Married Finances: Two Years In

Our finances are in a lot less of an emotional state at this time this year than last year, which is lovely. Talking regularly about money is so, so key to where we are with it.

From the outside, if you look at our cash flow, it now looks like we’ve philosophically combined money. But we haven’t. And it isn’t a black and white combined or not like so many people make it out to be.

My husband says there’s enough money to go around that it’s not worthwhile for either of us to stress about money so he’s happy to share <3

We still firmly believe that the person earning the money is the one earning the money and it isn’t by default shared with the other person. My husband, for example, has had a really kick-ass income year in 2018. He has been choosing to use that income to cover expenses for both of us in our current lifestyle and also to put towards our joint savings goals. I don’t, however, see it as half my income or that I’ve had a part in him earning this income. So many women (even educated, high-earning ones I am friends with) actively see their husband’s income as theirs because they’re married, which is not me. We have talked too about how once we are FI, then maybe he should keep some more of his income to himself, but he’s also said that by then, we will have been together for long enough that it won’t matter.

We do both now own the condo! Well, we signed documents saying we did months ago. We haven’t actually seen the new deed recorded with the county yet though. (It must have gone through because we have been getting so much new mortgage junk mail.) That means too, that we’re sharing the appreciation of the condo, which is a huge part of why my husband is sharing all of his income: 2017’s condo increase was about 25% of our net worth increase versus savings being 35%. This year, we’re forecasting the condo increase to be about 30% of our net worth increase and then savings about 45%.

We both feel really weird about the current financial arrangement. As you can see with the condo appreciation though, it doesn’t feel like there is a better option without shutting me out of the condo. The current setup feels more advantageous to me, but at the same time, there are many benefits my husband has from our financial situation:

  1. I bought this condo six years ago. Yes, he bought into it at full value as of the date we got married rather than my purchase price, but he didn’t pay me any interest.
  2. The condo appreciation over the last six years alone is responsible for a substantial portion of our current net worth. Had I not bought it when I did, we would have had to cover much of that portion with savings instead to buy it now.
  3. I paid off about 55% of the original mortgage before he started paying the mortgage last year. That means that our huge interest years are behind us on this mortgage. Even if we take 10 years to pay it off and the rate resets the worst it can each year, it’ll cost us at most $25,000 in interest over its remaining lifetime. If we had paid 3% interest for 30 years, that would have cost $150,000 in interest. But, we’ve already paid $25,000 in interest and will pay at most $50,000 total over at most 15 years.
  4. He lived here for two years rent free while we were dating, which saved him about $50,000 in rent.
  5. I saved for my retirement pretty aggressively in my twenties. To balance that out, we agreed that all of our retirement account funds are our own. Ideally, no one should touch those until our 60s anyway and I have about enough to cover current expenses at 60 already. Even if I never worked again, it would take him over 10 years to catch up to my retirement savings balance when we got married.
  6. The tax savings of my not working (versus my husband filing a Single tax return) at the moment covers 2/3 of “my” portion of the household budget and accounts for about 5-10% of our forecasted net worth increase this year, which brings the savings portion of the net worth increase down to basically exactly the condo increase.
  7. Lastly, my financial planning has had a large influence on my husband’s as well. This is evidenced by the fact that we have the same US vs international stock allocations and use the same index funds in our accounts.

We understand now how people say that it becomes difficult to measure how much each spouse financially contributed and why many don’t do it.

Even though it’s weird in the short-term, we also both recognize that in ten years, we likely won’t care much about these differences, but also, we have the same long-term goals:

  1. Be mortgage free by age 40. (end of 2027)
  1. Have enough saved for both of us to fully retire by age 40. (again, end of 2027)
  2. To be tax-efficient where possible.
  3. To increase our charitable donation strategy over time. (Currently at 2% of gross income!)
  4. To be able to financially support parents as needed without impacting our own goals. (We expect all of our parents to hopefully retire in the next ten years.)
  • Another exciting development this year is that we opened a joint Vanguard taxable account! It’s small compared to our separate ones. To symbolize what we each did more of when we were single, I am first on our primary residence and my husband is first on our joint taxable account.
  • YNAB has been a huge, positive change for us. We are both super respectful of what the other spends money on, which seems to be the hardest part about combining finances for many couples. We still like having the personal budget category groups though as it gives us each a bit more autonomy and even though we spend similar amounts, we spend them in different patterns, e.g. my husband spent more than half of his YTD personal spending in one of the months, whereas mine is more consistent month to month. This system has given us both similar levels of visibility into the overall spending and into how we allocate the money. We would both prefer to save more money each month, but we’re also accepting of it with our current financial situation and the level of non-salary income.

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    15 thoughts on “Married Finances: Two Years In

    1. Leigh, I think your philosophy on your husband’s income being his is really interesting. My husband and I have a different philosophy, because we made the choice for me to stay home with our kids, thereby forgoing income I would have made, raises, etc., for a number of years. But I can also see how you’d want to continue to think of it as his. That way, it almost forces you to consider how you’re funding your lifestyle should his income go away, and women in general probably don’t do that enough. My parents follow your strategy and it works well for them, especially because they have different spending habits. But after many years of marriage, you’re right, it seems to all merge together and it’s hard to tell who’s responsible for what, because both partners contribute to income and investment increases.

