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Alder posted:Yay, I'm now 100% finanacially independant I think you might be mistaken about the definition about financial independence if you believe being homeless is part of it. It sounds like you're saying you're own your own financially, but still dependent (need to work, etc.) FI is about being able to live off your investments without working, being completely independent financially and being able to do whatever you like with your time. I don't know much about homeless people and bank accounts, you might have more luck in the newbie personal finance thread. I wish you the best of luck with whatever's going on in your life.
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Apr 10, 2015 19:31
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Inverse Icarus posted:I think you might be mistaken about the definition about financial independence if you believe being homeless is part of it. It sounds like you're saying you're own your own financially, but still dependent (need to work, etc.) FI is about being able to live off your investments without working, being completely independent financially and being able to do whatever you like with your time. FI = having enough money/wealth to maintain your desired lifestyle indefinitely. If your desired lifestyle is hoboing around, being homeless could indeed be a part of it!
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Apr 10, 2015 19:37
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LemonDrizzle posted:FI = having enough money/wealth to maintain your desired lifestyle indefinitely. If your desired lifestyle is hoboing around, being homeless could indeed be a part of it! It's true, and I thought about mentioning that, but based on the fact that she/he is asking about opening a bank account makes me think they're on their own and just starting out.
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Apr 10, 2015 19:39
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Dwight Eisenhower posted:Any domicile is a means to cover your perpetually recurring liability against exposure (literally dying from cold), theft, and other risks. Let's call these domestic liabilities. Some domiciles also confer quality of life benefits. One thing to consider is that ghosts don't haunt 1-bedroom apartments, just houses, because ghosts are actually huge creatures and won't fit
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Apr 10, 2015 19:42
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Mofabio posted:One thing to consider is that ghosts don't haunt 1-bedroom apartments, just houses, because ghosts are actually huge creatures and won't fit Are you confusing spirits with Minecraft ghasts again?
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Apr 10, 2015 20:12
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Sundae posted:Are you confusing spirits with Minecraft ghasts again? No I'm not confused at all Yesterday my silly pharma company decided they were underpaying me and so I gots a 14% raise. I'm now making almost double what I did this time last year which puts me *holds entire palm on numpad* 3.5 years from FI. I'm deeply incompetent and forget to perform basic hygiene. edit: my friend just told me "Renting is a good way to prepare for death because implicit in the agreement is that you must one day relinquish your possession, whereas homeowners have a six-times greater rate of self-inflicted gunshot wounds because they have been lulled into believing themselves immortal. If you think you're immortal then at some point you're gonna try to shoot yourself to see what it's like." Mofabio fucked around with this message at 21:32 on Apr 10, 2015 |
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Apr 10, 2015 21:28
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Dwight Eisenhower posted:Owning a house free and clear ties up a bunch of money in it, exerting an opportunity cost on you, while removing most of the recurring expenses related to covering your domestic liabilities. There's an important aspect in that not diversifying into assets other than the house is a risk as well. I have seen disasters lock up insurance money on destroyed houses for years. Waiting for an insurance payout while having to rent and having no other financial assets is a major problem. For my situation I have too much of my total net worth in my house which is good but risky. For FI I think some income or cash flow producing investment assets are important. You can be FI and have enough to pay for lifestyle and a mortgage. It's when you decide to stop working that eliminating mortgage risks are really important. Although I'll probably never stop working until I'm almost dead so that's probably a moot point.
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Apr 10, 2015 23:37
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Inverse Icarus posted:I don't know much about homeless people and bank accounts, you might have more luck in the newbie personal finance thread. I wish you the best of luck with whatever's going on in your life. Sorry, wrong place then. Will check out the linked thread then. Thanks.
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Apr 10, 2015 23:50
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Devian666 posted:There's an important aspect in that not diversifying into assets other than the house is a risk as well. I have seen disasters lock up insurance money on destroyed houses for years. Waiting for an insurance payout while having to rent and having no other financial assets is a major problem. For my situation I have too much of my total net worth in my house which is good but risky. I agree with all of this and roughly split my savings between paying down principal on my mortgage and deposits into a taxable brokerage account which I can take money from free and clear. Having a paid off mortgage is a very handy position to occupy when you stop working and it is not your own decision, though.
