Tuesday, August 2, 2011

Marriage & Money

I know the chocolate was a bit much...so here's something a little more thought provoking and not as sweet!

During pre-marital counselling, one of the topics that we discussed was Money and Marriage! And of course as most or all of you know, money is the number one reason couples fight and break up.  I am sure this could be debated in some ciricles but for the sake of this post, i agree with this.

Money is definitely a sore spot for many people, individually as single people and then collectively after marriage.  

Before i got married, i had my ways of handling money. And Mr. Pancakes had his.  During pre-marital counselling, we talked ways to handle our monies  after marriage.  Even though we were living together before marriage, we both had "separate accounts" and split our expenses including rent,electric bill, food, cable/telephone and miscallaneous.  Mr. Pancakes had his "girlfriend fund" (now his wife-fund) and i had my "whatever fund.!"  We opened up a joint account to save for our wedding after we were engaged.  And this worked for us.

However, during pre-marital counselling, the idea of "the household money pot" entered our discussion.  The pot would be where my money was his money and his money was my monies.  Many financial gurus support this idea including Dave Ramsey  and Suze Orman to some degree.  While Dave Ramsey believes once you are married, all monies should be combined; Suze Ormane believes that monies you had prior to marraige should be kept separate while post-marital monies can be joined with some exceptions. 

Here is where Mr. Pancakes and i defer a little.  While i am completely in support of the "household money pot" without any exceptions, he believes in the exceptions.  The exceptions include if the other partner has terrible money management skills, is an impulsive shopper, overspends and or just bad with money! 

First Confession: Both Mr. Pancakes and I don't have credit cards.  We got raid of if soon after we started dating.  (i know there are some questions about how can you not have credit? Don't you need credit to buy a house? Dave says NO! Suze says YES! this is an ongoing debate with Team Pancakes, but that's for another post!).

Second Confession:  Mr. Pancakes is great with money!  He has his budget and he sticks to it.  Hence why he had a "girlfriend fund" which is now his "wife fund." I am not terrible with money! As a matter of fact, i have a budget too.  I just like to move money around occassionally.  So if i am running short on something during the month, i will borrow from my savings and then replenish it later (most of the time).  For Dave Ramsey fans, he is the nerd and i am the free spirit all the way!

The second confession is what prevented Mr. Pancakes from becoming gung-ho about the "household money pot."  He was worried that i would rob peter to pay paul, martha and john too! And potentially ruin our future by constantly borrowing from our accounts.  This was a legitimate concern but i necessarily did not agree!  I thought he needed to just go ahead, deal with it and join our monies together. 

However, the more he resisted, the more i had to look in the mirror.  Looking in the mirror, i could see i had some terribly bad skills at managing money from myself.  Once i got married and if i continued, we would never meet any of the financial goals we had as a couple.  If i continued to use and give money frivilously, we would be in the poor house (and not in the house i have always dreamed about) before we celebrate our fifth anniversary!  I definitely still had changes to do, including when i made a budget, i should stick to it and make it last after the month ends!

I am sure Mr. Pancakes looked in the mirror too because three months since our marriage was made official and six months since that first pre-marital session about merging our finances, my hubby/the man of the household is shifting his thinking about the "household money pot" idea.  I am not sure exactly what he saw when he looked in the mirror.  He may have realized that he can finally trust in my money management skills and or that he needs to live a little.  It could be many things and something entirely different but i am excited about merging not only our lives in marriage but in money too!

We definitely try to act as a team in every aspect of our lives (residence, health, money, TTC).  We always come together and compromise and try and find some middle ground in all areas of our lives.  Therefore, we will have a household money pot.  But to keep both our sanity in our marriage and marry both Dave and Suze, we will have our individual accounts for my "whatever fund" and his "wife fund."

Which side of the financial fence are you on: 
household money pot or individual money pot?

P.S: maybe this is a separate post all together, but how about combined taxes after marriage! That is something we will be doing together next year.  Scary! Battles all on it's on.  At least Turbo Tax! I've heard of couples that have had to use "form 4868 tax extensionbecause they couldn't agree on what to claim.   But like i said, this deserves it's own post!


Jere and Cara said...

We are a little bit of both...Our counselor (We have seen one for almost 3 years now. Just every 8 weeks as a tune up. I love it) sees that since we both have kids from previous marriages that need money from us for different things it would be okay to keep SOME of what we earn separate. But we do have a joint account as well. Honestly that all sounds great, but it gets VERY complicated. Splitting bills is a pain... we've been married almost 2 years and have done it this way all that time but frankly we both gripe about it. I think we are getting ready to combine it all. Yet I hesitate b/c I DO like having a little of my own money set aside, ya know? I dunno girl... i'm on the fence on this one!

Lauren said...

