Here’s an question we haven’t discussed: how do you and your partner share finances — and how did that change (if at all) since you had kids?
I still think of these things in terms of that formative Slate series on marriage finance from long ago (but would love to know if there’s something more recent!). In our original discussion on married money management years ago at Corporette, we looked at the three types of arrangements the Slate article described:
- Common Potters: people who combine all of their money
- Sometime Sharers: people who have both separate and joint accounts (usually with an automatic percentage going into the joint account, such as an agreement that 80% of each paycheck will be funneled into a joint account)
- Independent Operators: people who keep completely separate accounts
My husband and I have always been common potters — as I wrote previously, when we got married we kept everything that had been separate, separate, but decided to forge our way forward together, and we’ve done that since (give or take a few years where I tried to save my husband’s yearly bonus “for him”).
It was a choice we made on marriage finance as newlyweds, and I don’t regret it — it’s particularly made for easy decisions as our family has grown and money has gotten tighter because, hello, raising kids is expensive. Who pays for daycare, or the babysitter? We do. Who pays for the grocery bill this week? We do. Who pays for the family vacation? We do. (And, in case it needs to be said, I want to stress that just because this works for us it doesn’t mean This Is The Only Way…)
Psst: We always used to call money discussions “Tales from the Wallet” at Corporette — so we’re continuing the tradition here! Pictured – love this wallet from Brahmin!
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I know many friends (and readers) who chose different methods of managing marriage finances as newlyweds, so I thought it might be interesting to ask — has anyone changed their marriage finance methods after having kids, as kid-related expenses grew? If you had “his” expenses and “her” expenses (just as an example), how did things like Mommy & Me classes, or trips to visit the in-laws, or things like that get counted? Or, say, a babysitter for a night out with girlfriends?
Another thing to discuss: how have marriage finances changed if one parent leaned out or took a break from paid work entirely to raise kids?
Two anecdotes from friends that seem relevant here: One friend (who became a SAHM after her first child was born) used to order clothes, snacks, and personal care items for herself from Diapers.com because, as she explained to me, it still came up on the statement for the family credit card as “Diapers.com.”
Another friend (who switched to part-time work after her children were born) recently offered to buy me a drink, waving away a $20 bill I’d offered, saying, “No, Kat, I don’t pay this card.” So I guess the question is — if one partner has leaned out or stepped back after the kids came, how did you change your married money management methods? (How would you view my two friends’ situations?)
Here’s today’s question: How do you deal with money as a couple? Did you change your money management method after having kids? Have you had to work through any issues with your partner because of growing pains with the money management method you chose?
Stock photo via Deposit Photos / Syda_Productions.
Oof, that Diapers.com anecdote is so sad.
We’re completely joint finances and have been since we got married. Having a child hasn’t changed much, except that we save less than we did before because of daycare bills. We max retirement and contribute a modest amount to a 529, but the rest of our paychecks go to bills. We’ve taken turns being the higher earner and although my husband now earns over three times what I do, both of us are the breadwinner in the sense that we could cover our family’s basic expenses on our salary alone, so neither of us feels the need to ask permission to spend money on ourselves, our child or the household. I do think the financial balance of power would shift dramatically if I stayed home completely (probably through my own guilt more than anything) and I’ll admit this is one of the biggest reasons I’m still working, since our family would be very comfortable on just my husband’s salary and I think I’d really enjoy SAHM-ing.
We’re common potters. 2019 was the first year we made substantially different salaries, which I only realized when I got our tax forms (it was due to two big bonuses). One thing I would highly stress to families that don’t keep everything joint – please, please do proper estate planning. Your spouse probably doesn’t inherit everything from you on your death (they don’t in my state) and you can end up with minor children inheriting way too early.
Yikes, those last two anecdotes were … something.
We have one joint checking and then I have a separate checking, and most of our other accounts are joint except retirement. Husband manages the 529 for kiddo because he’s more interested in investing than I am. I transfer a set $ amount from my paycheck to our joint every month, but otherwise I charge anything I buy to my credit cards and pay myself from my checking. However probably 85% of what I buy is for the common household. We do have one joint credit card that we both use exclusively for grocery stores b/c it has a 5% cash back on grocery.
Although now that I think of it I don’t have physical checks for my checking account, so any checks are written out of our joint account. Then again I have the single venmo account for our marriage, so I manage things like, paying his assistant $50 for a baby shower gift for his employee, or reimbursing his buddies for beers sometimes (lol).
It sounds haphazard now that I type it out, but it works for us! We definitely don’t have “my” money and “your” money but we are almost equal earners and equal spenders so it’s never been a point of friction.
