[cwhitebn]

Hey everyone, I'm looking for a little advice. My partner and I have always done our finances separately for the past 5 years when we first met. I guess the time has come where things are serious and I'm looking for advice on how other couple's do their day to day banking to pay bills, mortgage, shared expenses, etc.

Our situation: Both have good incomes (one makes $60K, the other $85K), both are also in the middle of graduate school. My name is on the mortgage since before we got together and all the bills are in my name. Currently, my partner gives me a portion of his income to help pay for the house, bills, utilities. I'm looking to change that, share more, be open to maybe a joint banking account.

So, how does everyone else seem to share household costs? Maybe a joint bank account and each contribute a portion of income and use that account for our expenses and keep our own personal savings?

Thanks for the great advice I know you'll share. If there's any relationship gurus out there that can pass along their wisdom, I'm all ears

 

[AltaRed]

You will get a wide variety of responses and it is usually influenced to a great degree by the individual experiences. There is no real right or wrong BUT I will say that because you both are likely relatively young, are presumably in a common law relationship, and might have disproportionate assets, you should at least keep your own separate bank accounts, including personal savings, and then fund a joint household chequing account where you both put money in and pay the bills jointly.

Eventually you may forego having separate accounts where your pay is deposited, but that is a next step to take IF you choose to do so. A lot will change if/when you decide to raise a family together. At that point, lots of things should be 'joint'.

Added: When I married young, neither of us had anything, so we started life together with joint accounts and raised a family. That all worked as planned. But 5 years now into a new, second common law relationship that started at time of our retirements, we continue to keep our financials separate for Estate planning purposes (for each of our own adult children) and so the ONLY thing we have done on a joint basis, is to each fund a joint chequing account from our personal accounts, and have a joint credit card which pays for our household expenses. Even our house is in 50/50 tenants-in-common title to avoid auto-assignment of the house to a surviving spouse. I only add this personal story so that one can see how things can (should) be different depending on circumstances.

 

[milhouse]

We have a joint chequing to which we equally contribute to, to pay for nearly all of our bills and spends but keep separate accounts for more personal spends (loose definition but stuff like income taxes, some spends that might irk the other person, etc) and savings (TFSA, RRSP contributions, etc).
The joint chequing is mainly to allow for easy logistics. But IMO, the core of it really needs to be that your spending values/styles are similar so you don't freak out on each other's purchases but I suppose you can adjust what the joint account covers.
Prior to the joint account, odd as it sounds, it was somewhat random who paid for what so we really couldn't definitively tell if either of us was kind of paying a somewhat equitable share of the spend.

 

[Daniel A.]

My wife and I have tried different systems over the years for a long time we had just one joint account everything went in and everything came out, the problem was there was little control about where the money went. It seemed to work well for the kids as there was little discussion about spending.

Later in life we had one joint account and each had a personal account payroll went into the personal account and transferred money to the joint account this worked much better and forced a discussion about what was spent on the kids.

Now even much later in life I have my account and my wife has hers, she pays some things and I pay others, we each take care of our own car insurance/expenses as she has one car and I have a couple of things to insure car, motorcycle, travel trailer, house. We both have DB pensions and if she wants or needs more all she has to do is say so.

 

[My Own Advisor]

What is what we did AR:

"Eventually you may forego having separate accounts where your pay is deposited, but that is a next step to take IF you choose to do so. A lot will change if/when you decide to raise a family together. At that point, lots of things should be 'joint'."

For us it's not about who pays what or who makes what, but I can appreciate each couple has different values and a relationship.

 

[AltaRed]

Indeed. Without knowing more about the OP and her partner, we can only assume the OP wants to be 'more sharing' and that is good. A couple is aligned better when they share the household costs from a joint banking account, and even potentially a joint credit card for joint expenses.

We were not asked, but to make a comment anyway, we don't know the situation about what appears to be sole title by the OP on the home and the mortgage but that will (should) eventually need to be sorted out as well. In the event of a breakup, and I believe there are differences by province, the partner will likely be entitled to some portion of the home proceeds (value) simply by making monetary contributions to things like mortgage payments and/or property taxes and/or home insurance, etc. It will depend on the circumstances at the time.

