Because I am insane, I thought we’d end the week with the one-two punch of sex and money. Nice, right? Never say I don’t take on the big stuff. Aiiii…. here we go.
….
Let me tell you about me and money: I stayed up the other night worrying if buying a (nice) new couch that we could totally afford (because my grandmother told me to buy a nice couch so I only had to buy a couch ONCE,* you see) was as irresponsible as buying a half million dollar house with only 8% down and a dubious income.** If I bought a full price couch, would I eventually end up in foreclosure? We rent, but never mind that.
That sort of sums it up. My relationship to money involves: hording, good solid puritanical values, and being haunted by my grandmothers. One of my grandmothers supported a family of 10 through the great depression as a typist, the other watched her family fortune disappear during the same period. Both women did, and one still does, think about money a fair amount. So there we are.
I think it’s fair to say that we all have personal baggage around money, though some of us have more than others. I didn’t grow up with a lot of money, and I did grow up in a family who’s values around money had been set somewhere in the mid-30′s. David likes to say that I’m the only person in our generation who grew up during the great depression (which has actually turned out to be good training for the last few years). So, as soon as I figured out that I could earn money, I discovered that I liked to earn it. Earn it and save it, earn it and save it. Because for me, money is security, and personal freedom.
David is, thank god, more spendthrift than I am. If it weren’t for David, I wouldn’t be staying up nights worrying about new couches, because we’d be sitting on the floor. David is good at making me un-clench my little fists, and give up the money I saved for vacation… so we can actually take a vacation. David is good at making sure we diversify our money, because my strategy of savings involves, roughly, shoving money under the mattress. The virtual mattress, but still.
So, when it came to merging our finances when we got married, things got a little rocky. Why? Well. I wouldn’t put David as a co-signer on my checking accounts until the week before the wedding (and he was lucky he got on that early). I wouldn’t talk much about a married budget till a week before the wedding. I was maybe having a tiny problem with sharing my income up until a week before the wedding. Which, for the record, I don’t recommend. Financial surprises, even small ones, are not delightful 7 days before you’re getting married.
At the point where we were getting ready to set up joint accounts, and I was freaking out, I was looking frantically for advice. How had other smart women done it? How were there accounts set up on a practical level? How had they negotiated sharing money on a more philosophical level? What was hard? What was easy? What had they learned?
Crickets.
I couldn’t find any smart women who had written, even in general terms, about the pros and cons of sharing money in married life. My mom told me how they had their accounts set up (theoretically if not practically helpful, since it involved so much pen-to-paper checkbook balancing as to make my plugged-in head spin). But when it came to emotional advice, my mom didn’t have a lot to offer. “I donno,” she said, “I think that was one of the easier things getting married young and poor. We didn’t really have any assets to merge, so there was nothing to stress about.” Well, let me tell you, merging finances at 29, when you have both assets and a considerable amount of student loan debt in the equation? Stressful.
But. After surviving the stress, I can also tell you it was the single most revolutionary act of getting married for me. It changed my life, and I loved it. So next week, I’ll share a little bit of my story. Hopefully it’s the first of many discussions about smart women, married life, and money. Till then, feel free to throw around your own questions and thoughts in the comments.
*My grandmother has had her couch since she got married in the early 50′s. She said she saved to buy it on the TOP floor of the department store, where the nice couches were. She’s re-upholstered it probably 15 times by now, and lucky for her, mid-century is back in style in a huge way, so half of you would probably give your eye teeth for her pristine, picked-by-a-trained-artist, mid-century couch. I wouldn’t. Because mid-century looks… like my Grandmothers couch, to me. But, we’re dedicating our first couch purchase to her, none the less.
** We just saw a HGTV show where this happened, which more or less devolved into me yelling, “STOP! You can’t afford that house! Sttttoooooppppp!” Over and over again.
Intro photo by Zachary Hunt Photography.
I can’t wait for the smart women take on all this. A couple of weeks before our wedding our financial situation fell apart (the literal ‘how am I going to feed us and not get evicted this week?’ kind of falling apart) and six months later we’re just starting to rebuild. The downsides are obvious, but the upside of it is that we can start our new family finance system almost entirely from scratch. I’m really, really interested to see what approaches people have taken and how they make it work.
And personally, we have completely different views on money. I’m a hoarder who gets slightly panicky if I don’t have at least a couple of months living expenses put aside in case of emergency… so the last few months of barely making have almost killed me! My wife is one of the ‘only live once and can’t take it with you’ kind of people, so finding a happy medium is a work in progress.
Bring on the words of wisdom, I have a feeling I’m going to be taking notes today!
June 4, 2010 4:50 am
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Us too…. totally totally. I think it usually ends up a good balance for both people, but, yes, can be stressful for a long while.
June 4, 2010 6:39 am
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We’re starting fresh too because my FH’s parents company went bust, which is where he had invested all his savings. Just as we were getting serious, he “lost” all of it, and we are planning our life on the assumption we will get nearly none of it back – and it was a substantial sum!
I’m just glad it happened early, and we have been able to plan our wedding to fit the fact that we DONT have access to that money! (Wish we did though!)
Good luck on the financial rebuilding :)
I’m looking forwad to all the thoughts as well, since we are planning our “financial merger” at the moment…
June 4, 2010 2:10 pm
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Like some of the other posters, my fiance and I were thrust into this discussion by circumstances.
As things started getting serious in our relationship, we made an appointment with a financial planner to discuss combining assets – at that point, we were both concerned about protecting our own financial interests and investments (a fact of life when getting married in your 30′s, we thought….). A month later we got engaged. A week after that I lost my job, the next month most of his investments tanked. Several months later, we lost my condo.
We did a lot of crying, arguing, and plugging numbers into excel documents during the first months of our engagement. A year later, we’re on the same page about financial priorities and our communication in this area is stellar. We haven’t combined everything yet but we will after the wedding. And, while we don’t always agree on what’s a luxury and what’s a necessity (ummm, cable) we are able to peacefully and maturely agree upon what expenses are cut and prioritized when money is tight.
This was a rough year financially but I can honestly say I’m glad. I think that being on the same page about money has built trust in our relationship, and has set a stellar foundation of open and honest communication within our marriage.
Meg, thanks for bringing up all of these tough topics (money, sex, etc) and helping us to realize that it ALL really just comes down to communicating openly and honestly with your partner….
June 4, 2010 5:38 pm
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ooh money stuff is the hardest part of our relationship, I think. It took awhile for us to really figure out why, but when we did, we were like, “Oh, of COURSE that makes sense.” I think I see money similarly to you, Meg – it provides a sense of security and freedom, and a lack of it, or lack of control over it, threatens my sense of safety. For my fiancee, money is a way to self-care: after a bad day, she’ll buy something nice or comforting. When we’re short on money because we have one very small income, my sense of safety is threatened by her need to take care of herself; and her comfort can be threatened by my sense of safety. Complicated.
