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Separate Ways

Richard Quinn

IT’S CLEAR I AM a dinosaur when it comes to my views on money matters—and apparently several other things as well, but let’s not go there.

When I read in blog posts and articles that a married couple should separate their finances into his money and her money, that one person pays for this and the other for that, and never the twain shall meet, I’m shocked. Some articles indicate a severe division of money matters. No joint bank accounts. One person saves diligently for retirement. The other is a non-saving spendthrift.

I read an advice column where a woman wanted to know what she should do because her husband had been wasting money, was behind on his credit card payments and couldn’t pay his share of the mortgage. His share, her share? Can this approach work for long? I say to myself, “Is this really a marriage?”

But, of course, my frame of reference is that of someone born between the Greatest Generation and the baby boomers. Nevertheless, such a divided view of money doesn’t strike me as healthy.

During our marriage of nearly 54 years, our income—with minor exceptions—has been what I earned. Even in retirement, our income is my pension, my Social Security, my wife’s Social Security based on my earnings record, and her tiny pension based on employment that ended in 1970.

Still, never during those 54 years was any of our money considered mine. Never was there separate anything when it came to money. All our bank accounts are joint. All our investments, except our IRAs, are joint holdings. Stock in my previous employer, which I obtained through stock options and bonus awards, was converted to joint ownership.

Several years ago, my wife inherited a few thousand dollars from an aunt. There is an emotional attachment to that inheritance. We agreed that we would isolate that money in a separate savings account for my wife to use as she saw fit. The money is still there—and, while we’ve agreed it’s my wife’s money, it still sits in a joint account.

When it comes to spending, anything significant is a joint decision. Actually, some rather insignificant spending is also discussed. There are some exceptions. My wife’s visits to Talbots, the salon and the makeup counter are exempt, and wisely so.

I struggle to understand why other couples handle their money differently. What are the issues that drive their thinking about ownership and use of money? Is it power, control, selfishness, lack of trust or simply a generational difference? I suspect it varies by couple and may be a combination of factors. But whatever it is, I don’t get it.

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George Kaplan
George Kaplan
3 months ago

Since it was second marriage for both of us and we both had young children at the time, my wife and I did a “yours, mine and ours” approach to finance. We both put an equal amount into a joint account to pay the mortgage, utilities, food and such and paid for our personal and kids bills separately. We still discussed major purchases. It works for us.

stelea99
stelea99
3 months ago

Richard I am with you….In our 53 years of marriage we have lived in 3 states, all Community Property states. In CP states, generally, any source of funds used to support the marital community becomes Community Property. My wife only worked a couple of years until our first child was born. However, all our money and assets are jointly titled and owned. It may still be possible for couples in CP states to have separate accounts, but it can’t be easy to do.

wtfwjtd
wtfwjtd
3 months ago

Another fun fact: For a married couple, if separate finances means separate tax returns, then every dollar of Social Security income becomes taxable, as least as far as the amount received above the standard deduction. And if separate finances doesn’t mean separate tax returns, then finances aren’t really that separate, at least in the legal sense. I often wonder how people make these arrangements work, as well as the motivation behind them. Interesting questions, for sure.

Paula Karabelias
Paula Karabelias
2 months ago
Reply to  wtfwjtd

Good to know. The articles I’ve read about social security taxation have never mentioned that. I have a friend who for some reason files married separately. It also appears from what she has told me that when they retire, Social Security will be nearly all of their income.

John Redfield
John Redfield
3 months ago
Reply to  wtfwjtd

Last year, we filed a joint return, even though our finances are separate. Our prenup covers filing either way. I paid my accountant extra to estimate our taxes as if we filed separately and we split the savings evenly between us. Could have proportioned it based on income, but I enjoyed giving her a bigger check.

david gladis
david gladis
3 months ago

by suggesting power, control or selfishness are the reasons, you are harshly judging others who don’t do thing the same way the you have chosen. How about you do you and let others figure out what works best for them

R Quinn
R Quinn
3 months ago
Reply to  david gladis

I was speculating on the reasons for the behavior, that’s it. No judgement. There must be reasons for any behavior, some have been mentioned in comments. What are your words of wisdom?

david gladis
david gladis
3 months ago
Reply to  R Quinn

What my wife and I believe to be a wise and well thought through and discussed decision is unique to our situation. I would hope that couples make choices that are mutually beneficial and not based on power, control, selfishness etc. We choose a hybrid model. We separate some finances and combine others. Its a model that works well for us

R Quinn
R Quinn
3 months ago
Reply to  david gladis

Okay, as you should do what’s best for you.

