Money and Marriage

Often, when you get married, your finances change. Whether it’s just learning to share bills with someone else or combining at least some portion of your funds, you’re bound to have some kind of change.

There are basically 2 main choices of what to do next with your finances after you get married:

  1. Keep all accounts separate and split costs in a ratio of your choosing
  2. Combine all accounts into a communal pot

There is also a slight variation on #1, which is to maintain separate accounts but to have 1 joint account, which you both pay into to pay bills.

It’s difficult to make a choice on how you want to handle your married finances. If you have already been doing things a certain way for some time, it can be hard to change to doing them a new way. If 1 of you doesn’t work, by choice or otherwise, you pretty much have to combine money – or else decide that the unemployed person has to borrow what they need for their share of bills, and will later repay the other, but honestly I don’t understand doing something like that in a marriage. This is your life partner, not your flaky roommate. You took them for better or worse, and I would think “for worse” means covering the bills when 1 of you can’t contribute.

Josh and I have been operating with separate accounts since we moved in together 3 years ago. I added him to 2 of my credit cards as an authorized user (not a co-applicant) before we were married, so that we could more easily combine our spending on shared items or food spending. At the end of the month, I take the credit card statement and classify each purchase properly, and Josh paid me for his share of the charges. This system, while lengthy, worked well for us, with the added benefit of always knowing exactly how much that I, he, or we spent in every single category, which made it easy to see how on-budget we were.

After you get married, you start wondering, how long will we send 2 checks to pay the rent? How long will we split the utility bills down the middle? What if 1 of us is saving more for vacation than the other – must we vacation by ourselves or feel burdened with “having to pay” for the other to be able to come along? These things don’t sound much like the way a married couple would operate, at least not to me. It’s great to be independent and both earn your own money and feel some ownership of it, but I can see it becoming an issue later on when situations like I mentioned crop up, and especially as salaries change it can become competitive instead of collaborative. You shouldn’t feel the need to compete with your spouse over salary – you are likely sharing everything anyway such as your home, vehicle, etc.

I’m sounding pretty favorable towards combining money, and that’s because I am. I don’t want to always be paying things as though I’m paying with my roommate. I don’t want to save up for “my” house, I want to save for our house. That being said, it’s not without some difficulty to actually make this change.

The first hurdle I’m finding is having not only different paycheck schedules, but varying amounts in the paychecks (and not due to overtime or anything like that). I get paid bi-monthly, and it’s extremely consistent: the same amount of money in each check, twice a month, paid on the 15th and the last day of the month, or the previous business day if that day happens to fall on a weekend or holiday. Simple, right? And it’s in the account on that day. Josh’s paychecks meanwhile are also bi-monthly, but they are hourly rather than salaried, which means even if just works normal 8 hour days, it all depends how many business days were in that pay period to find out how much that check will be. And while it’s “paid” on days similar to how mine is, it doesn’t actually land in his account until an indeterminate number of days later. Honestly, I’m not sure how he’s been able to deal with this at all! Every single check is a different amount, and comes on a random day. How do you budget for something like that?

My plan is to budget based on the lowest possible number of business days in a pay period, which Josh determined is the 2nd half of February with 9 days. This all sounds great except…I live by Budget Zero. This means I budget every last cent of my paycheck, including savings. For me, savings aren’t based on “whatever is left at the end of the month”, it’s a specific, pre-determined number, and I spend my “fun money” around the savings, not the other way around (the fun money amount is also a pre-set budgeted amount). It has worked very well for me for the past 3 years – checks come in, and I simply allocate them in a spreadsheet I keep to all of the various categories as determined by my budget. Done! But how do you do this when the pay varies every single time?

Even with budgeting for the smallest paycheck that will be seen, this means that every other paycheck will essentially leave money on the table – money in the account that we haven’t already decided it’s ultimate goal. I’m thinking we will just use that “extra” money for our primary savings goal and that way it won’t matter (since right now we’re still miles away from reaching the goal and don’t need to hit a certain # every month). But then the issue of not knowing what date it will arrive. Luckily, either of us is able to pay the entirety of our bills on their own, so we should have enough to pay everything at any given time, but how do you make the allocations?

As I mentioned, right now when my check comes in, I simply allocate it until all of it is sitting in various categories. If we have 2 checks to fill out a single budget and those checks both came on the same day, we could still do that. But with them coming on different days…you can’t really even allocate the first one until both make it in. I guess we could just do that, but that means waiting longer before moving money to savings, which means losing interest. That plus I feel like my accounts are in a state of disarray when I haven’t allocated all of the debits and credits in it.

For now we decided to take the first step of opening the joint account. Well, we didn’t get very far – we decided to open a joint checking with Ally, where Josh already has a personal checking and several savings. Our application “was not allowed to continue”, and when I called about it, was informed that “an account representative will have to review your application”. So…who knows what went wrong there. Josh thinks perhaps it’s an issue with verifying my new name. And here I thought it would be easier to open a new account with the new name rather than updating it on a pre-existing account.

We also weren’t able to open a joint savings account. I have my savings in Sallie Mae right now because their rate is 1.4%, which isn’t amazing, but for an account where I don’t have to meet any requirements to get the rate (like high yield checking accounts), it’s pretty good. But they haven’t updated my name yet even though I sent them the paperwork last week, and I don’t want to worry about the name change on another  account.

So in limbo we stand. We could work on the budget while we wait on the accounts…but Josh’s interest wanes. I wanted to work on it tonight but it did not happen. Hopefully it happens soon, as the additional health insurance and soon the W4 changes will start affecting both of our paychecks, and I think it would be easier if we combined in time for those changes, so they don’t feel as strong as they would be on our individual accounts.

This entry was posted on Wednesday, July 28th, 2010 at 9:08 PM and is filed under Marriage. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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