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I was just chatting with a friend about joint accounts and splitting expenses with partners over the weekend, so let's discuss: how do you split expenses with your partner or spouse? DO you split expenses (or are you Common Potters)? If you're not partnered, how do you plan to do it? It's been far too long since we talked about married money management methods and whether one person is completely in charge of finances.
{related: how do you and your partner talk about money?}
There are a number of different methods that I've heard about through the years, and I'm curious to hear from you guys (particularly those of you who are the breadwinners): what is your family's method for sharing money? There was a great series in Slate many years ago (now available as a Kindle book [affiliate link]) that defined these main types:
- Common Potters – people who combine all of their money
- Sometime Sharers – people who have both separate and joint accounts (usually with an automatic percentage going into the joint account)
- Independent Operators – people who have completely separate accounts
As I've mentioned before, I never wanted to feel like I was “chasing” my husband for “his share” of the bills, so when we first got married we tried to be Sometime Sharers (with 80% of each person's income going to a joint account based on some old Suze Orman advice), but it got complicated quickly:
…if I bought him a sweater, was that our money? Or my money? (What if it was a really, really good sale that I totally couldn't pass up?) If he went out for drinks with our best man (who is my husband's friend, but is now like family to both of us) and bought him a round or two of drinks, was that his money? Or our money? It felt like the questions were never ending.
After a few months of marriage we decided to just keep all of the money in a joint account (Common Potters), and we haven't looked back since. (It probably helps matters here that I am both the primary spender in the family, as well as the person who manages our finances.) That said, I do still have separate investment accounts that I opened before we got married […] but all new investments have gone to jointly held accounts.
We are still Common Potters, and I have no regrets — but I recognize that there are LOTS of ways to do this! I think things got a bit complicated for some friends after kids came along — people who had been Independent Operators became Sometime Sharers or Common Potters in order to pay for childcare, as well as “family” type things like vacations.
{related: who manages the money in your house?}
So let's discuss, readers — how do you split expenses with your partner? If you are Sometimes Sharers, how do you break it down — percentage of income or fixed dollar amount? If you are Independent Operators, who pays for vacations and home/kid-related expenses?
{related: how married couples split finances after having kids [CorporetteMoms]}
Stock photo via Deposit Photos / dangubic.
Anonymous
I think these categories are a little dated—it is very easy these days to share expenses and manage money jointly without actually having a joint account. No one who has a 401(k) or IRA is a complete “common potter” as those accounts are individual (obviously they can be split in a divorce or inheritance, but they are still individual accounts for contributions and withdrawals). There are so many ways to transfer money quickly or split transactions with apps like Zeta or Honeydue. Most banks will let you grant someone view-only access to accounts, or add outside funds to an asset allocation or account aggregation tool, so sharing a joint checking account is really just one way to share finances, it is certainly not the only one.
Anon
Good point about the retirement accounts–I can’t use my husband’s 403b, nor can he use my ESPP. And so on.
Anon
Yeah, I agree with this. We’re common potters in theory (we view all the money as “ours” and we discuss all investment decisions together), but in reality, most of our assets are in various retirement accounts and we each have our own checking accounts in addition to a common checking and savings account and brokerage account. We leave enough in our individual accounts to cover our individual expenses, which lets us spend as needed on things for ourselves without feeling monitored, but everything else goes into the joint accounts which pay our rent and joint credit card or gets invested. It’s probably easier to do this when you’re not on a super tight budget (we’re both quite frugal, but have plenty of savings so a difference of a few thousand here or there isn’t a big deal).
JCL21
Yes, this! Would have totally called myself a ‘common potter’, but reality is joint checking account with individual/private credit cards, individual retirement accounts, a joint vanguard fund for post-tax savings and shared debt (mortgage, buy-in to my medical practice).
Anonymous
My husband and I lived together before we married I earned about four times what he did. He moved into my house so all the bills were already in my name.
It was easiest for him to financially contribute to the household by just transferring some money over to me each month to pay his share, or to spend $X amount on groceries or other expenses.
Because of the big income disparity we agreed on a pretty low number. I was already living below my means so it was more of a team building exercise and less a necessity for him to contribute financially.
After we married we merged our financial accounts and he became a stay at home dad so we just use my job’s wages for our expenses. After our kid is in school he’ll probably do an apprenticeship or learn a trade and maybe start his own business.
Since we earn enough through my job and I’m still leveling up in my career it’s important to me that whatever he ends up doing for work to be something that he loves and am less concerned about his earning potential.
I realize that it’s a huge privilege to be able to live well off of one income and an argument could be made for having him work now and maximize his earning potential, but we’d rather have him around spending time with our kid and helping me focus on my career. Every choice comes with tradeoffs and we’re happy with our choices.
