04/25/2012 01:31 pm ET Updated Jun 25, 2012

Ask the Readers: How Do You Merge Finances and Philosophies?

Everyone is different. That's the beauty of life -- but also one of its greatest complications. When two people fall in love, the meshing of these differences can be both fun and frustrating, especially when it comes to personal finance. That's what Elaine has discovered. She'd like some advice on how to merge finances and philosophies with her fiancé. Here's her story:

My fiancé and I are both very responsible with money -- neither of us has any credit card debt or late fees on our records -- but we have very different philosophies about money. I've always been a saver, and he's always been a spender.

I make around $25,000 a year, he makes about three times that. I always knew my chosen career field was not a profitable one, and have always saved with that in mind. He doesn't enjoy his job as much as I do, and gets most of his joy in life from spending the money he makes on things he really wants. His purchases aren't frivolous -- he researches what he's getting, waits until they are on sale to buy them, and uses them extensively once he's bought them -- but he does spend most of what he makes every month.<

He has shown willingness to compromise. At my insistence, he's started an emergency fund and is contributing towards his retirement account, but he still feels that he makes money so he can spend it on things he wants.

With that in mind: What suggestions do readers have for a responsible, soon-to-be-married couple with a very different philosophy on money and a significant income disparity? Has anyone encountered this and found a good way of merging finances?

Elaine's in a tough situation, and she needs to be careful about how she proceeds. In every relationship, the partners will have certain goals that don't align with each other. But it's important to make sure your common goals are met before pursuing personal passions. The tough part is determining exactly what those common goals are.

Here are a few ways to be sure that both partners are on the same page and that nobody feels singled out as the bad guy:

  • Regularly review accounts. Schedule regular times to go over the household finances. Some couples do this weekly; others do it once or twice a month. Be sure to review upcoming income and expenses, and to deal with any unexpected budget items.
  • Don't be controlling. Take "you" and "I" out of your budget conversations; replace them with "we" and us". Each partner needs to feel as if they're involved in the household finances. If you unilaterally tell you husband he can't spend money on his hobbies, he's going to be resentful. Work together to find common ground.
  • Be supportive. Find ways to encourage each other toward your shared and separate goals. If your wife asks you to call her out on bad behavior, do it. If she wants advice, give it. Don't lecture and don't act superior, but help your partner improve.
  • Play to your strengths. Some people hate looking at the Big Picture -- they don't care about retirement savings, interest rates, or the Dow Jones Industrial Average. Others don't like nitty-gritty stuff like clipping coupons or looking for sales. Let each partner be in charge of the stuff they're good at.

It's rare that partners agree completely on how to handle their money. They key is to find as much common ground as possible, and then to compromise on the rest.

We've talked a lot in the past about whether couples should keep joint or separate finances. I don't believe there's any one right answer. It depends on the couple. In the case of Elaine and her husband, I think there are three good options:

  • Joint finances with an adult allowance system. Elaine and her partner would pool their money in shared accounts, and then withdraw a fixed amount into personal accounts each month. (He would probably withdraw more since he contributes more.)
  • Proportional finances. Elaine and her fiancé would contribute money to their joint accounts based on the proportion of their income. Since he makes three times what she does, he would contribute three times as much as she does to the joint finances. After funding the joint accounts, both partners could do whatever they wanted with their leftover money.
  • Separate finances. A final option is for Elaine and her husband-to-be to keep completely separate finances, dividing the household bills in some way they find equitable. That's what Kris and I did, and it worked for 23 years. We never fought about money.

So, what do you think? Based on the info Elaine provided (and based on your own experience), how should she and her partner work together to cope with their different income levels and their different financial philosophies?

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"Ask the Readers: How Do You Merge Finances and Philosophies?"