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Apr 11, 2015 14:55
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Who the gently caress cares if the mortgage is paid off though if dividend income +swr is greater than expenses?
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Apr 12, 2015 06:43
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Geizkragen posted:Who the gently caress cares if the mortgage is paid off though if dividend income +swr is greater than expenses? Because not having a mortgage is guaranteed, while dividends and SWR are not. If you're withdrawing money to pay a mortgage while the market is crashing, you are in a worse place than someone who can run leaner for a while due to the market crash and come out the other side in a much stronger place. Due to the principle of SWR, you'll still be OK with a mortgage, just in a relatively worse position. This may not matter to you.
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Apr 12, 2015 16:09
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Yes a better place for sure but it shouldn't matter if you are work optional. Cue the twenty post discussion of why early retirement isn't retirement if you still work...
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Apr 12, 2015 17:00
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The tone just got kind of intense. I thought all along the point was that it may not make perfect financial sense, but there are intangibles that make the personal preference for some folks.Inverse Icarus posted:Part of my brain thinks that holding on to investments will prove a better financial decision long-term, but a big part just screams "YOU'RE IN DEBT GET OUT OF DEBT GET OUT OF DEBT" whenever I see the mortgage balance.
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Apr 12, 2015 17:07
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Then there's the fun stories about people who got foreclosed on despite owning the house free and clear. I think most of them were because people weren't reading their mail and being proactive though.
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Apr 12, 2015 18:00
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Whoops wrong thread
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Apr 13, 2015 05:00
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Thanks everyone who chimed in on the paying off your mortgage debate. I did a bunch of my own research and saw pretty much the same conversation play out on other corners on the web. I wanted to get as much input as I could before I got into the specifics of my situation.BEHOLD: MY CAPE posted:If you have one of the recent variety of <4% mortgages, the cheapest long term debt in history more or less which is further sweetened by a major tax break, paying it down as a young, wage-earning, risk tolerant investor is a mistake. Having some mix of liquid assets with a higher historical return is way better than having less cheap, tax advantaged mortgage debt unless you're like about to stop working, very risk intolerant, and want to retire your monthly living expenses. My wife and I keep separate accounts, and split everything equally. We're both techies in the SF Bay Area, well paid, and good savers. We had a long talk about money, life, and where we're going about a year ago. We have lots of common goals, but also have some different ideas about money. I'm a boring homebody, and to me money is freedom more than it is things. The only thing I really want in life is to be able to wake up and do whatever I want that day. I'm working on a side business (RPG publishing) and hustling a little extra money on the side making vinyl-print t-shirts and laptop decals. I don't spend too much on myself, I try to be frugal when I can, I drive a 1999 Accord with 90,000 miles on it, etc. Boring, classic RE goals. I've worked at a corporate software development job at a giant company for nine years, maxed my 401k and ESPP participation on day 1, and have ratcheted up my post-tax investments seriously in the past three years. My wife is essentially fourth in command at a small but very successful web design / SEO company she's been working at for over a decade. She manages a large team, and the company is opening a new office and putting her in charge of it. She's really happy with her job, has a personal relationship with the CEO, and she's a workaholic like her father, who is still practicing law at 82 years old. She plans to continue working for decades to come, doesn't have early retirement on her radar, and is comfortable being less frugal with her spending as a result. She loves getting new clothes, takes weekend trips with her girlfriends, and in general likes to have "nicer" things, but she has a good head on her shoulders, isn't wasteful or obsessed with brand names, and still saves 20%+ of her income. We're in the process of adopting a child (waiting to be matched!), and we both believe that it's important for a parent to be home, at least during the first few years. After talking about it, we decided that I would take a leave of absence from work when the child is born, possible for a year or two. During that time I'd be a stay at home dad, and I'd use what little free time I have to continue working on my side businesses while my wife continued to work full time. I have enough money saved up to pay for my half of everything for five full years, without changing a single thing about my lifestyle. The baby costs will obviously affect that and the market could always tank, but even in bad situations I should have more than enough for a couple of years to put my child first in my life, and focus all my creative energies on my side business rather than my 9-5. This has been the plan for a few months