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My husband and I spent the first few years of our marriage earning about the same. He’s a bit older and in finance; I’m in marketing and met him halfway through my MBA. I had student loan debt; he had 10 extra years of working/savings. We decided when we got married to merge our money but keep separate accounts for about 20% of each of our take home. He managed all our joint account. It’s worked out well since major decisions (life insurance, forced savings, housing, etc) come from the joint account and then we can each have different mentalities with our personal accounts.
The thing about marriage, though, is it’s super long and situations change. We had a year with crazy medical bills and I spent a year part time. Recently I took a huge career jump and he agreed to stay home for a year with our kid and manage a cross-country move. Now all our money is officially 100% joint, which has always been our mentality. It was the groundwork of those first few years and regular conversations about goals and partnerships that allowed us to make the shift to single income for a while.
Definitely talk about money but talk in principles not in dollars. The only certainty is that your circumstances will change
My 2 cents: If you think one spouse income vs. the other's is relevant you still have some work to do in your relationship. Your respect for your spouse's opinion shouldn't be based on their income. I cant imagine making any significant financial decisions without my wife's full buy-in.
Also - since I see from the thread you're not yet married - you should definitely talk about it now and going forward. Your experience with your parents of fights over money is typical and communication is key. Having a more conservative/aggressive investment strategy is worth a happy spouce, no?
Delta between spouses earnings is definitely relevant. Don’t dismiss it. My spouse makes 1/3 of my income and it does create contention at points, although she will have a pension that will be great during retirement. That said, I control the finances of the household and she is informed about any investments, etc. Communication and aligned interests are very important.
I feel like I'm just gonna stay silent and let you talk through it yourself....
Jk - if you sense it is a touchy subject, then maybe you should have one joint investment acciunt that is conservative and a certain % of both incomes goes in that account. Then each of you can have your own account on the side.
Thanks. Good luck to you and your fiancé.
After sharing expenses for your life together, can each spouse control their own investment strategy of the rest of their earnings?
My wife and I are extremely open about finances. We maintain a google doc with a spreadsheet of all of our expenses - then each paycheck we put an amount into a joint account proportional to our income. So if I earn twice as much as she does, I deposit 66% of the amount to cover the expenses and she deposits 33%. The rest of our paychecks go into separate accounts where we can do what we want with the money. This way when one gets a raise it doesn’t feel like it all goes to pay bills, and no one feels like they’re carrying an undue burden.
Our 401ks are both 100% in target retirement funds, Roth IRAs are in VTI, and 529s for our kids are in target date funds. So those are very conservatively invested.
I manage our other investment accounts - my risk tolerance is much higher than hers so I risk balance. If my high risk investments pay off most of the gains get shunted into low risk investments (we only have mortgage debt at a low rate so that just means index funds.). I keep a little of the remaining plus principal and reinvest in something risky. This way we both get a little of what we want.
Major financial decisions are done jointly but otherwise she trusts me - I’m very honest about both gains and losses so she knows where we stand. It’s been a good system for us and we’ve never fought about money, but every marriage is different so talk it out.
This is very similar to what I and my husband do. It ensure that we are contributing to household and child costs equitably and gives us our own money to play (or save!) with.
Just curious to hear what others are doing
If one spouse earns more do they have more say in the investment strategy?
Both of you could contribute a specific amount for investment, irrespective of income. Then out of that amount, decide what percentage goes to conservative investing and what goes to more aggressive ones. Simple
I guess I am lucky in this regards, my wife likes to save, but isn’t into investing so I am using it as an opportunity to teach. We now have 50% of what she calls “fun savings” which she uses for stuff that she buys without logically needing it - in a investment account - she is starting to see the value 1 year in, now that the investments grew more