My wife and I got together in our 40s with wildly unequal income situations. Hers: stable and high. Mine: fluctuating and middling. Keeping our money separate just made the most sense—and it has proven beneficial in multiple ways.
Lorelei and I have been able to maintain our financial independence while at the same time working together on shared financial goals of living together, keeping the lights on, owning a car, and taking vacations. Not only that, keeping our money separate has promoted more healthy conversations about personal finance and budgeting than I had in my first marriage when money was 100% combined.
For example, when it comes to everyday things like eating out, paying turnpike tolls, and filling up the gas tank, Lorelei and I discuss the financial burden of these costs and ensure the partner with the best capacity for covering the costs in the moment takes charge of them. This level of discourse helps us be thoughtful, and consider each other’s situation more than if our income was being dumped into a single, shared bucket of money.
To find out why keeping separate finances was leading to more freedom and thoughtfulness in my second marriage—and to get even more tips as to how to do this successfully—I reached out to Leigh Singleton, financial expert at the goal-based banking app Monifi, and Bobbi Rebell, CFP®, podcast host, and author of the upcoming book, “Launching Financial Grownups“. Here’s their best advice for staying together, whether your money does or not.
Be open to talking about money from the beginning.
Lorelei and I do not come from the same place when it comes to financial knowledge or experiences. I got myself into massive credit card debt as a young adult, worked hard to pay it all off, and have been a wise owl ever since (when it comes to money, at least). She was far more casual with her cash, less concerned about paying off cards in full, and never once made a budget or saved for the future.
Being open about our financial history and beliefs about personal finance instantly helped us as a couple. She appreciated my questioning (“do we really need that?”), because she learned and cared about the origins of my frugality. And she taught me to loosen up a little bit financially. My wife also saw that she could benefit from some structure around her spending and saving, and asked me to help her make a budget and a plan to save for the near and long term future.
Singleton says this is the first big, albeit unromantic logistical discussion needing to happen after a relationship becomes serious. “The most important part of the money conversation is that both partners’ needs, goals, financial pasts, and financial future are communicated openly and honestly,” she says.
Shared accounts may remove power dynamics and lead to transparency, but Singleton points out that many couples will have some legitimate hesitations for commingling their finances. “Those concerns should be validated and addressed,” he says. For example, perhaps one partner is afraid of losing their sense of independence or had a controlling partner in a previous relationship.
“If you choose to keep finances separate, make sure to have a clear plan for how expenses will be handled so there are no assumptions down the line,” says Singleton, adding that there isn’t a one-size fits all approach. “Couples with good communication skills tend to be happiest, and good communication can happen with joint or separate bank accounts. The most important thing to remember is that it doesn’t need to be an all or nothing approach. For example, couples may choose to commingle only some of their accounts. Perhaps housing expenses come from a joint account, but individual expenses come from separate accounts.”
Financial expert Bobbi Rebell suggests that couples do what feels right to them—and that there is no wrong way to be in a financially sound relationship, providing all the cards are on the table and each partner is aware of and agrees to the setup.
Decide which (if any) accounts should be joined.
Singleton offers easy advice for easing into a shared financial life. “Opening a joint checking account first, before combining other accounts, allows both partners to deposit money and pay bills from the same pool of money, and use it as a way to test the waters of combined finances before commingling long term savings that may have taken years to accrue,” she says.
What’s more, if you’ve decided to keep the bulk of your finances separate, it may make sense to open a joint account for a specific purpose. For example, if you two are saving for a big vacation, a joint account that you each agree to deposit a certain amount for a specific period of time may be beneficial. Not only is this a good way to work toward a shared financial goal, it’s another ideal test case for how financially responsible and committed each partner is toward working together from a money and budgeting standpoint.
Because my wife and I love to travel, we did this. We opened our first joint account to save for vacation expenses and each put $100 in every month so that when we eat out, see concerts, and book excursions while we’re away, there’s no conversation needed about who is paying for it all.
One account that should stay separate, however, is an “escape” fund, says Bobbi Rebell. Of course, no one goes into a relationship planning to have to flee one day, but pre-nuptial agreements exist for a reason—and, let’s be honest, unfortunately, sometimes one partner needs to get out. Rebell suggests having a personal, private account that serves as a just-in-case-this-ends fund.
Make a budget that’s divided fairly.
There are a few different ways to approach this if a couple decides to keep their money separate, says Singleton. “Some couples choose to divide every shared expense directly down the middle. While this can be logistically frustrating, it helps Netflix from becoming ‘mine’ and the take-out dinner from becoming ‘theirs.’”
However, this down-the-middle approach can be tedious, with partners Venmo-ing cash back and forth. Eventually, someone may forget and disagreements can ensue. Another idea is to divide expenses based on category. For example, maybe one person takes care of all house expenses while another takes care of all food-related expenses, says Singleton. This may not provide true equality, but counting pennies will only serve to drive a wedge into a healthy relationship.
One final option is to break down who pays what by the percentage of income earned, meaning that if one partner makes significantly more money than the other (as my wife does compared to me), it might make sense to divide expenses as a percentage of net income. In our case, Lorelei pays the rent and the energy bill and I pay for internet, cell phones, groceries, and streaming services. We tend to take turns with take-out meals. This division of expenses respects how much we both bring in each month and allows us to continue putting money aside—separately and in a joint account we use for those vacation expenses.
Create a shared spreadsheet that you both can access at any time.
Aside from regular money discussions, Singleton says it can be helpful to keep all budgeting information you share as a couple in a shared spreadsheet (Google Sheets, for example). This allows each partner to pop in whenever they’d like to see what’s happening financially.
Regular, quick conversations about your finances can also help you make sure you’re on the same page, give each of you a chance to talk about money worries, and share any new financial goals you’d like to achieve—and it’ll save you from having to devote an entire brunch to discussing your financial picture! If you have a spreadsheet that lets you easily check out a shared savings goal, these check-ins can be easy and even feel fun.
No matter how you handle your money as a couple, you have the responsibility to be honest and the right to maintain your independence. Even better, if at any point you see storm clouds on the horizon, you can take your money and run!