now, and as I mentioned we had a quarterly "sync up" on our finances, and for the first time we saw ourselves in striking distance of paying off the mortgage. We're not there yet, but it's close. My wife and I talked some more, and she said that if we had the mortgage paid off and she didn't have to pay her half every month ($1,050), she would use the surplus to cover my half of the groceries, utilities, and property taxes forever. She acknowledged that I would have to "bear the brunt" of the payoff because of how much more I have saved than she does, and that I would essentially be "buying my freedom" from work by paying off the house. I could be a stay at home dad full-time, without having to worry about going back in a few years to restart the rat race with a smaller hoard. She'd continue at her job, fully capable of supporting the family while still saving a bunch. We're not there yet, but this idea has motivated me so push my frugality even further while we're waiting to be matched for the adoption. Everything is up in the air and we're not sure how long it will be until we get matched, it could be tomorrow or it could be a year and a half from now. I'm curious what I can get the numbers to look like by the time the baby comes home with us, and if buying my freedom is actually possible. I'm still debating everything, but I'm very tempted to murder my mortgage. The "omg omg debt emergency" in the back of my mind is a very real thing to me, and I'd feel much safer/saner moving forward with the money applied to my house debt than sitting in an investment account. Feel free to poke holes in my reasoning. This is a big deal and I'd love feedback, even/especially if I'm being naive and oblivious to something obvious.
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Apr 15, 2015 20:13
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Inverse Icarus posted:Feel free to poke holes in my reasoning. This is a big deal and I'd love feedback, even/especially if I'm being naive and oblivious to something obvious. My main concern would be that since you're both in tech, your skills are quickly perishable. If you need to go back after 5 years of not working, it could be very difficult. The other part is if there is an economic downturn, or there turns out to be another tech bubble that pops, your wife being your sole source of income could be bad if she gets laid off. You may want to consider doing some consulting work on the side to keep your skills up to date and have a backup income source.
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Apr 15, 2015 20:27
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Inverse Icarus posted:Feel free to poke holes in my reasoning. This is a big deal and I'd love feedback, even/especially if I'm being naive and oblivious to something obvious. I am curious to hear more about the thought process behind treating your wife's money separately from yours, and having to each "pay half" of the bills and mortgage. My sister and her husband do this, and it has always fascinated me because it seems so odd. To list out some of the reasons I think it's a weird way to look at money: 1. California is a community property state, so unless you have a prenup, the law doesn't care about your division of property anyway 2. Men statistically have an easier time earning money, so it seems unfair to the wife 3. In the event of a child, do you have to charge your wife a fee for her half of the childcare you are providing to your own child? 4. If your wife loses her job and has no savings, do you kick her out of your apartment because she can't afford it? Loan her money at interest? Move to a place you don't want to live because she technically can't afford her half? 5. If you want to go on vacation and she can't afford it, do you go without her? How does that work? 6. If you retire rich because you saved, and your wife spent all her money and loses her job unexpectedly or whatever... do you get to eventually go to the good nursing home and she has to go to the crappy one? Once again this is a legal issue because medicaid wouldn't support her cost of living until YOU are also broke so it just makes no sense. So just to contribute without harassing you uselessly, in your situation I would not pay off the mortgage now in exchange for the future promise of your wife to cover your bills. I would not do this because: 1. Money now is worth more than money later, and you can expect to make a return on your accumulated savings. 2. Your wife could lose her job and be unable to fulfill her side of the deal. 3. You could get divorced and not be made whole (although I believe the community property law makes this a non-issue) 4. Your wife "paying for you" could cause her to resent you, because it is easy to forget that you were the upfront half of the deal when she has to pay for everything for you every month for years and years. 5. You didn't give numbers so I don't have a lot to go on, but trading the mostly full value of a bay area mortgage for $1050/mo for X years doesn't sound like a great deal to me (when I just guess how big your mortgage is). Edit: Thesaurus said what I was trying to say in a much funnier way in like 1/5th the amount of words 
Droo fucked around with this message at 20:58 on Apr 15, 2015 |
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Apr 15, 2015 20:55
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What happens if one of you ever falls on hard times? Would she let you starve or be more generous and tolerate scrounging around in the trashcan for food that she's discarded? Maybe she could sell you left-overs at a reduced rate. Or would she "donate" you some food and keep a ledger of her charity that you'd be expected to pay back one day (with interest, of course)?
