Need help explaining something ... opinions

[linnell]

Why not get three accounts, one that dumps your paychecks into a central home account and then each of you have x amount for fun money. You can save yours and he can spend and you will both be happy.

 

[fakereadhed]

Red flag! If you need to ask the BB instead of working it out with fiancée...

 

[Claire&TheBoys]

First, I agree with the uncle/accountant's advice that MFJ is the optimal way to file. You get benefits that way that you don't get MFS. So, I think you definitely need to iron this out now before you get married.

One option would be to take your gross pay, before taxes, and decide that each of you will deposit a particular percentage into a joint "household" account and pay all the bills from that account - mortgage, utilities, groceries, etc. Then you each have a separate account for yourselves, and from there you pay your own credit card bills and have your own "fun money." If you do it percentage-wise, and your husband isn't happy with the amount he has "left over" then he can up his withholdings and have more money in his paycheck, provided your debt to Uncle Sam is covered.

My husband and I married young, right after college at 23, and we've always had only a joint account. We save and spend "our" money. We did it that way when we both worked full-time, and we have done it that way since I went part-time to stay home with our kids. It's how I was raised, and how he was raised, but I know it's not for everyone.

Good luck with this situation.

 

[DisneyDebbie]

Red flag! If you need to ask the BB instead of working it out with fiancée...

I love to get other ideas and opinions. There are so many ways to handle finances, relationships, parenting, etc... I like to get alot of info. and decide for myself what will work best. There have been so many topics that I have learned about from the dis.

 

[crisi]

You know, if you don't have debt, using the IRS as a "Christmas Club" isn't that bad an idea. It isn't like you'd make money with it in a savings account - there isn't much interest to be had. And you get excited to get your taxes in - I think any interest you forgo might be a good trade for "yea! I get to do my taxes!"

I don't think that is the issue here to worry about.

I think the issue here to worry about is that your husband to be is a spender. He sets this money aside to spend and spends it. You aren't. And I think that is where the conversations and compromises have to happen.

How about you go about it this way - pick an amount you can agree on to get back from the IRS to use on something frivolous - its your vacation fund. Maybe that's $4000. Pay the uncle to figure out what the appropriate number of deductions for you each to claim to get there. Agree that this is your "splurge fund" and when the tax return comes in, it will be used for something that you both agree to - like a vacation. I'm assuming you are not so frugal (being on a Disney board) that you aren't going to take a vacation or do something else not necessary once a year.

Also agree that some money needs to be set aside each month for "emergencies" and some for "long term savings" - agree on how much that is and what you are saving for (my husband and I save long term for retirement, college, and - shorter term - cars and vacations). The emergency fund should have a target amount - and when that is reached you don't have to save anymore. But when it is used up, you HAVE to agree to replenish it.

 

[rockundergirl]

Red flag! If you need to ask the BB instead of working it out with fiancée...

Ha Ha, you guys are so silly. As I said we talk about this stuff all the time. We have a great relationship. I strongly believe that a person should never stop learning and sharing. This is a great group of people, and I wanted to broaden my thinking by getting the opinions of others. I'm curious, what exactly was it that I wrote that makes you think I have not spoke with him about it? Only so that I can understand how to be more clear when I ask for advice

 

[fakereadhed]

I understood from your post that you discussed it in depth.

As someone who has been married for what seems like forever there isn't a way to explain your point better and change their mind if you disagree with your SO on basic issues. You either work it out, or it's an ongoing problem. If you are of completely different opinions about how to handle money it is a red flag. As someone else said, money issues lead to divorce. I don't think you were wrong to ask for advice here. My advice was to see the money issues as a red flag and go elsewhere for advice(i.e. counseling).

 

[horseshowmom]

You are correct, your future husband is wrong. He essentially is loaning the government his own money interest free. Not smart financially. It's a forced savings plan where the government gets all of the benefits. I agree that you need to talk about finances before getting married. If your husband just can't handle money, perhaps you two need to agree that you will manage the money.

I hope she doesn't use this in her discussion. While I understand your point (and the financial issues you are addressing), the fact that he chooses to do it differently does not make him "wrong" IMHO.

My husband and I have joint everything because we agree thankfully. But I just want to say my parents have been happily married for 45 yrs now and have always kept everything separate because they don't agree on finances. This is what works for them.

Yes, it's smarter to jointly file but if it saves frustration perhaps you should go ahead and file separately.

Good luck.

I agree. While we have always combined our finances and viewed it all as "our" money (sometimes I've made more, sometimes he has), I realize this doesn't work for everybody. Many years ago I had a friend who had to split their finances. Her husband wouldn't keep up with the checks he wrote and frequently caused them to receive overdraft notices. She loved him, but he was driving her crazy. She decided it was better to separate finances than separate physically!

