Half A Million Together and Keeping Finances Separate

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We finally did it! After saving intentionally for almost 4 years we reached a new milestone: my partner and I have amassed half a million dollars together. I can hardly believe it. This is a special number for me because it’s the amount I need to retire. Now I know what you’re thinking: Why doesn’t he just give you his portion so you can retire now? I’ve wondered the same thing! 🙂

Now for the strange part. This milestone is completely arbitrary for one main reason: my partner and I don’t combine our finances. Hats off to anyone that does! While reaching this goal is a lovely excuse for enjoying wine and cheese in the park (our FIRE milestone ritual), it doesn’t really mean anything. My partner isn’t going to give me his share so I can retire now (why not?!). I’m not going to give him mine to do with what he wants.

Combining Finances: A Preface

First, some background. It seems that combining finances is one of those unquestioned cultural choices that is taken for granted in the larger sequence of ‘adulting’: get married/combine finances, have kids, buy a house, then have a 50% chance of getting a divorce and possibly spending a third of your combined wealth on lawyers divvying up the other two thirds……Oops. My pessimism is showing 🙂 .

Not combining finances (alongside not getting married) is a valid choice. It doesn’t mean your relationship is less real or less serious. Combining finances works for many people, and there can be good reasons for it, but that doesn’t mean it has to be the default choice.

And if you get married, you’re inherently signing up for a legal and financial partnership with someone else. It’s literally a business agreement with some smooches thrown in (sounds like board meetings would be interesting…). Even if you keep your finances separate within your marriage, your assets are not legally solely your own. The specifics of marital property rights vary by state, but overall includes anything acquired during the marriage that was not specifically outlined in a prenuptial agreement (if you have one…).

But being a financial unit as well as a romantic one brings a lot of challenges along: lots of people fight about money constantly. Based on a recent survey of divorced couples the #2 reason for divorce in the U.S. is financial disagreements (it’s the #1 reason in the UK).

Healthy relationships require work so ideally you would approach problems as a partnership and work to stay aligned on the same financial goals and budget. I’ve heard that some people accomplish this easily. Others create a modified solution, such as a ‘fun money’ account, which I’ve been told can help avoid developing financial resentment for their partner. These accounts include money that each partner gets to use without the other one commenting on it….Sounds like mini-uncombined finances actually…

Why Don’t We Combine Finances?

Well, we started out uncombined, by default, and every time a potential benefit comes up, it hasn’t been worth it for us. I’ve done many thought experiments about this and every time the cons outweigh the pros. My thinking usually goes like this:

  • Would it help decrease our tax bill? No – we make almost identical amounts of money, so it wouldn’t help
  • Would it help us get better healthcare? No – our plans are similar and low priced
  • Would it help us manage emergencies and risks? No – we both have large emergency funds. That wouldn’t change and we can lend each other money in a worst case, long term unemployed scenario. We’d just pay each other back (we’ve done it before)
  • Would it simplify tracking expenses? Maybe – depending on how you handle personal spending, but it carries that deadly risk of resentment

Buying What You Value

Being honest, I can see myself becoming resentful if we combined finances and I saw my partner spend *our* money on things I don’t value. I believe that I would see the situation as him spending (in some part) my money on something less than optimal – something that holds me back from my goals.

Let’s get into some specifics so you know what I’m talking about. While my partner and I agree on 95% of expenses, we are different people that value different things. For example, the things I value most and spend a majority of my budget on are: travel, time with loved ones, food and new experiences. My partner values time with loved ones, video games, comics, Rubik’s cubes (why do you need 4 different kinds?!) and occasionally fancy whiskey. Physically he’s a lot bigger than me so he eats and drinks more than me. His food and alcohol costs are much higher. Just these seemingly small differences have a large impact on our savings rates and our time to FIRE.