Edmund Marsh
Edmund Marsh
3 months ago

My wife and I married for the first time in our thirties, 23 years ago. We never considered separate accounts, but we did have to talk through how we would handle money together. We started from different habits of money management, but quickly resolved differences as we honed in on the shared goals of retirement savings and paying off debt. I think the key to financial bliss in marriage is putting in the communication work to come to a point of agreement. Seems to me that joint accounts are a work around or delaying tactic, but I people space for their opinion. Thanks for the article.

Edmund Marsh
Edmund Marsh
3 months ago
Reply to  Edmund Marsh

Should read “separate accounts are…”

John Redfield
John Redfield
3 months ago

My first marriage lasted 39 years and my ex never worked. All accounts were joint, but she never really understood money. I live in a community property state and since I was retired and the children grown, the divorce was a 50/50 split. I had no problem with that as we had grown everything together and I wanted her to be able to live comfortably after the split. We were different people at 61 than when we married at 21.

I remarried last Thanksgiving, I was 65 and my blushing bride was 68 – both retired. We agreed to split finances – what was hers was hers and what was mine was mine. We needed a prenup to keep the community property state out of our agreement. Lawyers made it unnecessarily complicated because that is their job, but our simple agreement was formalized.

If she wants to buy 100 plastic pink flamingoes, she can. If I want to buy Bitcoin, I can. If we have a money issue, we discuss. At this age, neither one of us is changing. What you see is what you get. The prenup protects our children and grandchildren. We both can and have lived on our own. Joint accounts make no sense for us. I am very thankful for finding my friend, my companion and my lover this late in my life.

Boomerst3
Boomerst3
3 months ago

My wife quit her job after our 2nd child, 40 years ago, and I became the sole bread winner. Everything has always been joint, except for IRA’s of course. She handles the checking account and pays the bills. We discuss big purchases but not little ones. It has never been viewed as my money, always seen as our money. Maybe because we are on the same page when it comes to being financially responsible, it works. I can see how it might not work if both parties differ in their spending philosophies.

R Quinn
R Quinn
3 months ago
Reply to  Boomerst3

I think you hit the nail on the head. Having the same view of financial responsibility is the key.

Barry Karnes
Barry Karnes
3 months ago

My wife and I married in her Catholic Church. We were required to complete a “Pre-Cana” course, basically a marriage preparation program. It forced us to talk about subjects not normally broached in the dating process. Of course money and spending habits being a big reason for divorce. It was a wonderful course and I believe it made both of us more at ease with each other. She paid off her student loan before our wedding, and both of us entered debt free. Then closed our bank accounts for a joint account. I can’t imagine any other way. I’m the money person, but financial decisions are always discussed, as are larger purchases, and the saying “is it a need or a want” has guided us for 32 years.

R Quinn
R Quinn
3 months ago
Reply to  Barry Karnes

I had a similar experience 54 years ago and a good guiding philosophy.

Randy Starks
Randy Starks
3 months ago

Blended accounts, both separate and joint, are OK. Just make sure that your investment accounts (taxable) are joint. Oh, and make sure that your beneficiary designations are up-to-date as well as a Will or Revocable Trust, Financial Power of Attorney, and Durable Power of Attorney for Healthcare for both husband and wife.

Ms. Liz
Ms. Liz
3 months ago

I’m a barely a boomer with a 33 year first marriage and separate money from day 1. We are both children of divorce though my parents held it together (barely) until I was married.

My parents fought about money a lot. Dad was super cheap and Mom was a bit more spendy. My husband was super cheap and I was a bit more spendy. I didn’t want to see my marriage play out as my parents did so we decided on separate money from day 1.

Pro’s – We never fight about money. As a CPA, I wanted to be in control of my money, my budget and my investments. I have a greater sense of accomplishment over my wealth than I would if it were shared. I’m an invest and let it ride girl, he’s a market timing guy (queue the sad music). I would have lost my mind if he were investing my/our money. A gift is really a gift. I don’t shop often but when I do I can spend a lot – he’s as excited to see my purchases as I was buying them.

Con’s – The bookkeeping side can be a pain but we both have accounting degrees so we’re used to pesky financial stuff. We both ended up working longer because we each have contingencies for our contingencies. With one pot of money, I think we would have been comfortable retiring even earlier.

Caveats – This doesn’t mean you don’t have to talk about your money and goals that involve finances. We talk about money a lot. Separate finances would not work if one partner was a saver and the other was a spendthrift. At some point, both partners need to retire so you both need to be working towards that goal. A huge disparity in income or the work done within the home would make it difficult to come up with an expense sharing method that seemed fair.

Personal finance is personal, we each need to come up with methods that work for our partnership.

R Quinn
R Quinn
3 months ago
Reply to  Ms. Liz

Personal for sure. Whatever works is fine. But in all honesty I’m befuddled by your approach. Like I don’t even get the concept of “expense sharing.”

