In my early days of marriage, I have often wonder how other double-income married couples manage their money. After talking to a few friends, I find that anything goes as long as both parties are happy about it. Here are some of the methods:
1. Popular Method.
Have a joint account for household expenses.
Each of them holds a separate individual account for personal use.
The challenging thing here then is to decide how much each contributes to the joint account.
Does each person deposit:
a. an equal amount (e.g. each person deposits RM600 monthly) or,
b. the same percentage of his/her net income (e.g. each person deposits 30% of his/her net income monthly) or
c. as much as/as little as he/she likes
into the joint account?
Then the other question is what are the items classified under household expenses.
If the husband wants to replace the old but functioning TV with a state-of-the-art TV, can this expense be considered part of household expenses and be paid out of the joint account? If not and if the husband is unwilling to fork out money from his own personal account but yet he is forced to do so due to his desire for the new TV, does he have the right to disallow his wife from using this new TV?
If the wife likes to eat out but the husband does not but gives in to her, who pays for the expensive meal? The joint account or each pays for his/her own meal or should the wife pay for both because she is the one who wants to eat out.
These are some of the things brought up by my friends as examples of the many things to decide in this method.
2. Share and Share Alike.
In this method, there is only one joint account. Everything goes into this account and all expenses come out of this account. At a glance, this is the easiest method to manage but then it is rather difficult to control who uses how much.
3. Wife = Financial Controller.
The husband puts everything he has into a joint account whereas his wife maintains her own personal account. The wife has the final say on what expenses get paid out of the joint account. This is the method used by my maternal grandmother but I don't think this method is popular with husbands nowadays. I have not come across anyone telling me the reverse where the husband is the financial controller. Perhaps this is because I only ask the wives.
4. Each to Each's Own.
Each of them has his/her own individual personal account. No joint account at all. They then decide who will pay for what. Surprisingly a few of my married friends use this method.
So the above are the four methods that I can recall. Does anyone have any other methods to share?
The most important thing here is that both parties must be willing to be honest with each other and to discuss about each spending and saving habits. No point having separate accounts but poor financial management and then needing one's spouse to bail one out in times of financial difficulties.