Hiccups on the way to combining finances
It happened fast. We barely talked about it, but all of a sudden, about a week after we got engaged — and before we were really ready — my fiancé and I had combined our finances.
I can pinpoint the impetus: Southwest Airlines was offering a promotion where if you got both the Plus and the Premier credit card and spent x dollars on one, y dollars on the other, you got a Companion Pass through the end of 2015. “We fly Southwest a lot anyway,” we reasoned. “And we’ll hit the minimums soon since this wedding we’re planning isn’t going to be cheap. We might as well get one of us a $5 ticket every time we fly somewhere together.”
So we applied for credit cards in both our names and started spending money on wedding-related things. The photographer wanted a deposit, but would she take payment in full seven months before the event? Of course she would! So too would the portable bathroom people and the half dozen other vendors required to turn a party into a wedding. Just like that, we’d hit those spending goals.
Combining checking accounts was easier than I expected. I prepared a full speech about how we should use my credit union instead of his “evil” bank, but my fiancé didn’t need a speech. He simply moved most of his money into my account, we put his name on it, and it was smooth sailing.
Until I went shopping with my sister a few weeks later.
I hadn’t purchased makeup in at least a year, and I was running low on supplies. We were at Sephora, and I had a few items in my little shopping basket. I calculated the cost: It was over $100. I started to panic. Blood rushed to my cheeks, my palms started sweating, and I could feel the tears welling up in my eyes. I couldn’t spend “his” money on makeup. That would be irresponsible!
See, up to this point, every time we swiped those cards, we were buying things together. Wedding stuff? Groceries? Dog food? Clearly distinguishable as combined spending. But this? This was something just for me.
Now, it wasn’t a frivolous purchase (or at least, not entirely), and it was absolutely something I would have bought without a second thought before we had joined financial forces. And the reason combining finances was smooth sailing from the beginning is because he knew my money philosophy inside and out, because he read Frugal Portland from start to finish, reading about my path into — and eventually out of — debt.
So I texted him. “I’m at Sephora with my sister. I want to buy makeup, but I’m feeling guilty.”
Immediately he texted back. “You don’t need my permission to buy makeup any more than I need your permission to buy a pizza tonight.”
I started to relax, then he wrote again. “We’ll run into issues like this and talk through them. We’re doing it together. I love you.”
I took a deep breath, squared my shoulders, and bought the makeup. My sister noted that I looked completely different after the text: more relaxed, more confident, happier. And I was.
That was a few months ago, and we’ve had our share of hiccups since then, but I’m glad we already have combined finances. I no longer see it as my money or his money. It’s our money. We have shared money goals — like saving half our income — and we’re on the same page. Saving half is something we do at the beginning of the month, and we keep the rest in our checking account. We still have the same credit cards, so there are no secrets.
It’s funny, actually. That one conversation — where I was so upset, worried, and nervous — was the only time either one of us asked for permission to spend. My sister and I were shopping online for her bridesmaid dress (would you believe it, the dog ate her original one?) and I asked if he had the credit card number memorized. He did, and rattled it back to me. “What did I just agree to?” he asked jokingly, after the transaction was complete.
The moral of this story is to pick a mate who shares your vision for financial goals. They don’t have to align 100 percent, but you ought to be able to talk openly about money with the person you’re spending the rest of your life with.
And try to save half your income.
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There are 32 comments to "Hiccups on the way to combining finances".
But what I really want to know is did he get the pizza? 😉
Some people believe you need separate cards or accounts so that you can spend money on gifts for your partner without them knowing what they spent. I prefer to know everything.
Even if you hadn’t done it quickly, you probably would have run into the same hiccups- I know I did, and we took several months to explore the decision.
Another bugaboo for us is solo travel. We usually travel together, but what if I want to visit my family on my own, or she wants to meet friends for a weekend? In the past these came out of our separate budgets. Of course it’s all the same money, but it seems different somehow. The psychology of combined finances, even for compatible people, is much more challenging than the actual mechanics of it.
For us, solo travel involves the challenges of money, as well as responsibilities and time. We have to coordinate and turn down certain things when it doesn’t work for the other. I have turned down two opportunities to travel to Europe very cheaply because we couldn’t swing how my husband would hand childcare on his own based on his work hours. He had to be at work at 6:30 and it was not compatible with childcare. Likewise, my husband has opted not to go on certain business trips or trips with the guys when my job is in overdrive at that moment.
Likewise, some couples may deal with a spouse who likes to drink with friends after work each evening–which again has both a financial and a time component to it.
“The moral of this story is to pick a mate who shares your vision for financial goals.”
