How do you approach finances in a relationship?

[hidden_kitten]

Currently picking apart the remains of my last relationship, and one of our problems was our approach to finances. Lived together but it was his property - I decided that with only part time employment I wasn't ready to take out a mortgage. However I had a nice pile of savings built up from living with parents and wanted to use it towards the move. My main expenses in the household were doing all the grocery shopping and sometimes furniture (I got a discount where I was employed so made sense). When I offered to contribute extra, eg pay the electric bills or pick up more shifts and pay him 'rent', he would refuse. BUT towards the end of our relationship he wanted me to use all my savings to buy him out of his van lease so he could sell it off early, get a bigger van for his business then pay me back. We were on really rocky ground by then and with no real contracts in place I said I really wasn't happy doing that. Why refuse general contributions to the house but then act like my savings were rich pickings just for his business!! He would also scoff at my suggestions for putting HIS savings into a high interest account (it's essentially free money!), and moving to another bank with better overdraft arrangements. It was like everything had to be HIS idea.

 

When do you decide to merge finances....or not at all?

 

What red flags do you look for early on to see if you are on the same page moneywise?

[reinventmyself]

Wow. .this stuff scares me enough to keep me single.

My exH was a debt-aholic. Money's main purpose is to be used as emotional blackmail.

I am saver, own my own home and have come close once to getting married and another time cohabiting.

The thought of combining finances scares the bejeebies out of me.

I would definitely discuss every aspect of expectations but having said that you probably couldn't have anticipated the van debacle.

 

3 accounts. One joint and 2 individual.

The joint account each contributes, percentage wise based on salary so it's equitable.

It covers household expenses, food, entertainment. . anything 'joint'

Individual accounts and prior assets are off limits!

 

I also pay attention to a persons attitude towards money in the early dating phase . . If we have incompatible money values I probably won't date them

[DancingFool]

Not married, no merging of finances for all kinds of legal reasons. That means absolutely no joint accounts whatsoever.

 

As for cohabitation, I treat it similar to arms length roommate arrangement. Agree on how to split the bills clearly and in writing prior to moving in. If you don't see eye to eye and can't reach agreement, that is your giant clue that you should not be moving in. It may seem clinical, but it will save you a lot of arguments and issues down the road. Leave no room for ambiguities because all it does is create resentment and the van type situation where one person may suddenly feel like you owe them something more.

 

Early on I just observe their habits when we go out.

[Khaleesi86]

I don't think I'll be merging finances completely.

 

I'll do what the above poster said and keep 1 joint and 2 personal.

The only thing I actually want coming out the of the joint account is the mortgage: The big sucker.

I plan to have 3 months of mortgage banked at all times for whatever reason... I'm scared to ever default on that.

The rest of the bills we can separate accordingly and be responsible for.

It's a better way to maintain joint as well as personal credit and property.

 

I'll probably oversee the money as I'm more of a penny pincher, but I don't want to control what he spends.

I want him to be able to get that hair cut or whatever and not be worried about consulting me.

Also, for surprises!

It's hard to book a surprise when they have access to your credit card statement.

 

My biggest red flag is people who overspend or have nothing to show (assets) after a high income.

It's not about how much you're worth, but how you're living, you know?

[Seraphim]

After marriage we mearged everything, nothing is separate. Everything is for the support of the couple and the family. What is mine is his and what is his is mine.

[mhowe]

We don't merge anything. If he buys groceries, I buy dinner. We have our own homes and no mortgage payments.

We pay our own bills, regardless of where we are living.

 

If you have no legal arrangement, don't pay anyone's bills.

[becomingkate]

About a year after we were married, we merged everything. We'd been together for four years by then, and knew each other fairly well.

[RainyCoast]

i hate the very idea of money staining a relationship but i've had the experience and came to believe this phrasing of "bickering over money is taking a toll on the relationship" is misleading. because the problem was never the money, it was exploitation. in retrospect, the people who resorted to financial abuse have always been manipulative in other ways as well and that was often noticeable early on. to answer your red-flag question.

so i've just gotten super careful with people and i don't feel like i'm overly cautios. i just don't want manipulation- emotional, financial or any kind, or the devastation that dealing with manipulative people invariably brings. the slightest sign of this and they're history.

