![]() ![]() ![]() No matter what you agree to, your economic fortunes are going to be linked to a very large degree. It didn't matter how we arranged it so much as that we needed to have an agreement. A big part of it was getting us to talk finances. Doesn't feel tenable to me.īefore we got married, we did pre-marriage counseling. Everything goes in one bucket and gets distributed according to need.Įditing to add: I feel like it would be pretty difficult to maintain separate accounts for everything yet have the same goals. If not, we'll probably withdraw equally from them to help fund retirement.ĭifferent people have their way of doing things, and there's nothing wrong with that. In the future, assuming we have enough in taxable investments and pretax investments, our Roth IRAs will be our personal investment accounts. That money is going toward expenses, maximum monthly Roth contributions, taxable investments, and whatever is left over goes into a short-term savings account to cover annual and irregular expenses that come up.Ī subcategory for our expenses is allowances that go into our private checking accounts to spend how we wish. We have a shared checking account where all our money comes in and leaves at the end of the month. I hope that helps provide perspective on the topic, as well as good fodder for discussion. I think having such an agreement, in many cases, will make the couple's life better as the higher net worth spouse won't fear losing a lot of previously earned money if something goes wrong. Prenuptial agreements are wonderful options for couples who enter marriage with large net worth imbalance, and should not be looked down upon. I'd have never earned that money without little bits of help from her throughout the 10 years leading up to that event, something I'm not sure everyone considers.Ĥ. I had a once-in-a-lifetime liquidity event, and immediately placed it all in shared accounts with my spouse. So it's simple mental accounting to treat income and assets as anything other than 50/50 ownership, as a divorce court will set you straight on that point. That's a mutual agreement the couple has made to facilitate their shared benefit, and that's why the state (in most cases that I'm aware of) rightly treats marital income and assets as joint property of the couple. Even if a couple has a large income imbalance, for example a working spouse and a stay-at-home spouse, that's not a good justification for avoiding shared finances. Hidden debt is a prominent example, but even just simple things like optimizing investment allocation can only be done with perfect information sharing.ģ. Any couple who doesn't know this information is at a disadvantage for planning, as each person is missing information that, if known, would create better uses of shared money. It is categorically better to have shared plans and mutual understanding of the household's balance sheet, expenses, income, and future planned major expenditures. It is not a matter of chocolate or vanilla preference whether or not sharing finances is better than not sharing them. I believe this trips a lot of people up on the question of shared finances, as people will often be advocating for separate physical accounts, not an actual disconnection of financial objectives, when they promote 'separate' finances.Ģ. As an obvious example, a couple with only tax-advantaged investments doesn't have a single 'joint' account by law, other than maybe their checking account. While joint accounts can be a good signal of togetherness, they are not necessary to have fully shared finances. Sharing finances is about sharing conversations, numbers, and goals. For those who are looking at this only as a practical question, I offer a few thoughts on the subject:ġ. For some, this question may have moral or religious implications, and I don't intend to cover those topics here. This post was inspired by this recent forum post: viewtopic.php?f=2&t=371040Īs past threads have shown, there are people firmly entrenched in multiple camps on the question of how to treat finances between spouses. ![]()
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