How happily married couples in US are managing their finances?

[tish]

I am wondering on how happily married couples (especially in US), where both of them are earning (and I am sure many of them are in this forum) are managing the financial issues in general and the following issues in particular

1. Short term to do financial planning just after the marriage
2. Long term to do financial planning
3. AAP
4. Retirement accounts (401K, IRA, PPF etc.,)
5. Mortgages
6. Investment accounts
7. Short term/ day 2 day expenses
8. Expenses for kids education
9. Setting up the trusts/will etc.,
10. Financial Independence

I believe any insights/wisdom would be helpful for the couples who are in trouble or for newly married couples or to be married bachelors/bachelorettes (especially when both husband and wife are professionals and breadwinners).

Is it better to have joint account for short term/checking account/day 2 day expenses and separate accounts for the long term investments/retirement accounts.

What about the wealth already accumulated by them and the accounts they were maintaining prior to the marriage?

Any pointers to the resources would be helpful as well.



Thanks!

[Lakshya]

I
I keep hearing that financials seem to be one of the major reasons for the couples parting ways/divorcing these days.

Thanks!

Where you hearing this? At indian temple's free lunch/desi get to gether or on Dave Ramsey/Dr Phil show?

[gwldaddu]

Is it better to have joint account for short term/checking account/day 2 day expenses and separate accounts for the long term investments/retirement accounts.

The approach mentioned above is the reason for the following outcome.

I keep hearing that financials seem to be one of the major reasons for the couples parting ways/divorcing these days.

[oasis138]

The approach mentioned above is the reason for the following outcome.

daddu

maybe a stretch to derive a causation ?

[sekhar99]

I am wondering on how happily married couples (especially in US), where both of them are earning (and I am sure many of them are in this forum) are managing the financial issues in general and the following issues in particular

1. Short term to do financial planning just after the marriage
2. Long term to do financial planning
3. AAP
4. Retirement accounts (401K, IRA, PPF etc.,)
5. Mortgages
6. Investment accounts
7. Short term/ day 2 day expenses
8. Expenses for kids education
9. Setting up the trusts/will etc.,
10. Financial Independence

I believe any insights/wisdom would be helpful for the couples who are in trouble or for newly married couples or to be married bachelors/bachelorettes (especially when both husband and wife are professionals and breadwinners).

Is it better to have joint account for short term/checking account/day 2 day expenses and separate accounts for the long term investments/retirement accounts.

What about the wealth already accumulated by them and the accounts they were maintaining prior to the marriage?

Any pointers to the resources would be helpful as well.



Thanks!

We both work. Wife does not care about financial matters at all. I pretty much handle/manage everything. Just need to make sure that I have got enough in the checking account to pay her Penny/Kohls other shopping:wink. She is not a big spender though. She is not even aware of how much she has got in her 401K or ESOP accounts.
It may not be the case with others. Especially where the spouse wants to take active participation in finanacial matter.

[My Roots]

I hope you plan to teach your daughter how to deal with her money and not be so wonderful!

Well said. I always had this question in mind about how they are going to raise their daughters whenever a wife is looked as cook or some one who is meant for taking care of kids,chores and preferred less knowledge about outside world, day to day issues.

[M V]

All accounts are joint accounts except the retirement accounts. Credit cards are on my name and she has second cards on all. As I mentioned she doesn't have any interest in finance matters. I tried to make her involve in Finance matter, but she never showed any interest. We don't have any separate individual accounts. Neither of our parents need support from us. So it is upto me on what to do with the savings..

From my limited observation among friends, this is not very rare. Many wives are not interested in the finances and investment aspects, husbands do all the planning and investing, including managing wife's ESOP, 401K.

While it is not feasible that wife be totally oblivious to family finances, this often happens as the woman gets busy managing young kids, work and house. If the husband and wife continue to update each other periodically, this division of life's chores works very well for some.

You are so fortunate to have such a wonderful wife. You should value her more than anything. In today's materialistic world this is unheard of.

Only cf_r2i knows what was exactly meant by the above, but rather than glorifying wives who do not participate in financial planning, and putting down wives who do so, maybe the comment was to do with the issues that can arise if husband and wife have totally different views about finances, long term investing and saving strategies. If both have strong opinions about finances and investing, then elaborate measures have to be in place to avoid potential problems. Pro-active steps like those listed in sid_earth's post are all the more useful in such situations.

[M V]

We have a joint bank account and individual bank accounts. 70% of post-tax salary from each paycheck is set to automatically deposit in Joint account. 30% in individual's account.
...
[/quote]
Sid, very comprehensive list of steps and they make sense too. But, frankly, it is so "American" and comes across as calculating [pun intended]. Our friends find my calling car1 as 'my car' and car2 as 'DH's car' odd! To reiterate, your list is a very sensible approach and worth adopting.

[quote]It is important that the spouse handling all accounts and finances/investments sync up with the other every month or two. Both should know (broadly) how much money is there, what's the plan for future, especially if R2I is involved. [/quote]
yes, this sync'ing up is very important. The spouse who is not involved in finances should clearly ask to know some details every now and then, rather than expect to be provided updates. And should once in a while take up one or two "financial research and decide/choose" tasks so that he/she is not completely uneducated about handling finances independently.

[quote]IMHO most finance related problems between couples come when one is not transparent with the other over such matters, or have some excessive debt or spending issues. This can be resolved by creating a long term plan to come out of debt, or a separate account to control credit-card spending of that spouse.

All above is moot if you live in a community property state. All wealth/debt is 50:50 unless maybe if you signed a prenuptial, which would mean that you are potentially unmarried or divorced already!

The 'living in a community property state' factor comes into play when divorce happens or a spouse dies. I think the discussion is about the happily living after (before?) that happens before either of those two sad possibilities. In other words, the question is "how do we pay for the washer and dryer? From joint account, or from one account each for washer and dryer." The question is not "who gets the washer and who gets the dryer". :)

[laks0]

2) All investing accounts are joint (except IRA's, which by definition are individual). Investment and earnings/loss from these are from the 70% in joint account.
3) All Earnings from stock options go to individual's account (and not joint).

IF there are plans to R2I, its always better to maintain separate accounts since Indian tax does not have a Married Filing Jointly option and it would be easier later on when the source of investment funds is asked.

[Sid]

IF there are plans to R2I, its always better to maintain separate accounts since Indian tax does not have a Married Filing Jointly option and it would be easier later on when the source of investment funds is asked.

That division can be done one day before money is moved from US to India. Also, In RNOR period, source of foreign income does not matter (as long as proper tax was paid in US). Having only separate accounts (and no joint) causes too many "bureaucratic" issues with regards to paying day-to-day bills. Life of R2Iers is already too cumbersome. Why add another issue :)