Anes Weblog  -

Web www.AnesHome.com

Enter your Email Powered by FeedBlitz

His, Hers, and Ours 19 06 05 17 17 -------- My Wife and I believe in the His, Hers, and Ours account management philosophy.  Some other marriages believe in "everything goes into the same pot".  There are some reasons we prefer our method, and I want to share them with you. First more details on our model.  We do share a checking account for utilities, groceries, and entertainment/vacation expenses.  We both contribute to it every month.  We do have another savings account for common investments (of which currently, we only have a Real Estate property that we bought with it, and is giving us more headaches than we expected -- just hope it sells for what other people ask for it).  Other than that, all other accounts go separate, including our own personal checking and savings, as well as retirement and brokerage.  Insurance is common just because the Umbrella Insurance requires it, but each one pays their share according to the assets they own.  Current residence is owned by one of the two, and the other pays rent. Although it sounds detached and draconian it has helped us to increase our net worth tremendously.  Marriage (or even cohabitation under our way of thinking) means more than sharing a bed: it means sharing the responsibility of supporting the other person in any circumstances.  We believe that supporting the other person means that we should be able to pay for the other person's living expenses in the case of disease, disability, or other accidentals.  The only way each of us (not only one of us) can cover that is by having a stable, financially secure life on our own.  A financial situation that doesn't depends on the other person ability to earn or spend money.  And such life should be so secure that it should even generate enough reserves to cover for the other person in the case of an emrgency or accident. Furthermore, our love to each other is so great that we do not want to become a load to the other person in the case of such accident.  As such, we are both working really hard, so that we can sustain ourselves for the longest possible ammount of time in the case of accidents or disability. We do however mantain an open policy about our finances.  Each one of us can peek into each other's accounts.  Each one of us offer advice to the other based in our knowledge and experience.  And we constatly offer suggestions and express concerns about what each other is doing.  We even verify that the other is on-track for an early retirement.  But we have never had a discussion on any spending or investment decision. Sure, the obvious problem with this philosophy is that in the case that there is no accident, we end up with a financial life that is more secure than it needed to be.  We are willing to live with that risk. Just in case such fundamental reason wasn't enough, we have found other reasons why His, Hers, and Ours is the way to go: Purpose of the accounts - One big problem many couples face is that common accounts tend to be for current expenses.  It is very difficult for people to invest the money that is held in common.  By establishing that the common account is for the most common expenses, every single cent that isn't deposited on the common account is a very good candidate for further investments into each of our networths. Investment decissions - I do not want to nag her for investment decissions that go wrong.  I want to advice her as a friend and as an equal, but I do not want to get into a fight for any un-wise, or unlucky decision that either of us take.  Plus, her invesment models are different enough from mine that it would cause a fight at the dinner table every night.  We prefer to talk about our experiences with His or Hers money than about how we took unnecessary risks with OUR money. Risk of Divorce - We are both comitted to being together forever.  Divorce is out of the question.  However, the #1 cause of divorce is financial matters.  By minimizing the causes for financial stress we make our marriage less prone to Divorce.  We owe it to each other. Sure, common accounts for everything are romantic.  But you and your honey should think about the implications of such decision.  My wife and I believe that a marriage has more chances of lasting forever if they follow the "His, Hers, and Ours" philosophy.

While, you have sound argument to adopt the model, don’t you feel that it will give raise to too many nitty gritties centering around money? For example, if you invite and host a dinner for your friend, is it common expenses or your expense?
cvrkswami () (URL) - 20 06 05 - 08:02

Jose, this would be a good article to include in the Carnival of Personal Finance (link: http://www.consumerismcommentary.com/index.php?page=archives/2005/06/20/carnival_of_personal_finance_1). Let me know if you want to include it.
Flexo () (URL) - 20 06 05 - 10:00

I think it would’ve been considered draconian maybe 40 or 50 years ago, but probably commonplace (and even suggested) today.
jim () (URL) - 20 06 05 - 12:14

Jose,
I think the idea is good for those who have a bit more $$$ than say…me. But if you are in my situation, that being that my wife and I have chosen to let her stay home with the kids and homeschool, and I will be the money source, (that means the household income is barely over $50K in the Boston area) then having all these accounts seems like trying to split a dollar into three catagories. That equals fees, fees, fees. But what we do is this: We each get a specific amount of $$$ to spend each week. (It is not a lot, but it is what we have agreed upon.) When the weekly allowance is gone for either one of us, then we wait for Friday for another fix. If we want to do something that costs more than our allowance allows, we have to budget it out to save it for a coupla weeks. I think I am probably in the lower-income bracket compared to the typical visitor to your site. But for what it is worth, that is how us “po’ folk” do it. Plus, there is something to be said about being in the trenches of limited income…I fond it bonds us closer simply because we have to work together to make things happen.
Danny Kaye () (URL) - 20 06 05 - 13:09

Thanks to all of you so far for replying to my article.

CVRKSWAMI:
So far we have not faced any ‘nitty gritties’. We both must approve every Common Account purchase unanimously. Otherwise, it goes into whoever really wants to spend the money. No regrets if she doesn’t approve. No regrets if I do not approve. As for dinner invitations, if the friend is a common friend, it usually goes out of the common account. If it is friend of only one of us, it goes from the personal accounts. Again, we both have to approve the expense before we charge to the common account.

Danny Kaye:
You are right. The system doesn’t work for everybody.
We are trying to be both financially independent by the time we have kids (if we do). And even if we have kids, my wife has specifically mentioned she doesn’t want to stay at home.
It is just an idea, and food for thought. Everybody should decide what is best for them.
Jose Anes () (URL) - 20 06 05 - 15:54

Sounds like this is working nicely for you. One of the biggest problems for implementing this in my family is that my wife stays home with the kids… Thus, no income.

—

http://www.fivecentnickel.com/
nickel () (URL) - 20 06 05 - 20:38

Sounds like it works well for you guys. We are of the “one pot” model, but my wife has very little interest in finances. I can see how if both people like control over the money that this would work well. Whatever works!

Jonathan@MyMoneyBlog
Jonathan () (URL) - 20 06 05 - 21:34

This is an interesting perspective. In my case, my wife tends not to want to take an active role in our finances, other than to see the latest facts and figures. I tend to enjoy it so we have combined all of our accounts.
http://elym.blogspot.com
Hazzardjk (URL) - 21 06 05 - 15:01