Combining Finances….10 Years in

This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.

I’m not sure how other people run their finances, but I couldn’t tell you within $500 how much money my wife has in her bank account.  I’m almost positive that she has no idea how much I have either (or even the number of accounts I have right now).  This isn’t a new thing for us, when we started living together we just never merged our finances and haven’t really had a reason to do so since.  Once our house is paid off however, we may actually have to blend our accounts, in order to take advantage of tax credits mainly.

I have a defined benefit pension plan that leaves me with minimal (I think last year it was $600) RRSP availability, while my wife has no pension plan and has never utilized her RRSP.  She has a significant amount of investment room that we can take advantage of when our house has been paid off and we’re moving into the “asset-accumulation” stage of our retirement plan (which I guess could include our house, but we don’t really classify it as anything but debt).

Currently, our finances are split up so that we have the same amount of spending money at the end of the month after the bills are paid and our aggressive mortgage payment has been made (that sounds kind of dangerous…aggressive mortgage payment).  There was never really a reason to combine our finances  – I’m guessing if we had a child or some other major shared expense we may make our accounts joint accounts, but we don’t really have anything that “forced” us to share money.

My wife really has no interest in managing any of our money or investments, she will most likely just want some kind of balance telling her how many more years she has to go to work for and will be fine with that.  When I say our finances will be combined, it will more than likely mean I have control over investment accounts in both of our names which will contain money from both of us.

This is still something different for us – by the time we pay off our house in (hopefully) a couple of years we will have been together for almost a decade.  In the past the only time our money really co-mingled was when I paid off a significant chunk of her consumer debt she had brought into our relationship.

Do you and your significant other mix your finances, or is everything kept separate?  How soon into a relationship would you blend your finances (does a decade seem like a long time)?

7 thoughts on “Combining Finances….10 Years in”

  1. That seems like an odd way of an established couple to deal with finances. I’m sure that there at least a few financial tasks that you and your wife both do on a monthly basis which essentially duplicates work tasks. Would it not be easier to merge your accounts and have no person administer while the other does something more rewarding with their time?

    Is there an advantage in keeping your finances separate? If you split up you will be required to equalize your assets (unless you have a prenup) so there appears to be no advantage to what you are doing other than doubling the amount of work.

  2. We have a joint account that all money goes into and bills get payed from. We then have our own separate accounts that we transfer a predetermined “personal” amount into monthly. This works really well for us. This way we don’t have to worry about upsetting the other with personal purchases. We have our own money and we can do with it what we want.

  3. I am of an older generation….hubby and I have always had a joint account.
    The retirement plan allows us each a specific amount of cash to do with what we please and I think that will work out well (retirement in exactly one year….woohoo). Neither of us are spenders though and i am wondering what on earth i can spend “my” money on…besides the gym membership (i know there are non-believers in the gym membership but i LOVE mine and use it 6 days a week)
    Right now some of our GIC’s are in my name only as i make a much smaller wage and the interest earned is tax free. When we retire we will income split (need to check on when we can do that….) and all the accounts will become joint.

  4. I grew with parents who were born near the end of WWI. Both worked full time and kept seperate accounts. My mother was frugal but my father, though he always paid his bills, like to spend on cars and booze. So that was the norm for me. I married, we both worked and kept seperate accounts, I had no idea how much she spent but I was totally blind sided when we divorced after 15 years and finding out she had racked up a personal consumer debt of $35,000 which was a lot in 1987.

    Moved on, still have seperate accounts while living with my common law wife. It’s what I am comfortable with.

    There are no arguments over money, ignorance is bliss.

  5. My wife and I have the same arrangement as Jim (above). We have a joint account where our pay is deposited and automatic transfers of $600 each month to our individual accounts. The $600 “allowance” can be spent on anything that person wants with no complaints from the other spouse. All shared expenses such as mortgage, taxes, utilities, groceries, etc come from the joint account. It allows us to save up for a large purchase while providing the flexibility to easily transfer money between accounts if there’s an unexpected expense.

  6. I read the post, and the comments, and I know lots of people who carry on with separate finances, allowances, etc… However, on a blog about “Early Retirement”, this would seem to me a fail. Simple reason:

    Common goal, common finances, full disclosure.

    ER requires working together, intimately, and in full cooperation. Anything else, and there is too much patronizing on someones part.

    Emotional issues aside of course.

    Curious? Tim, common finances?

  7. Like Jim, we have a shared account for the house and shared bills. Beyond that, her money is hers, mine is mine, and any shared expenses are exactly that, shared (usually I’ll pay for something on my rewards credit card, and she’ll pay me back – we have a google doc ledger that both can update so we have a running total at all times).

    I am very against us completely merging our accounts for one simple reason: I know myself. While she is a natural born saver, I am a spend thrift. What I cannot see, and cannot access, I cannot spend. No matter how good my will power may or may not be, we will never have a fight over me spending her money. To me, that peace of mind, the little insurance against my weakness, is worth far more than any financial advantage we’d get by joining our finances.

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