One-Year Update: The Joint Checking Account
Posted on April 14, 2006 by Her and tagged bills, groceries, income
About a year ago we decided to combine all our income, assets and debts. This was because we were moving in together for the first time, and it seemed it would be impossible to fairly divide all the shared expenses. Not wanting a big hassle, we held our breath and jumped into the pool of joint finances. One year later, I have to say it was a great decision. All our income (salaries, bonuses, tax refunds, eBay profits, rebates, etc) goes directly into the joint account. We each divert $75 per paycheck into our own "allowance" checking accounts, so we each get $150 per month to use toward our individual wants. Individual gifts (from birthdays etc) gets divided up so that $100 goes into the allowance account and the remainder goes into the joint savings account.
All our joint expenses are paid from the joint checking account. Every Saturday we sit down toegther, gather up the bills, decide how to allocate the funds available (which credit card gets an extra payment etc) and pay bills. We leave around $100 in the joint account to cover any additonal expenses during the week, and put any leftover money directly into our online savings account. We do this knowing we can always get the extra cash out of savings if we need it, however just having it out of sight has always prevented us from going over budget.
Other joint account expenses include things we can both use, such as dinners out, date nights, household items. groceries, etc. We also sometimes use the joint account to pay for some new clothes if we both need to stock up on necessities and are out shopping together.
Expenses that come out of our allowances include personal indilgences such as trendy clothing, lunches out, happy hour with coworkers, hobby supplies, etc.
This arrangement has worked out so well that the only time we argue is when we miscommunicate about our intentions. For example, a few times I have been trying to decide whether or not I should splurge on an expensive item with my allowance. I ask him what he thinks, and he assumes I'm asking because I want it to come from the joint account. That has happened a few times, so now I'm better at being clear about where the money will come from.
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julie | Apr 16, 2006
my fiance and i combined our finances too, roughly a year ago. we weren't even engaged at the time so I was a little hesitant, but it has been the best decision (besides saying yes!). Combining financial forces has allowed us to pay down more than $15k in debt! It feels like a team effort and a huge feat we accomplished together, plus helped us both learn to trust the other or be held accountable to the other. Combining money is one decision i will never regret.
c | Apr 17, 2006
I love the 'allowance' idea. My husband and I instituted that into our budget a few months ago, and it works fabulously. That way if you want to splurge on something, you can save up and not feel like you are taking away from savings or any other household expense. And there is no need to feel like you have to justify those splurges...
My Fiancee and I have had this discussion several times. She is in favor of a "your, mine and ours" system, while I am in favor of combining everything. Your way sounds like a good middle ground.
Amazingly my fiance and I developed the same system for our marriage and we thought we were actually be quite clever and original. But it's good to see that other couples have the same idea. I seriously believe that this is one of the best systems a couple can use, especially because even if one spouse is out of work (maybe while raising a kid) they can still have their own money and not feel like they have to "beg" the other spouse for some cash.
I wrote about this plan earlier this month:
http://groomslife.blogspot.com/2006/08/of-love-and-money.html
Thrifty Bride | Dec 12, 2007
My future Mr and I are into our 2nd week of the his, hers, and ours system of finances (as my mother calls it), and I'm in charge of the main account. All bills are paid out of here and all money is deposited here and a small allowance is taken out for each of us. So far I've spent my allowance on things for us and he's spent his on things for him, how did others reconcile this? Is that just my choice? I spent my allowance on dinner out with friends because he's spent too much of his allowance and I hadn't. We had just paid some big bills so we didn't have enough in the main account, where we would normally get money for eating our from. Sort of seems unfair, should I take back the money? At the same time I don't spend as much as he does during the week, I like to save it for special things (shoes in my case). What do others think?
speedy | Jan 17, 2008
@Thrifty Bride: If it was dinner out just for you with your gal pals, I would think that would come out of your allowance. But if they were mutual friends and you both went to dinner, then I would think that would be a joint expense. If it bothers you enough to post the question, then I think you already know the answer.
You mentioned that big bills had drained the joint account. This is where an emergency fund comes in. If you have a chunk in a savings account (mine is at an online bank) then you can transfer money to the joint checking account to cover large expenses. If you don't have an emergency fund, open an account and start saving immediately -- it will provide a cushion and will prevent you from covering joint expenses with your allowance.
Chitowngirl | Apr 15, 2006
In my personal experience, those that combined finances had a better success rate in their marriages. (This is just my experience) I have my own reservations about this because of loving the control I have over everything now and the personal freedom to do whatever I want. Ultimately I know that I will probably do as you guys did but it's just a scary thought.
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