What happens in the separate money world if one spouse is less prudent when preparing for retirement? Does living in retirement ever become 100% ours?

Do you talk about, even monitor each other’s retirement savings to goals? Is there a collective goal for retirement?

parkslope
parkslope
3 months ago

While separate accounts could reflect a lack of trust in some cases, the issue of joint versus separate accounts is trivial compared to couples sharing a responsible approach to money management.

Prenups are another issue that raises some of the same issues. Apparently, Millenials are more open to prenups than was the case for older generations.
https://www.wsj.com/articles/millennials-embrace-prenupsbut-through-a-very-different-lens-than-in-the-past-11611252036

BTW, my wife and I have two joint checking accounts–her name is first on one of them (the one we use the most) and mine is first on the other. I would be interested in knowing how many joint account holders deviate from the traditional norm of having the husband’s name on top.

Last edited 3 months ago by parkslope
George Counihan
George Counihan
3 months ago
Reply to  parkslope

You can put my name anywhere – as long as it is a joint account I couldn’t care less

Linda Grady
Linda Grady
3 months ago

I’m a little younger than you, Dick (a boomer), but I’m still with you on this topic. With everything joint, I was initially concerned that I might be locked out of accounts when my husband died suddenly a couple years ago. My fears were unfounded: I was able to easily access all our accounts and, over a few months time, make necessary changes for my new life as a single, financially unsophisticated retiree. We had a system very similar to what you describe and the passwords he used for our accounts were available to me. I always enjoy your articles, even when they are musing rather than giving advice. Thanks!

R Quinn
R Quinn
3 months ago
Reply to  Linda Grady

Thank you for your comment. I find musing more fun and it generally stimulates comments which I find are helpful gaining new perspectives.

I spent decades advising and educating thousands of employees and retirees about their employee benefit plans of all types. It was mostly very rewarding, but also seeing the advice and basic information often ignored, very frustrating.

HumbleDollar is very helpful in exchanging ideas and points of view. I wish more people would comment on all the posts.

Jo Bo
Jo Bo
3 months ago

Some part of the desire for separate accounts likely stems from one’s education and career paths. For example, it is not uncommon for women that have persisted and achieved in gender-biased fields to retain their maiden names — and separate finances. Success — financial or otherwise — can be hard won and not easily untangled from one’s sense of independence and identity.

Paula Karabelias
Paula Karabelias
3 months ago
Reply to  Jo Bo

Not for this boomer who in my first career as an electrical engineer in the 1970s was the only female engineer in a large utility company . I married at 23 and we both happily made everything joint , as my parents had. We only discussed major purchases and didn’t micromanage each other. It worked out great for us. The only friends or family I know who separate their finances are those who are on their second marriage.

R Quinn
R Quinn
3 months ago
Reply to  Jo Bo

I’m thinking you have a valid point, but I wonder how that may translate to the relationship of spouses overall.

R Quinn
R Quinn
3 months ago

I forgot to mention, while our two credit cards – Amx and MC have our individual names, they are each one account. My wife has her own Talbots card though. Perhaps the secret to a long happy marriage. 😎

Nate Allen
Nate Allen
3 months ago

My wife and I basically do the same as Richard. Joint credit cards, joint checking accounts, joint payment of bills, etc.

However, I can also understand why others do it differently and why that works for them. For instance, if someone was in their 2nd (or later) marriage and had experience with a previous spouse who was bad with money, then they might feel more comfortable with controlling their own side of finances. Or, perhaps, a couple who had lived apart for many years before getting married and were used to their own finances beforehand and were slowly integrating but weren’t quite there yet.

Is it for us? No—but then again lots of things in terms of lifestyle choices aren’t for us, but seem to work perfectly well for other people. I’m sure there are plenty of things we do that would not work for others as well.

R Quinn
R Quinn
3 months ago
Reply to  Nate Allen

You have a good point regarding the second marriage, quite possibly a reason, but at the same time what does that say about trust between the new couple or the ability for one person to trust another?

Finances/money issues are in the top five reasons for divorce, some research says top three. I wonder if the his/hers, yours and mine point of view is a factor?

Paul Decker
Paul Decker
3 months ago
Reply to  R Quinn

This is exactly my situation. My first wife was driving us to the poorhouse so I ended the marriage. When I met my late wife, she knew of what I went thru and it just came naturally that we’d have separate finances. We both worked, she had two grown daughters and I had no kids. She would pay a proportionate amount of bills and had plenty left to treat her girls (and later grandkids). Surely if one of us was in a bind, we’d help each other out but it never really came to that. She was very supportive of my goals too. It worked very well and never an argument.

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