding onto it since I still have about 25 years or so before I plan on retiring? Or do you think I should cut my losses at -$600.00 from my initial $1,600 investment? I know we’re in different places since I just started my investment career and you’re well into yours…

    -DLee

  99. Joe,

    Great point. You’re absolutely right. We can always reevaluate later if things change.

    As long as things are working out for you guys, then that’s all that really matters. Pros and cons to both sides of the coin, in my opinion.

    Thanks for dropping by!

    Best regards.

  100. DFG,

    That’s a great suggestion. I think communication is incredibly important, even if the other partner isn’t actively contributing income to the pot. As a team, you both should have visibility on what’s going on with the budget, where the income is coming from, and how it’s being spent. That way everyone is on equal footing and there’s a comfort level there.

    Keep up the great work!

    Cheers.

  101. Bridget,

    Saving one salary and living off of the other, especially when the larger salary is that which is being saved, is a fantastic way to go about it. That way you become comfortable with living off of just the one income. If there are any speed bumps down the road, you’ll already be equipped to handle it by simply adjusting your savings rate, rather than wondering how you’re going to make the mortgage or something along those lines. 🙂

    Thanks for sharing!

    Cheers.

  102. DLee,

    Tough to say, my friend. I cut because it’s turned from an investment into a speculation. You can make money in spec plays, and there’s a chance that it moves back over to an investment if a new management team can clean things up. But there is really too many questions in the air right now to have any clear picture as to where this company is going. I also cut because the tax-loss will save me a little money come tax time. And I can always reinvest later, if ARCP changes dramatically from here.

    But I’ve cut positions even when I first starting because I felt the business wasn’t moving in the right direction. Not that it’s an apple-to-apple comparison, but I sold out of TEF very early on because I felt the dividend was unsustainable and the company just wasn’t high in quality:

    https://www.dividendmantra.com/2011/12/recent-sale/

    I think you have to ask yourself what kind of investor you are, what your risk tolerance is, and where you think ARCP is headed.

    Best of luck!

    Cheers.

  103. dzogen,

    That’s a nice article. Fairly well-balanced for being in the mainstream media. And I noticed they included Joe Udo in there, who’s from RB40. Seems that these mainstream articles are starting to become softer around the edges as time goes on. 10 years ago, these people would have been looked at way funny.

    Good stuff. Thanks for sharing! 🙂

    Best wishes.

  104. Hey, Jason!

    I’ve been meaning to ask this for sometime, and now seems fitting given the subject matter. I was wondering if you’ve considered what long term costs (healthcare, etc.) are associated with Claudia’s age and how it will affect your FI. I see you mentioned covering shortfalls in her expenses later in life, but nothing really beyond that. It seems that there could be a lot of expenses that could really change the final FI amount you need.

    Also, have you two ever reviewed each other’s finances? It always worries me to think I could marry my girlfriend only to find out that my financial goals could be significantly delayed by surprise past debts.

    Thanks for these relationship finance posts! It really helps to think about these issues and come up with equitable solutions for a couple with differing priorities.

  105. Hello Jason,

    First off wanted to say I’ve been following the site for about a year now and really enjoy it. I agree with the individuals who have commented before that you guys made the right choice for the current stage in your relationship. I’m sure if adjustments need to be made at a future date you guys well make them. My girlfriend and I right now have separate finances and it works for us. Guess we well have to wait and see what happens down the road if we well keep them separate or combine them.

    All the best,

    Robbie

  106. Ryan,

    Good questions!

    Long-term healthcare costs are really impossible to accurately model or predict. However, she takes pretty good care of herself and has a very healthy family. That said, she’ll qualify for Medicare long before I will. In addition, she was born in El Salvador and goes down there fairly often. Healthcare is a lot cheaper there. If something major befell us, we’d probably seek treatment there (or somewhere else cheaper). In the meanwhile, she carries her own health insurance.

    I’ve reviewed her finances. She has no debt. But she doesn’t have many assets either. The one x-factor for her may be an inheritance from a certain member of her family. We’re not counting on it, but it could be a decent sum which would help her catch up a bit. And she’ll have access to Social Security five years after I start living off of my dividend income. I often joke that I’m just with her for her forthcoming SS income and AARP benefits. She just laughs at me.

    I hope that helps. I would DEFINITELY carefully review any partner’s finances before considering marriage.

    Best wishes!

  107. Touchy subject. I take care of all the finances in my house. I moderate how much the wifey spends on herself and the kids. She is fine with how it works but at times she gets anxious on how much she spends and worries if I will get upset as she is much more impulsive than me. To ease my watchful matter I give her free reign at the dollar store lol!

  108. A-G,

    Haha. Free reign at the dollar store, huh? You better watch out. I’ve noticed the goods they sell are increasingly way more than a buck! 🙂

    Thanks for sharing.

