Combining finances • Hacker News Board

Re: Combining finances

#71

Post by kelnos » Sat, May 25, 2019, 7:50 AM UTC

skrebbel wrote: post #62

isbjorn16 wrote: post #43

#4 misses some other cases. My spouse and I are firmly in this category, but we also have different spending habits for sure! They buy a lot of little stuff that I don't see as particularly useful, while I don't buy anything at all for months on end, until I spend a whole hell of a lot all at once. Should be a recipe for disaster, right? Except it isn't. We just accept that this is who we are, and we're comfortable w…

The case #4 missed is "yay we have so much disposable income that really it doesn't matter, and this entire article is academic". That might be common on Bay Area-dominated HN, but not in most of the world, where I suppose this article is targeted at. I guess wealthy people don't need advice on how to combine finances :-) Personally I find "she spends $4000 a year on stuff I don't see the value of but I'm fine with t…

I don't think that's particularly fair; I think you just have to scale it to your own situation to see how you feel about it. For you, jointly spending $4600 a year on fun stuff sounds ridiculous. That's totally fine, but it's missing the point. (The parent might be ok with $4k a year but not $8k a year. Everyone has limits, and it could be a source of conflict if his spouse wants to expand her spending.)

$4000/$600 is 6.67. Let's say you spend $50 a year on your own fun purchases. Would you be ok (both financially and emotionally) with your spouse spending $333 a year on their own fun purchases? I'm of course making up the $50 number, so set that to whatever's reality for you, do the math, and see how you feel.

Maybe it works out that you're only comfortable with your spouse spending 4x what you do, or 3x, or 2x. Or maybe it's the reverse, and you're the bigger spender, and you need to find out what your spouse is comfortable with That's fine. The point of this is to negotiate with your spouse to get to a point where you're not anxious or constantly arguing about spending levels.

Re: Combining finances

#72

Post by kelnos » Sat, May 25, 2019, 8:04 AM UTC

ianferrel wrote: post #29

soperj wrote: post #9

This sounds basically like have one pot of money, but allow both people to blow some of it every month on unnecessary stuff. Which is the opposite of what a saver personality would like to do. I don't see how it would work in a relationship where one person is blowing the "fun money" every month while the other person saves it. There would still be resentment.

My wife and I do this, and while we're both savers by nature, I'm more of a saver, so I end up piling up the fun money while she tends to spend hers (I think. Mostly. I don't actually know how much she has in her personal account because I don't care) There's no resentment because we already agreed that fun money isn't part of savings or long-term planning. And the fun money is a small enough part of our overall budg…

> I don't actually know how much she has in her personal account because I don't care

I feel like this is a useful thing to do for people who feel like they might feel resentment (or guilt) at their partner for spending too much (or for spending more than their partner) on fun stuff. As long as neither partner goes over the fun-stuff spending limits, it just doesn't matter, and there's no reason to even know.

> And I do still spend my fun money, I just spend it in larger chunks. ... I'm more likely to save up for a while then ... rent a cabin for a weekend ski trip.

Out of curiosity, what happens if your wife wants to come with you on the ski trip, but because she spends her fun money regularly and doesn't save for larger purchases, she doesn't have enough to cover her share of the cost? Or is that just not an issue, because you'd plan it far enough in advance that she'd have time to save? Or would you just say screw it, and call it a gift to her?

Re: Combining finances

#73

Post by kelnos » Sat, May 25, 2019, 8:07 AM UTC

soperj wrote: post #9

This sounds basically like have one pot of money, but allow both people to blow some of it every month on unnecessary stuff. Which is the opposite of what a saver personality would like to do. I don't see how it would work in a relationship where one person is blowing the "fun money" every month while the other person saves it. There would still be resentment.

I guess it depends on what happens with the saver's extra saved money. If it just gets used for larger fun purchases less frequently, there's no problem. If the saver uses the extra cash to invest and it's understood that it's still the saver's fun money, even when it comes time to withdraw that money during retirement, that's fine.

If it goes into the shared retirement accounts, then that might cause problems.

Then again, it just depends on attitudes. If you're a saver, but recognize that your partner's happiness in part depends on spending more, then perhaps you just won't care.

At the end of the day, you've jointly agreed on what the monthly allowance of fun money is, so there shouldn't be resentment. If there is, then you agreed to something you shouldn't have. If your partner can't agree to a lower amount, then you just have to accept that your financial/spending compatibility is low, and decide that the rest of the relationship overcomes that incompatibility. Or not, and then you break up.

Re: Combining finances

#74

Post by skrebbel » Sat, May 25, 2019, 8:12 AM UTC

kelnos wrote: post #71

skrebbel wrote: post #62

Earlier quoted context omitted.

The case #4 missed is "yay we have so much disposable income that really it doesn't matter, and this entire article is academic". That might be common on Bay Area-dominated HN, but not in most of the world, where I suppose this article is targeted at. I guess wealthy people don't need advice on how to combine finances :-) Personally I find "she spends $4000 a year on stuff I don't see the value of but I'm fine with t…

I don't think that's particularly fair; I think you just have to scale it to your own situation to see how you feel about it. For you, jointly spending $4600 a year on fun stuff sounds ridiculous. That's totally fine, but it's missing the point. (The parent might be ok with $4k a year but not $8k a year. Everyone has limits, and it could be a source of conflict if his spouse wants to expand her spending.) $4000/$600…

No, my whole argument is that that factor (your 4x, 3x, 2x) example becomes irrelevant once you're wealthy enough. Other stuff starts to matter more. My theory is that the GGP is in this position.