Anon
We are independent operators. We’re in a filial responsibility state, my husband has a mentally disabled brother, and his only living parent has dementia and refuses to do estate planning. Per our financial planner, we have everything as separate as possible as a hedge against the worst-case scenario. We don’t want my (substantially higher) income counted towards what he could owe if he were forced to support his family.
test me
We (married seven years, no children) are “independent operators” and it works really well for us. Both my husband and are pretty financially responsible, but we have different approaches (he’s “set it and forget it” and I’m “obsessively track every penny”), so this keeps us from driving each other crazy. Our portions of joint expenses that have to be paid from a checking account (which I think is just our mortgage?) get automatically deducted from our individual accounts each month. Everything else goes on a “joint” credit card (technically in my name and he’s an authorized user). Once a month, I reconcile the bill (and make adjustments for any expenses outside of it – for example if I put travel on my better travel card, or we have our housekeeper come and I write them a check) and schedule two separate payments – one from his checking account and one from mine. All in all I probably spend… 10-15 minutes managing our joint finances each month, so if it seems onerous it’s not (I manage big budgets as part of my job, so this is a fun activity in comparison).
We are tentatively planning to have kids in the next couple of years, in which case we’ll reevaluate if this becomes too much work, but honestly this works so well for us that I have a hard time imagining making major changes.
MK
I really love having mostly separate finances. We each put $X into a joint checking account each month for our mortgage, utilities, home repair fund, etc., and everything else is separate. The majority of my income goes to my own 401k/savings and I love not having anyone scrutinize it. Got honeygrow for lunch five days in a row? Bought stock in some random company you read a blog about? None of anyone else’s business!
This works well for two roughly equal earners with comfortable salaries & no kids. We would reassess the amount each person contributes to our joint account if that changes, but probably not overhaul the system.
Anom
Married for 10 years with two kids, rent. We are independent operators, sort of, in that we have no joint bank accounts. DH pays the rent, I tend to pay for all the household expenses. We used to kinda split nanny bc of needing to take the max out in cash from the ATM from two accounts, but now he pays the nanny. He makes about 2X or more what I do. He generally takes care of all of our investments bc he’s in finance and thinks about this stuff all the time. It works for us in part bc we think about all of it as shared even if it’s in only one person’s name. Also probably bc aren’t hurting financially and have enough saved. Also very importantly we both have similar financial attitudes and spending habits.
Anon in the Bay Area
Coming to this late but it evolved. We started with a list of “shared” expenses (rent, utilities, groceries, some insurance) and everything else was separate. Went out once a week and alternating picking a place and picking up the tab. That worked well because we earned roughly the same amount.
Then he got laid off (good severance but no income), then he got a great new job and I got laid off (no severance), then I got a new job making what I had before but he now outlearned me by about 20%.
Then kid #1 and the resulting hit to my income, Then kid#2 , which coincided with a chance for him to make a lot more money but have less flexibility and availability. That is when I went part time because keeping our family afloat with two young children and two demanding careers was not happening without a lot of stress, plus childcare and all the extra help we needed was eating up most of my income and not making anyone happy.
At this point we have almost completely joint finances except for retirement accounts. We each get a small amount of mad money from each paycheck put into a separate account, but that is a matter of a few hundred dollars per pay period that we mostly use for gifts for each other, manicures for me, and sem-annual boys’ trips to Vegas for him. Fortunately our spending habits and financial priorities align and talking about money before getting married is right up there with talking about kids in my view.
Aerin
I find those examples of how being “sometimes sharers” is complicated rather silly, honestly. They’re both straightforwardly personal expenses (the first is a gift, and in the second dining out is only a joint expense if both partners are present, picking up the tab is irrelevant). It seems like they’re either severely overthinking or looking for a way to make it a joint expense so it doesn’t have to come out of their personal. We’ve handled expenses this way for almost 15 years and I can’t think of a single scenario where “which account should this come out of?” was some tricky theoretical conundrum. If it’s ever been in question, it’s more along the lines of “I had this personal expense come up that I can’t quite cover, can we pay for it from the joint account and I can buy groceries on my card for the next couple of weeks?”
Of course, we only put about half our money into the joint account. I wonder if the people who find it really difficult to balance just aren’t keeping enough money for themselves. 80% sounds like a lot! We don’t have kids, though, I imagine that would change things quite a bit.
Anonymous
We are “common potters.” Honestly, I cannot imagine having it another way. When we met, my husband was in a significantly better financial position than I was. He owned multiple properties, had a lot of savings, no debt, steady job w/ pension, etc. I was just leaving graduate school with six figure debt. When we were engaged, he paid of my student loan debt because it made sense for our financial future. 8 years later, I make double his salary. It is all our money.
Elizabeth
We were independent, but became common potters after having kids. (This also coincided with me going back to school.)
Everything goes into one joint checking account, then we each get a modest amount (several hundred dollars per month) to put in our separate personal “fun money” accounts. That way, we both feel like we can do our own “frivolous” shopping without caring.
As mentioned in the post, I guess our finances aren’t completely shared because we have separate savings/retirement accounts, but I don’t think of those much in the day-to-day.
I am also a YNAB devotee!