Getting married and finances
My girlfriend and I are going to get engaged soon and have been discussing how to handle finances. She comes from a very wealthy background and is worth 8 figures in her early 30s, and will easily be worth $50mm by age 50. I come from a standard upper middle class family and will inherit money, but nothing like that. She has no debt and a set income of $20k a month. I also have no debt and my after tax and 401k income a month is around $14k a month. Combined, it’s a large income, though I do save 20%ish a month and sock away my bonuses. I also have no debt after these last few car payments. We currently live together in a house she owns outright. I will be signing a prenup before we get married and don’t have an issue with it. She comes from a family where her parents both keep entirely separate accounts. They are both on second marriages but this is still mind boggling to me. They buy their own groceries, toys, trips etc. It kinda creeps me out and gives me large lack of commitment vibes. My girlfriend is open to have joint checking and having me deal with financial advisors etc, but still goes back to it would be simpler to manage our own spending money, which she admits comes from seeing her parent and step parent do it that way. I come from a family where all the money goes into one act and my parents have split responsibilities on how they manage it, hence wanting to just put it all in one acct. I’m really interested to hear how people manage money with their spouses, especially if one comes from a very wealthy background and maybe from some financial advisors who manage clients like that.
Thanks!
Sign the prenup as Mickey Mouse and then you can be worth 25M by 50
Based on the most helpful WSO content, here are some insights and advice on managing finances in a marriage, especially when there is a significant disparity in wealth backgrounds:
Key Considerations:
Prenuptial Agreement:
Separate vs. Joint Accounts:
Hybrid Approach:
Financial Management Strategies:
Budgeting and Saving:
Financial Advisors:
Communication and Transparency:
Practical Tips:
Insights from WSO Threads:
By considering these strategies and maintaining open communication, you can effectively manage your finances as a couple, regardless of your differing financial backgrounds.
Sources: Calling all Financial Advisors: What products do high net-worth people use to manage their wealth?, Managing Your Money - Building a Personal Financial Model, Managing Your Money - Building a Personal Financial Model, To what extent do you tell family / friends about your salary?, How Much Money is Enough - Two Ways to Figure it Out
I'm not married yet, so take my answer with a grain of salt, but I'm in the opposite situation where I come from a wealthy background and my girlfriend is upper middle class. For us, everything will be joint, but this also has to do with the fact that I am the primary breadwinner and when we have kids, the plan is for her to be a stay at home mom. I also have a provider mentality. And this may be a big difference with you and your fiance because women typically don't have a provider mentality as they usually want to be provided for. I also wouldn't say that having separate accounts necessarily means less commitment since that is how her parents have done it. It's just normal for her in the same way that joint accounts is normal for you. You could also make the argument that a pre-nup could be considered noncommittal.
I think that unless this is a dealbreaker, just go with the flow and see how it goes. I've heard from my married friends that initially they kept everything separate, but when you have joint expenses it can become a headache keeping track of everything so they joined finances later in their marriage. You can always adjust your finances and work through it as with everything else in a relationship/marriage.
I know this post is a bit old, but I totally agree that joint accounts often become a practical necessity once you start sharing a life. Managing separate bills for every little thing sounds like a logistical nightmare in the long run.
I wasn't as forward thinking as you marrying an heiress, but my wife and I have our investments combined (minus 401(k)s) but our checking and minor savings accounts separate. We thought about making a specific "bill paying" account, but she's been paying roughly half the bills and I've been paying roughly half the bills for years and it has never not worked, so we figured we'd keep it going. Once a year we sit down and do an overall "annual review" to make sure we're on track. I have no interest in reviewing all of her day to day spending and she has no interest in reviewing mine. We have pretty different views on money day to day, but are aligned on the more important financial goals, so it works perfectly. As long as we're hitting our targets as it relates to saving and investing, the rest doesn't matter to us.
It is nice never having to deal with the "Did you really need another pair of shoes?" or "Did you really need a new putter?" type of bullshit conversations about money that a lot of people have.
Background : Just recently married. I'd say we come from somewhat the same social economic backgrounds, both probably middle to upper middle class. I'm a couple years older than my wife, so I guess I've had better earnings and a couple more years to grow investments, so I out weight her in terms of savings. I'm also more finance minded, so I budget very well and know my numbers to a T where everything has a place (which someone could probably look and say is overkill, but I have everything in place which makes it very simple once its up and going), where as my wife is more figure out money as it is paid. Not saying she is bad with money, we just each have our separate system.
Spending: I'd say our spending system is more percentage based for large things but split for almost anything else. For example, say she makes $50K and I make $100K, I'd pay 2/3 of the rent because because I make 2/3 of the income. I also do most of the grocery shopping as I prepare most of my meals where as my wife doesn't, so if she needs something when I go to the store I just charge it back to her. If my wife went to the store more I'd maybe say it even outs, but its usually me. We both save and have a joint account that is mainly funds from our wedding, we don't really tap it for anything. When we have a kid we might need to merge more money, but we'll see how it goes.