We have had a household money pot from the moment we said "I do." It didn't ever really cross my mind to do it any other way. We each have a small "guilt-free" envelope that each of us can spend without justification or reasoning but this is a very, very small portion of our budget! I love that we can talk about it and everything is wide out in the open! As long as you talk about the major things, and have trust with the little things...I really don't see how you could go wrong with one big household pot!

Natalie said...

We have one big household pot. There was no question in my mind that this was the way we would handle our money, it just world for us. I am in charge of keeping the finances in line though, well I put myself in charge because I am the "nerd" lol! We are working Dave's program and love it!

Marilyn said...

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Donna @ The House on the Corner said...

Money can be a touchy subject! I'm lucky - I don't have any real bills and my kids are grown and gone - so it's easier to keep our money somewhat separate - and in my younger days - we barely had enough to pay the bills so there was really nothing to discuss ;-)

Thanks for joining the Tuesday Train!

Frugalista said...

We do a bit of both. We each have individual savings and checking accounts and joint savings and checking accounts. Each month a certain amount (determined by me based on income and expenes)automatically gets transferred to the joint accounts to cover joint house bills, grocery etc and the rest is ours to do with what we want.

Sam {fitnessfoodandfaith.blogspot.com} said...

hmmm, that's tricky. we keep one account to share between us and it has worked out so far! every couple is different, though.

Nini said...

Hubby and I are both. Prior to getting married our monies were separate but once he experienced a fire in his building and we started living together sooner than we planned we quickly adjusted and had a "house fund" which was to take care of all things house and then our own separate accounts. Now that we are married it is still pretty much the same except now that I am back in school the amount that I put into the "house fund" is less because I only work part time and he owns 3 businesses. It works for us. I think every couple has to do what works for them. I can tell you in my previous marriage my ex didn't work for 4 of the 5 years (I worked 2 sometimes 3 jobs) yet he spent the majority of the money. Never again!

Mrs. Pancakes said...

@ Nini, oh i hear you about the ex thing that would be royally annoying!

Dana said...

This is ongoing conversation with the hubby. We have our own separate accounts and a joint account. We continue to tweak and adjust our finances. I think as you continue to have communication about it, things will work out.

My Journey With Candida said...

My Hubs takes care of all the money, bills etc. All I do is hold out my hand when I need money.
I am not much for spending money so it works well for us.
He has all the stress of paying the bills.

New follower

toi said...

Even before considering marriage I knew I wanted to have three accounts: our own personal accounts and then couple account. We still do :). Our personal accounts are for what we want for ourselves or as a gift for one another, while the joint is for the family bills. I believe this way gives freedom but also keeps the relationship healthy about money issues.

Now that baby is on the way I am thinking about baby's fund, lol!

shopgirl said...

This is such a great post! It is important for couples to talk about money and finances prior to getting married and have regular meetings about it during marriage.

My husband and I put everything in one pot so to speak. And we have an agreement that purchases need to be discussed before either of us buy it, even kitchen stuff. It gets time and effort to get used to it. But it works for us. I think every couple has their own method, but as long as there is communication, understanding, and respect for money and each other, it's all good.

p.s. love your title! Pancakes are my favourite breakfast food made with a side of fruit and sausages.


shopgirl said...

oops...forgot to say. Now folllowing you! I hope you will follow me too!

Krysten @ After 'I Do' said...

Money is SUCH a touchy subject. I'm pretty sure it's what the hubs and I argue the most about.

Saying I do said...

My parents kept their separate bank accounts when they got married. I, have always said that I would never do that and now that I'm married, we are working on combining our accounts. My parents were kind of always "who pays for this?" "who pays for that?" some gifts were paid for by mom, some were paid for by dad,...but who do I thank? Just one? both of them? I always felt odd and like I didn't know who to thank and ehh it just wasn't for me. I announced to my mom from the time I was a young teenager that I planned to combine accounts when I got married.

Anonymous said...

I used to be a big fan of Suze Orman. I think Dave Ramsey's Depression Era advice has merit. But I haven't yet buy into everything a finance expert says hook, line and sinker.

The getting rid of credit card completely is debatable. I still think FICO scores carry a measure of importance.

Can't wait to read your follow up posts on this topic.

Jessica said...

Thank you for the advice!

Hope you will stop by my brand new blog: http://artsandcraftsado.blogspot.com/

Sophia Chang said...

Go you for blogging about this! Since it's the top 2 causes of divorce along with sex, it's such a great topic but one that not enough people speak openly about. I love your candor and it helps the rest of us pre-married folk :) I also live with my significant other - money is so tight in this day and age!

Jenny said...

Marriage is a lot of give and take. I've been married for 13 years and we're still working on it. My best advice is to always communicate and work together. Don't leave the finances up to one person or you'll end up in trouble!

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