At the very least, naming this has given us an easier time *talking* about it, but I suspect it will be a conversation we will always be having.
I’m curious about how many people do merge their finances or don’t merge their finances after they get married. A friend recently mentioned that none of her friends are doing that anymore. As a same-sex couple, I’m also wondering how many of her assets are automatically *our* assets – is she responsible for my federal student loans, since federally we aren’t even married?
Most of the time I find it’s easier to not think about this, but that only works for so long. Thanks for writing about it! Can’t wait to see what everyone has to say.
June 4, 2010 5:12 am
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The merging of assets is what I want to talk about next week. I thought it was the most powerful thing EVER (and for most of us, you might as well, since it’s all community property anyway).
As for you guys, do more research but normally NO. Most of our friends have pretty serious wills in place to make sure the assets stay merged. At the federal level, no you won’t take on her debt. The whole thing is effed up, but here we are.
June 4, 2010 6:42 am
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“…my sense of safety is threatened by her need to take care of herself; and her comfort can be threatened by my sense of safety. Complicated.”
um, wow. you are my hero today for putting this into words. i read it last night and just cant stop thinking about what you said because that is EXACTLY the situation i am in. Im like you, my husband is like your wife. Our different opinions on spending/saving have always been the biggest source of tension between us and figuring out why has been such a frustrating journey.
Kinda interesting… his parents were exactly the same when they first got together in the mid 1970s. When his dad was in college he would never let his checking account drop below $150 dollars even if it meant skipping meals, sitting at home instead of going out to a movie, whatever. His mom, on the other hand, would “play the game” (as we like to refer to it) with her account and feel totally comfortable letting it get down to under $1.
And of course there are so many additional layers to our personal beliefs about money…
I grew up in a family where there was more than plenty… he didn’t.
He started working at 15 and has paid for all his schooling.
My parents paid for mine and I wasn’t entirely financially independent from them until after I graduated.
So in a way I feel frustrated when I have to be what he calls The Voice Of Reason and say- um, no, we cannot buy that right now. He doesn’t mind it when I do that- in fact he wants me to be the one to balance him out. I just get sick of feeling like I have to be the unfun rational one.
It has gotten better. Just one of those things to keep talking about.
Onward with the navigating of our relationships:)
Love to you all.
ps. Meg- when I saw that you posted this all i could think was- oh dear god that woman is amazing… im barely get caught up on the sex comments and she is diving into money. i get so excited when something new is up but its such a catch22. because i disappear into apwland like its a black hole.
so thank you:)
i really hope you are getting enough sleep.
hugs.
June 6, 2010 1:35 pm
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I think I saw the TV episode you’re talking about and both my husband and I were yelling at the stupid people on the TV.
I know that typically money is a hugh source of tension for couples, but strangely this is an area were M and I are completely on the same page, no tension, great communication etc. In fact, in our pre-marital counselling one of the exercises was to draw up a joint budget. We started laughing, opened up the spreadsheet we’d had going for ages and quickly checked if there was anything that needed updating. Maybe the fact that we both work in the banking industry helps us to feel comfortable dealing with this stuff.
Philosophically speaking, our view is that the only appropriate debt for us to have is our bond (I think that’s what you call a mortgage in the USA :). All credit cards are paid in full every month and both cars are paid off. Also, we treat things like it’s all our joint money (but we each retain control over parts of it).
Practically speaking:
1) I have a personal cheque account (checking in the US, I think). My salary gets paid into this account and then I allocate the money to various bills etc. from there. Only I have signing power on this account. It also has a credit card attached, for my personal use. I pay for my individual expenses out of this (car, cellphone, yoga class, gym membership, clothes, make-up etc.)
2) We have a joint cheque account, it’s in my name but we both have full rights over it. We each have a credit card attached to this account. We pay all of our joint bills out of this account (phone, internet, groceries, entertainment, holidays etc.). At the beginning of each month we each contribute an equal amount into this account and we watch the balance in case we need to contribute more. [I earn significantly less than M, we pay equally for expenses, but I pay less into the bond because that's all I can afford].
3) M has his own personal account that his salary is paid into. He pays his own individual bills (e.g. his cycling habit)
4) We both have miscellaneous small savings/investment accounts that we handle completely separately.
5) Currently all of our saving is done through our bond (we’re hoping to pay off our house later this year, just over 3 years after we bought it). In the longer term we intend to save regularly and jointly into some kind of retirement/education funds.
In the beginning, after we merged finances, we were definitely conscious of when each of us spent on our personal cards or on the joint card (e.g. when I paid for M’s dry cleaning on my card, I’d ask for the money back). But, a couple of years later we’ve both completely mellowed about this. We try to pay for joint expenses out of our joint account, but both feel that things all sort of even out in the end so it’s not a big deal if I pay for him sometimes or vice versa. We actually talk about money and our financial situation A LOT and I love how freeing I find that.
June 4, 2010 5:15 am
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It’s like someone wrote my comment before I could! (our partners even have the same initials. Odd!)
I am also living in a land where they spell cheque with a q and have set up a really similar system with my partner. When I moved in, we got our joint account, and have developed from there. We also have a spreadsheet where we track our joint expenses and our share of them based on our proportional incomes. We rent, instead of owning (but mad props for paying off a house in 3 years, that is awesome!) but we’ve talked a lot about home buying and what we are comfortable with.
I’m interested in how people deal with inequalities between partners in particular – we’ve both paid off our debt, but I know debt inequality can be a huge issue for people. And as someone who was unemployed for the great majority of 2009, I know how that can strain a relationship as well – its hard to balance not being “kept” with not going “broke”.
Keep the one two punches coming!
June 4, 2010 5:36 am
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“It’s hard to balance not being ‘kept’ with not going ‘broke.’”
So, so true. My boyfriend makes a lot more than I do, and would gladly pay for everything. I can barely afford to pay for anything, but I insist on it every chance I think I can, because it’s crucial to my sanity to have some financial independence and power. Even if, in monetary terms, I don’t.
June 6, 2010 8:40 pm
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Our situation is very similar to yours, Rose. We merged our finances back in October when we started renting together. We didn’t do much research except talk to family and friends. So with the input of my in-laws (still married), my parents (split up), and other couples (married/engaged/dating/single) we decided to keep our individual accounts and open up a joint account for rent, bills and savings.
We worked out a budget (and sometimes re-work when needed) and do our best to stick to it. The tough part to this (and I think Meg, you touched on this a few times) I make more money than my fiance. So when it came to being equal contributors we had to figure out how we can contribute fairly without draining our individual accounts. So far it’s worked out well. We try our best to hold each other financially accountable.
