Tuesday, February 18, 2014

On combining finances

When Sebastien marries me, he'll be financially gaining my Roth IRA (~45K), and I his IRA and retirement accounts.  But the biggest financial gain will of course be each other's continued support and encouragement, as we both work to get team Dina & Sebastien in a great place.  Without Sebastien's complete faith and belief in my intelligence and capabilities, grad school would be a hell of a lot harder.  Actually, I literally wouldn't be where I am today without Sebastien. (True story -- I missed Wharton's application deadline and considered that the end, and only upon his suggestion did I ask and succeed in submitting my materials the next day.  Happily, I am at Wharton now.  Sebastien points to that as literal proof that he has made my life better - there are of course a million other things, big and small, that I could point to as well.)

Great team or not, we're very different people and think in rather different ways.  As a personal-finance obsessed individual, I have a lot of strong thoughts about combining finances and exactly what kind of a financial arrangement my marriage should be (make no mistake, it is one).  In our case, as with many issues, the person who cares the most often gets a bigger say. Sebastien knows he's in for some quarterly or annual PowerPoint presentations about our finances & goals (and that he's going to love it).  I also might be counting down the days to our wedding ... because I'll then be able to go through his accounts and optimize the investments within.

That said, one person steamrolling the other never works, nor would I wish for our finances to be anything but a journey of equal partners.  And here things get funny -- I come from a family where my parents have completely, completely joint finances, whereas his have a pretty opposite situation.  *Surprise*, I think my parents' way is the best way (for me, and if I'm being honest, in general).  I think combining finances makes it easier to work towards shared goals, and that you have no business getting married if you're worried about how your partner handles money.  I don't understand separate finances -- why not live your marriage as a team, with a comprehensive and thoughtful prenup & wills to carry out your mutual wishes should you split or when you eventually die?  On the other hand, life is imperfect, so while joint finances are my theoretical ideal, in reality separate finances (temporarily or indefinitely) are clearly the call many couples make, for lots of good reasons.  More importantly, I bet a lot of people disagree on the joint-finances-as-ideal view -- do you?  What are the advantages you see of separate finances?

We're working to get to a place with 1 joint checking account, 1 joint credit card, 1 personal credit card each (this is important ... you never want to be in a position where you can't get your own credit if necessary), additional personal checking accounts if we're inclined/too lazy to close the ones we now have.  Another big difference we have -- I think the savings/emergency account is sort-of a myth, while Sebastien feels his is too low when it's under 15K. I'll be honest, I like to invest my money and rid myself of expensive & regular payments, so that if I lose my job (been there, done that), I don't have a lot of necessary expenses and don't need a lot of money on hand.  And yet, there's nothing odd about wanting to keep a chunk of money close at hand and highly liquid in a savings account.  In the end, our differing views are probably beneficial -- Sebastien will push to build our savings, for those future times when we can't be nearly as flexible about job loss or refrain from taking on any regular expenses.  And I'll push to max out our investments, so our future selves can work less if we choose, and bask in the glory of dividend payments and compound interest.

Where you do you stand on combining finances?  Totally separate, totally combined, or somewhere in the middle?  Going down any of those paths is, I think, truly terrifying -- the most discussion, the better.  What do your parents do, and have you been influenced?


  1. My parents have rather complicated finances, with my mother at the helm. My husband's handle everything entirely separate. Personally, I'm with you. Hubby and I share finances. After all, a marriage is a contractual agreement to treat your lives as one - a combination of ideas and dreams that reach towards common goals. And if you can't share your finances, you shouldn't be sharing your dreams...

    1. Very nicely stated, that last bit :)