When I'm counseling newlywed couples, I get this question a lot, "How should we combine our money to pay for household and other miscellaneous expenses?" It's a very important and excellent question. My first response is however, "Do you have a budget in place?" Most of the time the answer is no, but that's why they're meeting with me in the first place. Once a budget is completed we can answer the question of how they should combine their incomes. Because you must understand how much it cost to live in your particular lifestyle comfortably on a monthly basis.So lets say both husband and wife work a full-time job. The wife brings in a net income/take home salary (after taxes) of $1500 a month; the husband brings home $1700. Their monthly household expenses are $2000.00. This includes mortgage/rent, food, clothing, automobile expenses etc. If we combine their incomes together, their total is $3200 (1500 + 1700). Their monthly budgeted expenses is $2000, so we will divide this amount by their combines incomes 2000/3200 which will give us 62.5% or rounded up 63%. Now, we can conclude that they both should contribute 63% of their monthly income to their household expense account. Now the wife will put $945 into their joint account and the husband will contribute $1071 into that same account. As for their left over portion, they can agree to place an equal percentage in a joint savings or in a separate account for personal expenses or do both. I recommend both! They can create a vacation account, a gift account etc. But a couple should definitely have both a joint checking as well as a joint savings account for unknown expenses and emergencies.Most of my clients are happy with this arrangement because it allows them to operate as a unit, yet leave room for their individual spending habits. I often suggest however that purchases over an agreed amount be discussed say $500 or $1,000 but that's just a suggestion. I also suggest that the couple attempt to live below their means in case of an unexpected emergency or loss of income and if a couple plans to start a family they should both contribute an increased amount into their household fund while the wife is still working. This will decrease the stress of being overwhelmed by bills that are not of necessity. Save up cash for big-ticket items and avoid abusing credit cards (a common occurrence among newlywed couples). This system should work for all income levels.Let me know if you would like for this topic to be on one of my upcoming shows. We air live every Sunday at 9:00pm EST. Don't worry..... if you miss a show you can listen to the archive version on the website's front page.P.S. Join us on facebook!
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