This. It makes life sooo much easier when you’re on the same page with goals. Then the little things along the way are less about “asking permission” than giving a heads up and staying on the same page from month to month and year to year.
Funny, I was going to comment on the same quote, only to say how practically unrealistic it is.
There are a lot of things to watch out for in potential matches. Financial compatibility, while of course important, is going to come pretty low on the list, given that it only becomes relevant late in a relationship. It’s pretty difficult to abandon ship at that point without a stronger reason.
I disagree. 🙂
The vision doesn’t have to be exactly the same, but it should be similar. I am a saver, and I would feel thwarted at every turn if I had married someone who spent like every day was his last. How can a couple meet goals if they aren’t on the same page – and maybe not even in the same book?!
I’m with you in spades, Another Beth.
I really hope I’m reading too much into this, because it’s making my blood boil. It sounds to my ear that she’s given herself plenty of space to later say helplessly, “Oh, I didn’t know” and play the hapless victim.
“Financial compatibility, while of course important, is going to come pretty low on the list, given that it only becomes relevant late in a relationship. It’s pretty difficult to abandon ship at that point without a stronger reason.”
Personally, I’d say it becomes relevant even before there is a “relationship”. If she puts financial compatibility low and late on her dating list, then her odds of a mismatch are extremely good. Oy vey, imelda, please write back and say this isn’t what you meant.
To stay on topic, when DH and I got married, we blended finances right away. We banked at the same bank, so you think that would have made it easy. But our “Dum-Dum” bank made mistake after mistake. Now they’re in the process of becoming our former bank. They just don’t know it yet. Who’da thunk it would be tougher to to deal with the bank than each other? Perhaps it’s because we are on the same page financially ;-0
Great post! And good for the two of you! Best wishes on your future.
It seems to be common wisdom that money is one of the main drivers of divorce/relationship-breakers today. Who said this? And when was it said? My quick google searching only revealed a lot of opinion-based links.
Having open discussions about money with your potential long-term partner makes sense. And wherever that fact is about money and divorce should be directly tied to this post (and others like it!)
All about communication. Since my wife and I go on the same page with our budget our relationship has never been better.
My wife and I are one team. All the money belongs to the team. We buy things that the team needs/wants/desires. When we send emails or buy gifts, everything is done in the team’s name. Each of us bring different perspective, different skills (and skill levels) and temperaments but team is paramount.
Are there conflicts? Heck, yes! But we never lose sight of the fact that we are one team.
I really love your comment.
My husband used to have a different view of money than me and every time we got into an argument about money, I would say ” we are a team and need to work together”. After hearing it enough, he finally got it and we discuss our finances often.
I’m always wary of people who give financial advice but don’t combine finances with their spouse. I couldn’t imagine committing to starting a family together while still keeping separate books.
To me, finances seem so much easier than kids. If you can’t even get on the same page with money, how are you going to handle the hard stuff?
different people find different things hard, is all.
My husband and I are 99% united on financial ideals, but that 1% can be hard-fought. There’s a lot of anxiety and history on both sides from the ways we grew up and the ways our parents handled money.
Childrearing is totally easier, in comparison, except for the parts of it that require financial decisions. We parented for 6 years before we combined the last of our bank accounts.
I like having combined finances, and it’s been pretty easy for us since we’ve been together since we were young.
I know that some people can do separate finances and I don’t judge it or anything, but I think that our actions always affect others and getting in the habit of thinking about money that way is just healthy and gets us in the habit of being more thoughtful about how our actions affect our partner.
It’s the same with time and other resources. If I decide to train for a marathon I’ll be unavailable for 3 hours every Saturday morning. If I choose to spend my free time doing heavy yardwork then I might not be up for that late night party my spouse was excited about. For me the idea of combining finances encourages selflessness, and in your story as in mine it’s fostered warm fuzzy feelings of us encouraging each other to spend money on things that are important AND keeping each other in check a bit when needed.
The moral of this story is to pick a mate who shares your vision for financial goals.
I think that even if you didn’t pick a mate based on shared visions of money, once you make a commitment to live together you owe it to each other to find a way to make things work.
Ideally, even if you never discussed money much before you leapt, you’ll share core values and an idea of what life together should be like. Money is not a value in itself but a tool to get you where you want to be. It should be possible to agree on how to run that tool, even though in our society for a number of reasons many adults relate to money from a place of nearly total ignorance.
I’ve mentioned this before elsewhere, but even though my wife and I are very compatible in most things we struggled to get on the same page financially for years. We both had very different money habits, me being more of a risk taker and she more risk-averse, but at the same time she spent a lot more on “stuff”. We were both very ignorant about money when we started.