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Apr 15, 2015 20:57
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I think it's bizarre too but I imagine that functional and mature adults are perfectly able to communicate about these things without driving a wedge between them. The issues brought up are equally concerning for couples who combine all their finances, if less complicated logistically.
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Apr 15, 2015 22:40
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Droo posted:I am curious to hear more about the thought process behind treating your wife's money separately from yours, and having to each "pay half" of the bills and mortgage. My sister and her husband do this, and it has always fascinated me because it seems so odd. To list out some of the reasons I think it's a weird way to look at money: My wife and I have a similar arrangement. We divide household expenses based on percentage of income we bring in instead of down the middle, and we are (and will remain) child free, so that certainly impacts answers. We have a household savings account that we funnel our money into, then pay household expenses out of that. We target several months expenses to be in the fund in reserve (so it acts somewhat like an emergency account, although we each keep one of our own as well). Tracking of household expenses is done via a spreadsheet that would happen no matter what method we used to pool money to track expenses. We aren't super anal about it. It isn't like we are tracking everything with line item receipts, so if she picks up some makeup or something when she is doing the Target run for groceries it isn't a huge deal. Likewise if she picks up the tab for dinner a couple times to my one we don't hold it over the other's head. That's garbage that people in bad relationships do and will happen no matter how they track money. Droo posted:1. California is a community property state, so unless you have a prenup, the law doesn't care about your division of property anyway While I see what you are saying here, I think that basing your lifestyle on what the courts would do in the event that you broke up and were dicks to each other isn't exactly the best way to approach this question. Don't just ignore it, sure, but it seems pretty silly to change a system that works for you due to this potential. Droo posted:2. Men statistically have an easier time earning money, so it seems unfair to the wife Splitting by percentage addresses this one Droo posted:4. If your wife loses her job and has no savings, do you kick her out of your apartment because she can't afford it? Loan her money at interest? Move to a place you don't want to live because she technically can't afford her half? Heh, by percentage addresses this as well since $0/year = 0% of joint expenses! And the follow up question of "well what if they don't/won't find a job" is an issue with about any system you consider. The reserve in the household fund is there to assist with situations like this. Droo posted:5. If you want to go on vacation and she can't afford it, do you go without her? How does that work? We contribute to a vacation fund as well. This is mostly because I can't relax on vacation if I'm worrying about every expense, so we jointly contribute to the account and just use what is in the account on vacation. That money is already "spent" mentally when I put it in the account, so it helps with my fixation on frugality that I'm sure many in this thread are familiar with. Droo posted:6. If you retire rich because you saved, and your wife spent all her money and loses her job unexpectedly or whatever... do you get to eventually go to the good nursing home and she has to go to the crappy one? Once again this is a legal issue because medicaid wouldn't support her cost of living until YOU are also broke so it just makes no sense. Thesaurus posted:What happens if one of you ever falls on hard times? Would she let you starve or be more generous and tolerate scrounging around in the trashcan for food that she's discarded? Maybe she could sell you left-overs at a reduced rate. Or would she "donate" you some food and keep a ledger of her charity that you'd be expected to pay back one day (with interest, of course)? Well, worse case scenario is that if the money system isn't working out for us, we can switch to your socialist welfare marriage down the road.  The most important thing is to communicate goals and work together - The nuts and bolts of what you do really doesn't matter in my mind. Joint money isn't some sort of magic bullet that will make financials super easy if you and your spouse aren't on the same page or have poor communication.
