February 12, 2008, 7:00 am

Combining Your Personal Finance With Your Spouse

by: The Financial Blogger    Category: Personal Finance
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In a world where marriages are not what they used to be, where couples split up for all kind of stupid reasons, many individuals have the tendency of keeping their personal finance apart of their spouse. It is part of their “just in case” plan where they have to be ready if they ever have to break up. Even though the divorce rate tends to reach 50%, I still believe that your personal finance should be put together with your spouse.


The main reason behind my thinking is for efficiency purposes. By combining your income and assets, a couple can achieve more projects in less time. It also avoids the incalculable time spent on separating bills, unexpected expenses and purchases. By working together, you will not be alone to plan your retirement; you will work on it as a team.

A team. I think this is the perfect word to describe what should be a couple one it comes down to personal finance. By working together, you gain the ability to focus and brainstorm to find more solutions to your financial problems. You can also benefit from the strength of each other. Some people have connections to get a better deal while some other are good with doing a budget.

When should you combine your personal finance with your better half? I think that when you move together or when you think of having children could be a good starting point. This shows involvement and that your couple is getting more serious. By getting more serious, you are better combining your bank account and start working together for a better financial future.

What happen if you break up? Then you separate everything in two and you go your own way. I don’t see it as being more trouble than if you would have done your “just in case plan”. On the other side, I don’t think this is very promising to spend time planning on what will happen when you break up instead of planning the purchase of the house of your dream. I’m an optimistic, I prefer to plan the brighter future and forget about the rest!

By the way, I know many people who did their list in case they ever break up. I guess we can say it was a great success since that they all had the chance to test their plan as they all break up!

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Comments

by: moneygardener | February 13th, 2008 (2:00 pm)

Good post. I agree they should be kept together despite the divorce rate.

The divorce rate, according to some 200X statscan study I read, is that 38% of marriages fail before their 30th anniversary.

If both people enter a marriage with roughly the same amount of assets then a 50/50 split is fair. However, if one parter was a saver and managed to save up a few tens of thousands (or more) and the other has saved nothing, or has debt, then I fail to see why the saver shouldnt protect himself/herself from the worst (Prenup).

Its not about “love” or “trust”, as I am sure that the majority of the 38% had both when they got married, it is simply about having a having a plan should the worst happen. People have car insurance, people have house insurance, and yet the odds of having your house burned down, or your car unsalvageable are LESS then ending up with a divorce, with a divorce being more financially ruinous in a mix-matched (asset wise) marriage.

I would be interested to see the marital status/age of people who agree or disagree. I’m still young and single, but both my parents were divorced once before they met each other.

by: The Financial Blogger | February 13th, 2008 (9:58 pm)

Eppz,

I know I was exaggerating with my 50% rate but it sounded better 😉 Seriously, how do you assess a 50/50 split if the wife stay at home to raise the kid?

For example, my wife works in a daycare and I am a financial planner, I am obviously making more money than her. On the other side, she is bringing a lot to the family by taking care of our children and doing all kind of activities with them. We work as a team and I seriously consider that half of what I make is hers…

no need to plan it in advance anyway, Canadian laws already took charge of that so there is no need of separating anything anymore.