Farnoosh Torabi is a personal finance expert and author of “When She Makes More: 10 Rules for Breadwinning Women.”
In her book, Torabi explains to how she and her husband, Tim — a software engineer — manage their money.
She earns a good bit more than her husband (although she doesn’t specify a dollar amount), which is why she pays for 80% of their household finances.
Here’s how they make their money situation work for them as a couple.
They keep their paychecks separate.
Torabi says that she and her husband’s paychecks “don’t funnel into one big pot.” Instead they keep separate checking and savings accounts. “Within our separate accounts we maintain an adequate amount in checking to cover the monthly expenses we’re each accountable for and in savings to stay financially independent,” the author writes.
They have a joint credit card, which she pays off every month.
Torabi and Tim charge the majority of their day-to-day expenses — groceries, household products, vacations, gas, insurance, furniture, family gifts, dinners out, car maintenance — on a shared credit card. Torabi pays this card off in full every month and says these charges amount to around 80% of their household expenses. “It’s a helpful way to maximise points but, more important, it’s a way to streamline many of our family-related purchases and stay organised,” Torabi writes.
The author’s certified financial planning classes and textbook materials also go on this joint credit card, along with her husband’s evening software development courses. Torabi doesn’t mind paying for both her and her husband’s education. “After all, our individual education helps the well-being of our family,” she writes. “It’s an investment in our futures and I’m more than happy and proud to be able to afford that for us. If our paychecks were reversed, I know Tim would do the same for me.”
But they also each have their own credit cards.
Torabi keeps a credit card that she uses “strictly for business-related expenses,” and Tim pays for the other 20% of the couple’s day-to-day expenses on his own debit or credit card. This includes dinners out with the family, his clothes, and incidentals like subway and cab fare, haircuts, take-out meals, and a gym membership.
The author says that her husband also pays for their monthly garage fee and some of their utility bills, since he was already doing so when they were living together before they were married. “Frankly, I don’t care enough about some of the utilities to take control of them,” Torabi admits. “While I appreciate our cable service, for example, this is something Tim more enthusiastically researched and chose, so that’s become his jurisdiction.”
They have a joint bank account.
Although the author and her husband keep their paychecks separate and maintain their own credit cards, the couple does have a joint bank account that they opened shortly after getting married. Their first deposits into the account were the checks they received as gifts at their wedding. Torabi and Tim plan to save this money for future use. “We plan to put that joint savings toward the down payment or closing costs on a new house,” Torabi writes.
They both contribute to various ‘family’ investments.
Tim is the sole funder of their 529 college savings plan. “Because of our income disparity and the fact that it’s easier for me to cover most of our living expenses, we’ve decided that this is a smart way Tim can be a major financial provider for our family,” the author writes.
Torabi and her husband both contribute to their own separate retirement accounts, although she says “the assumption is that our savings will be mutually beneficial when it comes time to withdraw in retirement.” The couple also share a taxable brokerage account which Torabi funds from her income as a supplement to their retirement accounts.