Dear Penny,
My fiance and I plan to get married within the next two years and buy a house. We both have agreed we want to keep our own bank accounts, but I am worried things won’t get split correctly.
He has two daughters from a previous marriage, and I have two Shih Tzu dogs. How should we go forward financially? Get a joint account and he pays more because of his daughters?
— D.
Dear D.,
I think that whenever you combine households, you have to accept that there’s no perfect way to split things. It’s rare that two people will bring identical resources and obligations into a relationship. That’s especially true for blended families.
The simplest way to split things here would be to pool your money into a joint checking account that you’ll use for household expenses, like your mortgage and utilities. I’d also suggest a joint savings account where you can store your emergency fund.
You can each use the money in your personal accounts to pay basic expenses for the family members you’re bringing into this relationship, i.e., your fiance’s human kids and your furry kids. For example, your fiance should use his personal money if he pays child support and also for major kid-related expenses, such as sports fees and 529 plan contributions. Meanwhile, you’d use your personal account for things like vet bills and pet insurance.
Where it gets tricky is determining how much you should each contribute to joint accounts. Usually, I recommend that couples contribute to shared expenses based on their respective incomes. So if one person earns $60,000 and the other earns $40,000, the rule of thumb is that they’d pay 60% and 40% of the household bills, respectively.
In your situation, I’d look at how much you each have left over after you pay for kid- and dog-related expenses and use that as the basis for contributing to the joint account. So if you and your fiance each bring home $5,000 a month and he spends $1,000 a month on kid stuff, while you spend $200 on your dogs, you’d calculate your share of the bills as if he has $4,000 a month to contribute, while you have $4,800. You might tweak these numbers if one of you has significantly more debt than the other, though.
But overall, you should split mutual expenses according to how much income you each have available. In other words, if you have roughly equal amounts of money left over after paying for your obligations, I don’t think your husband should be paying more for things like housing and electricity just because he has kids.
Part of my reasoning here is based on the fact that you’re planning to buy a home relatively soon. When that happens, you’ll not only be life partners but also co-investors in an asset that will hopefully appreciate in value over time. Unless his kids are getting a stake in this house, I don’t think he needs to be paying more just because they may live there part of the time.
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Explore all your optionsMore importantly, though: You’re building a family with your fiance, and your future stepkids, as well as your dogs, are all part of that family. But it’s hard to merge lives if you focus too much on keeping score.
I’d suggest not nitpicking over things like whether your fiance should be paying a greater share of the grocery bill, just as you probably wouldn’t want him sending you a Venmo request if he picked up a bag of dog food on his way home from work. Similarly, if you want to enjoy things like a vacation or a night out at the movies, you may wind up paying a disproportionate share.
Creating a future together means approaching life as a team. Surely, you’d have the other’s back if one of you lost a job or got sick. But that same logic applies to if you encountered a big expense related to his kids or your dogs. You’d need to tackle that challenge together instead of brushing it aside as the other person’s problem.
It’s great that you’re thinking about these issues now instead of waiting until you’ve swapped “I do’s” and signed your names to a mortgage together. Just make sure you’re on the same page before you merge lives any further.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