[Seraphim]

About a year after we were married, we merged everything. We'd been together for four years by then, and knew each other fairly well.

 

Same , we were together 5 years when we married.

[lukeb]

We can talk generalities, but it really depends on the relationship itself, there are no right or wrong answers, just right and wrong answers in particular situations. A lot of it comes down to trust, what you are bringing into the relationship, an overall sense of fairness.

[tattoobunnie]

My hubby and I have separate banking accounts, but share credit cards. And I pay all the bills, like go in his account and my account and pay pills. Even though he'll have money, paying on, before, or close to due dates seems to allude him. Even when I was nagging...he'd still be late. While they're all paid off, he also had loans out he didn't even remember! Yikes!

[needhelp6]

Fiancee and I live together, I pretty much pay all the bills and she buys groceries and household items. We maintain separate bank accounts.

 

Once we're married we will have joint checking/savings accounts, one joint credit card and one individual credit card each. I do feel its important for both of us to have a card that we can use should we want to purchase a gift etc. for the other person without them seeing the statement, or for whatever reason she doesn't want me to see that she spent an exorbitant amount of money on make-up or me purchasing an expensive box of cigars which she hates so I really don't want to call attention to that.

 

We discussed this in per-marital counseling and thought this would work well for both of us.

[HeartGoesOn]

When do you decide to merge finances....or not at all?

 

You'll have a stronger leg to stand on if you wait until you're married. Read the many horror stories regarding this subject, after doing a search on the forum.

[intheferns]

ExH would give me all his money and I would take care of all the bills. He had a credit card for expenses, I made sure everything got paid. He spent money like water. I will never do this again.

A joint account for shared household expenses - mortgage, utilities, house maintenance and groceries that we each contribute a set amount to and the rest is individual. If I remarry, then maybe a joint savings account too for building our nest egg. I think it will also be important to me to have a frugal partner capable of managing his money so the joint accounts are not raided to cover shortfalls.

 

Or blended money with monthly fun money allowances for each partner deposited into individual accounts.

[journeynow]

We tried different combinations during our years together, and settled on each having separate accounts, covered different bills, just as we worked out different roles around the house.

 

hidden_kitten, one way a situation like your last one could be handled is to put that rent contribution (that he declined) into savings to contribute in another way down the road. You wouldn't necessarily have to agree on it, but then the money is available later for the purpose of contributing. Of course if he still refused, and you split up, the money would be yours, just as the house would be his.

[j.man]

As one very smart poster already wrote: one joint, two separate.

 

Rent, utilities, groceries, vacation fund, etc., etc. go into joint 50/50. Rest goes into our own.

 

Some people want to share everything, and that's fine. Personally, I come from a very poor background and have been lucky to find success. I contribute toward the college tuition of three of my siblings and keep a reserve for anyone else in my family who has a dire emergency. I'd never ask my partner to be financially responsible for any of that. Likewise, she is free to use her extra earnings in whatever way she sees fit.

 

As has also been said, there's no right or wrong. Just be wary of how soon you choose to share finances to any degree with someone.

[journeynow]

As one very smart poster already wrote: one joint, two separate.

 

Rent, utilities, groceries, vacation fund, etc., etc. go into joint 50/50. Rest goes into our own.

 

Some people want to share everything, and that's fine. Personally, I come from a very poor background and have been lucky to find success. I contribute toward the college tuition of three of my siblings and keep a reserve for anyone else in my family who has a dire emergency. I'd never ask my partner to be financially responsible for any of that. Likewise, she is free to use her extra earnings in whatever way she sees fit.

 

As has also been said, there's no right or wrong. Just be wary of how soon you choose to share finances to any degree with someone.

