Marriage Advice: Finances
Some notes I dropped on Yelp Talk:
In my marriage, all the income went into the Savings account.
We drew an equal allowance, transferred monthly to separate Checking accounts.
We shared expenses equally. We each wrote a check for half the rent, I covered utilities, she covered groceries.
The wife was a student, the husband a tech professional.
I figured over time the breadwinner status might change.
I still think this was an awesome system. :) Basically, you set the allowances such that the Savings should grow over time, and there’s a “buffer” in the Savings account so that short-term loans may be drawn as needed to cover overages. Both partners are financial equals, and earning your money is something done for the family unit.
My last employer was slow setting up the 401(k) so at the end of 2006, we enrolled in individual Roth IRAs, and rolled some of the Savings into the 2005 Retirement.
One “advantage” of the individual IRAs turned out to be that in dividing community property at separation, the “community property” of retirement savings was pretty much “done” . . . not sure how it works with 401(k)s.
Last, I recommend that once you guys are ready to marry or such, you start your new life together with new accounts, etc. In the unfortunate event that you need to calculate “community property” down the road, having accounts clearly understood CP versus pre-marriage, that’s helpful.