      • Thank you, Laurie for sharing your thoughts! I love talking about this stuff. I absolutely agree that it’s different when you both chose for you to stay home with your kids. I have some friends who see their husband’s income as theirs because they’re married, which I feel like defeats the whole movement of women being able to earn their own incomes! My husband’s and my spending habits aren’t even that different, which I think confuses people about our love of separate assets, haha.

    2. I really like reading about how you guys do things – it is very thoughtful and you explain your reasoning well. I’m glad things are going well and your systems are working!

      I would phrase it as I see both of our incomes as household income rather than seeing my husband’s income as my income :) We’ve been together nearly 15 years, starting from when we both had very little money, and it was a gradual shift in time, although mostly starting from when we were engaged rather from when we were first dating.

      • Thank you :) I really like your phrasing that you see both of your incomes as household income! Some of my friends see their husband’s income as theirs, which is where my wording came from. I love documenting this gradual shift over time. Your blog is a great documentation of your guys’ shift too! 15 years is almost half your lifetime! That feels like so long :) When we started dating five years ago, my husband’s net worth was a low five figure amount. His net worth grew exponentially in the last five years, which is amazing to see in chart form.

      • I would agree with this phrasing in our case. (Though, as you know, we’ve always shared income because my husband didn’t worry his pretty head about money other than his allowance until relatively late in our marriage.) It helps that we both came into the marriage with almost no money (~2K (college job savings) for me, ~ -$10K (education debt) for him) and we’ve mostly made about the same each year and occasionally I’ve been on half-pay or he’s been unemployed on 0 pay, so there haven’t been huge disparities over time. If we’d started out with big differences, we might have done things differently. I assumed we’d be doing the three accounts method (his/hers/ours) but we didn’t really have enough money or income when we started to make that practical, and then complete sharing just ended up working well for us.

        • My husband finally actually opened “the big money spreadsheet” recently. He said he had no need to know how much money we had where until we needed earnest money and an eventual down payment for a house. (More on that soon!) What prompted your husband to start worrying his pretty little head about money?

          I went back a few years and when we met, we probably had a negative or near-zero combined net worth. (His data only goes back to 2010, so I can’t find the zero point.) But by the time we started dating, it was around $400,000. Things have actually mostly evened out now from the huge income disparity but we both really like having some separate money from past stuff.

          • We saved enough that we were able to take a year off at half-pay in a really neat city and he thought that was amazing. It opened his eyes to what money can make possible. (He has done our taxes every year since we got married, so he has been kept informed about the state of things since that first April, but just once a year.)

          • That is amazing! I’m glad he both had that experience and that he determined it was amazing. It’s really cool what money can make possible. Thank you for tipping me off to that money gives options many years ago!

    3. Just found your blog and binged read the whole Married Finances line. Being single/frugal/high-income/proactive in early working years, I was always intrigued about married finances, especially when one was more proactive earlier than others and how that might work & play out.
      Thank You for your articulate candid posts!

      • I’m glad you’ve enjoyed the posts, Kevin! My husband and I talk about money a lot – it’s a part of our regular conversations about life – and I feel like that becomes especially important when there is an income or asset disparity. The disclosure and discussion portion of our post-nuptial agreement was absolutely the most key part. I would say in our case that I had more luck early on, rather than that I was more proactive. Now, my husband is having some great luck with his income! One of our balances there was to let him “catch up” in terms of assets before combining anything more. Good luck having these discussions when the time comes!

    4. Thanks for sharing your honest thoughts! I also don’t view my husband’s money as my money, though we do have a prenup. We both contribute a % of our income to our joint pot money and use that. My husband is living ‘rent free’ in my condo right now, but we will be moving next year into a home that would have been paid for in majority with his money.

      • I love the joint account so much! I really feel like everyone who is sharing household expenses should both know where the household money is going, whether it’s with a spreadsheet or a joint account (or both!).

        Is it weird that he’s living rent free? I know that eventually started to get to me, once my now-husband started making substantially more money than me and I was still paying for all of the housing. Is it weird that you are moving into a home that will have been paid for in majority with his money? That was a big part of why we were putting off buying a house – I didn’t want to lock myself into the level of income I had in my career, so we needed time to be comfortable doing it with my husband’s income, but I am putting up about half of the down payment or so, which helps me feel better about it.

        • I think I’ve had passing thoughts about the rent free aspect of my home, but it’s in the prenup so the sale of the home is all mine. We pay for our joint car’s parking spot out of the joint expenses but I pay for my maintenance fees etc. with my money. Yeah, it feels a bit weird but I don’t mind too much because I will be paying for the home with more of my life savings… and his portion is not as big a proportion of his savings than mine.

    5. I enjoy your blog, but this post was weird. You are married and share everything according to the law and the voes you took. Playing some weird feminist game of combining our finances would defeat the woman’s movement to earn their own income seems illogical z since the shared endstate is both of you retiring by x date, paying off your home,and helping your parents.

      Seta joint budget, invest, and talk about purchases over a certain thershold agreeable to both of you. Your his, he’s yours, and you share the good and the bad.

      • I’m sorry to break it to you but one of the great things about marriage is that each couple gets to define what marriage means to them and do what works for them. Our vows did not indicate sharing everything. Nor according to the law since we have an agreement that supersedes our state law.

        We do have a joint budget. We do invest. We don’t even really discuss purchases over a certain threshold because we are very much on the same page about money. If you are offended by us, you don’t need to keep reading my blog.

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