We tried all kinds of methods but they were either too complicated, too arbitrary, too stressful, etc. However, in spite of the problems, we remained committed to make things work. We agreed to pare down on stuff, I became more careful with risks, but we stilled lacked a method and there were a lot of little decisions that wasted a lot of time and energy. Should we buy this kind of garbanzo or that kind of garbanzo? This one is more expensive but that one is better. Bla bla bla bla. 10 minutes on garbanzos. Move on to the next item. Uffff!
Finally, like Ulysses returning to Ithaca after 20 years at sea, and having survived many perilous situations, the Balanced Money Formula provided us with a rational, clear, headache-free blueprint that allowed us both say– “this is it!” And we’ve agreed since then. Amazing.
Combining finances is hard work for sure. What helps us stay on the same page is that we each have a monthly allowance. This helps me NOT freak out when he spends money on lunch or whatever, and it makes him feel less constraint by a budget. Win win. 🙂
This is a very romantic post:) I love it that he read Frugal Portland from start to finish! And your qualm of conscience at Sephora followed by a happy resolution through communication and trust . . . That’s the stuff of a great love story for our time – when most divorces are rooted in financial stresses. I’m going to guess that you and your fiancé are not in your early 20s. Am I right? I think that relationships and combining finances work best when the two individuals have each had the chance to figure out their money before coming together. So many couples start off in a financial vacuum. They have no clue. With two strong and compatible financial philosophies joining forces, you have a great foundation, and you’ll be equal to the task of tweaking things as time goes by and priorities change. All the best for your big day!
We don’t have joint accounts but we have the same financial goals which keep us on the right track. We might get joint accounts in the future but right now separate accounts are working fine for us.
Our finances aren’t fully combined either. We have a joint long term savings account for large purchases or significant travel. We also have a mutual credit card for all shared expenses. Other than that the rest of our money is separate and it works perfectly for us.
We both know how the other handles finances so there is no hidden debt (thankfully!) It also eliminates any nitpicking questioning of the others spending habits because as long as the cc is paid and the contributions to our long term goals are happening it doesn’t matter what the other does with their money (within reason).
That’s not to say we will never fully combine finances, but I like what we have going on right now. It works like a charm and we have never had even a minor disagreement about money.
First let me say that I absolutely believe the dog ate the bridesmaids dress and I bet shell think twice before she lives one laying on the bed again. I have had my kindle destroyed by a dog and the things that have been eaten by rescue puppies are well, sometimes unmentionable (like the time he chewed through a cord and peed after giving himself a small shock.
The true test of our relationship was whether or not we were both willing to let the dogs sleep in the bed with us.
Finances combined? Always.
We’ve actually setup bluebird accounts and I give my wife an “allowance” every month so she never has to ask me if she can spend money again.
My advice would be to never, ever combine ANY finances before a couple is legally married.
Engaged couples (even those who were starry-eyed in love and seemingly compatible when they first got engaged) can break up which could very well create a huge, acrimonious mess when they try to untangle their finances if they were combined prematurely. Sadly, even the most trusting and committed married couple can fall out of love and divorce because of the actions of one or the other spouse. At least married couples have financial recourse through the courts. How hard is it for married couples to calmly divide up their joint assets? It wouldn’t magically be any easier or civilized for an engaged couple to divide up theirs. There’s no such thing as a Broke Up an Engagement Court as there is a Divorce Court. It’s not hard to imagine a judge turning a baleful eye towards the ex-fiances and muttering, “Caveat emptor” when a squabbling ex-engaged couple comes before him.
The only way to avoid this is to keep separate savings and checking accounts until marriage and to not buy a house or other tangible assets, either. An engaged couple is just asking for trouble, otherwise. (An ex-fiance could care less about getting 1/2 of an unworn wedding dress or tuxedo but it’s a safe bet he or she wouldn’t be as sanguine about 1/2 of a house or 1/2 of a stock portfolio. How do you pro-rate those? Just as for a divorcing married couple, you’d need a pricey accountant to, for example, figure out how much Ms’ stock shares are worth because she bought hers on X day when the stock market was going up vs. the ones Mr. purchased on the day he bought his when the stock market closed lower–and he’d unexpectedly lost his job 4 hours before. Calculating the taxes due on capital gains for redeemed stock are a migraine headache to figure out which would only add to the mess.)
Not very romantic advice, I know, but open-eyed and realistic. At least it’s lots kinder than drawing up a prenuptial agreement.
