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