I’m interested to see what Sara from 20000 Dollar Wedding has to say about this. I feel like she always offers smart tips on budgeting, saving and dreaming. Yes, dreaming b/c the big dreams are things we want to save for- vacations, a real couch!, and a moped. :)
June 4, 2010 5:44 am
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This is exactly how we have our finances set up. We’ve been living together for almost 5 years and didn’t merge until this year, and it makes my head hurt how much easier it is now verses how we were handling it.
In the beginning it was all 50/50. We would look at our individual credit card and bank statements at the end of every week and sit there crunching numbers until we’d determined who owed who for reimbursement of joint expenditures. It was hell for two theatre majors not too keen on math, and we got more and more slack about it until we were doing it once a month…and then guessing…then I lost my job and couldn’t find another for 9 whole months. My partner picked up ALL of the expenses. (I think I paid the internet bill and that was all.) After that we were finally ready to merge. I feel like you shouldn’t merge until you feel READY and if that is before marriage, or three years in, don’t make the move until you’re READY. There is no right or wrong way about this.
I feel I have to note that I am now paying rent by myself for 9 months and then all of our alternate expenses for 9 months after that to make it up, because I feel like we should have started this joint thing on a more even platform, but my partner doesn’t care at all. Those are my own values. Also, I read an excellent post on the Simple Dollar about financial equality in marriage and he made a good point that you can determine fairness of contribution by salary…so if I make 30k and he makes 10k, then it could be just as fair to split the bills 75/25 as 50/50, and if tomorrow he makes 40k and I make 30k, we can adjust to 57/43 and so on.
June 4, 2010 7:34 am
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This is how we split things up when my hours got cut in half last fall. Suddenly I couldn’t afford to pick up half of the shared bills anymore, so we worked out what percentage of the total income we each made, and shuffled things around so that we each paid that percentage of the shared bills. I also dropped several of my luxury expenditures, but I would have done that in any case.
June 4, 2010 8:22 am
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Also how we split expenses – it used to be 40/60, but then he took a paycut with the recession and I kept getting my yearly raises, so now it’s 46/54 and I’ve taken on an extra bill or two to re-equalize things.
June 4, 2010 12:19 pm
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We have done things similarly to Rose as well and it works for us. I purchased our primary house several years before Eric came into the picture and then he purchased our cabin at the start of our relationship. We still pay for our individual mortgages through individual accounts and have a joint account for the fun stuff. We both trend towards being hoarders, me to get that much closer to a secure retirement (this was the theme of my parents and by golly they retired at 60 and are loving life) and he really does not spend money much. We don’t argue about money. Ever.
June 4, 2010 8:00 am
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I am also an R with an M for a husband and have a broadly similar situation. We pretty much merged finances when we moved in together although we kept our own accounts seperate. Since getting married we have opened a joint account for household bills, rent etc. We still have our own accounts into which our salaries are paid. We came into marriage with differing levels of assets and liabilities (savings and student bank loans) and while each is technically still responsible for our own debts we see all assets and liabilities as equal.
As a lawyer though I see a lot of married couples fighting over marital assets. Pre-nups are not valid as such here in the UK although a court will consider the intentions of the parties. What is valid though are deeds of trust which set out who put what in when purchasing a property and who should end up with what if the property has to be sold. If a couple has significant assets (business/property) and/or children I would highly recommend having everything set out in writing. We all want marriage to last forever but I see so many needless arguements which could be avoided if everything is discussed/set out at the start, pre-marriage. Of course, things may be different in the US.
June 4, 2010 8:47 am
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Rachel, I’m 100% with you on giving some thought to the legal aspects of merging/not merging assets BEFORE you get married. Here in South Africa, if you don’t sign an ante-nuptial contract (pre-nup) before the wedding the government automatically registers your marriage as ‘in community of property’ (i.e. EVERYTHING is split 50/50, including debts – can’t open a credit account without spousal approval, if one of you starts a business that goes bust you could lose all your joint assets etc.). If you sign a contract before however than you have the option of deciding how your assets are treated (e.g. completely separate, some joint and some separate etc.).
I tell all my engaged friends to at least go and consult a lawyer regardless of what they decide to do. it’s a really big deal to get this wrong.
June 5, 2010 12:50 am
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longtime just-in-a-happy-healthy-relationship lurker, first time commenter. meg – thank you. this discussion cannot have come at a better time for me. my boyf and i are currently mid-moving in together (literally, packed boxes are slowly making their way from our separate apartments to our new home), and we’re just starting to talk about budgets, habits and expectations for the first time. (wait, you mean moving in together isn’t just a never-ending sleepover of excitement and pleasure?).
rose – your breakdown seems smart and perfect for us, and i’m proud to say we’ve (in the last half hour) decide to mimic it in a way; start a joint account for “must spends” (bills, groceries) and vacation savings, and keep our own accounts for everything else. so thank you for sharing!
meg, again, thanks for the forum and the community and all of the badass conversations you’ve inspired here at APW. i check every day simply because there is always something insightful and brave to learn from the women in this community. hoorah.
June 4, 2010 9:13 am
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I am hoping this mellowing out thing happens for us, too! Right now we are conscious of who pays for what since we keep most of our money separate, but I have a feeling it all really does just “even out” and that would prevent lots of petty arguments.
Your system is pretty much exactly what I am shooting for in dividing our financial responsibility. We are working on getting there. I might actually show your comment to my husband so he realizes the other people DO attack this in ways other than all-money-together or all-money-separate (he can be kinda black and white about, erm, everything).
June 4, 2010 12:15 pm
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Good luck Charise. I think the mellowing out is natural. If you both agree on your ‘money philosophy’ – your priorities, what’s acceptable, what’s not, then I think in the end it becomes too exhausting to worry about every cent in black and white and you can both relax a little.
June 5, 2010 12:45 am
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Rose #2 here, sorry to be confusing. My partner and I have set up something very similar: personal accounts for personal expenses and joint account for joint expenses – we both contribute a set amount each paycheque and go over all bills etc. once a month to make sure our budget is on track and we have enough in the joint account to cover everything.
On the advice of my aunt, I found these ideas and tips *very* helpful in setting this up, particularly her idea of “equal shares, not equal amounts” in figuring out contributions when partners have different incomes. This isn’t an endorsement or anything, but I thought others might find it helpful (well articulated ideas PLUS a formula for figuring this out!)
http://biz.yahoo.com/pfg/e39couple/art011.html
June 5, 2010 8:22 am
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Thanks Meg! You got me thinking about where I have gotten my crazy money baggage from. My parents have come to the conclusion that you are born with your money baggage…mainly from telling the story of my sister constantly going broke in junior monopoly as a little kid (she still spends money like it is going out of style) and me taking an hour to spend a quarter at the corner store on penny and nickel candies because I wanted the most bang for my buck (I still don’t live on a budget or know how to budget because I never spend everything). I had heard on a talk show that in a family situation like mine the parents should be most concerned about the child with the hording tendencies and not the one who can’t figure out money. I do understand what they were saying there, but my connecting money to security and well being I still have a hard time believing because I am so opposed to spending everything. Sigh…
So, it is going to be interesting now that I’m trying to combine finances or atleast financial thinking with my BF, definitely looking forward to what you and other smart women have to say on this topic.
