Separate vs Joint Cash Flow Systems

Everyone manages their money differently.

My household is fully joint (2-working spouses) and we love it. I also have plenty of clients & friends who do separate and are thriving together.

When issues arises in either scenario, sometimes you need to make small, subtle changes to shock-and-improve the entire system.

This piece covers recommendations I’m currently suggesting for a client-couple who prefer separate finances.

I'm working with a 10-year married couple in their 50's who have 𝐜𝐨𝐦𝐩𝐥𝐞𝐭𝐞𝐥𝐲 𝐬𝐞𝐩𝐚𝐫𝐚𝐭𝐞 finances (no joint accounts) and are 𝐧𝐨𝐭 thriving.

They live at-or-above their means = No extra savings.

This is their 2nd marriage and are a wonderful couple.

Their issue, however, is that they have 𝐧𝐨 𝐯𝐢𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲 𝐢𝐧𝐭𝐨 𝐡𝐨𝐮𝐬𝐞𝐡𝐨𝐥𝐝 𝐬𝐩𝐞𝐧𝐝𝐢𝐧𝐠.

And when we created their financial plan, we learned quickly they are not on track to retire.

The biggest driver?

𝐒𝐩𝐞𝐧𝐝𝐢𝐧𝐠.

My current theory [in testing] is that they should at least have 1 joint account for joint bills.

Why?

They need to know what it costs to keep their lights on. And currently, they have no idea.

1. Create 1 joint account

2. Have a grown-up conversation about how much they'll each contribute to it regularly for joint bills.

Money is a painful talking point for them.

They sometimes have to "borrow" from each other, or venmo for groceries. It feels icky.

Tiny shooting pains that folks with $300K+ household income shouldn't be having.

I believe that simply 𝐫𝐞-𝐫𝐨𝐮𝐭𝐢𝐧𝐠 𝐭𝐡𝐞 𝐬𝐲𝐬𝐭𝐞𝐦 - by using a joint account for shared expenses - will help illuminate, even with no other behavior change.

So I am suggesting a new partially-joint system like this to get the ball rolling:

I fully agree with letting your spouse have freedom to spend. Guilt-free.

But not at the 𝐜𝐨𝐬𝐭 𝐨𝐟 𝐚𝐰𝐚𝐫𝐞𝐧𝐞𝐬𝐬.

The main problems I'm hoping to solve are:

• awareness (of total household income and spending)

• putting them on the same team

• reduce icky feeling from nickels-and-dimes

I suspect all these could be solved in the former, completely separate system.

But I believe the old muscle memory would prevail.

1 small tweak to a system can be enough to lighten up a dark room.

This isn't about getting them to do 'what I do'. It's about creating a new harmony so they can reach their goals.

Which, for them, is not working into their 70's, and being able to take impromptu trips to Vegas :)

If the above suggestions don't work, I'll gauge their feedback and learn what felt right/wrong.

Looking ahead, personally, I want to learn more from couples who keep finances separate and are having success (able to work together on joint projects, and save for joint visions).

My hunch is that it’s easier to live harmonious when there is plenty of extra income each month, and no spending burden.

But when you are over-spending at the detriment of your long-term needs, separate systems can get very tricky.

Feel free to message me to share what’s working (or not).

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