Help a Reader: Splitting Household Expenses

Here's a question a reader left here recently on my post titled Marriage and Money: How to Split Up the Money and Bills:

I haven't heard anyone speak on second marriages, joint account, husband makes more yearly but brings home less from f/t due to $750 CS mo & ins & loan repayment, yet it's 50/50 living in the house I owned before marriage. I have a teen and he has two (diff mothers), one grown & other is 10. What suggestions do you have regarding best ways to do finances?

It's a little cryptic, but I think you get the flavor of what she's asking. Any suggestions on how they should split up costs/handle expenses?

Comments

[JimL]

It is simple, when married, 2 become 1. Finances should be joined. When money is separate it is like saying that my money is more important than you.

[MC]

I got burned in my 2nd marriage, which disintegrated after 10 yrs. My divorce lawyer told me, "how could you be so stupid?" and I had to agree with her! My ex had significant debts when we married, and so we kept out money separate and he "kicked in" a bit now and then to support our joint life together---but not too much because of his other obligations. When his debt was gone, the situation stayed the same---I paid for everything while he was supposedly "saving" his salary. I paid for the down payment on our house and the mortgage payments for 10 yrs. When we divorced, it turned out that his "savings" account didn't have much in it! I never did figure out what he did with the money, but when we divorced he still got half of the house that I'd paid for.

If you have/had assets before your 2nd marriage, and especially if you have a child that you'd like to provide a secure future for, you need a prenup. If your partner has loans, they become your liability when you marry. Do you want the equity in your home to go to pay for his debts, or do you want it to fund your kids' college educations? You need to work out all this stuff legally before you jump in.

[Michael Goode]

Why even bother trying to help? If someone can't bother to fully type out their problem I will not bother to try to help.

[Strick]

If this is a second marriage AND either have kids from the previous, I guess I understand keeping "previously obtained" assets (house/401ks/large savings accounts) protected by ownership/beneficiary designations and pre-nups. (And I've always liked the idea someone in this position had of just having a separate term life insurance policy where the kids are the beneficiaries to just greatly simplify things).

As far as this question goes, I don't really get it. Have a joint account, put your income into it and pay your bills out of it. Additonal savings going into retirement plans are just in your name anyway and you can make the beneficiary whoever you want (I guess in a lot of states you can't disinherit your spouse, but I'd guess a 50/50 parent/child split would always be allowed).

If this is the just same question that people in their first marriages have of not trusting their spouse with "my" money or wanting everyone to pay their "fair share", then I don't think this is a financial issue deserving of a financial answer, its a lot deeper than that.

[Lurker Carl]

I presume you knew about your husband's history and obligations before the marriage. So talk to your husband about what you need him to contribute (time, money, behavior, etc) to this marriage, my opinion is meaningless.

[Mike Hunt]

Talk about it and make sure it seems fair to both people. Consider making it equitable in the short term and the long term (what if you were to part ways)

Would you hold a grudge?

-Mike

[Ellen / MoneyLounge]

Traditionally a married couple combines their finances, it's just part of the deal. But you should go with what you both feel is fair and right. If you don't want to pay his debt, and he doesn't want to pay your child support, then keep it separate. I think this should be decided based on your situation.

[Noadi]

I would go with a blend of separate and joint finances. Keep your own bank accounts and assets separate but create a joint account for the household as well. Contribute to it equally and create a budget for using it.

As for the kids, their necessary expenses for when they're living with you should be built into the budget for the teen and 10 year old. The grown kid is a different matter if he's still living with you, unless he's in college, he should be paying rent to offset his expenses. Non-necessary spending on the kids should come out of your personal money unless you both agree on it. I think the key here is talking things over thoroughly and making sure you're both clear on what you'll be doing.

[Phil]

Have 3 bank accounts. His, hers and ours. His pays any dept prior to marriage. Same for hers. And the joint accout pays all the new together bills. Also keep what you had before the marriage as your own property. I mean if you own the house. Don't put his name on the deed. If your sharing a morgage payment after the fact then make the other one pay to catch up. It doesn't sound so loving to be like this, but if you've ever gone through a divorce you understand that being smart is better than all the warm fuzzy love you had when you first started out.

[Cheapskate Sandy]

Man this is tough. Okay here goes...

1) Sell your home keep your money. The two of your should then equally invest in a new home or apartment or whatever.

2) Follow Phil and have his/hers/ours accounts. You both should contribute a set amount to the household account which covers mortgage, household bills and household emergencies. The separate accounts should be used for personal bills before the marriage. The 50-50 thing when once spouse makes significantly more isn't fair so maybe a percentage? I don't know.

3) Why the heck didn't you talk about this before marriage?! Doesn't bode well. Good luck.