Seperate Finances Question

[LivingAlmostLarge]

Okay so people who are married or living together but unmarried and have seperate finances I was wondering, how doyou handle certain things.

For example buying a new car, does the person who drives the car have to save up and buy it with their own money or is it done jointly? Same with if one of you crash your car what do you do to replace it? Also are you each responsible for repairs to you "own" car?

Second with retirement, do each of you save seperately? Do you each plan on saving 15.5k into a 401k and $5k into a Roth IRA? Or do you just both make sure you save at least 10-15% for retirement of each salary into your own accounts?

Third, do you split bills based on income % or in halves?

Fourth, if you want to go on vacation, do you split it like travelling buddies or does one person pay for it? Does the person who makes more pay for it?

Fifth how do you split big purchases? Do you have to agree? For things like a new roof on the house, let's say it's $15k do you each fork over $7500?

How do you merge finances when you each manage your money seperately to plan for long term goals? How do you save for children's college? Or how will you?

Why is it unfair to make someone pay for "your" car or "your" student loans? Did your spouse not have a say in deciding whether or not to get a car with a loan? Or take out student loans?

Thanks, I'm just curious and confused because I've always had joint accounts. So everything is a joint decision. Yes we each have a car brought into our marriage we bought, but we think of it as our cars. If one car broke we'd consider a family car and decide who should drive it and who should have the older car based on our needs. As for student loans "we" consciously decided that DH should have $17k in student loans and are deciding again if he should take out $8500. So it's a conscious decision that we wil pay off.

What happens if we split up? We'll split assets and debt. But I was am curious, because even now, if I went out and bought a $300/month car my DH would be furious and vice versa. He would not be happy if from my paycheck I blew that much and it took away from our common goals.

I know someone who says it's her income, so she should pay for her own car and her hubby has no say. He has a lower income and a paid for older car because he can't afford better. So they don't have a say over how they spend income.

So if you have seperate finances, is it because only you have final say over your money? Or is every decision still joint and negotiable? Where if it made the other person unhappy you wouldn't do it?

Also when we spend money it's all our money.

[Caoineag]

We still to this day don't have just one joint account (we have two with one person being in charge of the account.) We have always split things fairly equal but we don't worry about making it perfectly equal on everything.

For example, my dh pays rent because he always the first home so its easier for him to do it and he likes to buy our meals out so he takes care of that as well. I like to pay bills because I am a little obsessive so I have the monthly bills and I pay for groceries because I like to do that as well. We both contribute to retirement plans and we both save money.

Now when all is said and done, I have $400 above budget that can be used for savings and dh has $1600+. Obviously that's not very equal but that just means he saves more than I do. Big goals are joint. I tend to spend more of our fun money than he does but thats just because he doesn't want as much stuff as I do.

I guess what I am saying is that we still make mostly joint decisions and just split out the responsibility. Generally with a joint account, only one person does all of the legwork but we are a team so we each take a chunk of responsibility so more than one person is working on the finance stuff.

Another thing to point out is that if I needed more of my money, I would let my dh know and have him take something off my plate.

[PrincessPerky]

I would imagine to each his/her/their own applies here.

I don't do the seperate thing, but I have heard enough who do to reallythink it doesn't make sense..not that they shouldn't do it, but in general it seems to be more emotional that logical.

For example, my in laws, the guy pays for all bills, the mom pays for all food...now if he wants steak she pays, if she wants to turn down the air to be cool, he pays..not like it is his air conditioning, or her steak, they just picked a way to split, and that was that. doesn't really matter so long as they are happy.

I think if you want to split bills/finances and be perfectly even you will have too much math and prolly fail anyways. if on the other hand you want different accounts so you can each control what you prefer and don't mind that the numbers are not all even go for it. so long as you can balance the checkbook I don't think you need to balance the finances in house.

( but then maybe I am missing something, we have joint accounts all money is shared except his ebay selling -which I have been known to spend..and my survey money..which I spend on house stuff..so really all joint)

[anonymous_saver]

I've been with my partner now for almost 5 years, 4 of which we have lived with eachother. We have seperate finances. There is no way, I would ever get a joint account in my life. My partner feels the same way. We save for retirement seperately in our accounts, as well as emergency fund, etc. My partner will have approx. $40,000 in student loans when they are done with grad school. That will be paid off only by my partner and not me.

We have very similar incomes, although I make a small amount more, and we pay 50/50 on everything. I'm not sure if we would ever go to %'s since the fields that we both intend to stay in will be similar pay.

That being said, it's not like I would let my partners' pet starve or anything, but if I bought food for their pet, my partner would return the favor to me some day.

[LivingAlmostLarge]

The questions stem because most people who have seperate accounts do it to not fight over disposable income they have after paying all the bills. And maybe I'm stupid but we have very little disposable income after paying all the bills.

[anonymous_saver]

Your not stupid. Your question was a resonable one.

To be honest, I'm 26 years old and make about $38,000/yr. I could (and have) lived off much less. I have lived off of $10,000/yr. before and so has my partner. Shhhh though... don't tell our bosses that!

[ActYourWage]

I've been with my partner now for almost 5 years, 4 of which we have lived with eachother. We have seperate finances. There is no way, I would ever get a joint account in my life. My partner feels the same way. We save for retirement seperately in our accounts, as well as emergency fund, etc. My partner will have approx. $40,000 in student loans when they are done with grad school. That will be paid off only by my partner and not me.

We have very similar incomes, although I make a small amount more, and we pay 50/50 on everything. I'm not sure if we would ever go to %'s since the fields that we both intend to stay in will be similar pay.

