How to Deal with Joint Finances

Throughout your college years and beyond, you are in charge of your own money.  You can do what you please to get into credit debt or spend little and put it all into savings.  It really just depends on your spending habits and what you want to do with your money.  But when you eventually meet that special someone, things can change in a hurry.

If you eventually get serious with someone, one thing that you must eventually talk about is how you plan to handle your finances.  While you may hope, chances are slim that you both feel the exact way about spending money.  And with the growing divorce rate in the country, this is something that is important to talk about early on (Please note that I do not mean the second date).

For this to be successful, it really just depends on what will work best for you and your significant other.  You could do something that many others do or you could consider something radically different.  It is what will work best for the two of you so that money can be discussed in an open matter but not something that brings up arguments at all times.

On another note, if one parent is staying at home raising the kids and the other is in the work force, I assume that the finances will be joint.  The time and effort that someone puts into raising kids is a full time job in itself and something that would cost thousands upon thousands of dollars to hire out.

If both parties are working, the first situation that you could consider is putting all of the money earned into one account.  There is a lot of different things you can do if this is the route that you decide to take.  One thing that has worked over the past year or so for my wife and I is that we actually give ourselves a monthly allowance.  Because we put the rest of our check into bills and savings, we decided that it would be a good idea so that we would have some of our own money.

It was recently setup where the money is taken out of our joint account and put into her individual account so that she can spend it as she pleases.  If anything, she enjoys this more because she doesn’t have me worrying about what she spent money on.  When going this route, you need to figure out what a good amount would be to get each month.  It really just depends on what your financial goals are overall and what you can afford.  I have heard different numbers per month vary from $100 to $500 so find a number that would work for you.

You could also do it so that each person has their own debit card and they are pulling it out of the joint savings account.  This may take a little more trust in what they spend as there may be a large amount in that account.

The other big way to handle money is not have things setup jointly.  I know that this has worked many times for so many people but I find this hard.  My feelings are that if one person is making more than the other, how does the other one feel?  And would one feel resentment towards the other if they pay for most of the things?  Again, the reason that I feel this way is because I believe in the joint system of finances.

Before my wife and I got married, we used separate finances.  Because I made more than her, we agreed that I would pay 60% of the bills/entertainment and she would pay 40%.  During those months, we kept track of it in a notebook and ended up close to even over that nine month stretch.  It was a hassle trying to figure out who paid for what but it was a way to make things more even.

It usually should be that the person who makes more money should help cover a larger part of the overall expenses of the household.  If not, I am willing to bet that there is an underlining tension that may come up during arguments.

The main reason that I do not like keeping money separate is when something comes up.  For example, if you have to buy diapers for the baby, are you going to be mad if you have to pay for them and the other person makes a ton more?  Does that even out over time?  Who pays for the dinner when you go out?

I would assume that more and more these days, people are dealing with joint finances.  They are doing what they can to make this work.  And if you find a way to make it work, that really is the most important factor in your finances.  It is important to talk to your special someone about it and see how they feel.  The more communication (And not yelling) that occurs, the better situation that could come of this.