June 4, 2010 5:34 am
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I love that you are talking about these topics! (sex and money) They are SO SO important! Someone told my husband and I that the two things we would fight the most about are SEX and MONEY. I didn’t believe them, but they were SO RIGHT. Now, granted, when I say fight, I do not mean screaming, pouting, and throwing of objects…but sex and money are the topics of most of our serious marital “discussions.” My husband and I took a pre-martial FOCCUS questionnaire through our church and we scored 91% in the finances section, which is high. I naively thought that we would be in the clear for our financial discussions…but I PROMISE PROMISE PROMISE it is that 9% that we didn’t completely agree on in regards to finances that shows up in our marriage.
We are both savers. (Thank God. My best friend married a spender who at one point emptied their checking account without telling her. Cue nervous breakdown. My idea of saving money is to save it, hoard it, and then when it’s time to spend it, chicken out–because why spend money you’ve saved for furniture or a vacation when you can SAVE MORE?!?! ).
Here is my advice:
1. If you are both working, keep your own accounts. Most employers do direct deposit and closing one account could get tricky and why risk screwing up your paycheck?
2. Put each others names on your accounts–but primarily use the same account you did before you got married. It would be a hassle to inform your partner every time you withdrew some money for starbucks.
3. Create a spreadsheet. My husband is a Spreadsheet Genius. He set one up with spaces for mortgage, power/electric, water, food, clothing, makeup, eating out, grocery store & toiletries, (keep eating out and grocery separate), medical, investments, etc. Then, we would go through our receipts and enter his spendings in green and mine in orange. The spreadsheet would automatically totaly our monthly spending and savings.
4. Look at your savings and spendings and see if their are areas you can cut back to save more. My husband realized that he was eating out at work too much and I realized that I really was buying clothing a bit too often.
5. Keep it an US perspective. My husband pays the mortgage and household bills out of his paycheck. I had a tendency to “brag” about how much “I” was saving since I’m the “grocery store, entertainment, eating out, clothing person.” One day, during a brag session he suggested I pay half the mortgage and bills so he could save more money too. Point taken.
6. GIVE. Since my husband and I are both savers, we have often can afford to give. My nature, I am not a giver. I have learned to unclench my fist and find charities we both have a heart for and make donations. There is something so special about making a donation as a couple to cause close to both of your hearts. It makes us feel closer and more like a little family reaching out to someone in need.
Ok, that’s it for me. I can’t wait to read what great advice others have on the topic!
June 4, 2010 5:46 am
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Just wanted to chime in to recommend xpenser.com (or a similar app if you have a smart phone that has one) as a place to record your spending. My husband and I just started using it last month and love it so far. Basically, makes it super easy to record your spending right away by email (if you can email from your phone), text, voice or going on the website.
June 4, 2010 6:15 am
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I’ll add a vote for mint.com — it tracks everything and lets you know your net worth (frightening….). It was particularly useful when we were establishing a budget — I was able to look at my past expenses (ie “We spent $941 on restaurants last month, so maybe we could cut back”).
June 4, 2010 6:24 am
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Yes! Mint.com has been great for me personally as a single gal. I’m hoping to utilize this with my FH, regardless of how we decide to tackle the other pieces of the money puzzle.
June 4, 2010 6:51 am
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Thanks for the recommendations! Our computer died a few months ago and our spreadsheet died with it. :( We’d been thinking about purchasing Quicken, but will take a look a Mint and Xpenser.
For the record, I reread my post and am horrified at my grammatical errors. I do know the difference between their/there/they’re…but apparently not before my second cup of coffee. I’m so ashamed…
June 4, 2010 7:08 am
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I’d been using Mint but since it tallies all of your worth, including cars (if you include them) and IRA Roth accounts, it gave us an inflated number that was toooo comfortable. The reality is that we have a small amount in savings, a smaller amount in checking, and I hoard like crazy to make the number go bigger.
Unfortunately, I’m the sole breadwinner right now while my husband is in school, so we don’t save much at all (if at all – sometimes we dip into savings, which is happening more and more lately, to pay for our monthly stuff).
I’m glad this discussion is happening. We could use pointers on how to handle money better. Right now the idea is to just savesavesave as much as possible and I freak out sometimes when he’s been eating out too often.
June 4, 2010 7:30 am
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I used Mint for a while a few years ago and then had to shut it down, didn’t end up being that useful to me. the way charges were being posted from vendors, Mint didn’t really know which were groceries/clothing/whatever, and I found I was spending all my time making tags and labels and whatnot to try to make sure things were being categorized correctly. this was several years ago so probably the technology has improved? also I have to admit to a little terror at having all my financial information in one place on the Internets. I prefer my spreadsheets.
We are also in a (basically) one-income household right now so even though we had planned to officially merge finances after the wedding, we’re basically just doing what we’ve done since we moved in together, which is have separate accounts and share a credit card. except now I’m paying most of the rent and the credit card bill myself. I think when we’re back to two incomes, we’ll be able to have a more meaty financial discussion. right now the focus is Pay the Bills, not so much left over for my usual frivolous spending habits (it’s been a really good lesson for me actually).
June 4, 2010 8:28 am
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I too am a Mint convert. You can also remove items if they’re giving you a too-inflated sense of worth, such as vehicles. I find it handy for keeping track, getting good credit offers, reminders on bills, etc.
@Ddayporter I haven’t had an issue with mint mis-interpreting my charges except when I buy gas at grocery stores and it thinks I’m spending a ton more than I am on groceries. I stopped using it about three years ago because of that issue, but when I started again a few months ago it wasn’t doing that as much.
June 4, 2010 9:55 am
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Mint.com also has apps for iphone AND android.
June 4, 2010 10:17 am
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Mint.com is a great tool. We don’t use it regularly, but when something big is about to change (like how we both just got much higher paying jobs and need to rebudget for the new house we’ll be renting at a higher rate than we had been) it’s great to be able to sit down and say, “Okay, so on average, for the last few months, we’ve spent x on groceries.” I would recommend people to go ahead and link their accounts to it just for that purpose, even if you don’t use it often.
June 4, 2010 11:15 am
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Just had to chime in on this one – keeping track of spending is a great financial tool. My fiance & I tried all the apps and spreadsheets and ultimately found that cash envelopes were by far the easiest system for us. It’s not for everyone, but we appreciate always knowing for sure how much money is left each month, even if he forgets to tell me he spent $50 on gas, I can see that the money is gone and won’t overspend our budget.