If filing separately creates family harmony, so be it. It's cheap at the price. I do think you need to address the issue of bill payments though. Maybe you should adjust your percentages to what his salary would be if he claimed deductions or what yours would be if you didn't. That seems more equitable if you're going to do percentages.

 

[disneybound31]

Dh and I have always pooled all our $ into one joint account and paid all our bills from it- we do have a return at tax time...it varies from about $1k to $2k each year. We rather like it this way because for us it is a forced savings. I put the largest chunk into our emergency savings- then I use $600 to pay our car insurances for a 6 month chunk and whatever is left is fun $. That might be $40 and we take the kids out to dinner or it might be $400 and we replace an appliance or do a minor home improvement.

If we have that additional $ in our hands each month it would probably get blown on other things even though we are savers.

I do our taxes each year and handle 99% of the finances- I have run the numbers both ways at tax time and it NEVER gets us ahead to file separately vs. jointly. DH is also the type who values items and I value experiences. I would like to spend all our discretionary income to visit places we have never seen before (right now I am trying to sell the family on my plan to get us to Niagara Falls with a side trip to NYC and Philidelphia/Rittenhousetown...my maiden name is Rittenhouse and I want my kids to see what their family has contributed to this country- we were the first papermakers to come over from Europe) and DH would rather get a new fridge or put french drains in...so we compromise. Sometimes we go on a cool trip, like to Mt. Rushmore, and sometimes he gets to improve on the house, like when we finally replaced the stove with a glass top model that he wanted. And I could care less how old and worn out my car gets as long as it drives down the road!

You can be different and still have a good life together. Compromise is very hard but very important and I thank you, OP, for reminding me to remember that!

 

[bellarella]

I think this is a rather silly bridge to die over.

Right now savings accounts earn so little that the difference between getting your money in one lump sum as a refund, or split out over the year is rather negligible, and certainly small enough that the enjoyment of getting the 'big check' can be worth the interest forgone. If you say that you invest your money in something other than a cash equivalent vehicle, then I'd say you are putting the money at risk for losing value over the course of the year, so your plan isn't any "better" than your fiancé's, just different. Investing the money makes you feel good, getting the check makes him feel good. Recalculate the amount you contribute on the basis of the IRS tax estimator and then you can each do as you please.

Now, on the flip side, I will say that I'm in the camp of disliking separate finances. There is just no way to keep finances separate without every decision coming down to money, which I think makes mountains out of molehills. Is the ice cream you hate out of the shared grocery budget, or my discretionary fund? Do we each get the same amount of fun money, or do we get the same percentage of fun money? Should the allocation take into account the number of hours one person works, or just salary (since if one person works more hours they are less likely to do the same amount of household chores)? What if my hobby is more expensive than yours, but your takes more time from the family? Sure, I've put myself at risk of needing a good divorce lawyer, but I have kept skills up to date and have a plan if I were on my own. I would would rather have a couple of years of re-entry stress than a marriage where money is always a debate barely under the surface.

 

[edk35]

Ohhhhh... You have to get on the same page before you get married. Money issues are usually a big factor in divorces.

I think Dave Ramsey or other Gurus might have a better explaination so he can see it in black and white. I know it is very smart to do what you do, and horribly not smart doing it the way your DH to be does. I do like your DH does because we are not yet disciplined enough to save back anything we might owe on taxes. We are in the process of paying down debt so it all goes to that. The surest way for you all to incur debt is to spend like its found money.

Good luck!

I agree....You both need to be on the same page.

 

[edk35]

You sound like you're very independent and self-sufficient. Can I ask you why you're getting married? Please don't take this the wrong way. I just don't understand why a couple that has been living together, and is happy with the arrangement, would see a need to get married. Most companies don't require you to be married just to add a domestic partner to insurance. You don't need to be married to buy a house or create a child.

There must be something about that little piece of paper that makes things different for you and your future husband. What is that "something"?

Because to me, when one or both partners in a relationship is reluctant to combine their finances, it seems to say "I choose you for now. But maybe not forever. I'm not sure that I trust you to make the best decisions for us. I'm going to withhold this little part of me back so that there is something that I can have complete control over. And you can't."

I'll admit that I come at this from a different perspective. I got married almost 27 years ago. I'm from a different generation with a different concept of what marriage is.

