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My fiance and I lived together for about a year before we started keeping our money together.  Like most couples, a lot of our squabbles were financial.  There were issues as to how the rent was divided (I was earning much less and subsisting partly on student loans) and who paid for what.  There was controversy surrounding who contributed more financially, and what should and shouldn’t be common expenses.  The stress was compounded by the fact that I thought he spent more money than I felt was appropriate given our debt load.  When we moved to a new apartment and I graduated and began working full time, we decided that we had to start keeping our money together in order to reduce the disagreement.  In some ways, this decision is scary.  After all, we are engaged but not yet married, so there is no legal protections in place for the equitable  division of our assets should we split up.  Plus, since we had fought about money in the past, there was no guarantee that the fights wouldn’t be made worse by sharing a joint account.

Why We Chose A Joint Account

I know a lot of couples, even after they are married, never completely combine their finances, instead keeping separate accounts for separate spending money and then perhaps having 1 joint account for common expenses.

There were several reasons we didn’t want to do that, and instead wanted to just have one joint account where everything goes.  

One of the reasons was to ensure that we were on the same page about our spending.  I tend to be a saver and he tends to be a spender, but with our debt load we both agree that neither of us should be spending right now.  When he kept a separate account, I was never sure of exactly what he was spending money on and where.  Although we made agreements to both limit our spending, he wasn’t really accountable to me because our accounts were separate, so it was easier for him to justify going over budget.  I, in turn, felt resentful and lied to because we had made an agreement and he was breaking it.  Its not that I want to keep tabs on his spending, its more that I wanted to ensure that we were both responsible to each other in ensuring that we save towards our common goals.  Now, I can see that he is staying within budget, because I can see exactly what he is withdrawing.  I now no longer have to wonder if he is exceeding our agreed upon spending, because I would be able to know this by looking. Furthermore, because we both put our money in the account and it has both of our names on it, we also feel more accountable to each other and there is less of a temptation to just spend selfishly.  We still have privacy and some freedom in spending, because we can each take out a certain amount of cash each week to spend on whatever we want.  This privacy and freedom is just more controlled.

Another reason is that there is a disparity in income, which will only continue to grow.  He makes more than I do, because we made a decision together that I should choose a career which allowed me flexible hours so I could take care of our home and our puppies.  Furthermore, after we get married and have kids, I plan to be a stay at home mom.  If we each contributed a set amount to a joint account and kept the rest separate, then there would be a vast difference between our bank accounts.  Some people might not feel resentful about this, but I know I would, especially if I am staying home and taking care of our kids.   If we contributed disparate amounts to our joint account based on our income, that too could breed resentment, not to mention disagreement about what should come out of the joint account and what should come out of our individual accounts (especially when it comes to household items, which women always tend to spend more on).  Plus, how would we handle retirement savings and other common goals.  This just seemed like too much work, fraught with too many possible disagreements.  So, we have decided we want to share our lives and be partners, each contributing different strengths to our union, and thus all our earnings and contributions should be shared equally.

A third reason is we can better accomplish our shared goals by keeping our money in a joint account.  We want to pay off debt, and it doesn’t necessarily make sense for us to each put our own salaries toward our debt.  It makes more sense for us to pay off our highest interest debt first.  We still have managed to keep this fair though, because both have items that are costing us an approximately equal amounts of interest on a monthly basis.  So, we still split our monthly earnings and each get 1/2 to pay on our debt, but that is 1/2 of our total monthly earnings… i.e. some portion of his paycheck goes toward my debt, because it is part of our priorities as a couple to pay down all of our debt.  

Why we think this is OK, even though we aren’t married yet

Since it was always clear that we would keep our money together after marriage, the big issue we had in deciding to do this now is that we aren’t married yet.  Yes, we plan to be.  But, until we actually are, there are no legal protections like I mentioned above.  We were wary because all conventional wisdom suggests that you should not combine finances with someone until there is an actual legal commitment.  

However, we don’t plan to have a lot of money in our checking account, until after our debt is paid off.  While we intend to have a $1000 emergency fund in there at all times, the rest of our money goes out as quickly as it comes in, to our respective debts.  Since we each get 1/2 of our money each month to pay our debts, and we don’t have a big balance that we could end up fighting over if we break up, then there is little opportunity for financial snags which could come from unmarried financial mixes.

How has it worked?

Good, so far.  He is being more responsible about spending.  I can see what he is and is not spending, so I don’t feel like he is hiding purchases.  We’re more on the same page about our goals, and we have become much more open with each other about our financial habits.  It has only been about 2 months, but hopefully we’ll continue to improve our financial picture and things will get easier.  I don’t know if people who have no money (like us!) fight more about it, or if people who have a lot of it fight more (of course we are a long way from having that problem!).  

Anyway, anyone else out there have comments or tips about how they handle finances with their significant others? Please share!