June 4, 2010 5:47 pm
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Another website is wesabe.com. It’s the one I and my FH use, and we love it.
June 7, 2010 6:16 am
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So glad to see a money post! I have been in the same situation, wondering how other couples have managed their accounts, aside from just having a joint checking and joint savings. This seems to be the predominant way to do it around here (Oklahoma).
After we initially moved in together we maintained separate everything. About a year after that I printed out two blank budget sheets, filled one out for myself and left the other blank. I put them both on the kitchen counter, mentioned it to my fiance then dropped the subject. A few days later he filled his out. A couple of days later he asked me some questions about mine. It was an easy, no-pressure way to get the convo going.
We just bought a house together (yay!), and when we did that I added him to my savings account. This savings account has always been attached to my checking account (so I can transfer money into it online), and now it is attached to his checking as well so we can “share” money that way. This was the most I was willing to bend at the time, as I am 32 and have been independant for so long and find it hard to share! Moneywise or otherwise! But I am trying!
However, we still split bills like utilities down the middle and each writes a check for half. I find it a little tedious. Other things “come out in the wash” so to speak. I buy most of the groceries, he usually pays when we go out, etc. We each have our own retirement accounts and fund them as we see fit. If we are saving for something that is for both of us (i.e. the wedding), we agree on an amount to set aside weekly to achieve that goal.
I look forward to reading about how others have gone about the combining of finances!
June 4, 2010 5:55 am
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We also each have our own bank accounts and we do not have any linked accounts at this time. We each have designated bills to pay. I pay for groceries and utilities and he pays for rent and entertainment/ eating out for all of us. Our situation is slightly more complicated since I have a 4.5-year-old child from a previous relationship and I do not consider my child’s expenses to be Hubby’s responsibility. I pay for my child’s necessities like daycare, medical bills, clothes, etc from my account. Hubby pays for random stuff like water guns, hats, meals out, etc. I make less than 2/3 his salary and the total expenses from my account turn out to be more than his each month, but as for shared expenses between hubby and I, I spend much less. There was a short period after he lost his job about 1.5 years before we got married, he ran out of savings and I invited him to move in with us (into a one-bedroom apartment). I supported the three of us for about three months and moved us into a 2-bedroom apartment for a hundred or so dollars more per month. Hubby did find a job and we sort of worked out what was fair for each of us to pay at that point.
One thing that we do that works pretty well is having a family cell phone plan. I get the email notification every month, pay the bill, send him an email with how much was paid and say, “Cupcake, I just paid the phone bill. Check your email!” He sends me half the amount of the bill through PayPal. This way there are no checks or anything and I can transfer the money directly into my bank account. The whole process takes about 5 minutes, not counting the time it takes PayPal to get the money into my account which is about 2-3 days.
We live pretty simply so money has not been a big deal. We both ride public transit (I my employer pays for my monthly pass) and we do not own cars. The extra expenses of loan payments and maintenance are great ones that we just don’t have to worry about. As long as the bills are getting paid, neither of us care much about personal spending. We’re both hesitant to let go of any large sum of money so saving comes pretty naturally. We have no debt and paid for our small wedding in cash. I’d say that it is working out for us pretty well so far. The only thing I suggested we get a joint account for was to hold our wedding money and to save any money we received as gift after the wedding. He suggested I keep it in my account and just let him know when it was his turn to pay for something. We’re looking at getting a high-yield savings account for gift money once interest rates start looking a little more healthy. I don’t know if it’ll have both of our names on it or not, but it doesn’t really matter to either of us.
June 4, 2010 4:18 pm
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So nice to hear this being talked about. Another Brit here and me and the other half have a similar situation to Rose. We each have our separate accounts which our salaries are paid into and from there we pay into a joint account from which our mortgage and shared bills are paid. There is however a discrepancy. I earn significantly more than he does, and therefore I pay more into the account but I also find myself paying out of my own account towards joint expenses (case in point accidental £150 in the garden centre as we’ve got all excited that our urban upbringings haven’t affected our ability to grow food!).
I’m very happy to do this and I know he knows I’m doing it, but it isn’t something that’s always mentioned ‘out loud’. Because the thing is, I know that for him, me earning more is a bit odd. He comes from quite a traditional background where Dad works and Mum is a housewife and all the men in his family work hard and support theirs so the idea that I’m propping up the financial support of our baby family doesn’t always sit happily with his concept of what he ‘should’ be doing.
Luckily things are working out pretty good for us. All the big bills come out of the joint account and every now and again I pay out of my own account for supermarket shops or garden centre oops’s and every now and then he’ll buy the drinks when we’re out.
Money is something that needs to be talked about in relation to weddings though, and not just the ‘how you can save on your flowers’ kind of talk but the ‘what happens if there are financial discrepancies that you can’t figure out’ sort of way. So thank you Meg, for yet again saying what every other wedding related site is afraid to.
June 4, 2010 5:59 am
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Snap! I earn more than my boy and therefore pay more into the joint account than he does. My account is then used for those expenses that creep up on you like road tax or car insurance. Under Scottish law everything is split 50/50, if anything goes wrong, so even though we are keeping our savings and debt separate for now once we are married it’ll all be ours.
June 4, 2010 10:35 am
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Meg, Nate Berkus said the same thing about couches on Oprah: buy a REALLY good couch that you will keep forever, no matter how often you redecorate. Turns out your grandmother was ahead of her time!
June 4, 2010 5:59 am
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I love Nate Berkus. My grandmother is a trained artist, so she tends to be good at the interior design stuff…
June 4, 2010 6:45 am
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I am really looking forward to what you have to say, Meg. To be honest, money is the only thing my fiancee and I have ever really fought about. My spending style is a lot like yours in that once I have money, I have a hard time spending it. I keep a detailed spreadsheet of my expenditures and I can tell you where every dime I have spent in the last three years has gone. FH, on the other hand, tends to spend what he has without really thinking about the future. He doesn’t overspend, mind you, but he doesn’t really monitor his spending either. He also hates to talk about money, since it is something his family doesn’t do (where mine talks about it all the time). Drives me crazy.
Our solution (once we marry in October) will be to merge our salaries and let me handle the finances. Since I’m a bit of a control freak in this arena, I am looking forward to having the final say on what is spent and where. The only problem is this: I don’t want FH to feel like he’s getting an “allowance”. I want to give him boundaries for spending as a way to secure our future, but I don’t want him to end up feeling like he is being totally controlled to the point where he can’t spend any money without getting my permission. It is going to be a delicate balance, I’m sure.
Thanks for highlighting this topic. I look forward to what you have to say!
June 4, 2010 6:00 am
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We both get allowances ;) More on that soon.
June 4, 2010 6:45 am
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We call it our discretionary, rather than an allowance, but it’s the same thing. :)
June 4, 2010 8:01 am
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heh, we call ours Mad Money!