Psychology: I'd say were the rubber really means the road is the psychology you both have around money. My wife's parents are divorced for reasons I don't have a firm grasp on (my wife has 2 sisters and I don't think they understand it ether). Long story short I believe it was a financial issue, so I think my wife has some scars about not working or relying on others for money, a position her mom was in. Sometimes those are the things you need to work around.
End of the day I think people don't want to be told what to do with their money, because they are ether handling it well and don't want advice, or they know they are not handling it well but don't want others to know. It's like your physical appearance, if you look like a model you don't need advice, and if you're overweight you know it. I think it's like anything else, grandmothers and old people (not hating) never tell you about people who made a joint banking account and did it well, they always talk about someone who stole money in a relationship or suffered financial abuse. You really just need a financial plan that works for both of you, and that you both agree to. I could probably manage money for myself and my wife together, but I don't think she would go for it, and I don't think I would want to operate without a budget, so we each do it our own way.
Woah u def hit the jackpot :0
Sorry, but this sounds like a disaster long term. Good luck
This kind of sounds like a humble brag, given she stands to inherit 50 million and so questions about finances are pretty inconsequential considering that.
I mean once you have kids, you’re locked in financially and can ride her till your death. 50mm is hard to squander.
That said, I agree it’s sad her parents keep separate financial lives. But I bet they are both white and feeling trauma from their failed first marriages.
My advice would be to sign whatever prenup she wants, but then ask her to consider simply joining finances going forward. So you’re paychecks from that day, both go into one joint account.
My wife also comes from more money than me. Not 50mm sadly, but def more than me.
This is what I did. Jumped in with two feet. I brought up a prenup myself and said I’d be happy to sign whatever you want, but going forward everything we earn will be shared. Everything, including retirement accounts.
She was cool with combining everything as well. Her dad has set up a revocable trust for her stuff, as I’m pretty sure he still doesn’t 100% trust me lol and wants to make sure I don’t get it in the event of a divorce.
But our attitude was like if it’s a real marriage, your lives are going to be intertwined and you’ll have kids, so separate finances is ridiculous. Unless you’re planning on hiding something, I don’t understand separate bank accounts or not sharing electronic passwords or prenups themselves.
Every single older person I know what never shared their phone passwords with their spouses or had separate bank accounts that the spouse couldn’t access - every single one - they got divorced eventually.
Basically, in your case, your future wife’s wealth is so staggering, it doesn’t matter what you, you’ll likely be taken care of financially for the rest of your life. So I wouldn’t worry about it, just go along with whatever she and her parents say so you lock in that marriage. And after ten years and kids, judges can even tweak the prenup terms I have seen. You’ll be just fine.
Totally different situation, when we got married my bank account was in the triple digits and she was $30k in debt from school and we're a single income household, but we have a shared account that's for expenses and then a separate account for each of us that we send money to each month for our own personal interests. That way there's no guilt around spending the fun money, it was sent there to use after expenses have been taken care of.
I personally would put together a shared account for your life expenses that you contribute and manage together that includes funds for shared interests, and then have separate funds that you can each use however you want. How much you put into the accounts is really up to the both of you.
Marriage is a life long commitment. If you go in separate it is my opinion that it is a much easier path to divorce. If you trust someone to spend your life with them, you should trust them in every aspect. Money is a factor in deciding who to marry, if you don’t like how they spend or trust them with money you shouldn’t be marrying that person.
again all my opinion but my wife and I share finances and it’s brought us closer together and helps form an us mentality instead of mine and hers.
The year I met my wife, I made ~9x+ what she did + had ~30x+ the NW. She is a very organized ex-finance girl...so she does a better job of not wasting money than I did. She did have a real career in credit and quit to focus on our family as per our original plan, which I appreciate a lot.
I think the separate accounts thing is very weird, and like you said, it doesn't signal commitment...
IMO if you meet the right person, this kinda thing isn't something you worry about at all. Our spending habits are also both pretty similar and she is even worse than me in a lot of ways lol, so it works well. I usually have to convince her to spend money on herself. For example, she is pregnant atm and I had to convince her to spend money on massages and hiring more help.
Congrats!
Thanks!
Just have a shared account for expenses and I would never co-mingle premarital assets. Keep that separate.
Some of you guys are weirdos.
My wife and I have zero desire to share bank accounts. Why add another line item to manage?
I pay mortgage, she pays taxes and insurance. If she goes grocery shopping, she pays with her money. If I buy groceries, I use my credit card.
It’s literally left pocket right pocket. Any extra money or savings she wires to me to invest. So I guess you can say we do have combined investment accounts (easier to manage exposures, taxes) But I have zero desire to see or care what she buys on a daily basis, with her own credit card and checking account
Yeah dude apparently we're both on a fast track to divorce because we don't have shared checking accounts.
Del
Get that bag son
What works for me: keep both personal accounts separate for personal spending. for joint stuff, create a joint account that is fed to fit the needs of the mutual household/grocery. Feed the joint acct either by: A-both paychecks go into joint account, then you feed your personal accounts a set amount from the joint. or B-paychecks go into personal accounts, X amount from both go into the joint. You'd probably see personal accounts get 25% each or less of takehome as household spending/saving typically trumps personal monthly expenses.