Instead of us worrying about what the other is spending, it is a non-issue. I don’t care how he spends his money because it doesn’t affect me. I can’t bother him about buying a $70 bottle of scotch for his birthday and he can’t be upset I spent $7,000 on a plane ticket (yeah…that’s real). We have separate finances, different spending habits, and different FIRE numbers.

How Do We Manage Joint Spending?

So how do we manage the logistics when we share expenses, such as rent, utilities, and eating out together? My first love, SPREADSHEETS! For years we’ve been using copies of a google doc built by a friend in college, tweaking it as needed. It lets you input items and easily split them with many people, even in uneven portions (which is helpful when your partner is literally double your size…tall men eat a lot). This helped keep peace within a house of 10 college students that were constantly sharing pizza and beer and it’s kept our post-college shared finances super simple. (Nerdy Aside: To be fair, to keep this simple you kind of have to not mind spreadsheets or another way to track your finances, which is a shared hobby for us. For those of you that use YNAB, one hack we use to keep this easy is that we list each other in the YNAB app as a third party account similar to a credit card, where you can have a surplus or deficit.)

Combining finances with a partner (like all big decisions) should be carefully opted into and when we discuss it we just don’t see the benefit for our lifestyle. Over the 10 years of our relationship (most of which we’ve lived together) I have become more and more grateful that we haven’t combined anything. We each spend money on what we value, but since we’re two different humans those can be very different things.

So there you have it: not combining finances has helped us keep our sanity and save as much as we can without compromising what we value. Discovering that we can skip out on an unquestioned cultural choice has helped us avoid common relationship pitfalls and as a result, we’ve finally reached a milestone that we’ve been striving for since October 2014. Next stop: One Million!

Do you combine finances with your significant other? If so, has doing so had a positive impact?

28 thoughts on “Half A Million Together and Keeping Finances Separate

  1. We’ve gone the traditional route of marriage and combining finances. We eventually ended up with a fun money monthly allowance for many of the reasons you list. Combining finances made sense because we were broke for a long time and every penny had to be accounted for.

    We agreed to have fun money as we (I) fell into the resentment trap when we were a little less broke. It makes a massive difference to me as I am the more frugal one and I had a lot of resentment over petty things!

    1. That’s awesome that fun money works for y’all! It’s also great to hear I’m not alone in fearing the resentment trap 🙂 . It’s inspiring to know that you figured this out about yourself and cut it off at the pass.

  2. I combined finances with my boyfriend when I felt we would get married. Then we got married and divorced two years later, and it was a nightmare.
    Though I’m not against getting married again, I will NEVER combine finances with my spouse. I would also like to have a pre-nup. Honestly, you just never know what will happen and divorce brings out the ugliest in people.

    Thanks for sharing how you manage your money as a couple! It’s something I’ve gained a lot of interest in since my divorce.

    1. Oh no! I’m so sorry to hear it was a nightmare. You sound like my (favorite 🙂 ) boss. She told me point blank to never combine finances with anyone. She is on her second marriage and they don’t combine anything – including housing. She bought their apartment and he bought their vacation house (NYC fanciness…).

      A pre-nup is always a great idea. I don’t really understand how it’s culturally categorized as an insult almost. Really strange. I completely agree – anything is possible and preparation is key.

      Anyway, happy to share – thanks for stopping by!

  3. Good for you – you obviously see clearly what works for you both, so long may it continue. I think it helps that you’ve decided not to have kids (I think I remember reading that….?). It becomes complicated when one of you takes a long time out of work to take care of the family.
    Like Liz I’ve been through a nightmare divorce financially speaking and I’ll never do it again – me, myself and I all the way!

    1. Yes – you’re totally right: we’re never having kids and that definitely helps. Before I posted this we were discussing how combining finances could help if one half of the partnership was staying home and taking time out of their career.

      I’m sorry it was a nightmare – though it sounds like you have a great plan going forward! If you’re looking for more side income I’d buy a “me, myself and I all the way!” t-shirt ☺️. Thanks so much for your comments!