I kind of feel the same way as you too. We have been married 23 years and we are JOINT everything. I know everyone is different but I am glad we just don't have issues over finances. I have always done the bills/money management and when we met with our minister he even suggested that we both decide who would do it...just makes things easier. We were both on our own too...living independently with careers.

 

[bellarella]

Ohhhhh... You have to get on the same page before you get married. Money issues are usually a big factor in divorces.

I think Dave Ramsey or other Gurus might have a better explaination so he can see it in black and white. I know it is very smart to do what you do, and horribly not smart doing it the way your DH to be does. I do like your DH does because we are not yet disciplined enough to save back anything we might owe on taxes. We are in the process of paying down debt so it all goes to that. The surest way for you all to incur debt is to spend like its found money.

Good luck!

Ok, so this makes me laugh (not at you, but at Dave Ramsey). Getting your taxes back in one lump sum is no more "horribly not smart" than using Ramsey's snowball method. If one were really disciplined, one would not snowball debt, but would pay off the highest interests loans first. Now, recognizing that for some people, the emotional reaction to paying down a debt is a better motivator than sticking with the best mathematically solution, Ramsey came up with the snowball method. It is emotionally satisfying, but not the "best" way to pay down debt.

So, mathematically speaking, earning a small amount of interest by not getting a big refund is optimal, just like not snowballing is optimal. But if you accept that the emotional reaction to the snowball method is legitimate, then it is disingenuous to call getting a refund "horribly not smart."

If savings accounts were earning 5% or more, then, yeah, maybe you could make a stronger case that one is "better" than the other. But these days, it really isn't a big decision.

 

[jackirkh]

I am getting married in May and I really enjoy reading everyone's insight into this! Very helpful!

 

[IDoDis]

DH and I have been married for 19 years. When we each managed our own money, his finances were a disaster. He had wracked up credit card bills and was starting to get behind. This was shortly after we were married. So, I took over. We both make the same amount of money, but back then we didn't so I had to bail him out of debt. However, since then, both checks go into our joint account via direct deposit. I pay all of the bills, buy the groceries, take care of the kids needs (clothing, sports, etc...), etc. with this money. DH gets $150 per pay check every 2 weeks to do with what he likes. The money gets transferred to his paypal account and he uses his paypal card to buy things and withdraw cash. That way I know how much is going out each month and there are no surpises. If he wants/needs a new computer or a new gadget (he has many), then he has to save for it out of his spending money.

I'm a master saver and put away what I can each month into our savings account. I don't have the $150 per paycheck (every 2 weeks) for myself, but if I see something I want, I buy it. I usually don't even spend close to that and often spend nothing on myself. But that's my choice. DH doesn't really care if I buy things for myself and I don't care if he does as long as he uses his own spending money. When I do decide to splurge and buy myself something, it's no big deal because I don't do that every month.

 

[tigger_mommy]

I would just explain to him that you are giving Uncle Sam an interest free loan. They keep $500 of his money a month and then give it back at the end of the year. If he would just take that money and put it into and account that accrues interest he would have more "mad money" to use at the beginning of the next year. OR he could pay extra on the mortgage and get that paid off early, as well as any other debt you have. Giving the government your hard earned money, interest free, should be all it takes to get his head wrapped around this.

I do agree with a previous poster, you need to get on the same page about money. That can be a huge stress for a marriage. God Speed and good luck to you!

 

[crisi]

Now, on the flip side, I will say that I'm in the camp of disliking separate finances. There is just no way to keep finances separate without every decision coming down to money, which I think makes mountains out of molehills. Is the ice cream you hate out of the shared grocery budget, or my discretionary fund? Do we each get the same amount of fun money, or do we get the same percentage of fun money? Should the allocation take into account the number of hours one person works, or just salary (since if one person works more hours they are less likely to do the same amount of household chores)? What if my hobby is more expensive than yours, but your takes more time from the family? Sure, I've put myself at risk of needing a good divorce lawyer, but I have kept skills up to date and have a plan if I were on my own. I would would rather have a couple of years of re-entry stress than a marriage where money is always a debate barely under the surface.

I agree here as well.

If you both need some money that is "unaccountable" to the other, each take an "allowance" - proportional or the same. My sister and her husband B.C. (before children) both worked in highly paid professional jobs and both had HUGE allowances. He's a spender - she isn't. He made more so his was proportional to his income. He spent it all - she managed to take them both to Europe after five years. Now they have kids and the spending and savings is more kid focused.

Also agree what is "buyable without consulting" - my husband has learned to talk over any large purchases with me before indulging in them. He can spend $100 or $200 and I'll adapt the finances around that - but $2 or $3k and I can't move quickly on that. So his dollar limit is around $1000 over what he'd normally spend in a month (more around Christmas).