+1. We’re very similar. Our paychecks are deposited into a joint checking account. My husband pays the bills he’s responsible for (his credit cards, utilities) directly from that account. For some reason I have always transferred whatever I need to pay my credit card and other misc. bills into my own checking account and paid from there. I maintain a minimal (~$100) balance in that account. We have our own credit cards, but I’m a second card holder on my husbands’ accounts and vice versa. All our other accounts are joint, except for retirement, and husband manages them all including making transfers into Vanguard accounts and “high yield” savings accounts. He also manages the 529s. We meet with our financial advisor every 6 months so I have visibility into what he’s doing, but I basically stay out of it.
I think your last sentence about having similar spending habits and philosophies is really key to this common pot approach. I make a bit more (probably 65% of our HHI) but I don’t care that he’s spending “my” money because we’re both relatively frugal and most of our purchases are for the family or are small personal indulgences.
We’re common pot, although I can’t pinpoint exactly when it happened. We lived together for 2 years before we were married without combining finances at all, then each of us was unemployed for several months at some point over the next 3 years, and we got married, and things started creeping together. We made about the same salary then, and both continue to work full time, so it was easy to combine and feel fair. $$ was fully combined by the time we bought our house and I was pregnant with our oldest. We each maintain our own investment accounts that pre-date our relationship, but we do not contribute to them anymore; we started a new, joint one. We share credit cards, and checking account. Both of our full paychecks are deposited there, and then we automatically move money out into the joint investment account, savings, 529s, etc. Most of our bills are on auto-pay, and DH is in charge of remembering to pay of the credit cards every month.
We do monthly financial check-ins where we review account balances, analyze spending and discuss/adjust as needed, make sure savings goals are on track, re-balance investments, assess insurance coverage, and identify/assign financial house-keeping tasks. Obviously not all of those happen each month, but we have a standard agenda we try to rotate through. I am the CFO of the family, but my husband is obligated to sit next to me with a glass of wine, help log into accounts, and pay attention. :)
Common pot here. We got married mid 20s before either of us had much of anything. Our retirement accounts are separate, but our understanding is that they are for “our”
Retirement. When I had a hugely advantageous retirement plan (company matched 10% up to 6% of my salary), we maxed it out at the expense of maxing his. For a few years he had the better plan and maxed it. Now I’m a self employed keough so on years I make enough, we can jam extra money into that.
We each get an “allowance” of $100-$500/month depending on the finances. That does into a separate checking account for us to do whatever with. Mine builds up; DH spends his on hobbies.
The only thing that has changed since kids is how much we spend, not how we spend.
We pool all our money. It was hard early on in our marriage because my husband was in grad school full time and we lived on my income. Now our finances are still tight with a kid and student loans and everything else, and I don’t think we could achieve our goals if we weren’t working together closely and pooling resources. We have a budget we track monthly and big items we are saving for. I don’t understand how couples make it work if they don’t share their money in one pot at this stage in the game with kids. You aren’t just paying rent and gym memberships anymore. The stakes are high. Maybe if you both have very high incomes, or one person is the clear breadwinner, it easier to continue operating more as individuals.
We pool everything. I am a SAHM now, but I handle all the finances (paying bills, managing investments, etc) and we have frequent budget conversations, so that makes us feel equally involved/in control. I don’t have any “guilt” because I think of what I contribute to the family in terms of money and time saved (childcare, meal planning, the flexibility for him to advance at work, kids rarely get sick so fewer medical bills (def partly luck, I admit!), Etc), and I also came into marriage with a lot more saved that helped pay off (his) student loans and save for a house. My view is marriage is a partnership and each person has a lot to contribute – a salary is one component.
Beth @ Parent Lightly says
When we first moved in together, before we got married, we kept things mostly separate. We each had our own account and put money into the joint account to pay common expenses (rent/mortgage, meals out together, groceries, etc.). We each contributed a percentage according to our salary (e.g. husband made 60% of our total income so he put in 60% to the joint pot). Anything left over was our own. That was OK but a little complicated. When I went back to grad school, my income dropped dramatically. We also moved at that time so it was a great time to fully integrate our finances. We’ve now used a common pot since then (2006). It works fine. It’s easy, I automatically transfer $ to savings each month so we don’t have a chance to spend and otherwise we are pretty on the same page in terms of finances.
Common pot here. Started that way from the beginning when my husband supported me through school. I in turn supported him though a lengthy layoff during the recession. We both manage all the money. Our retirement accounts are technically separate, but I invest both because I have had better returns than when he tried his hand at it. We don’t have allowances or anything like that. No secrets between us for spending. We have always been on the same page. We always discuss bigger purchases. We were married 12 years (plus 2 years of dating) before we had kids. When we got together, and for a long time, he earned twice what I made and then the tables have turned where I earn twice what he does. We had a lot of time to work out any minor differences but our style has not changed through the years, after kid, or after reversal of breadwinner. The only thing we ever discuss regarding finances is “should we cut back on eating out” and “how much do we want to put into the 529 plan and how soon?”