  4. My husband and I went to our HS prom together, dated throughout college, and have been married for almost 25 years so I know our situation is uncommon to start. We combine all our finances where we can, though retirement funds by their design are individually held. It has worked for us b/c we both have very similar spending and saving philosophies. Even our splurges (baseball games for him and theatre for me) are pretty evenly matched. He’s much bigger than me and should eat and drink more than me, but unfortunately he doesn’t so I think our food bill is 50/50 anyway:)

    1. That’s awesome! It’s great to hear stories where combining finances works out. I’m loving (and jealous) that your hobbies are evenly matched. It’s also nice to hear how you’ve grown together over a long time and I imagine helped shape how you both spend money today. Super cool. Thank you for sharing!

  5. I’m not married but have been with my partner for 13 years and we’ve kept our finances mostly separate. We own a home together and so have many joint expenses but we’ve never taken the step of combining.

    Honestly, I always figured we would combine when we got married but neither of us has been too concerned about taking that step so we’ve stayed status quo. It works for us. We’re open about our money and have similar spending habits and goals, and I kind of like the bit of privacy.

    1. Congratulations on 13 years together! It’s really cool to hear about your situation: owning a house together, but not combining finances. It’s great to know that can work (my partner might want to buy a house one day. I do not and was planning to just rent from him to keep thinks separate). Very interesting that neither of you have been concerned about getting married. I’ve only heard the opposite from my friends. And the privacy aspect of keeping things separate is very nice!

  6. ours are half combined i would say. we each pay around half the monthly bills. i do the investing part. we had to adjust when mrs. smidlap lost a full time job, but that system worked well for 15 years of marriage. are you counting pizza slices eaten and doing a ratio kind of thing? we just relax and live like 2 independent people.

    1. That’s awesome y’all have found what works for you! Haha – no we don’t count pizza slices or get that level of granular, but our college friends sure did!

  7. We’ve done lots of permutations on the spectrum of combined to separate – turns out mostly separate works best for us. And so that’s we do! If our financial personalities were more similar then I think we would have landed elsewhere.

    1. It’s always interesting to see how different couples handle this conundrum 🙂 . Personal preferences seem to vary wildly. Thank you for sharing!

  8. I did the marriage thing. I tried to combine finances. I was the sole provider and enabler. She would not discuss finances despite my persistent pleading. She took credit out in my name and ran up the balances, made charges on credit cards I filed away for a rainy day. My wife was an expert at secrecy and deceit. I had to end up separating accounts and she would take my debit card out of my wallet and use it, among other things, I separated from her and eventually filed for divorce and child custody. Turned out she was addicted to meth. I’m just glad to be back in control of my life and the lives of my kids. If there is a significant other in my life I’ll be able to cross that bridge with more wisdom.

    1. Oh my goodness I’m so sorry to hear that. I’m so glad you got out of that situation and internalized the wisdom from it. Thank you so much for sharing.

    2. Same thing happened to my brother – they filed bankruptcy 3xs and she just kept getting more “secret” credit cards to finance her meth habit (which he was in denial about). He separated their finances and she would steal his atm card out of his wallet in the middle of the night. He starting losing his vision and had to take SDI and she still stole from him She was no longer working (surprise!) and had a boyfriend (another meth addict) on the side. I had to take over managing my brother’s money. Fortunately, she moved off to AZ with her boyfriend. After she left, I had months of straightening out their fiances and emptying out their rental house that she hoarded up, but it was worth it. My brother is out of debt and has savings again.

      1. Oh my gosh – that’s horrible. I’m so sorry that happened to your brother, but am happy you were there to help and that he’s back to saving again.

  9. As for me, I’m the person you probably don’t want to share your finances with – I am slowly getting out of debt, after making a lifetime of poor financial decisions and believing that I would always live check to check. I don’t like tying my finances up with anyone else so I don’t have to worry about getting someone else’s money as messed up as mine has been. I’m far more careful now, but I still occasionally give into a generous impulse, and I’m glad I have no one to question me about it.