June 4, 2010 1:30 pm
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If I can recommend something–I must say I’m a big fan of the Venn Diagram method of couples’ finance. We have a joint account for joint things (rent, bills, doggie expenses), and personal accounts for personal things (i.e., I don’t have to ask permission to buy a $100 pair of shoes, and he doesn’t have to ask permission to buy a Wii). All accounts are with the same bank, so if we are in bind, money can easily transfer from personal to joint, or vice versa. For us, this is a much better system than combining EVERYTHING and having all spending be a free for all. It gives us the opportunity to talk about things like “Hey, we kind of want to buy a new couch sometime soon, but there’s not a lot of extra money in the joint account…how much more can we each contribute from our shoes/Wii/Starbucks funds to get to that point?”
The only other money-related problem we’ve come across has to do with kids (hypothetically, I barely remember to take myself to the doctor, let alone a kid in the near future…). Fiance thinks that a kid should get a job as soon as he or she can to learn about how to manage money. I think that we work for the rest of our flippin’ lives, so enjoy being a kid while you’re a kid. I know that both of these views stem from our own childhoods, so I’m sure it will continue to pop up…oh well, more reason to stick with dogs :)
June 4, 2010 8:15 am
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I am into that solution, but *super* into that description. I have a nerdy appreciation for Venn diagrams.
June 4, 2010 9:56 am
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I’m in the same boat but reversed positions. *I* am the spendthrift (well, not quite, but much more than he is; just fyi – we make about the same amt of $, he just saves more). I like to shop, for me, for him, for our apartment. And I’m super excited about what our double income will do for our lifestyle. BUT I’m also super glad that he’s going to take on the finances, and setting an allowance for both of us (we’re doing a joint checking, but also maintaining individual accts). I know it sounds weird, but I have know that a) I respect both of us enough to honestly realize he’ll be better about our savings plan in the long term, b) he has enough respect for me to know that I have our best interest at heart too and wouldn’t jeopardize that.
June 4, 2010 12:00 pm
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Kat – this is what I mean when I talk about a ‘money philosophy’, it doesn’t matter what it is as long as both of you are 100% on board with it. Good luck!
June 5, 2010 1:00 am
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At first, I was convinced that for our marital bliss, the mister & I would NEED separate accounts, a spreadsheet that tracked our expenses down to the penny, and monthly allowances. I planned to be much more Type-A than I naturally am. I realized that this had a lot to do with my own two hang-ups about money: 1.) My family never had enough in savings, our cars always broke down when we couldn’t expect a paycheck for another 2 weeks, and we often visited food pantries or lived on .49c frozen pot pies for weeks. I became a hoarder who didn’t really know much about saving; and 2.) I was earning little over half of what my fiance made, and didn’t want to be using/spending more than my fair share.
Except, J is brilliant about saving money, investing money, and being comfortable with using it. And, he’s not interested in “what’s fair” for my allowance. He finally convinced me that we could have equally meaningful conversations about finances regularly, could share an account, and spend what we felt was appropriate without reporting daily on each candy bar I snagged from the vending machine. This requires a lot of trust (he wasn’t a fan of my grocery shopping strategies at first), but it’s another way we’re learning about each other and growing our marriage.
June 4, 2010 6:02 am
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oh yes. i’m pretty sure i scream those same words at HGTV on a disturbingly regular basis.*
(that also means i watch HGTV ona disturbingly regular basis. and by “regular” i mean every night. for hours.)
my favorite episode so far
- seemingly well-established lawyer lady and business owner hubby in atlanta buying their first place. all kinds of crazy demands. end up with brand new 5 bdrm home for half a million. she keeps saying it’s their first place AND their last place. they want to live there FOREVER. so thats why it has to be perfect….ONE HUNDRED PERCENT FINANCING and 2 mortgages. WTF!?
also good:
- young couple out of med school in lots of debt, need 100% financing…. but now with economy can’t GET 100% financing, but keep searching for a very pricey new home anyway…. finally mom and dad agree to loan them the down payment. and they get lovely big new home. whaa?
sorry. see? now you’ve made me yell at the HGTV couples via your blog… sorry :/ i get madddd.
June 4, 2010 6:11 am
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I’m the same way. The boyfriend and I watch House Hunters on an embarrassingly regular basis and we also trash-talk the realtors who SHOW people these way-out-of-their-price-range homes.
Needless to say, screaming at HGTV is an alarmingly common occurrence and I got a good chuckle out of Meg’s comment about it, as well as yours, Sassy Kathy.
June 4, 2010 6:32 am
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yes, apparently screaming at the fools on the show is simply PART of the viewing process, no? :) HGTV got it totally right with those commercials for house hunters… where they show couples sitting around at night watching and yelling “NO! take house #3! not that one not that one!” haha
June 4, 2010 6:36 am
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If I hear one more couple demand double sinks in a bathroom….
June 4, 2010 8:05 am
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hahaha! Seriously. Since when does a happy marriage depend solely on double sinks??? HGTV is an addiction of mine, and now I think I’m realizing its due to some people’s ridiculousness.
June 4, 2010 8:27 am
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OMG THE DOUBLE SINKS!!!! I DON’T GET IT!! Why why why. I can count on one finger the number of times in our 8 year relationship that my fiance and I have needed to brush our teeth at the same time. It’s my number one HGTV pet peeve, along with people saying that they need a lot of space to “entertain”…if i had a nickel for every time I did a little song and dance number for my friends in the living room…
June 4, 2010 10:45 am
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I had double sinks with my ex H. Perhaps indicative of the extra space between? If we had had to share a sink, there would have been arguments, but we argued over everything, so that’s not a surprise or anything.
T and I have one sink. We get ready together sometimes (hello! snuggles in the shower when you’re still waking up = awesome), but I don’t mind at all. It just leads to more hugs, rubs, “pleases,” “thank yous” and overall niceness.
June 4, 2010 11:57 am
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Amen, on those double sink comments!
June 4, 2010 12:14 pm
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Dude, I love my double sinks! Granted, we would be fine without them so it would never be a deal break in a house, but we are running around getting ready at the same time in the morning and I like to have plenty of room to brush my teeth/dry my hair/put on makeup while he’s over slinging shave gel all over his side.
June 4, 2010 12:33 pm
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OMG the double sinks. i’m literally giggling out loud in my cubicle right now.
- double sinks
- entertain entertain entertain entertain entertain blahhhhhhhhhhhhhhhhhh blah shush
- “ohhhhh no… this master bathroom is kind of small” (um, what the FREAKER are you doing in there? cartwheels? hosting dance performances?)
- “oh i just don’t like the color of these walls at all” (you’re right! paint is permanent! better nix this house)
- “it doesn’t have a fence…. where will sparky go?”
