So the situation is we've been separated "in-house" for the past six months. Because of our house debt we are stuck together for the foreseeable future and have to live together.
In the mean time, my wife has been running up her credit card again (which we paid off in January), taking two weekend trips a month, renting a beach house and taking the 3 kids on vacation. She also buys them lots of gifts and takes them out all the time. For me, that means when I get to spend time with them, we never have any money to do anything. Plus, in general, she is really spendthrift when it comes to money and admits it.
She started her own savings account, without my knowledge, some time ago. Our joint checking is at one bank and our joint savings is at another bank.
I decided it was time last weekend to stop the bleeding. I closed the joint savings account, printed a final balance summary and had the credit union cut her a check for 50% of the amount in the account. I then deposited my 50% in my own account where she is not the joint owner.
The next step I am taking is generating a spreadsheet with all the recurring financial commitments of our joint checking account. Our joint checking account will only be for mortgage, utilities, budgeted groceries and daycare. There will be a set amount autodebited from our paychecks to make sure that account is solvent. We each will be responsible for our own cell phone bills, credit cards and gasoline/commuting. For everything else involving the kids like sports fees, school lunches, doctor visits, we will show each other each bill and split it 50/50.
My salary is more than my wife's, but not significantly so. I bear most of the tax burden on my paycheck as a result (I have no exemptions and additional withholding) and I pay all the medical/dental/vision premiums. Our take home pay share is 51.7% vs. her 48.3%, which again is not significant.
Having said that, I made it so that after all the deductions for the recurring bills and individual bills, our individual take home is 50/50. We both live in the house and both take care of the kids jointly. I don't want to be a prick and say that I make more money so I should get more. I'm trying to take the high road.
The anticipated result is that my wife will now have to be more responsible with her portion of the money (after 17 years of trying) and if she wants to take vacations and blow money on things, it's up to her.
I'll have more money to spend on the kids when they're with me, but I'll still be frugal and demonstrate to them good money management skills.
If anyone else has any thoughts on this, I would appreciate the input. I think I am trying to be really fair and equitable in having us both have the same amount of cash after all obligations are met.
Also, the car she drives most of the time is on a loan in my name. Would it make sense for her to get a loan to buy the car and then get her own insurance for it? The reason I ask is that "my car" the minivan has over 100,000 miles on it and will become a maintenance problem within a year. I'd like to get something smaller and more economical.
Well, she is lucky that you consider her regarding the finances. I helped my H get a car in my name, and to thank me, when he left he brought the car back and left it for me to deal with. He made more, but I had more available because of his bills, alimony, etc. I told him I didn't want to have a car in my name that he was driving around doing his thang ;o) I offered for him to get a loan and purchase it for me, but he didn't or couldn't. He left me with the entire bills and rent without concern or care. Continue to take the high road, you will be blessed.
You are right to take the high road but one thing in your plan that would make me nervous and leary is that if you both own the house (as I understand from your post), and she has no contol over spending what happens if she can't make her half of the mortgage. That'll come back on you and you will still be stuck having to cover or foot the bill if you want to keep the house. Everything else seems reasonable to me. I don't know what kind of conditions you might put her to make sure she doesn't screw that up but I would surely have some kind of backup plan for that. And I don't like putting conditions on loved ones, but it seems that in your case there is risk if you don't have an agreement for that up front, that it is a recipe for more of the same. I don't know, just my thought on it.
Yeah, I can imagine it has to be difficult. My wife and I are going through the same exact thing; living in the house dividing 50/50 but at least she has a good head on her shoulders about expenses so I don't have that pressure. Man, and we only had four years to pay on the house. I feel for you man, I am in a kind of fog about my whole situation. I don't know if I am just worn out or it hasn't really hit me yet. I am still thinking it's just a horrible nightmare.
We were supposed to refinance our house within the next five years, plus it's underwater (we bought in 2006, just after the bubble burst). I'm looking at bankruptcy as an option, but before we get divorced.
I have thought about bankrupcy too but it would not do me any good since in my case, 75% of our debt is student loans that we took out for our 3 childrens college. Unfortunately for me, there is no escape from that debt except to sell of most of assets, house, stocks, and even dip into our 401K retirement fund which will carry a huge tax penlaty. Student loans are not covered under bankrupcy laws - I am stuck there, otherwise, bankrupcy would have been an option for me too. So if you are not buried in student loans - you have a possibility there.