Keeping Up With These Joneses - joint marital finances

Kiplinger's Personal Finance Magazine, Oct, 1999 by Mary Beth Franklin

This couple's separate finances give way to common goals.

The house Debra and David Jones bought in the mountains of Colorado last year is more than their dream home: It also marks their evolution away from seven years of separate-but-equal money management in their marriage.

"I think it's logical for people who have been through a divorce to be more guarded in how they handle their affairs," says David, 47, vice-president of sales and marketing for Storage Technology in Louisville. Colo. "We were committed to one another from the beginning, but trust has to be developed over time."

When they met, Debra, now 41, was an executive with Silicon Graphics Inc. (SGI), a cutting-edge high-tech firm in Mountain View, Cal. They married in 1992 and moved into Debra's home in Menlo Park.

"We decided that what was mine was mine and what was his was his, and we'd split our expenses down the middle," Debra recalls. "I paid the mortgage since the house was in my name, and he reimbursed me for his share. We did the same thing for the utility bills and credit cards. It was very complicated."

Whether you pay your expenses out of one account or two really doesn't matter as long as it works for you, says Marianne Shine, a planner in Deerfield Beach, Fla., who teaches premarital money-management courses with her husband, Randolph. What does matter is that you agree on your financial goals and communicate when making spending and investing decisions.

Common goals

Buying a home together in the foothills of the Rocky Mountains--contributing equally to the down payment and titling the house jointly--was a watershed in the couple's relationship, says Debra, who still spends much of her workweek in the San Francisco Bay Area, where she rents an apartment. "Now we have our names on all of each other's accounts."

Although they maintain two checking accounts, where their paychecks are deposited electronically, they also keep a joint household account into which they contribute regular amounts each month. In California, they kept completely separate bank accounts and had to write each other a check any time one needed to reimburse the other. Now each has access to the other's account and can transfer money back and forth without permission.

"Ironically, the need for independence that I had when we were first married has become less and less as we lead increasingly independent lives," says Debra.

To finance their dream of retiring in the next 15 years, David fully funds his 401(k) plan at work and Debra socks the maximum away in her SEPIRA, a retirement account for self-employed people. The couple also invests jointly in a growing portfolio of technology stocks. They are confident that their retirement savings are on track after consulting with their financial planner and a sophisticated Internet-based retirement-planning service. And both have disability insurance to protect their earning power.

Household "Infrastructure"

Debra, who has owned her public relations firm since 1996, commutes to Colorado on weekends. And although David's office is about 40 minutes away in Denver--and is the reason they moved to Colorado in the first place--he also spends more than half his time on the road. Their busy lives require that they have help running the household when they're not there.

"If we had children, I would never do this," Debra says of their commuting lifestyle. "But since we don't, it gives us the opportunity to bring other people into our lives. They have become members of the family." The Joneses employ a housekeeper and a young woman who tends to their two horses and three dogs and lives in an apartment on the property. Debra, who normally handles the household bills, recently hired a bookkeeper to take over that chore.

Debra wasn't always in charge of bill-paying duties. Shortly after she and David were married, Debra seized the opportunity to work for SGI in Denmark, and David went with her, taking over the finances while she put in long hours at the office. He could afford to take some time off after selling his leasing company in Canada and a home in Hawaii. An avid golfer, David used his time abroad to work on his game and plan his next business venture.

The couple returned to California in 1995--Debra to SGI and David to a new job with Storage Technology. With both working full-time and David traveling constantly, Debra took over managing the bills and what she laughingly calls the "infrastructure" needed to maintain their lifestyle: the housekeeper, the gardener and the dog walker.

Pursuits of happiness

Busy as they were, Debra and David found time--and money--to spend on their separate hobbies. He joined a golf club. She bought a horse. (When they moved to Colorado, she bought another.) They discussed their decisions in advance because both involved time away from one another, and each agreed to be totally responsible for his or her own costs.

"We both have relatively expensive habits," admits David. "I have no idea what the horses cost, and I'm sure she doesn't know what I spend on golf." That's one of the reasons they still have separate checking accounts. "When everything is joint, there is a responsibility to discuss any significant purchase. Neither of us wants to have to do that," he says.