(apparently i have some not-so-pent-up hgtv issues… hehe)
June 4, 2010 12:44 pm
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My pet peeves:
1) Couple looking around ginormous two story suburban home. Cue mom, “But where will we put the baby’s toys???” I don’t know, how many f*cking toys does your 6 month old have?
2) Couple looking around apartment. Cue, “I don’t know, our couch probably won’t fit.” Mmmm hummm. You should definitely not buy this $400K house because your effing $500 couch from SEARS won’t fit. That makes TOTAL SENSE.
3) Childless couples who demand three bedroom apartments in big cities (why?) or five bedroom houses in the suburbs (you know, by the time you have that many kids, you might want to move ANYWAY.) And then they have like a 1.3% down-payment on said ridiculous huge place.
Ah, HGTV. The most amusingly ridiculous thing about being a newlywed.
June 4, 2010 6:55 pm
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YES on the double sinks and YES on the big master bedroom. Really? That’s a deal breaker?? I feel that everyone at some point in their life should live in a 450 square foot apartment in Manhattan (or insert other major expensive city — or Europe, for goodness sake). The differences between what we need and what we want is staggering! Which is fine when you have the money to splash out on it! . . . but when you don’t and you splash out anyway, well . . . REALLY??
June 5, 2010 6:14 pm
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we’re about to move into our first place together… and it is quite teeny indeed. i was automatically uncomfortable/freaked out by the lack of space. now i’m looking at it as a challenge. and an excuse to purge.
June 6, 2010 6:18 pm
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you guys make me oh, so glad we can’t afford cable tv right now.
June 6, 2010 5:23 pm
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Our sitch is similar to Rose’s, and I’m STILL getting used to sharing finances. He makes almost three times as much as I do, so it’s silly for me to try to pay half of everything, but try, I do. Like the others, I’m slowly relaxing into the situation, and allowing myself not to track the shared expenses down to the penny to make sure I’m contributing enough. I mean, it’s a partnership, right? and partnerships are rarely 50/50. Pretty soon I’ll be working and he’ll be unemployed so I’m starting to be ok with the whole thing.
But wow, money is hard, it’s stressful, it’s complicated. Looking forward to the discussion!
June 4, 2010 6:12 am
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This is SO TIMELY. We’re in the process of merging finances, and it’s…. hard. I’ve been handling most expenses until now because my partner was unemployed, but he just got a job and suddenly our whole situation has changed. It’s more money (yay!) but it means undertaking this whole “joint accounts” thing, and I am CONFUSED.
The best idea I’ve heard was to each put a set amount into personal accounts each month (for personal savings — equal amounts so that no one’s at a disadvantage), and put the rest into a joint account for expenses. The problem now is implementation. Is that separate account purely savings, or should it cover expenses? If so, what expenses? I have a shitload of student debt and he doesn’t — I want to be putting a lot of money into that, but does it come out of my personal savings or the joint money? It’s debt I acquired pre-him, but if I hadn’t been supporting both of us for the last year, I’d have paid more of it down.
Luckily our conversations around this have all been really good. We’ve both had relationships where money was an issue, so we’re very conscious of maintaining good communication. I just wish i could find decent advice from a smart woman… so thanks for addressing this, Meg!
June 4, 2010 6:15 am
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ahhh yes. the lop-sided student loan debt. he’s racking up a little bit of his own right now, and I’m paying most of the bills so not paying more than the minimum on my loans, which of course means I’m hardly paying it down at all. once he’s out of grad school and we have two incomes again, I think we will reassess the debt situation. Right now I would be uncomfortable with him paying down my debt, but a year or two from now, when I’m not like “hey we got married!” every other day, it might feel more right for both of us to tackle both of our loan debts.
June 4, 2010 8:57 am
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I’m curious about the debt coming out as a wash in a few years, especially when high student loan debt also equals a good salary.
Of course, one usually has to take on all the debt to be making that money (lawyer, doctor) and the partner does share in the benefits of the other’s salary.
June 4, 2010 10:13 am
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ha! well. I’m probably talking about considerably less debt than you’re talking about, I’ve just got your average out-of-state public university bachelor of arts degree. which means about $30K when I graduated college, pennies next to doctor/lawyer loan debt, but it sure still feels like a huge mountain to me, since I don’t have doctor/lawyer income to pay it off quickly. he’s going back to school to be an elementary school teacher, also not a high-income job. not to say that I won’t benefit from his advanced degree, his happiness at not sitting in front of a computer doing meaningless work (meaningless to him) is benefit enough right there. and I suppose he is currently benefiting from the degree I got before we met, since it enabled me to get the income I’m getting right now. still it feels like, my debt accrued before we knew each other should be my responsibility to pay off. He’s getting assistantships so won’t even have that much debt by the end of it. I guess we’ll see, a couple years down the road, if we’ve gotten to a point where we really feel comfortable truly owning each other’s finances 100%.
June 4, 2010 10:39 am
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Ah, money. Yes, I remember our pastor telling us in a premarital counseling session that sex, money, and driving were the places where most people fight. Lucky for us, we only fight about driving, among those three. :) I have to give mad props to my husband who, when he learned about my mix of consumer and student loan debt, agreed that that was “our” debt now (this is two years pre-wedding). Since then, it’s been paid down out of our joint account. We have a system like others mentioned here – joint account for most expenses, equal allowance to our individual accounts for eating out, fun spending. When I moved from grad student to fully employed, I suggested that I wanted my retirement fund to get as much as his does, and he agreed. Other than that, we really haven’t had to have major conversations about it – we have very similar financial values, I think, and we do a lot of trusting of one another’s decisions about money, out of both bank accounts.
June 4, 2010 2:36 pm
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I think you raise a good point that this whole finances thing is a process. I think it’s really important to have the conversations as soon as possible, and definitely before the wedding, but the reality is any changes will take some getting used to. It’s a process, and that’s ok
June 5, 2010 1:08 am
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I really want to hear how people deal with the student loan debts of either party. In Australia, they come out of individual pay checks so it’s all done before money goes into accounts, individual or joint. And especially when one person has more than another – I mean *significantly* more – how do you deal with it?
I have a feeling Meg will be talking about this in her next post and I can’t wait. Such a great post! APW is seriously ace this week.
June 5, 2010 2:30 am
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Such a good topic… As newlyweds fresh out of graduate school/working to save for grad school, neither the boy or I are abundant in funds, but it has been healthy to figure out how we want to plan our financial lives (even though there isn’t much to plan with right now…)
I think the best piece of advice we received though was from the boy’s grandpa. His grandpa was a truly kind and wonderful man, and a financial whiz who was successful in a variety of business endeavours (and also happily married for 60 years). Cody asked him what advice he would give us starting out our financial lives together. He told us to get a joint checking account, because now we are partners together in life…that it was important to share and share alike. Thus far, I have found that to excellent advice, on a practical level (“which account do we pay the bills with?”) and on an emotional/psychological level (we have no secrets from each other about money/loans/etc).