    Cheers!

  109. Robbie,

    Thanks for the support. Appreciate the readership! 🙂

    Separate finances work well for us too. And the nice thing about all of this is, as you mention, nothing is set in stone. If changes need to be made on the fly, it’s quite easy to make that happen. I hope you guys find the right balance as you move along.

    Best wishes!

  110. When we first married we had a joint budget but it did cause issues when money I was counting on to pay bills disappeared for a last minute purchase for the kids or gift, etc. Once the kids started going to school and my wife went back to work we decided it best to split things. Because I made more income I found it easier to just pay for everything but groceries, her gasoline, and any gifts or clothing she wanted to purchase. Even though she really had more disposable income the point was not fighting about money and we are headed toward 38 years of marriage. I was still able to retire at age 51 and all is good. It is true that the biggest blessing is having someone on the same page. I think you have a great plan and I wish you both the best of happiness.

  111. We’re kind of somewhere in between. Been married for almost 9 years, together for 14. We figured out our monthly expenses for the “house” and each puts in the same amount to the joint account. We pay for all household related expenses from this: mortgage, taxes, food, house improvements, childcare, car/gas, eating out, cellphone, utilities, vacations, etc. If we know we have a large purchase coming up, we each put in extra or “up” the amount we contribute to the account. We tend to look at it as if more than one person from the house is involved, it comes from the joint account. We should be doing a better job on joint savings/investing, as right now each person manages that individually.

    Any leftover money goes into our personal accounts and we can do what we want with it: hobbies, gifts, personal spending: drinks at league, pedicures, lunches out, clothes, etc. I also ran a couple of small businesses over the years and the funding from those came from this part of the money.

    Right now I currently make more money, but I’m younger, so I’m just taking the excess money and pumping it into DG stocks to help down the road with FIRE. My wife has a pension that we will be tapping, but combined, the assets will be producing a nice little post-day-job income for us. In the end, while there is indeed a divide between his/hers for the things; it doesn’t really matter, one helps when one can and we know that the overall goal supersedes the wants of the individual.

    So far, things have worked out well even through various points of turbulent income streams. We have a similar outlook on retirement, esp. after I’ve discovered FIRE earlier this year; and even better after I’ve “run the numbers” on the how and logistics of making it work with combined assets and minimizing taxes.

    Keep planting those dividend paying stocks to harvest the rewards 🙂

  112. Tommy,

    Absolutely. The whole point is to really avoid any conflicts about money, however that’s achieved. But you’re definitely right in that it starts by being with someone who’s more or less on the same page, financially speaking. If you’re coming from totally different perspectives, combining or separating budgets probably won’t make a big difference either way. There may just be too big of a gap to bridge.

    Seems like you guys have figured out what works for you. The best news is that you guys have worked it out both ways and it worked. I think that probably says something about the lack of importance of whether or not you combine budgets and more about being with the right partner.

    Thanks for sharing!

    Best regards.

  113. DH,

    Thanks for sharing your system. Seems there’s a lot of ways to go about it, but the most important thing is that it works and leads to minimal friction.

    Your system over there is somewhat similar to ours. Although we don’t have a common account from which to draw the household expenses from, we just split those things down the middle. And then of course we have our individual accounts for our individual spending (and saving, investing).

    That’s fantastic that you guys will have a pension in the mix there. Those are definitely going the way of the dinosaur, so it’s good to get it while the getting is good. Seems like you’re right on track. It’s good to see the light at the end of the tunnel and know that it’s getting brighter every single day. 🙂

    Keep up the great work!

    Best wishes.

  114. I once saw a statistic (can’t find it today and don’t know if it’s trustworthy) that unions/marriages were 60% more likely to fail if they maintained separate budgets. While I think 60% sounds high, I do believe that this is probably true and couldn’t imagine it working any other way. (l will acknowledge that this is mostly structured from my personal beliefs in religious matters.) Can it be done, certainly is plausible. Have I seen it fail, yes, many times. You guys didn’t rush into this whole thing so you already have ALOT going for you if it’s been done right.

    A saying that’s always been passed down to the groom in my family is: May your wedding be short and your marriage be long! <– I think it's a great goal anyway!

  115. Joe,

    Hmm, that’s an interesting statistic. Of course, you know what they say about statistics…

    I’ve seen it work well both ways. But I generally believe that the type of partner you’re with is far more important than whether or not you combine budgets. If you’re with a like-minded partner that’s aiming for the same goals, it will probably matter very little if you share budgets or not. Though, running a “conventional” relationship where one partner works and the other stays at home would likely be impossible to run without a combined budget. So that’s perhaps where some of the statistics come from. Not really sure.

