Monday, December 15, 2008

potato wedges - joint finances

After enjoying and featuring "..Kraft Dinner.." by the colourful blogger, Potato, over at Blessed By The Potato, we thought we'd sign him to a temporary guest column series contract with the moneygardener for an undisclosed sum... This post series promises to be unlike any other consumer reporting/ offbeat commentary you've ever read. John Stossel eat your heart out.... This series will be a change of pace, and we're calling it potato wedges. Enjoy...

Well, I'm married now.

We talked early on about money. We agree on a surprising amount: we both are fairly frugal, and are comfortable with equity investing, we're both responsible and pay bills on time, and can keep (roughly) to a budget.

The one thing I was not expecting after the marriage was that we couldn't figure out the nuts and bolts of actually managing joint accounts. Before, we had recorded all our spending during a month, who paid for what, then would transfer money between us so that we both paid roughly half the household expenses, maintaining always our own individual accounts. I figured that there were a number of approaches to take once we were married: we could continue to split things equally; we could just simply pay for things and not worry about whether it was equal or not, perhaps transferring between our individual accounts if the balances got out of...balance; we could split the monthly costs instead according to who made what, so that our savings/investment accounts went up at about the same rate; or, we could have the higher-income person pay for everything, so that investments are made in the hands of the graduate student lower-tax bracket person. In all of my scenarios, there wasn't an explicit need for a joint account of any sort, and I hadn't really planned on making an extensive use of one.

Wayfare, being a more sentimental person (i.e.: female), was appalled at my down-to-earth practicality, and insisted that a joint account was a must, because we're married, damnit! So any wedding gifts that came in the form of cash or cheques went into the newly-minted joint account (and I wish I could describe with words the look on her face when I suggested we just split the wedding gifts and put them in our existing accounts and just record the wedding-gift-house-downpayment fund balance in a spreadsheet). This was just the beginning though, because that's our joint house savings account is for that purpose only now. It's sentimental and carries with it a certain lingering magic from the wedding (I wonder if PC financial offers bonus interest for magic?). In the face of a looming liquidity crisis, I suggested she just use the money in the joint account to pay her tax installment to the CRA, and re-deposit it when her paycheque arrived.

Whoa. It was a good thing there was halloween chocolate nearby, or I might not be here to blog about the experience.

So as you can plainly see, money is just money to me. But to Wayfare, things can be a bit different.

We still haven't fully figured out exactly how we're going to do this. Right now we're working off the "doesn't matter who pays for what, just let it ride" method, largely because it involves the least amount of work. We know that we don't really want to get a Joint Account for everything -- we don't really want all our paycheques going into some common pool and merging our credit cards and just working from there: we both like our autonomy, and don't want the other person to know what we spend on gifts, etc. Besides, it's all "our money" in the end. We don't really have a model to work from: talking about money is not a big topic for most people, especially the nitty-gritty of how they combine their individual accounts after marriage. We know that both our sets of parents have Joint Accounts (capitalized for emphasis that this is not merely a shared account) and one spouse takes care of all the finances. Since we're both financially savvy though, we both want to keep some measure of control, to keep our fingers in the pie as it were.

Michael James beat me to it this morning with a great quote: "Sharing a bank account feels sort of like sharing a toothbrush to me. It can be done, but you'd have to be in quite a romantic mood to think that sharing a toothbrush is a good idea."


Michael James said...

Thanks for the mention. I'll try to have another good quote during the next year :-)

Finance Matters said...

I have to agree with the missus. Very difficult to budget properly with separate accounts or keep track of spending. You create a lot of potential conflict because you are more likely to make purchases without consultation thinking it's "your" money not hers. Just my opinion.

TStrump said...

I agree with separate accounts.
Let's face it, times have changed, plus it's important for people to keep their own identity.
A joint account can be kept for household expenses.