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Apr 15, 2015 22:42
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Inept posted:My main concern would be that since you're both in tech, your skills are quickly perishable. If you need to go back after 5 years of not working, it could be very difficult. The other part is if there is an economic downturn, or there turns out to be another tech bubble that pops, your wife being your sole source of income could be bad if she gets laid off. You may want to consider doing some consulting work on the side to keep your skills up to date and have a backup income source. My company has an official leave of absence / sabbatical-like policy that I would be filing for, which allows for up to three years off work (unpaid, no benefits.) It's essentially "we'll do our best to hold a spot open for you," and I've seen several people take multi-year breaks and come back to work afterwards. I am generally well liked by my coworkers and I have a reputation with management for getting things done. I'm fairly confident that if the poo poo hit the fan and if my wife was laid off, I could go back to my company and be rehired fairly quickly, and she could watch the baby. Obviously, terrible things could happen. If my wife is laid off because of a prolonged bad economy, maybe my company can't rehire me. Maybe I'm overvaluing myself in my company's eyes, and they can't wait to get rid of me. The side business I'm working on involves a good deal of coding and web design, but looking for contract work to keep my skills up to date isn't a terrible idea either. Droo posted:I am curious to hear more about the thought process behind treating your wife's money separately from yours, and having to each "pay half" of the bills and mortgage. My sister and her husband do this, and it has always fascinated me because it seems so odd. To list out some of the reasons I think it's a weird way to look at money: When my wife and I got married, we just decided to keep our finances separate. There wasn't a whole lot of thought put into it, we had been living together (and with other roommates) for five years, and we bought a house together for a full year before we got married. We just kept doing what we were doing, and since we were both making/saving so much it really didn't matter. Going one by one on your questions: 1. No prenup, and I'm not planning on a divorce. I know that no one ever does and that poo poo happens, but I'm not going to live my life worrying about my wife leaving me sometime down the line, and positioning myself in the best way for that scenario. If I gently caress up badly enough to drive her away and we have a paid-off house that she gets half of, so be it. 2. This is true to an extent for us. Our raise/promotions constantly have us leap-frogging each other with regard to who's making more, but the stock-related benefits my large company offers (RSUs/ESPP) push me ahead a fair bit. I straight-up invest these stock-related benefits (selling company stock and diversifying.) It could be argued that it's not fair that I make more money than her and pay the same amount in monthly expenditures, but there's nothing nefarious here, it's been just a continuation of how we were living as roommates. 3. No. We talked about daycare a good deal, and in addition to everything I've said before, daycare is crazy expensive in the SF Bay Area. We would need a weekly full-day sort of daycare if we both wanted to keep out jobs, which is like an extra mortgage payment flying out the window every month. If I were staying home, I'd be providing all the childcare and mitigating this expense, and no one would be "charged" anything. If I end up keeping my job and pushing the rugrat to day care, we'd split the daycare expense evenly. 4. This has never come up, we've been extremely fortunate in our lives, but no, we wouldn't do anything like that. Maybe we've just been "lucky" enough to not have to have combined our finances to this point, but if she lost her job and her emergency fund and everything else, I'd support her in whatever way I could, and I'm sure she'd do the same for me. 5. I don't really go on vacations without my wife. Again, I'm a boring homebody. Occasionally we travel separately to visit our families or go to weddings in NY and MD, leaving the other person home to watch the dogs. Generally when we go on an actual vacation or visit together for the holidays my wife books the flights, dog kennel, and whatever else and takes the cost of mine share out of the next time we "settle up." 6. No. If I retire early and the poo poo hits the fan for her, I would do what needed to be done to support my family. As I said above I'm fairly confident that my company would "hold a spot open for me" in most non-horrible scenarios. Additionally, we both have 401ks that we're not tapping to pay off the mortgage. Mine already has $160k in it, which at 4% should be worth north of $600k in 34 years (when I'd be 65.) She only started hers two years ago, but is now maxing it out. quote:So just to contribute without harassing you uselessly, in your situation I would not pay off the mortgage now in exchange for the future promise of your wife to cover your bills. I would not do this because: 1. Agreed. This is pretty much what my father said, and I greatly respect his thoughts on money. It took me about decade to amass this hoard, and he believes it's worth more as an income-generating hoard than a paid off house and no income. This is what a lot of people in the thread were also getting at. 2. Agreed. As I said, she's a workaholic and I can't ever imagine her being without a job for long, but your point stands. She's got a solid emergency fund to cover the interim as well. And as I said above, I could always start working again if needed, or take contract work. 3. Agreed, but as mentioned, I'm not the kind of person to worry about this. 4. This is something I'm a little worried about. My wife understands everything and is fine with it now, but six years down the line when she's paying for my pop tarts she might not be as happy with the deal, which might lead to divorce, and a double-whammy of me getting hosed over. Again, I'm not the kind of person to position myself defensively with my family. If they stab me in the back, so be it. 5. The $1050/mo is her half of the $2100 monthly payment. We owe $255k at 3.8%, the house is worth ~$520+ based on comparable all-cash sales in the neighborhood. Thesaurus posted:What happens if one of you ever falls on hard times? Would she let you starve or be more generous and tolerate scrounging around in the trashcan for food that she's discarded? Maybe she could sell you left-overs at a reduced rate. Or would she "donate" you some food and keep a ledger of her charity that you'd be expected to pay back one day (with interest, of course)? Again, we've been very fortunate and this has never been an issue, but I'm certain we'd take care of each other if terrible things happened.