 

I agree with j.man, there's no right or wrong. But communicating about it is important, and re-evaluating periodically is important, too. Situations and perceptions change, so communicate and listen to each other.

[needhelp6]

Based on the many anti opinions I received on my pre-nup I'm shocked by how many people are OK with separate bank accounts. This is quite puzzling, while not exactly the same it's in the same vein, in-fact, I could argue worse as you're creating a day forward union, yet only in select areas, and this is from day one vs. I'd venture to say I'll never use our pre-nup, it will gather dust at our attorney's offices. Our pre-nup only covers assets prior to the marriage, I would never consider telling my wife something that I earned during our marriage was off limits to her.

 

I also agree communication is key, and communicating in advance and flushing out any concerns. Situations like supporting or helping relatives could become an issue in marriage. We discussed this in pre-marital counseling and feel we have a very good process in place for handling these situations fairly.

[tattoobunnie]

My folks have been hapily married for 45 years, and my father who is also the nicest man like ever, is also a degenrent day trading gambler that has gambled off close to 5 milion. Along with gambling off his pension, his and her life insurance, properties on the water, etc. If my mom didn't learn how to do finances, he would have gambled off the house they currently live in if he could. It's not a question of what's mine is yours in many scenerios, some partners, as much as we love them, and choose to be with them, we understand and recognize that their idea of handling their finances is SCARY!

 

If it works for the couple, and they both feel good about things, then, that's what works for them.

[needhelp6]

My folks have been hapily married for 45 years, and my father who is also the nicest man like ever, is also a degenrent day trading gambler that has gambled off close to 5 milion. Along with gambling off his pension, his and her life insurance, properties on the water, etc. If my mom didn't learn how to do finances, he would have gambled off the house they currently live in if he could. It's not a question of what's mine is yours in many scenerios, some partners, as much as we love them, and choose to be with them, we understand and recognize that their idea of handling their finances is SCARY!

If it works for the couple, and they both feel good about things, then, that's what works for them.

Same applies to pre-nups, they're not for everyone but if it works for the couple and they can live happily ever after like your parents then great!

[mhowe]

You can agree in principle to anything out in the future. But when it comes time to pay $10k a month for your MIL to live in an assisted care facility and she has treated you like dirt for most of your marriage....the "what's mine is ours" mentality can go right out the window.

[needhelp6]

You can agree in principle to anything out in the future. But when it comes time to pay $10k a month for your MIL to live in an assisted care facility and she has treated you like dirt for most of your marriage....the "what's mine is ours" mentality can go right out the window.

Excellent point! After doing pre-marital counseling I'm a firm believer it for exactly this reason, you cover life events like this, how would a situation like this be handled so neither party is surprised, put in a bad position or the marriage/relationship damaged. In our case we we know exactly how this situation would be handled 1) MIL's funds/assets used to pay for expenses, if real estate market is low wife and I will purchase from estate to fund care and sell once values have rebounded and proceeds will be returned to the estate 2) If extremely long care is required and assets are depleted MIL will go on medicade and wife and I will fund what that does not cover. At passing estate will repay wife and I for our care expenses from life insurance policies. Any funds left over will then be split by her heirs.

 

Regardless of whether or not she treated me like gold (which she does) or if she treated me like dirt I understand that this woman is her mother, raised her and assisted in forming the woman that I love, my wife is very close to her mother and it would pain her to see her mother not receive the highest level of care available which would pain me. That said, I also voiced my concern that IF we funded long term care (fiancee's family are not in a position to contribute) I thought it only fair that we be reimbursed by the estate prior to heirs receiving any inheritance or in other words, everyone should share the costs equally vs. she and I fund the care and then at death assets divided equally and we're stuck holding the check.

 

This forced a couple of conversations in her family that quite frankly people had been tip-toeing around. Future MIL agreed to the plan, changed her will and now lives with peace of mind that regardless of the situation, she will receive the highest level of care available should she need it AND fiancee, her family and myself all understand what will happen and our exposure so there are no surprises. Communication!