My husband and I do not combine our finances. We do not have a prenuptial agreement. In theory all our assets and liability are owned by both of us. We had the same arrangement prior to our marriage when we were living together. It might change later on in life but I think it works for us, for now.
To set the background, before we met, I already owned my first property. He bought his first property six months after we started dating. We lived separately and managed our own household independently. When we go out, we always split the bill. This includes vacations. I let him pay for dinner for special occasions.
We lived together after 3 years of dating and decided to live in my condo, mainly because I have a 2 bedroom condo. His place is newer and can be rented easily. We split the rental income and expenses in half around that time. I also kept a spreadsheet and divide all communal expenses in half. Money were transferred by the person with a credit balance.
We then decided to purchase a property. This was the tricky part. I know the amount I can afford for downpayment. We searched for more than a year until we realize that we need to increase our budget. This is where my then boyfriend stepped up. He put in more in downpayment when we purchased the house. I sold my condo and offered to pay him for my full half, but he turned it down. Fast forward to a year and one month we were married. I still pay for half of the household bills, but our method now is not stringent.
How we split the household bills
The biggest expense is the house which is divided by half. We divide the utilities based on type. For example, I pay for internet and water, sewer and garbage, and he pay the cable and electric. Our food is mostly from Costco and we alternate the payment every month. We don’t necessarily calculate the total and perhaps sometimes he pays more or sometimes I pay more. At the end of the year it evens out.
But aren’t we supposed to be a team?
We are a team. Before marriage, we have a goal, to buy a house and to live a life the way we want it. We regularly discussed retirement and came up with some numbers in mind to achieve it. We know each other’s net worth and think of this as ours.
Advantages of this process
I like our method. I don’t need to see his daily expenses and he doesn’t need to see mine. Since we managed our household before, I trust that he will not come home with a new car or purchase something big without letting me know. Having this accountability as an individual makes us very independent of each other. We chose to be together because we want it, not because of the convenience.
I also think that this works for us because we earn enough as an individual. He gets paid more, but I reached a point where I can afford what I want with my own salary, and I earn more than enough. It also works because even if he earns more, he respect that fact that our lifestyle should not be based on his earnings. He doesn’t ask me to go to a high end restaurant, or get a nicer car.
This also gives us independence to spend on things that matter more to us. For example, I bring lunch to work. Our group eats lunch in the kitchen together and I like the camaraderie that it brings. His group goes out to lunch so he eats with them. We also have different hobbies. We choose to spend our money to things that brings more utility to us. We also don’t need to ask for permission to purchase something big, but we do tell each other before purchasing and seek each other’s opinion. I probably told my husband that my computer is ancient before I purchased a new one.
I realized that there are disadvantages. For example, we don’t really know our actual spending as a household. This data is a key in order to cut expenses on certain categories.
For now, this works. We never fight about money, ever. We respect each other and don’t need to hide our spending. We’re responsible for our own action as individuals and don’t necessarily need to rely on each other financial. This may sound so unromantic, but for me this is a true definition of romance. I have a marriage based on love, respect, loyalty and friendship. I can sleep very well at night.