But when her buying 2000 euros worth of shoes means I can't get a new pair of jeans anymore then we have a problem.

Re: Combining finances

#75

Post by burfog » Sat, May 25, 2019, 8:14 AM UTC

skrebbel wrote: post #64

rconti wrote: post #57

Earlier quoted context omitted.

"My" approach is just the chip-in. The allowance system is what I ASSUME most people use (the one the article is advocating). I'm surprised the author thinks it's novel. I agree on budgeting and bookkeeping. Frankly, we do neither. I buy a bigass TV because I want it, my wife buys some awesome workout gear because she wants it. It just works. But yes, it's a position of luxury to not have to budget.

FWIW My SO and me are the only people I know who do the allowance thing. My friends routinely talk about "he/she spent so and so much on $USELESS_ITEM, grumble grumble". I say "pocket money!" and they nod and laugh and don't do it because it makes them feel like children.

Doesn't that encourage waste? You seem to have decided that a certain portion of income will just be blown on random stuff.

I go with double-approval. You could call it a veto system. Both must agree before spending.

There is pre-approval for unavoidable expenses like bills, groceries, fuel, emergencies, and tolls.

Re: Combining finances

#76

Post by kelnos » Sat, May 25, 2019, 8:28 AM UTC

unholyguy001 wrote: post #37

Betting the OP doesn’t have kids. Until you have kids you are playing the game on easy mode The biggest problem with the approach is large, optional purchases that effect quality of life. Things that are too big for “fun money” Remodeling or Upgrading a house Private school for kids Vacations Vacation property Nice cars College savings Rainy day funds One way to handle such is for both partners to agree on % saved ou…

Only two of the things you mentioned (private school and college savings) are unique to people with children.

All kid-related expenses (including private school and college fund) should be considered joint expenses and come out of the shared pool of money. Parents should agree on how much to spend monthly/yearly on non-essential/fun stuff for the kids (similar to how the parents each get their own fun money allocation). If one parent wants to exceed that for a one-off thing (and the other parent disagrees), they can dip into their own fun-money allocation.

Couples without kids still have to decide what to do about home improvements, vacations, vacation property, cars, and rainy day funds. It's just that couples with kids may have less money to allocate toward those things, or have to make harsher compromises. But hey, if you decide to have kids, that's what you've signed up for.

A couple might agree that replacing the old, fraying carpets is obviously a joint expense, but the fancy car that only one spouse wants and cares about is a personal/fun-money expense. Having or not having kids doesn't change that.

Re: Combining finances

#77

Post by galfarragem » Sat, May 25, 2019, 8:57 AM UTC

I'll bite it.

With nowadays lifestyle and state of Law doesn't make sense to marry in the traditional sense. Ok you can do a pre-nup but that is a huge hassle for the couple.

People value stuff differently and on the long term ignoring that is a certain path to regrets. So the best, IMHO, each one should keep legally their stuff with some joint ventures on common projects (house, etc). However I'm not saying to strictly split every expense or be stingy. I'm happy to pay most of daily expenses, holydays or extras. I just don't want to wake up one day feeling used neither legally get stuff from my partner or her family.

Re: Combining finances

#78

Post by username90 » Sat, May 25, 2019, 9:16 AM UTC

ianferrel wrote: post #29

soperj wrote: post #9

This sounds basically like have one pot of money, but allow both people to blow some of it every month on unnecessary stuff. Which is the opposite of what a saver personality would like to do. I don't see how it would work in a relationship where one person is blowing the "fun money" every month while the other person saves it. There would still be resentment.

My wife and I do this, and while we're both savers by nature, I'm more of a saver, so I end up piling up the fun money while she tends to spend hers (I think. Mostly. I don't actually know how much she has in her personal account because I don't care) There's no resentment because we already agreed that fun money isn't part of savings or long-term planning. And the fun money is a small enough part of our overall budg…

> Mostly. I don't actually know how much she has in her personal account because I don't care

If you divorce you will, since she will be taking half of yours if she didn't save anything.

Re: Combining finances

#79

Post by username90 » Sat, May 25, 2019, 9:19 AM UTC

clavalle wrote: post #15

soperj wrote: post #9

This sounds basically like have one pot of money, but allow both people to blow some of it every month on unnecessary stuff. Which is the opposite of what a saver personality would like to do. I don't see how it would work in a relationship where one person is blowing the "fun money" every month while the other person saves it. There would still be resentment.

That's the beauty of the system...each one should not care what the other does with their 'allowance'. If one wants to save, or invest, or what have you, while the other one buys gifts for your neighbor's aunt because they like giving gifts to everyone...well, so be it. It is not from the centrally held account so it is perfectly fine. Meanwhile, that central account and the rules of expenditure are rock solid and it…

> each one should not care what the other does with their 'allowance'.

This is impossible in any legal system where all money saved are seen as a joint asset. This means that if one person saves their allowance and the other spends it, then in the case of a divorce all of that money will be split.

Re: Combining finances

#80

Post by cheerlessbog » Sat, May 25, 2019, 9:52 AM UTC

lukasm wrote: post #66

bdowling wrote: post #63

Earlier quoted context omitted.

The general rule is that property owned prior to a marriage remains the separate property of that owner. So the answer to your first question is generally A. The answers to your other questions will depend on whether the couple is in a marital property state or a community property state, because the default rules regarding marital income are different.

Not sure why you've been downvoted. This is how it works in my country and I think this makes sense.

If three was a mortgage on the property the payments on the principal are presumably community property, and the appreciation of that post of the value.