I’m surprised at how many people seem to favor the one-pot joint-everything system, and I definitely disagree with a moral of “pick a mate that shares your financial vision”. Hubby and I have a 3-pot yours/mine/ours system, and it works well for us, because we have different money styles. But, we are open about all our accounts & purchases, and discuss shared needs vs wants as well as savings goals. I think a better moral to the story is “communication is key in finding and doing what works for you (and your partner)”. And hey, that moral has applications outside of personal finance too!
Well said, and I agree. My husband and I also have mine/his/ours accounts. We put the same percentage of our salaries into the “ours” account and that goes to joint expenses, from the mortgage to DIY/garden equipment to rounds of drinks at the pub. So long as we are both there, social spending is fine, and so long as it’s for our mutual benefit we’re happy to make small purchases without checking. Big purchases are always discussed in advance. And anything that is “mine” or “his” can be spent or wasted or invested for personal gain as we see fit. This works well for both of us.
Money is often the fall guy to blame when there are other serious problems in a relationship and people don’t want to work on those issues. As people get more upset in a relationship the money becomes more and more a tool for acting out and justification for poor actions. I don’t think people have to be on the same page with respect to money but they need to be in the same book and agreeing that they are working for the same ultimate goals. Let’s face it, it’s a partnership, not a search for your mental and physical mirror image.
My spouse and I started with next to nothing, so I can’t imagine not having combined finances because everything we’ve built has been together. That said, I can certainly envision if my spouse passed and I were to bring a bunch of funds and assets to a new relationship I would, if only for the sake of my kids, be very careful about mingling money. So I can see both sides.
In the end it’s more about communication and what works for the family than about a particular style. I also think things can be allowed to morph over time and what may have worked when it was just two of you may need to change when there are four of you and then may need to change again when there are two of you yet again.
I just love this post! My now husband and I combined finances from the very beginning, almost ten years ago. From the start, it just felt very natural and right. I love the commenter who said it’s about the “team”. I completely agree. My husband and I are on the same page about our finances, our savings, and we communicate often about purchases. While I handle the financial logistics, we have monthly budget meetings, and discuss in between about our goals and spending plans. I love that Kathleen called her fiance at Sephora. I remember many of these calls – and it always helped to communicate. One way we have alleviated some of the pressure of spending is to create an allowance account for each of us for wants and spending money – a monthly budgeted amount goes into two accounts, and can be used as either of us please. If he wants to go to a concert – he can save up and go! If I want to go out to lunch with my sister – no problem! If I want to spend my allowance on a daily latte (haha no way) I can without any issues. It has worked very well for us, and keeps our wants and hobbies on an equal footing. And still – we communicate about our plans even then. We’ve found that this works great, and we don’t fight about money in our relationship.
I think a really easy way to avoid the “hiccups” is to have joint credit cards but separate bank accounts, use credit cards for everything, and each pay for your own items and your own half of joint items. Maximizes rewards, and no need to get approval for purchases.
That is our system exactly! works super well 🙂 Of course we pay it all off each month, so in a way the credit card is our joint checking account.
Something that I’ve found helpfule to my husband and me is to have designated “discretionary spending”. Basically we’re allowed to spend X dollars a month in the budget without asking each other. We basically budget it as an expense.
For example, say we each get 200 dollars a month to spend however we like on whatever we want. My husband can choose to save the money and carry it over to next month, or he can go buy a 150$ leather briefcase without asking me about it.
It’s actually nice because since it’s already written off as a monthly expense I don’t fret about what he is spending it on(e.g. in game app purchases) because I trust him to stay inside the 200$ limit and we’ve both agreed it’s okay for that money to be spent that month.
It has helped us to create a stress free way to spend money on fun items(such as makeup, electronics, books, etc) without having to constantly consult each other on what is okay.
I really enjoyed this post, but I am concerned that you don’t replace your mascara often enough.
Aw, I love his response! My husband and I recently combined finances in May (after 4 years of marriage). We’ve had our fair share of hiccups, as well 🙂
This is an older post, but I figured I’d add my 2 cents that are different. We’ve been married for 25 years and decided to get separate accounts about 5 years ago. We never really had big issues, but for whatever reason we decided to give it a try. He gives me a certain amount each pay day (I’m the bill payer) and the rest is up to us (our vacation funds, savings, college savings, retirement is automatic). We both squirrel away money for our own hobbies and don’t have to think twice about a splurge because we know exactly what money is left (and no one else is going to use it).
We have accounts that are shared and actually have access to each other’s stuff, but this has been a very positive change. No more worrying (by him) if he can spend X on a weekend and not realize I hadn’t yet sent off bill Y.
If I’m trying to protect some disposable funds (for whatever reason) I’ll find myself leaning towards dining in, but if he’s up for it (and wants to pay) then he can treat us. Same in reverse.