 

[ekatiel]

i see it as a good way to be. It just doesn't match us. We talk about stuff a lot because we know its going to be an ongoing disagreement. We are in love, but complete opposites when it comes to money. Combining would make it worse IMO. With my ex we combined everything, it worked for the most part. With my soon to be DH, we just have much more independent lives. We work and travel separately. He sees value in objects, I see value in experiences. I think it would build resentment for each other if we had to run everything past one another.. but Idk,, I will think about it.

Pool the money, give each spouse a set allowance each month/pay period. That way, he can have money to "blow" on whatever. The tax thing is less of a big deal. The everyday, "I can't believe you wasted $100 on X," is what's gonna get you. Decide together on an allowance and choose not to judge how he spends it .

DH and I have been married for 19 years. When we each managed our own money, his finances were a disaster. He had wracked up credit card bills and was starting to get behind. This was shortly after we were married. So, I took over. We both make the same amount of money, but back then we didn't so I had to bail him out of debt. However, since then, both checks go into our joint account via direct deposit. I pay all of the bills, buy the groceries, take care of the kids needs (clothing, sports, etc...), etc. with this money. DH gets $150 per pay check every 2 weeks to do with what he likes. The money gets transferred to his paypal account and he uses his paypal card to buy things and withdraw cash. That way I know how much is going out each month and there are no surpises. If he wants/needs a new computer or a new gadget (he has many), then he has to save for it out of his spending money.

I'm a master saver and put away what I can each month into our savings account. I don't have the $150 per paycheck (every 2 weeks) for myself, but if I see something I want, I buy it. I usually don't even spend close to that and often spend nothing on myself. But that's my choice. DH doesn't really care if I buy things for myself and I don't care if he does as long as he uses his own spending money. When I do decide to splurge and buy myself something, it's no big deal because I don't do that every month.

The paypal thing is a genius idea! I'm going to have to look into that for me and DH. DH likes to "save" his allowance money to buy tech gadgets, but when DH doesn't spend his allowance $$ it seems to vanish in the account-- life happens! Anyhow, poor DH will say something like, "I haven't spent my allowance $$ for 8 months. I'd like it all now to buy X." And of course, the money has pretty much vanished into everyday living!! We've thought about setting up more checking or savings accounts, but that seems like a hassle. The paypal thing would be great for us, that way we'll really get all our allowance $$! --Katie

 

[ilovemk76]

So soon to be dh and I have very different ideas about money. We talk about it a lot.. and most of the time just respectfully each do things our own way. His accountant ( his uncle ) told him that filing jointly is almost always better tax wise once you are married and he mentioned it at dinner last night. This sparked our first in depth conversation about taxes... it went poorly.

Me : I claim 3, to insure I get a very small refund at the end of the year, I see no purpose having the gov't hold onto my money all year and gift it back to me like its a gift...

Him : claims 0, so that at the end of the year he joyfully gets back an insane refund in one lump and feels like he hit the lotto. ( as a side effect he sees this as fun money to be wasted)

I tried many different angles to explain why I feel so strongly about my way of doing things.
Also.. I'm a little up set at this because we decide on who pays what bills on how much we each make in our paychecks each month... I was not happy to find that hes shorting himself about 500 a month that he gets back in a refund and wastes.. while I have my paychecks paying out how they should and in turn I'm paying more then my share of the bills. ( to give you an idea of our math.. If our paychecks combined are say 10k per month , and 4 k of it was from my pay check, I make 40% of the money so I pay 40% of the mortgage, 40% utilities etc) I thought this was a fair way to each have a fair amount of spending money / extra money etc.. Its not perfect since I work a lot more hours and still make less then him lol , but it works for us.

His solution : I start claiming 0 then a the end of the year we split the refund as fun money or spend it on a family vacation or something.

my solution :we meet in the middle he claims 1, I claim 2 when taxes are done we spend the money on something for the family .. vacation/ home upgrade etc..

What do you guys think? I'm a missing any factors that might help me explain my point? Maybe I'm just wrong? Idk... its crazy how much we talk about money and try to be open and still stuff keeps coming up .

I never understand the my money, your money for a married couple. Our income is just that our income. The bills are paid our of our fund and we both have fun with the money we budget for fun.

Do not get married until you can agree on your financial house. Money is the number one reason for divorce.

 

[malibuconlee]

Sorry I didn't read all the replies. I ready when the thread first started, but coming back had a thought.

If you are paying bills based on a % of income each of you makes, go off of your GROSS, not your take home.

However when you do get married your taxes will definitely change. Be ready for that.