    1. I really don’t think I would want to combine my finances with anyone regardless of their financial situation 🙂 , but it’s great you’re becoming more careful with your money and seem to be aware of your habits and areas for improvement. Just seeing that in yourself is amazing. I think it’s very helpful to assess how I should continue to grow.

  10. My boyfriend and I have been together 11 years and we keep our finances separate. We live in a house that is in my name and my parents also live with us. We have the monthly bills split up depending on who is using that resource i.e. electrical bill split 4 ways, water split 4 ways, cell phone bill split 3 ways ect. We don’t reassess it every month, it’s just based on the average. I am in charge of paying most of the bills because I have the best track record for paying them, so I collect the money from everyone else. We also all pay into an emergency account every month that we use for things like repairs or replacement of appliances and renovations.
    I always thought my boyfriend and I would get married but after a lot of years, it doesn’t seem that important. I worry too because one of my uncles had to divorce his wife after she got sick and had to go into a care facility because it was going to bankrupt them. After the divorce she got to stay in the same facility but her care was covered by the state. If I get sick like that I don’t want to drag anyone elses finances down with me. Everyone always says the benefits of being legally married likes taxes or insurance but I think there are real risks to your finances also. I also like to have privacy with how I spend my money and I don’t want to have to ask anyone permission to buy something. If I had to be accountable to someone else it might stop some of my frivolous spending, but I think I would also because resentful not being able to spend my money the way I want and more concerned about how my boyfriend spends ‘our’ money.

    1. Sounds like y’all have an awesome system set up! That’s interesting how you views on marriage have changed a bit. I’m so sorry about your uncle’s wife. That sounds like a tough situation. Agree on the resentment – I would for sure become resentful and don’t want to even risk it.

  11. A fellow financial independent! My hubby and I have lived together for 17 years, married for 8, and our money is pretty much totally separate, except for agreed-upon shared costs. We pay things like rent and utilities through a joint account that we both contribute to 50/50. We typically make about the same amount, and we’re both head-strong, fiercely independent and (overly) proud, so a 50/50 split works for us. Despite being married and filing jointly, we actually go a step beyond and break down the tax bill, then each pay our own share.
    Keeping our money separate prevents *so* much resentment and fighting. Neither of us would tolerate being told by the other how to spend money that one of us had earned for ourselves (so long as bills are getting paid).
    It also harkens back to what I learned from my mom when my parents divorced – don’t give him your name or your savings. 😉

    1. Haha yes – hi! That sounds like an awesome set up and wow paying your own portion of the tax bill is cool 🙂 . Glad to hear we’re not the only ones that see resentment on the horizon of combining finances. “Don’t give him your name or your savings” sounds like a pretty good mantra to live by 😉 .

  12. Interesting… my partner died last year. We were together for 29 yrs. It was a common-law marriage as per Canadian law. We had separate accounts. In Canada, you do have money if a couple splits the tax bill if one earn less than the other. However we never talked about it nor was I motivated to do it. He also took early retirement since he was 16 yrs. older.

    In all honesty, when 1 of the partners has children from a former marriage (which he did), it’s just easier to have separate finances since he had joint custody of children and such arrangements when children were young after divorce. They have a good birth mother and I wasn’t interested in being the 2nd different (I am very different from her)mother.

    We did share expenses re food and travel. We also maintained 2 homes with each person having their own property title since I accepted a job elsewhere after a long job search, He loved the convenience of 2nd home as a “vacation” home and vice versa, same for me.
    Believe me, already have clear property ownership makes a difference to the surviving spouse after the other dies. I really recommend for anyone who enters in a love relationship much later in life, that they keep their own account.

    1. I’m so sorry. It sounds like y’all figured out a great way that worked for you. I’m obviously all for separate accounts. Thank you for sharing.

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