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By Jean Chatzky
Note: This article was previously posted on Alliant's Money Matters page in 2013.
The best money system for couples is one that limits nagging and promotes autonomy.
Whether or not a couple decides to merge their money is a polarizing issue – easily up there with whether a woman should change her last name after marriage. Some people strongly believe that to truly be one, you should be sharing the same bank account. Others feel that’s akin to micromanaging every cent the other person spends.
Here’s where I stand: My husband and I use a yours, mine and ours approach. It’s a three-pot system: I have a personal account. He has a personal account. We have a joint account, used for household expenses and purchases we decide to make together. I like it because I feel like you should be able to buy things – whether they’re cups of coffee or pairs of shoes – without asking each other for permission. That need to always check before you spend starts feeling a little parental to me, and that’s the furthest thing from romance.
How do you start?
To do this, you have to figure out how much it costs to pay the bills each month and save for your family’s goals. Then you each kick in an amount, into that joint account, to cover it. How do you land on that figure? If your salaries are fairly equal, you can just split the amount needed for your monthly nut in half. If they’re not – as is often the case – you should land on a percentage of your take-home pay. The percentage will be equal; the amount will not be.
What’s left over in your individual accounts after you kick in for the greater good is yours to spend how you please. If he wants to buy tickets to the game, he can do that without asking you. You can pick up that theater ticket without asking him. And if either of you want to dig in to that joint account for an out-of-the-ordinary expense – a new grill, maybe, or that arm chair you’ve had your eye on – you run it by your partner first.
No nagging allowed
I think a set-up like this eliminates arguments. It takes nagging off the table (at least over the finances) and gives each partner a sense of autonomy. It also allows you both to have a stake in the game, so you both know how much the bills are each month, who they’re paid to, and how to budget for the household.
But whose is whose?
What yours, mine and ours doesn’t do is dictate a split of your property in the event of a divorce.
In most cases, the assets you acquire during your marriage are legally considered marital property, no matter whose name is on the accounts. Say you’ve been able to save several thousand out of your personal stash, and have it in a savings account in your name only? Half is still considered your partner’s money, though there are exceptions. Inheritances are usually separate property. So are distributions from certain trusts, or damages you receive from a personal injury claim. How the rest of your money will be divided in the event of a divorce depends on where you live. In community property states, all property and debts are split 50/50. In other states, called equitable distribution states, the court or a mediator will decide how to divide your assets fairly. If you’re concerned about protecting assets you entered the marriage with, you should have a prenuptial agreement.
At Alliant, it’s easy to set up multiple accounts, whether to save for a car or new home or to create his/hers/ours checking and savings accounts like those Jean discusses above…
It’s easy to open a new Alliant checking account at an Alliant Branch or on the Alliant Credit Union website.
Alliant Supplemental Savings Accounts
You can have an Alliant Supplemental Savings account earmarking funds for a specific purpose or for a particular family member. And you can easily set up an automated monthly transfer from your Alliant Checking or Savings account to make it even easier to save.