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Apr 15, 2015 23:15
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I don't think keeping finances completely separate and Financial Independence really meshes together. You also don't seem to understand there's a difference between positioning yourself defensively with your family and going almost out of your way to get hosed over. Just combine your finances if you want to do the stay at home dad thing.
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Apr 16, 2015 01:27
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Harry posted:I don't think keeping finances completely separate and Financial Independence really meshes together. What? They're totally orthogonal.
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Apr 16, 2015 02:33
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Dwight Eisenhower posted:What? They're totally orthogonal. If you have kids it becomes even more problematic. It would be very difficult for the FI spouse to not become the 'default parent' even if they don't want to, and then at that point they're more like a traditional homemaker than someone who became FI. I'm not saying it can't work, but I think it would be difficult for most people.
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Apr 16, 2015 02:48
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It does seem like it would be a little different if there was one partner who really really enjoyed work though. Then it seems like a difference in preferences.
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Apr 16, 2015 03:55
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This is a disagreement about the definition of separate and shared finances. What the OP here mentioned sounds on its face like what my wife and I do except with separate bank accounts and some more admin. Both partners are committed to their shared life together and are willing to negotiate what that means. What you're assuming is more like some kind of roommate situation plus children, where the relationship is an accessory to the sharing and so the only way to maintain a healthy relationship is to make use of some arbitrary notion of equity, like some roommates do. The problem you're imagining wouldn't be an issue in a healthy relationship since I'm sure the FI partner is going to want to share his/her time with the non-FI partner since that's kind of the intent of most healthy relationships, and the finances would balance out around that. The same imaginary problem could come up for a traditional shared finance couple with fewer accounts. An FI person is savvy enough to know when 80% of their nest egg originated from one partner but both partners are benefitting. If the relationship or individual is dysfunctional, resentment/contempt will follow just as easily. This isn't a financial issue, it's a relationship one. The administrative details of the finances are irrelevant. I still think it's bizarre though, because that level of administration is inefficient and a drain on a lifestyle, unless you enjoy it or get some benefit out of it because of the obligatory "syncing" meetings or something.
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Apr 16, 2015 04:16
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tuyop posted:This is a disagreement about the definition of separate and shared finances. I don't really understand getting worried about how they perceive their finances. Some couples keep things separate, some more separate than this. Others have a prenup where they are legally separate and then after 5 years the finances merge and so on. The way they separate the finances isn't a problem if it works for them. I say focus on the bit that matters the FI. Even if you separate finances merge the investments for the purpose of FI calculations. At what number do the investments cross over the threshold for both of you to be FI? Then head towards that.
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Apr 16, 2015 05:11
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Yeah, as long as both partners share similar goals and spending habits then the degree of financial separation is just an accounting methods preference. It's similar to how some people might use one savings account to hold the emergency fund, the vacation fund, the car fund, etc. while other people prefer to have different accounts set up for each of those.
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Apr 16, 2015 13:29
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Separated finances with mutually understood commitments to recurring expenses keep all additional discretionary spending and saving from becoming a point of contention. I know plenty of people who do things each way, and while I wouldn't say I know many who are making separated finances work toward FI, I also don't know many who are making merged finances work toward FI. I think the only time it even becomes relevant is if you're dual income with incomes that have rough parity.
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Apr 16, 2015 13:59
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Dwight Eisenhower posted:Separated finances with mutually understood commitments to recurring expenses keep all additional discretionary spending and saving from becoming a point of contention. When two people have income coming in I see splitting it working (although I still don't see the point). But when you have one stop working, then having to use a bulk of their savings to pay off the mortgage where the wife then will contribute more to the monthly expenses it just doesn't make sense.
