(Can you tell my Adobe Creative Cloud subscription has expired?)
Before MrFodder and I moved out together, for the most part, when we ate out, we split the bill, and when we went to do some kind of activity, we'd each pay for our own ticket. The only notable exception is that I would always buy him a choc top when we went to the movie, but I don't even remember how that tradition came about, and he insists on keeping it.
After we moved in together, we created a joint account which all of our joint expenses would come out of: rent, bills, dining out together, other costs that we both shared. Anything that was a solo expense would come out of our own account. We worked out how much we needed to put away each month, and depending on the ratio of our income, we would contribute that much. E.g. at the time, I had just joined the grad program, and MrFodder was still working part time at uni, so I earned about a third more than he did. I contributed 60% of the monthly joint account contribution, and MrFodder paid 40%.
After we got married, we discussed changing to a single account for everything, but decided that we liked the way we have split our expenses. The only thing that has changed is that our income is more or less even (MrFodder now earns more than I do), so we both contribute 50% to the joint account.
A few people have asked why we are like that, one person pointing out that it almost feels like we both have one foot out the door and aren't totally committed to each other. I disagree, it isn't really like that at all. I think our system stems from the fact that we both like to contribute equally, and we both also like the freedom to do our own things.
This is completely based on stuff I've read online, and things I've heard from other people, but it seems like money is a huge contributing factor to marital problems. My parents suffered from this quite badly, but it seems to have gotten better now that a couple of us have moved out of home. Most of the issues seem to arise when each person has a different view on how money should be spent / saved.
I remember reading an article about the difference between male and female Christmas presents (assuming a heterosexual couple). The guy will get some sort of gadget / video game / tie / socks - essentially something for himself. The woman will get some sort of household good: bowl, serving platter, kitchen appliance - something that would presumably benefit her in some way, but actually benefits the entire household. I find it hard to judge, as I enjoy making desserts, so cooking related gifts for me do make sense, but it was definitely the case for my parents: dad would often get DVDs for a TV show / movie he likes, and mum would get some kind of appliance.
I feel like that's a really unfair divide. Imagine if our personal spending money were divided like that, with MrFodder being able to buy things for his hobbies, and my spending money being used for kitchen appliances and vacuum cleaners. I mean, to each their own: maybe someone really likes fancy crockery and wants to buy fine china while the other person doesn't care. It doesn't seem fair for both parties to have to put aside savings in order to buy a $2,000 set of plates when one person would have been perfectly happy with a $200 set of plates. So it does go both ways.
There's also the other factor, where one person feels the need to scrutinise every single purchase the other person makes. Sure, checking your bank statements regularly is a good habit to get into as it means you find out earlier if someone has stolen your credit card details, but I don't think it's healthy if there's a weekly monetary interrogation in any relationship.
As we both have our own separate money, we are free to spend what we haven't allocated towards our joint account as we wish. I have my $400 per month challenge and MrFodder has his addiction to buying games on Steam, and both of us are perfectly OK with that. If I want to spend $25 for the tiny glimmer of hope of meeting Arnie, that's my prerogative. As long as we're both keeping up the requirements payments into our joint account, then that's OK. What I really like about this system is that I don't have to justify spending $50 on ingredients to practice baking sponge cakes to anyone but myself.
When it comes to the bigger purchases, like furniture, we both have a discussion on what we want, and pick out something together. Then we transfer half of the required money to our joint account to cover the cost.
This is where it might fall over for some people, and it probably only works for us because we're both fairly frugal and like to keep an emergency fund. If one person were like that, and the other weren't, then things like new furniture would probably be limited by whatever the person with the least amount of savings could afford, which might make it tough to discuss what you want if the person with more money wants to spend more. One person may always end up covering the lion's share if the other person is a reckless spender. Or maybe they just don't care, because one person happens to earn a lot more than the other. Again, to each their own.
The other side benefit is that we can buy things for each other and keep it a surprise - though we've kinda given up on the gifts thing now, so it's bit a big a deal anymore. I asked some of the married people I know who have joint accounts how they buy gifts for each other, and a lot just said they will take out cash beforehand. But that really only works if you're buying something in person - you can't do that online! :( Gifts for family and friends will come out of the respective person's bank account: MrFodder buys presents for his family and friends, and I buy presents for mine.
When they're bigger purchases that don't affect both of us equally, we aren't required to talk it over, but we tend to anyway. For instance, MrFodder really wanted a new TV and I wanted an ice-cream machine. I rarely ever watch TV, and I don't think MrFodder wants to make ice-cream at all (though he'll happily eat ice-cream I've made), so they could have come under personal expenses. But the TV was $3,000, and the ice-cream machine $400, which is a decent chunk of money that isn't going towards our savings, so we both talked it over. MrFodder found a TV he liked, and I found an ice-cream machine I liked, and we both got the OK from the other person.
There is a bit of overhead making sure our joint account has enough money for everything, and this is where software like YNAB comes in handy - as you get a good view of your spending patterns. I actually enjoy doing this kind of stuff, so I don't mind doing it, but other people would probably find it a chore. I find it a chore if I haven't kept it up-to-date for a while, but once it's on track, I like looking at the reports and seeing where all of our money goes. But our joint expenses don't really change all that much, so there isn't a huge amount to manage, and it's mostly just a matter of dividing up how much of the credit card needs to be paid off with the joint account money, and how much is my personal money.
Is this the best way for a couple to manage their money? I don't know, but it has worked for us so far. However, we are both fairly responsible with money, so combing our finances probably would have worked, too. I guess having the option of spending money without having to check with the other person first is something that's important to both of us. We trust each other to talk over the big things, but we don't sweat the small stuff. I'm really curious how other couples have handled it, and what their personalities are like. There aren't many similar-aged couples I know where I'm close enough to both partners that I'll have a fair idea of their personality, and be close enough to ask this kind of question. :(
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