My Husband and I Have Separate Finances

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My husband and I have always tried to keep our finances separate.

This post is in no way an attempt to influence you to change your way of managing your finances with your partner. Separate finances work really well for us and it does not feel strange because it is the way it has always been for us. If you have joint finances and it works for you, I encourage you to keep doing what works best for you.

We have some combined finances now (mortgage, savings) but I’d like to share with you how we manage separate finances.

 

Why We Keep It Separate

I realize this concept probably sounds a little strange, especially based on the numerous articles and posts I’ve read about joint finances, budgeting for the family, etc.

It does not come from a lack of trust, lack of communication, fear of judgement, insecurity, or any other negative place.

Instead, this decision comes from our family histories and internal values. We have different backgrounds with money, financial role models, and emotions tied to money.  We also have different spending habits, savings plans, and money management techniques.

I grew up in financial strain with terrible examples of how to manage money. As a result, I have strong ideals of being an independent woman who can make it on her own (cue Miss Independent). I used to change my savings plan annually, though I’ve stuck with pretty much the same plan using Qapital for the last 5 years. This year I added the Payday rule to my Christmas goal and I’ve saved more in the month of January towards that goal than I typically have in 3 months in previous years.

My husband watched his parents get divorced and have finances issues as a result of untangling their joint lives. He has been working and saving consistently from age 14. My husband has a distinct savings plan.

Despite our differences, we make a good team.

 

Our Accounts

I have a savings account and checking account at a local credit union. This credit union also holds both of our mortgages. I also have a savings account and IRA at Capital One because of the interest rate.


My husband has a savings account and a joint account at a nearby bank. He also has a savings account at Capital One.

We have 1 true joint account; a checking account at my husband’s bank. This is also the only account we have checks for.

We also pool our money in 1 savings account at Capital One because more money=more interest. This originally started when my husband had a much larger amount saved than I did so I shifted my savings to this account. We still keep track of who contributed what to this account.

 

Dividing the Bills

Our shared bills include: mortgages (currently 2), electric, water, gas, and internet. We also have individual bills: cell phones, car maintenance, subscriptions, etc.

We use income-proportionate bill sharing to divide all shared bills. This started when I was in grad school and made significantly less money than he did: I worked part-time and had an unpaid internship. He worked full-time.

Because of this significant difference, we adjusted our bills to reflect our incomes. He paid more rent, the electric bill, and the internet bill. I paid less rent, the water/sewer bill, and bought groceries.

After I graduated and was able to locate a full-time job, our bill plan changed. My husband paid off his student loans within a year of graduation while I went on to grad school accruing more debt. He has no debt at all (which is apparently a double-edged sword) so the mortgage is in my name.

We first focused on paying off my student loans as quickly as possible. We both made around the same amount of money, so we agreed to the following plan:


Me- $1000 towards student loans, Groceries
Husband- Utilities, Mortgage*, $450 towards my student loans
*Our first mortgage is very low.

I’m pleased to report after about 3 years of throwing money at them, we were able to pay off my student loans.

 

Our next focus was on saving enough for a 20% down payment for a house. (link to down payment post)

 

Communication

Having separate finances requires us to have open, honest communication about money. We talk about joint accounts, bills, and our individual situations. I feel like we talk about money at least weekly. And these conversations started when we were dating, including why we both want to keep our finances separate.

I find having separate finances freeing in a way, because:

1. It supports my desire for feeling independent and capable.

2. I only have to track my own expenses.

3. I don’t have to justify my discretionary purchases, and vice versa.

One of the reasons this works so well for us is our frequent communication. Despite these frequent conversations, we don’t argue about money and we still maintain 90% separate finances. At this point, one of our running jokes is “It’s my money, I’ll do what I want” when we talk about discretionary purchases (yarn, tools, etc.).

 

The Running Tab

Another running theme in our relationship is “The Running Tab.” As bizarre as it sounds, we keep a mental list of money we owe each other for what reason. As we’ve become more financially stable, this is not used as often in our relationship. This decreased a lot when Qapital opened their spending account option.

We mostly use the running tab to keep track of who bought dinner last when we go out to dinner.

Therapist Note: It is crucial to a healthy relationship to not keep score. I separate finances from this because they are a true debt. We do not keep score about anything else except the dishes because we’re petty like that.

 

Conclusion

It’s not the most common way of managing money as a couple, but this works really well for us. It allows us to meet our individual needs around money without causing concern or stress.

Separate Finances

How do you manage your finances?

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