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Apr 16, 2015 14:15
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But doesn't split financies defeat the point of marrying a super rich person and having it made as a trophy husband/wife  That's the most direct route to FI.
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Apr 16, 2015 15:39
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Alright so just because I am seriously fascinated ... so the gist I get is that basically, in the event of a job loss/etc, you would abandon the system of equal participation and combine your finances at least temporarily. And the reason I brought up the community property thing was just to point out that you aren't actually accomplishing anything by having "his" money and "her" money once you are legally married as it pertains to the outcome in a divorce. So my question is... what exactly are the benefits of having this type of financial arrangement (where one person literally writes a check for half the mortgage)? * It doesn't keep "your" money safe in the event of a divorce, and you all say that's not part of the thinking anyway * It is clearly more complicated and time consuming than combining * You have generally stipulated that you would abandon the system in the event of a problem * It can lead to investing inefficiencies (e.g. one spouse has a much better 401k, which should be funded 100% first, then other spouse second) * You could accomplish the same kind of non-challengable spending money by simply giving each spouse an allowance each month that they can do with what they want, no questions asked, and this would be a simpler approach * Even if you split things by income percentage, that's still highly unfair. E.G. we each spend 5% of our income on restaurants, so I get $500 per month and my wife gets $150?
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Apr 16, 2015 16:45
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We split. We have similar incomes (she earns little more but not much) we each pay into a joint account each month for bills/short term saving for holidays n poo poo. Then I do most of the fi saving, nearly all my wages to be honest minus fun money and she covers most of the daily/weekly spending. The divison of money being equal fits both our 50% saving target and division of labour! Also she has a defined benefits pension (and I max mine) so funding one over the other is irrelevant.
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Apr 16, 2015 18:27
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Defined benefit pension? Sounds awfully nice.
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Apr 16, 2015 21:13
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Radbot posted:Defined benefit pension? Sounds awfully nice. That's what social security is. Defined benefit pensions can be quite poo poo. Ask me how I know  Cast_No_Shadow, you didn't really explain why you do it that way though. Droo brings up a good point that it just seems to make things harder for no discernible benefit.
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Apr 16, 2015 21:22
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Inept posted:Cast_No_Shadow, you didn't really explain why you do it that way though. Droo brings up a good point that it just seems to make things harder for no discernible benefit. As far as I can tell couples who split their finances probably don't see eye to eye on things (as in this example?) and as a result don't want to give up control over their finances, even if the control is somewhat fake. I say do what you gotta do to make it work. These things are never a problem as long as there's enough money. The real issues arise when the money situation becomes tight. Rick Rickshaw fucked around with this message at 21:29 on Apr 16, 2015 |
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Apr 16, 2015 21:25
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Inept posted:That's what social security is. Defined benefit pensions can be quite poo poo. Ask me how I know I'm referring to employer provided defined benefit pensions. How can those be poo poo, unless it's specifically used as a reason to pay you less than you should be paid?
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Apr 16, 2015 21:39
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I agree with Droo but combining vs. separating finances is almost like a religion in that it's very difficult to convince someone to switch. Some of the arguments are emotional, and when people get into a routine they don't tend to think of it as very difficult so that argument doesn't usually work. My husband and I would personally have done a lot worse so far if we'd kept finances separate. We were able to make a move when he was offered a job opportunity that gave him a much higher salary and earning potential. It will probably cause me to hit a 6-figure income 3-4 years later than I would have if we had moved for my career instead, but we're making a much higher total now and it will only improve. I can also max two pre-tax retirement accounts because I don't have to live on my income alone. Gotta say, I also don't really understand being worried that your spouse will resent you to the point of divorce over paying to feed you/living expenses.
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Apr 16, 2015 22:00
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Radbot posted:I'm referring to employer provided defined benefit pensions. How can those be poo poo, unless it's specifically used as a reason to pay you less than you should be paid? It is, in a way, used to lower your pay. It is a part of your total compensation package, if you would have done a better job investing that money yourself, you are worse off. If you would have blown it on something else, you're probably better off. Pension funds have defaulted before, I wouldn't take it as a given mine will be there in 40 years.
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Apr 16, 2015 22:23
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