I’ll start out by saying, how you manage your finances is no indication of your commitment to your marriage. It doesn’t mean you are planning for divorce, or that you didn’t marry for love. It does, however, say a lot about how you personally like how you like to manage your money. Are you a lone tiger who likes to be in full control of your destiny, or a wolf who values the state of the pack?
While joining all your financial details is popular, not following the crowd doesn’t condemn you to a marriage full of financial heartaches and failure. Some people just like to handle their finances themselves as independent responsible adults.
Here are some reasons why the ‘Yours, Mine and Ours’ approach shouldn’t be ignored
- It’s pretty easy to implement.
Pick the bills and debts you want to tackle together and decide on the account that will be used to pay for them. All it takes is a new joint bank account, some setup and a conversation on who is doing what and you are basically in business. For more details on how to set up the hybrid check out this post on the topic.
- A good choice if you can’t commit
Not sure what’s right for you, or you and the hubby can’t decide how to proceed? A hybrid can bridge the gap and give you a feel for what you’d like to do or not do
- Best of both worlds
You get the view of the family’s financial state and still get to be autonomous – pick your own bank, invest separately as you would like etc.
- You can preserve the credit of one partner
If you choose to do a hybrid, you can decide that one person will be used to handle the couple expenses that require credit even though you both pay the bill. So both spouses don’t have shared credit for everything. For example, you might carry the mortgage for the house, but your spouse carries the car notes.That means, at any time, one adult can have a fairly empty or more balanced credit to be used for emergencies. If God forbid there is a foreclosure or repossession then both credits are not impacted.
- Feeling connected
It can help for your spouse to feel more connected and part of the financial decision-making process if they have some input or view into the financial dealings and decisions as a couple. If you choose to tackle all debts together, it can strengthen your resolve to be a team
And just like the world is full of unique people, you can be a financially successful couple WITHOUT merging your whole financial life like most other folks. Here are some tips on how to get it done successfully and still be a happy couple.
1. Find that magic number
The magic number is how much each partner will put towards shared debt and household expenses every month based on your money conversations and your decisions on how you want to manage debt and bills. In a nutshell, it’s the amount each spouse will be expected to provide from each of their paychecks to the joint payment account.
2. Open a joint bank account
Now I know we said we weren’t joining whole lives and we aren’t. We are simply putting one location where the money for the joint payments will come from for community assets like the mortgage, electric bill etc. Joint payments and only joint payments should come from the joint account. No shopping trips, no new Bluetooth headset purchases, nothing nada zip that isn’t preapproved as a joint payment.
2a. Optional, have a couple use ‘shared’ credit card
If you want to gain credit card reward points and the billing vendor allows for it, then set up payments to a low limit shared credit card that is ONLY USED FOR BILL PAYMENT. You and your spouse need to agree that no personal or private charges will be made to this account without discussing it first. Even better, cut up the card so you don’t have access to use it outside of direct bill pay or accidentally use the card.
3. Fund the account
Based on each partner’s magic number (derived in step 3), you and your spouse should have a direct deposit for the respective amount placed in the joint account each month. If you get paid bi-weekly, then split the payment in half and pay half each month etc.
4. Automate the bill payments
Neither you or your partner should have to ask ‘did you pay the _____(fill in the blank) bill?’ Set up auto-debt or bill payment from the account to the credits. This allows you to have it scheduled on a regular basis and guaranteed to be delivered – unless you make a change. If you decided to use a credit card to get reward points, then set up a monthly credit card payment to cover those bills.
Please note: you might need to schedule your bill due dates accordingly to ensure there is always adequate funds in the account to cover the bills.
5. Know that it is done
Set alerts to text, or email when the bill payment has been completed so you both have confirmation it has been done. You save arguments of you or your spouse forgetting to make a payment, or getting charged a late fee for a missed/late payment.
6. Enjoy YOUR Money
The money that is not set aside for paying expenses and debt is yours to command. You decide how to allocate those funds to your own debts, or use it however you wish. I will say though, that if you came into your marriage on the better footing, and your spouse is struggling to get to a better place, then it is loving, thoughtful and wise to help your spouse cover the debts that are being paid for personally. It does no good to see your spouse struggling to make ends meet while you are living high on the hog. ALWAYS be considerate and think how you really want to spend your money – for the good of yourself, which is perfectly ok because you’ve earned, or for the good of your family because they deserve it.
7. Joint savings
Getting your debts and expenses is usually the hardest part to handle in this set up so once you have that sorted it takes nothing to decide how much each person needs to save each month and have that direct deposited from payroll to a separate savings account.
Sounds easy enough and the hybrid approach can be a great solution, but it isn’t without setbacks that you would want to work around.
The downfalls of a hybrid approach
- Limited view
You only get a snapshot of the family’s financial status. You can see the bills are up to date and the emergency fund, but you don’t see the debt that is being accumulated separately. You or your spouse could be racking up hundreds of thousands of dollars in debt and be completely unaware.
- You are oblivious to your partner’s finances
If your spouse is embarrassed to say they are struggling with making payments, you may never know that they need a little more help unless they tell you. You could be living on cloud nine thinking they ‘are doing great’ while really then resent you for actually being okay and not helping them.
- Separate but not protected
If the awful were to happen and you and your spouse decided to split ways, depending on your state, you could still be liable for any personally incurred debts that took place while you were married, even if you have no knowledge about it.
- Feeling distant
If your spouse is pro sharing and you aren’t, even with a hybrid it can feel like you are distancing yourself, not wanting to be coupled with, ashamed of or uncommitted to your marriage. It could also appear to your spouse that you won’t merge because you protecting yourself in case you break up.
Even in this approach, you’ll want to have lots of dialogue (money dates) so you can make sure you and your hubby are on the same page with the current state of the finances.
Take the tips or make your own
I talk to my married friends all the time and when I tell them that my husband and I have our paychecks go to separate accounts, I get the ‘deer in the headlights, your talking Greek, don’t you know your marriage is doomed’ look.
I’ve been an individual for a long time before getting married and I already had a good money management strategy. I liked it and it was working for me so some things I wanted to keep. Like saving rainy day funds and goal funds in separate accounts. If you like them, and they’ve been working, then you might want to keep them. If they haven’t, or your spouse needs some help, then you might want to change. Just because someone says you have to join accounts for financial success, it doesn’t mean you can’t succeed in other ways.
I struggled a lot with wanting to join accounts like the ‘gurus’ said but liked the autonomy of choosing to be a cheapskate this week if I wanted to. I was so glad to figure out this set up that melted the best of both worlds. Family bills and couple debt was taken care of, and I covered the personal debt myself – no reason for my husband to suffer for my past screw ups.
Now you know there are options and have an idea on how to make them work.
Share it with your hunny and get the convo start. You might come up with your own hybrid take on how to manage your money.
Leave something in the comments and let’s hear some new ways folks are tackling finances!