yours/mine/ours

My friend Daniel Hope is presenting a marriage workshop series, and I was honored to give a talk on marriage and money at last week’s session. By all accounts, the most useful piece of that talk was a framework for setting up accounts that I call “Yours/Mine/Ours”, so I figured I should share it with the world at large.

Yours/Mine/Ours is a “middle way” between two extremes I’ve seen in the married world for handling shared finances. On one end, you can share everything between the two of you. It makes things very simple — everything goes in one pot, and everything comes out of one pot — but after a while, things can get…hairy. Maybe he has a habit of overspending on things she doesn’t care for. Or maybe he doesn’t want to spend money on anything, so she feels guilty any time she so much as buys new socks. (Modify genders as you see fit.) Resentment builds, and you either argue about it or, worse, you just don’t talk about it and let the pressure quietly build up to explosive levels.

At the other end, you can decide not to share anything, finance-wise. You have completely separate accounts, and you split the check for everything. Not only does this quickly get complicated — mortgages don’t really lend themselves to being “split” — but it doesn’t reflect reality very well. Does one of you really own all the groceries, and the other all the utilities? And of course this sort of arrangement precludes one spouse from ever leaving work (for example, to raise children).

Yours/mine/ours is a compromise between the two that looks like this:

As you can see, all income first goes into a joint account (“ours”). All shared expenses are withdrawn from that joint account (mortgage, groceries, utilities, child expenses). Also, at the beginning of every month, some amount is transferred into separate, personal accounts (“yours” and “mine”). This money is for individual spending; he can’t say boo about what she does with the money in her personal account, and vice versa. He doesn’t even have to be able to see into it.

This method has several advantages:

It heads off control issues. There’s no question as to whose money it is, or who is ultimately in control. Everything is “ours” first, then “yours” or “mine” second. This is especially key in situations involving disparate income, or where one spouse isn’t working at all; even in the situation where one spouse is a homemaker, this method makes it clear that they have an equal stake in the household’s finances. (And yes, each spouse should have an equal stake, if you want a strong and healthy relationship. Income is irrelevant.)

It’s relatively simple. It’s nearly as simple as sharing one account for everything; the only wrinkles are (a) an automatic monthly transfer from “our” account to “yours” and “mine”, and (b) the fact that you now use your personal account for personal expenses.

It gives each spouse their own space. Everyone needs space to be who they want to be, and this is no less true in the area of personal finance. The “yours/mine” accounts allow you to buy whatever you want, without having to run it by the other spouse. (Note: I don’t recommend attaching a credit card to a personal account. One spouse going into debt “on their own” is a great way to freak out the other one.)

It allows gifts to be that much more meaningful. When you buy a gift for your spouse using your personal account, it means something more than if everything were shared. I mean, this is money that was specifically allocated for your to spend on yourself, and you chose to spend it on your spouse! (Not to mention the fact that this allows for you to more easily surprise them, because they can’t see your bank statements!)

How about you? If you have a similar arrangement, let us know how it’s working out for you in the comments. (And if this kind of sharing doesn’t work for you, let us know that, too!)

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