Tuesday, January 19, 2010

Mine, Yours, Ours

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.

19 comments:

  1. I am in favour of separate accounts for personal use- its so much easier to manage and also you have total control over what you spend personally. Household expenses should be restricted to bills I think?

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  2. You don't be surprised that I'm actually using your 4th method. We never have joint account in anything except the house. We have our own personal accounts and we manage our own individually. When come to household expense, we are using his savings account which I contribute monthly a fixed amount. I'm okay with it as he's a much better financial controller than I am. For the household expense, it was not limited to monthly bills, we also use the savings to pay quit rent, house insurance, my car repair and sometimes wedding angpow. Hehe!

    So far I'm happy with our arrangement. He's the one who pays more than I do, anyway. Haha! I agree that both parties must be honest and transparent about spending money. Most people's quarrels are about money. We try to avoid it as much as possible...

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  3. Thanks for posting this up, Mun! In my household, what we do is consolidate all the funds into one account, or they could be in multiple accounts (I had a thing for opening bank accounts ;p) and then we each take out a fixed amount every month each for ourselves, based on our needs such as food, parking and etc. Anything out of that is from what we call the household account which includes bills, gifts for others and etc. Normally when we buy gifts from each other, it is from our own budgets too. But since ALL the money is rightfully him (cause he is the breadwinner), he gets to buy more expensive stuffs for himself and me! ;p

    In my case rightfully, I don't own any money cause I don't work; but he is kind and tells us that I can buy anything I want. So when it comes to buying things for him, I take out a portion of the money that he gives me to buy him something - it's like for that month, I just don't spend that amount on myself loh.. so, I never really get to buy him anything very expensive. Sometimes that feelings sucks.. but come to think about it, he already has everything he needs!! Lols!

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  4. Mine would be method no.4 (is this a survey or something) hehe...basically every month both of us fork out a fixed amount of $$ to put into the joint account and withdraw it for a common purpose such as buying house furniture & fitting, traveling, renovation, etc. Normal household expenses are all covered under the man of the house. So very clear cut and no further arguments on this :)

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  5. If I am the financial controller, all hell will break loose... I'll spend every last dime on shoes.. :p

    Mine is a typical chinaman. He pays for all househould expenses. On top of that he will give me an allowance every month in case I need to buy any household stuff when I go shopping alone. If there is nothing to buy, I'll spend it all on myself. Lols...

    Joint accounts are just for investment or my emergencies. He contributes them. I suddenly felt so lucky. Lols..

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  6. Thanks ladies for sharing about your methods. :)

    miracle8, utility bills definitely go under household expenses. Some couples also put other items under that as well.

    Jennifer, ah, so your spouse is your household financial manager. Will he update you monthly on how much is in the savings account?

    GerryMoon, if you want to buy your spouse an expensive present and don't feel good about it, try chanting the abundance affirmation you just shared with us in your blog. I'm sure it will work and the feeling will turn positive. :)

    sdovelly, nah, this is not a survey. Erh, method no.4 has no joint accounts at all. Your method is not in my list as your spouse covers all the normal household expenses.

    Redbabe, hehehe, I know why suddenly you feel lucky. *whispers* cos you get to spend all your own salary on shoes lols.

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  7. Haha!! Usually, I only chant it when I need to get something for myself.. lols!! But thanks for the reminder, I might actually try it for that purpose!! :)

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  8. Actually, he does. He always updates me the balance in our savings and tells me whether it's enough to cover the expenses. He even updates me on his own accounts. I have all his passwords and pin no. but I rarely take mind to check as I believe he takes good care of his financial. He keeps a spreadsheet that has every money transactions and it's very in detail that sometimes scare me. Haha! Somehow I'm glad he's that organized, I have no worry about getting ends meet each month.

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  9. You are so right... *evil grin*

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  10. We've been doing very well with method 4. In fact, to think about it, after married for 5yrs, this issue has never came up before. He pays for everything, unless I am out shopping alone. :)

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  11. Haha so there should be method no. 5 as well for peole like me? what do u think Mun? :)

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  12. Jen, good that he keeps you informed!

    Siew, absolutely no joint account at all?

    sdovelly, oh, there are many more other methods as per some of the comments here inclusive of yours. I just listed some only. :)

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  13. when i was still earning my own income, i settle all expenses pertaining to our children. hubby pay for the household bills. we buy what we want using our own income. no joint account. most important, husband and wife cannot be calculative; who pays more and who pays less.

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  14. miche, thanks for visiting my blog. Yes, you are right. To make a marriage work, husband and wife cannot be calculative but then sometimes one party will "sakit hati" when one pays more for household items and then one's spouse have extra money to spend on his/her own hobbies or gadgets or enjoyment.

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  15. well, a master guru once said to have a joint account and an individual account. as long as the couple have money to buy household things, husband or wife should control each other's finance management. like ur husband buys a raoul tee for RM200 without feeling hurt but he scolded u for just buying a valentino rudy shoe after 70% even though it's ur own money. to prevent this have ur own individual account.

    a suggestion would also be have a piggy bank in the house so husband and wife can put loose change into it for any household expenses.. it really hurts the pocket if u only deposit into the joint account at the end of the month. sometimes household has unexpected events that need money like a plumber coming into ur house to fix the pipe.

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  16. Thanks for sharing with us the master guru's advice, renaye. :)

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  17. What an interesting post and even more interesting comments!

    As you know, I'm not married but have been living with the opposite sex for many years.

    In my previous 4 year relationship, the ex was a mega-rich Indo boy who basically paid for everything. The odd thing was that he also bought me cosmetics/face creams as he thought I didn't have many of my own!

    My current relationship (now in it's 5th year), we basically split the rent but no joint accounts. I pay for groceries/household items as it's me who mainly does that type of shopping and Joel pays for all the meals we eat out.

    I once went to a mortgage broker and announced that I would like to have separate accounts (eg: when a brother and sister buys a home together). SHE WAS SHOCKED! She looked at me like it was the oddest thing in the world. Why have separate accounts if you were going to get married?

    I thought it was very backward thinking coming from an educated Ang-moh!

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  18. Hello Catty Pants, thanks for dropping by. More and more couples nowadays are opting not to have joint accounts. I think it makes money management easier. :)

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  19. i don't think method no.2 is difficult as "who uses how much" is not important to us. :)

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