 

[cwhitebn]

Thanks AltaRed for your input earlier, I really appreciate and can't agree more than as things change as we grow older and start a family, so will our financial planning change. I like the idea of a joint bank account that we can share to pay for the daily living (housing, groceries, insurances, etc...things we share equally) but have our separate accounts for own individual things like shopping, travel, etc.

 

[Spudd]

What we did when we first got our joint account was we figured out a monthly budget for joint expenses, and each put in a proportion of our salary to make up the budget. The higher-earning person contributed more money, but same percentage of their salary, as the lower-earning person. This was to prevent the lower-earning person from having to give up a huge percentage of their salary if it was 50/50.

Then we each kept whatever was left over in our personal accounts for personal spending. This worked out well for us as it allowed each person to spend as they felt fit without having to discuss it with the partner.

Eventually, my husband went back to school and we went to 100% joint everything. It also works well for us, but I always feel a little guilty buying things like knitting supplies or yoga clothes with the joint money, so I'd like to eventually get back to having our own personal accounts too.

Some couples prefer to have everything joint and feel like it makes the relationship better. Everyone needs to find what works best for them.

 

[MrMatt]

Read Gail Vaz- Oxlades book "Money Talks", it's full of all the good advice.

That being siad,

My situation is simple, my wife and I are 100% shared on everything, all money goes into one account and pays for everything.
- We split bills and credit cards between us, simply to ensure we're both building good credit.

We have allowances that we can spend on anything we want, no questions asked.
- Really no questions we don't even have to disclose. I think people need that, at least a small amount (even if it's $5/wk to pay for Timmies now and then)

We have weekly budgets for weekly expenses to ensure we're on track. We account for different needs, ie she has a higher clothing budget than I do.
For bigger purchases we discuss, and we have planned expenditures and allocations throughout the year.

As far as other personal expenses, we discuss it, she got a sewing machine, I got a soldering station (Hakko, it's awesome). But that's because it was appropriate, we don't play the you get something I get something game, I think that's a losing strategy.

 

[cwhitebn]

Thanks Spudd, this scenario sounds perfect for what I think my partner and I need. Each splitting 50% of our paychecks into an joint account and keep the rest separate for our own personal spending. Thanks for the advice!

 

[twa2w]

Everyone does this differently.
My son and c/l keep separate accounts. They contribute a pro rata amount to rent.( one pays, the other reimburses). My son pays for car expenses as he has the only car. They take turns with groceries, meals out. Vacations are mostly road trips so one pays gas and food, one pays hotels, campgrounds. They review to make sure it is fair based on % of income. Each has own investments/ savings.

My spouse and I have shared everything since day one - everything into joint account, investments and credit card. That said she has a sole name account and credit card to keep own credit. We are both fairly frugal and have never had any issues.

Friends pool all income to joint account, then each gets a no questions asked allowance. She buys clothes with hers, he buys bikes or sporting goods.
All other expenses and investments come from joint account/ credit cards.

Figure out what works for you. Remember in the case of a split, unless you have a co-hab agreement, it is mostly 50/50 split depending on asset or province so if one is a strong saver and the other is not, in the end it won't likely matter.

 

[AltaRed]

Another thing to remember about joint accounts. One person is always? almost always? the primary account holder. It is that person that thus builds their credit rating. Thus each person in a couple that has only joint accounts should have at least one credit card as primary holder to keep things rolling smoothly in event of a relationship split. Nothing might be more insulting (or infuriating) than the 'under' spouse being denied a new stand alone credit card in his/her own name.

Message: Keep some balance between spouses in how joint accounts are opened and managed.

 

[Daniel A.]

Always remember financial issues are the number one cause of divorce, either the couple are on different pages or one just goes along not really being happy with the arrangement but stays quiet not wanting to rock the boat.

Don't avoid having it clear what works best for you.