    Appreciate the warm wishes. And I wish the same for you and yours! 🙂

    Cheers.

  116. Jason, marriage is the act of pooling together financial assets under the misguided belief that one party will not betray the other. You SAY you’re keeping your money separate, but you’re not. The feminism-backed court system will ensure your hard-earned assets, and any future hard-earned assets, will be taken from you. I’m not familiar with the legislation governing marriage in your jurisdiction, but I’m confident you won’t find within it the word ‘love’ written in black ink. I wish you luck with this high-risk, speculative, investment.

  117. Agree with this. I am currently paying my ex $2100 per month which you could say is a nice dividend income stream for her. I would recommend against marriage (but then again I’ve been on the other side of it & am cynical) and if you must get marriage then get a pre-nup. Good luck and avoid the minefields that will blow up all your hard work.

  118. FutureJason,

    I like the name. 🙂

    I won’t disagree with you that marriage is a “high-risk, speculative, investment.” But one could argue that life is one as well. Being alive is a risk. Getting in your car and driving down the road is a risk. Eating a medium-rare burger is a risk. Etc.

    Just my opinion, but you sound like someone jaded who was burned by someone. I’m sorry to hear that. I do believe that picking the right partner from the start is incredibly important. That reduces the risk, though it won’t eliminate it.

    The court system isn’t always kind, though I’ve witnessed it both ways. The worst cases I’ve seen have been those involving a guy who earned a lot of money and had a wife stay at home to raise children. So then you have to rely on the courts to place a value/income on her “job”, which also sometimes includes picking up the tab for her lifestyle for years after the fact (alimony) to adjust for quality of life.

    Thanks for stopping by!

    Best regards.

  119. dzogen,

    Sorry to hear that. Although, a $2,100/month alimony stream infers that you probably made a lot of money and she maybe made little or none? This is all anecdotal.

    If I’m not mistaken, a prenup generally cannot dictate the splitting of future marital assets. And some (most?) states disallow any language regarding future claims to alimony. As I understand it, it’s most useful in regards to specifically laying out who owns (and potentially owes) what before the marriage begins. Basically, you’re putting ink to paper when it comes to separate assets. From what I’ve read on it, a prenup is generally not good at somehow limiting someone from splitting marital assets (those that were accumulated after the marriage commenced). And prenups aren’t ironclad either.

    Cheers!

  120. The wife and I have separate accounts until the dividend income cancels out the commission cost at Etrade then we will both share that account. MotifInvesting is good, but it doesn’t give me the option if I need some of that money for an emergency.

    Even though it’s separate accounts I still act as a CFO, I plan out the bill roadmap for the year and make goals to have them paid in advance for the year. Not having to worry about the cable bill for 6 months was nice.

    And since we already have everything budgeted off our base pay any overtime just gets put into investments.

    I read the comment about the individual that got divorced, sorry to hear. I’ve also thought about that, and since Etrade is a joint acct, if that were to happen (heaven forbid), she would get half of whatever dividend income was coming in. Just another reason to strive to get it up there

  121. Steve,

    Sounds like you guys have a great thing going on there that works for you guys. I find that there’s a lot of different ways to handle a household budget. Funny how something seemingly simple can be done in so many different ways. But I think what’s most important is that you pick a partner that’s more or less like-minded, and that the system avoids friction. The details are probably a lot less important.

    Divorce is obviously something we’d all prefer to avoid. I think that alimony example is pretty rough, and rather unfortunate. But, as I understand it, one would have to have a pretty substantial income (and the other probably very little) to end up with an alimony payment like that. But the rules vary by state and situation, obviously.

    Thanks for sharing. 🙂

    Best wishes.

  122. My wife and I do a similar idea. On pay day, we both contribute a certain amount into a joint account. Any and all joint bills leave there, mortgage etc. The rest stays in our accounts, we can do what we like. The joint account moves money into joint savings, for house renos or trips for both of us. I pay a bit more into joint because I make more. This has worked well for us. It allows me incentive to be a cheapskate (to save more of my money) so I can invest!

  123. Steve,

    That sounds like a really great way to go about it. I think there’s a lot of ways to think about budgeting in a relationship, and no way is right or wrong. But I agree with you in that there’s an incentive there to save and invest more when you have a little more control over your side of things. 🙂

    Thanks for sharing!

    Cheers.

  124. Newbie here – just happened onto your website, which I love and is going to be such a phenomenal resource for me. I so enjoy your extraordinary openness and frankness. Thank you for sharing with the rest of us what most people will never talk about!

  125. murielle,

    Thanks so much. Really appreciate that.

    I try to be as forthcoming and transparent as I can. That seems to be the only way we can effectively and fully communicate, share, and learn. We’re all in it together!

    Stay in touch.

    Best regards.

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