That being said, it's not like I would let my partners' pet starve or anything, but if I bought food for their pet, my partner would return the favor to me some day.

I have never understood why people would not join accounts (only after marriage though). To me that is short term thinking and not fully trusting your partner. It is like living with a roommate without the commitment to one another.

[anonymous_saver]

It works for us. It's easy, there is commitment and we trust eachother completely.

[disneysteve]

I've been with my partner now for almost 5 years, 4 of which we have lived with eachother. We have seperate finances. There is no way, I would ever get a joint account in my life. My partner feels the same way.

I would agree for non-married partners because of the legal issues that could arise, but for married partners, I think it is different. I wouldn't have married someone who I couldn't trust with my money. To each his own, though. I know the separate thing works for a lot of people but I know it would never work for my wife and I. We combined our accounts as soon as we got engaged. That was 17 years ago.

[skydivingchic]

Let me start by saying that if joint finances work for you, great. But I personally see joint finances as much too big a risk to take. DBF and I have been together for many years and have chosen not to get married. We do own a condo together but our finances are otherwise completely separate.

We split bills and living expenses (utilities, groceries, etc) 50/50. I pay for the day to day stuff throughout the month, half the expense gets written on a white board, and he reimburses me monthly. His income is higher than mine and always has been, but they are not completely out of proportion.

Condo – Our condo is owned 50/50 and we have each contributed 50% of the mortgage, taxes, insurance, downpayment, etc from day one. We have a legal document outlining what happens to the equity if we break up or one of us dies. We each carry enough life insurance to cover the entire mortgage in the event of our death so that the other would have one less thing to worry about. Each month we each write a check for half the mortgage and half the HOA fees. This year we agreed to pre-pay our mortgage each month and the amount was discussed and agreed upon.

Cars/Student Loans - We each own, maintain, insure, and pay for our own car and motorcycle. If one of us wants a new vehicle, that person has to save up or choose take out a loan in his/her name only and the other would have no say in the matter. We each paid our own student loans off.

Retirement - We each save separately for retirement. I have a 401(k) and a Roth and he has a 401(k). We both sock quite a bit of money away into these accounts.

Vacations – We decide together where to go and we each pay for our own travel expenses. If it is a tour type vacation with a lump sum cost, it is really easy to split. When we take driving trips with hotels, gas, and food expenses, we each pay for certain expenses, save the receipts, and settle up at the end for a 50/50 split. If one of us wants to buy souvenirs or gifts, that is separate and comes out of our own pockets. We are both currently planning a trip which does not involve the other, as we have some separate interests we want to pursue. His will be taking a motorcycle trip to Alaska with a friend and I am planning a sabbatical to Peru for a Spanish immersion program. We are each saving and paying for those trips out of our own accounts.

Big purchases – This depends what it is for. If it is something for the condo that would stay with the condo when we move (i.e. new kitchen, carpeting, washer/dryer, etc), we each pay 50/50 for that and decide jointly on the items. If it is a something that wouldn’t stay with the condo and could not be split, like a piece of furniture, one of us buys it and it would go with that person should we ever split up.

We have chosen not to have children, so that is not an issue for us.

This method has worked for us for many years, partially because we have similar outlooks on finances. Neither of us has ever carried much CC debt, we both save aggressively for retirement, and we are both extremely independent people. I cannot even imagine having to justify my spending choices to someone else. I work hard for my money and don't want anyone else telling me what I can and cannot spend it on.

I personally believe that it is imperative for me to be financially independent and I would be completely uncomfortable being in any way dependant on another person. If the need ever arose, I could walk away tomorrow and maintain my lifestyle. Not having that kind of independence and freedom is not even an option in my eyes.

Editted to add: I see joint finances as a huge risk not because I wouldn't trust DBF with my money, but for other reasons. I've seen way too many cases of domestic violence where women felt/were trapped due to being financially dependant on that partner. DBF is obviously not abusive, but I'm wouldn't be comfortable not having the ability to walk if need be. Also, what if he is killed in an accident? What if he gets a disabling condition like cancer that would cause him to be unable to work? There are just too many scenarios I can think of in which being financially dependant on another has a very bad outcome for me to be comfortable not be independant.

[ActYourWage]

@anonymous_saver

Interesting. What if you two had a kid? How would the finances be handled?

[anonymous_saver]

It doesn't matter if we are married or not, our finances would stay the same way, seperate. We don't see any need to combine our finances. This works for us, and we trust eachother completely with our finances. We already trust eachother with money, that wouldn't change if we get married.

If we had a kid, we would still split the finances still, no joint account. If my partner paid for day care, I could pay for entertainment money and food or something. Granted though, we aren't having kids, so I guess that's only in theory and not in reality.

[ActYourWage]

Is it safe to say that most or a good deal of people that do not join accounts do not have kids or plan on having kids?

[LivingAlmostLarge]

I have found that to be a common theme, when I asked the question on another board. Many people who have seperate accounts do not have children. And do no plan on having kids.

Those who want kids but don't have them yet admit it could become difficult if one parent choose not to work and stay at home with the child.

[DebbieL]

I've never joined my finances with anyone (including the father of my child - who is long out of the picture). It has always worked well for me to keep my own finances and have my partner keep theirs. It's easy, there's no squabbles and it just works well.

I'm married and my DH is very much like me. We both like to handle our own finances (although our philosophies are similar and we are both savers). We do both contribute a certain amount monthly towards bills, but the rest is ours to do what we want with. He and I have similar net incomes and both save a large portion of our income each month.

I think that whatever you are comfortable with and works for you is okay.