I'd then build out a few separate targeted joint HYS accounts (fed by the 1st joint acct monthly) that are bucketed for joint-specific spending occurrences like: Property tax, emergency fund, car, baby, daycare, home improvement, vacation, etc. So when she pays for new windows, she pays herself back via the home improvement, when you buy flights for your vacation with her, you pay yourself back with the vacation bucket.
Overall, waterfall account buckets that auto-feed X amount per month for specific purposes that clearly delineate and budget spending. you both still have your personal accounts for your own spending, and your joint spending needs are satisfied automatically.
I have everything family oriented on our AMEX, which i control and audit monthly. Groceries, kids, liquor, lunch, dinner, presents. I subtract out certain items like gym, sports tickets e.g. Giants games, Yankeee's games where she does not go.
As the lesser spending spouse, you will be hamstring where you will be forced to spend more of your pro-rata to keep up with her frivolous spending. I would force in a forced savings for you in the pre-nup. I'm 100% her folks will have you sign a pre-nup. If you forgo this savings, you should have this reflected in the pre-nup after 5 years of marriage you get your 50k a year *(whatever rate you want)^5
Caveat, women only understand that your money is their money, her money is her money. Emotionally this is how they will always see it.
Is she new or old money? I grew up in a new money family, but had some old money friends and neighbors growing up and have been exposed to it professionally. Frankly, old money seems to have higher odds of the person being deeper on the anti-social spectrum than most.
While I agree that signing a prenup should be straightforward for a marriage, I would recommend getting an attorney to review it and do not let them pay for the attorney. It is important to understand exactly what happens should a divorce occur. Also, if a man has money then he provides the wife the same standard of living. This should be the same for you, be sure to get that sealed with her signature and notarized (again, hire an attorney). If she won’t do it, then she has no financial skin in the game and could drop you on a moments notice.
One of my neighbors as a young child was old money, the beneficiary passed and the widow got nothing. Their children were going to be fine over the long run, but the trusts wouldn’t even cover the mortgage and the neighborhood was upper middle class to upper class in terms of home value. The trustees let the widow get foreclosed on. No one from the family offered to help out at all - no adultery, no abuse and from what I was told the family were wonderful people. However, it was just the right mix of a super tight trust and frankly awful in-laws who could’ve wiped their ass with the value of the mortgage.
It is important to know that you will actually be secure should things fall apart or she passes. Establish something where you actually have some control and rights to 50% of the assets as a co-trustee or joint account holder. A couple things that family didn’t do, they never took full distributions (wanted a normal life). Had they taken a few full distributions then they could’ve established their own trusts/jtwros and the widow would’ve been fine. In this scenario make sure that both people have to approve any distributions to another account aside from SMA’s, foreign jurisdictions are frequently only a wire away.
Aside from speculative accounts (e.g. day trading yolo accounts) be joint in everything that you can. Retirement accounts can be a bit less of a concern, but even then it could make sense. If one of you has a bit higher risk tolerance with the investments then separate investments can make sense, just be sure that is established in an air tight trust as well.
It’s complicated and an awkward conversation, regardless of the dollar amount, but one worth having. Should the family should love each other more than their capital. You’d be amazed how greedy people are. If they try to say ‘it’s offensive’ mention that you have some understanding of trust law and you don’t want to get upended should something tragic happen.
One key word in all of this:
Attorney, not CPA, not CFP, attorney that you’re paying. Also, research divorce statistics and the impact that someone coming from a broken home has on getting a divorce. I have friends that got burned in similar scenarios - one’s wife told me she didn’t think marriage was serious prior to the wedding. I let him know, he believed me and got pissed because ‘their love was real.’ One thing that was definitely real was her craving for new dick. They were split within 3 years - her family had money, his was fine but by no means wealthy. He got nothing. So take any reports of red flags from mutual friends or concerned people (aside from some goofy ex) seriously.
Side note, it’s a lot harder for someone to fuck up when every transaction is happening from joint accounts. I’ve seen a couples divorce and a near divorce because of financial strains due to one person not contributing as much as well as one spouse making poor financial decisions that were also levered (these were not wealthy people).
That being said, congrats on the engagement! Marriage has been the best things that has happened to me (I married down in terms of class - up in terms of intellect and beauty). I love my family second to God. Holding my children is a feeling that I can’t describe. Choose your battles wisely. Discuss absolute no-gos and be ready to forgive each other often. You both will need the forgiveness. Avoid the silent treatment and bone often.
I’m curious how you ended up handling everything, since this post is a bit older and your situation was pretty unique.
I totally get why that separate account thing feels cold; it’s a vibe killer when you’re trying to build a life together. We went with a hybrid setup: joint for the "boring" adult stuff like mortgage and travel, but kept our own "fun money" stashed away. It saved us so many pointless fights.
Having someone look at the legal side of the prenup really helped clear the air too, like when we worked with Atty. Rebecca Gumaer at Front Range Family Law. It just made the "business" part of marriage feel less personal and more like a simple safety net.
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