 

[RBull]

cwhitebn- another bluenoser-not many of us on here.

We've been married 28+ years and set up joint bank, mortgage, investment, credit cards from the get go although I contributed much more initially and ongoing. For about 2 years my wife had her own savings account to give her a feeling of independence. She gave it up after I teased her about only keeping $100 in it and never using it.

My wife prefers I take the lead on finances and major purchases but there is always a discussion about any kind of spending beyond a few hundred. It's natural communication to us and we're extremely of like mind on both spending and saving so it works well. I'm the primary on everything but her credit rating is almost identical to mine so not sure how that works.

G/L with your decision.

 

[MrMatt]

We've been married 28+ years and set up joint bank, mortgage, investment, credit cards from the get go although I contributed much more initially and ongoing. For about 2 years my wife had her own savings account to give her a feeling of independence. She gave it up after I teased her about only keeping $100 in it and never using it.

G/L with your decision.

I think that touches on the important part, she has to feel independence.
As much as financial minded people think it's about the money, it's about emotions.

Every person has a different level of need for control, independance, freedom, whatever you want to call it.

For me it's $5 + being able to freely negotiate anything else, others have far different needs.
That being said, we're not tightwad negotiators, most likely we get whatever we want, It's much easier to say "whatever you want" then let the spender decide that it really isn't worthwhile. I've put off/cancelled hundreds of thousands in purchases this way. Most think we're crazy, but it works for us!

 

[AltaRed]

Thanks Spudd, this scenario sounds perfect for what I think my partner and I need. Each splitting 50% of our paychecks into an joint account and keep the rest separate for our own personal spending. Thanks for the advice!

As you can see, everyone has a different (and often strong) opinion. Ignore them. Just do what is comfortable for you and your partner. When both of you find a compromise 'sweet spot', that is what is right for you.

 

[twa2w]

I think that touches on the important part, she has to feel independence.
As much as financial minded people think it's about the money, it's about emotions.

Every person has a different level of need for control, independance, freedom, whatever you want to call it.

Absolutely right. For every person who needs a sense of independence, there is one that feels they are not a committed couple unless everything is joint.
Then there are the ones that say ' what's yours is mine, and what is mine is mine'
:greedy_dollars:

 

[DayTek]

My husband and I have lived together for almost 12 years. We've always had one chequing account that both payrolls and bills come out of. Multiple joint savings accounts. Joint credit cards (one I'm the primary on, one he's the primary on). I control the finances (I am in banking) and we are both very content with that. I'll check him in once in a while on how we're doing and that's good enough for him. Full disclosure, no secrets. Big purchases we talk about and decide together. It works for us.

 

[cwhitebn]

Thanks everyone for the advice. I understand the need to feel independent and support my partner in having their own separate accounts. We've always had separate finances. Our relationship has taken some hits lately and I had to look back at how things have been doing. I'm definitely the financial "go to" in our relationship but my partner feels left out or that he's not "equal" in sharing the decisions. Hence why I suggested maybe it's time to open things up, share our finances, starting with a joint account we can both contribute to for our mutual spending all while still having our own investments, savings, etc.

Part of the "emotion" side to this is I have a significantly higher income than him, own the house, no debt. My partner has no debt, half the income and savings, and no other real assets. My father who has always been wise with money has always preached to be cautious...so I'm guess I'm afraid if our relationship should sink, and we split...I tend to loose quite a bit (with my partner gaining a lot more). But I don't want to set us up for failure by thinking that way.

Does it make sense to start off with a joint bank account? Perhaps when he's saved up more and we're ready to buy a house together, we can put our names on the mortgage.

 

[kcowan]

I'm definitely the financial "go to" in our relationship but my partner feels left out or that he's not "equal" in sharing the decisions. Hence why I suggested maybe it's time to open things up, share our finances, starting with a joint account we can both contribute to for our mutual spending all while still having our own investments, savings, etc...

I think you need a discussion that goes beyond finances. The finances seems to be a symptom of the problem, not the root cause.