June 4, 2010 6:17 am
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I think it’s a little like changing your name: you don’t have to make the life-long decisions immediately. My husband and I have been married 9 months now and are only just starting to talk about merging assets and debt and our investment strategy. We figured out how to cover the monthly bills early on but waited until now to talk about the big stuff when we have a chance to breathe and read books about finance.
June 4, 2010 6:25 am
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So it’s like the changing the name conversation :)
June 5, 2010 2:32 am
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This is something my fiance and I actually discussed pretty early on. Once we got engaged, we set up a joint savings account with ING with the idea that we would use that account to keep track of wedding spending and then later use it as our joint account for joint purchases/bills/expenses. Each month, we put the same set amount into the account. (We have roughly the same salary, which helped with figuring that out.) We’ve also put in the money we received from our families to help finance the wedding and we’re putting any checks we receive as gifts in there, too.
Right now, we split our rent 50/50 (we each write a check each month), roughly split groceries and other apartment necessities 50/50 (alternating who pays each week), and take turns paying when we go out. After we get married, we plan to use our joint account for these expenses, and we’ll increase the amount we each contribute to the joint account each month to cover them. Other than that, we maintain our own checking and savings accounts to do as we please, so we never feel like we have to ask permission to spend (or save) money we earn on our own. Neither of us have ever had any credit issues and our only debt is my school loans, which I pay for on my own.
June 4, 2010 6:27 am
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Can I just say that I am utterly mystified by the American custom of writing cheques (checks). I have had the same cheque book for 5 years and used 3 cheques out of it. Cheques take more than a week to clear at the bank and are hellishly expensive (in South Africa). Internet banking all the way!
June 5, 2010 1:12 am
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Checks are gradually phasing out, from what I can tell. None of my friends use checks for anything other than rent, and even then, landlords are gradually accepting credit cards. I remember my mom using checks at the grocery store — luckily, it’s most debit cards these days. (Of course, I use my credit cards as much as possible and pay it off at the end of the month. I’m spending the money anyway, so why not get the reward points/cashback/etc.?)
June 5, 2010 6:24 pm
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Using checks is pretty annoying for me, too. Especially when translation companies in the US still insist on paying their freelancers (that’s us!) using them, even though the rest of the world does bank transfers or PayPal. Getting a paper check in US dollars means waiting a week for it to arrive in the post, waiting a week-ish until my Spanish bank can snail-mail it to their central bank in Madrid, which then contacts the US institution (by Pony Express, it seems… just on boats), which then confirms that the person who sent it still has that money in their account, and then snail-mails it back to my bank (another week), which then charges me a commission for having to do all of that, and then takes almost another week to deposit it into my account and for the funds to become available. It’s obnoxious enough to make us look for clients outside of the US, which is frustrating when there’s an American company that wants to give us work!
Bank transfers within the EU are generally commission-free, and if you’re using the right bank, it’s not too expensive to send them to the US. Aren’t they still really expensive in the US, though? I know it costs me $15 to receive a transfer from my own Spanish bank account in my US bank account, which is just silly!
I think my mom still uses checks at the grocery store (in the US), but I haven’t used them (when I’m in the US) in years, and even then it was only for rent in college. I can’t wait until American banks catch up for transfers, and in the meantime I will enjoy immensely the fact that in the US you can use a debit/credit card for everything! (Many places in Spain and Italy (where we currently live) either don’t accept them or only allow you to use them if you reach the minimum, which is often about €12.)
June 13, 2010 4:31 am
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Seriosuly, this topic could not come at a better time for me.
We’ve been back from our honeymoon for a few weeks, and are kind of at the “now what?” phase with our finances. Basically, we’re living like roommates financially, even each writing our own checks for “our half” of the rent. Meanwhile, we have all of our wedding gift money socked away in an ING account (ie, the virtual mattress).
I honestly don’t know how to proceed… We’re both 34, so we’ve been taking care of our own bills for more than decade, and I think each of us appreciates the level of power and control associated with “my money being MY money.” Without prodding, I can almost just see inertia kicking in and us continuing this way forever.
But I know that’s not what I want, because I feel like merging your finances is a key component to merging your life, merging your dreams, etc.
So … help?
June 4, 2010 6:31 am
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We use the wedding gift fund as our joint account and use it for the gravy (dinners out, trips, new couches etc). Eventually it will drain and I think at that time we will each transfer money in from our individual accounts on a monthy basis.
June 4, 2010 8:09 am
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Sex and money posts in a short work week = a loss of productivity for me while I check the comments every hour or so!
The Mr. and I don’t argue about money. But there are definite differences in our approaches to managing finances and when we decided to combine ours after we got married, we came upon the differences quickly.
I think of a budget as a way to plan out your money so that you can buy what you like, live the life you want, and save what you can. I work in education and have never made (and likely will never make…) anything like the kind of salary my engineer-lawyer Mr. does. But before marriage, I always made enough to live alone, belong to a gym, go out with friends, and keep myself in a comfortable-for-me supply of clothing and shoes. My Mr. thinks of a budget as a way to meet your immediate life needs (roof over your head, food in your mouth, clothes on your back) and then save everything else. This has served him really well. He bought the house we live in together…by himself…and had money saved up to renovate it. I am awed and impressed by that. But…not enough to change my notions of a budget. I still think that spending money to enjoy life now is every bit as important as saving up to have money for later.
I like to think of my “budget model” as a moderate one, and the Mr.’s as conservative. And we have worked out a few compromises to keep us both satisfied and sane in light of our differences:
*We have both paychecks deposited into a joint checking account and pay all US bills from there (I do the physical bill paying, by choice).
*We have a joint savings account and have a set amount transferred to that account on “pay day” each month. That way our savings is taken care of up front, and it is not in our checking account begging me to spend it on something. ;)
* We each have personal accounts that we transfer a set “allowance” to each pay day. I can spend mine on whatever I like and don’t have to “report” to the Mr. on how or why I spent my money. He gets to do the same. The amount of the allowance is equal, and since the Mr. is a saver, I am certain that he has money in his account left at the end of the month. I never do. But since the accounts are individual, we never have to see (and then potentially bicker…) about each others’ spending habits.
So far, so good. Nine months into our marriage we have more money in savings than I ever would have saved on my own, and I have learned to be far more choosy about what I really “need” to buy in terms of clothing and shoes. It feels nice.
June 4, 2010 6:34 am
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I just read other people’s comments and realized I should add a few things:
1. We are both in our 30s and lived independent lives for a LONG TIME before merging our finances.
2. We do not split things 50/50. I couldn’t afford to pay half of all of our monthly expenses and still get the same allowance as my Mr. We simply pay all our bills (“his” mortgage on our shared home, utilities, food, gym memberships, etc) from the joint checking. I guess I can see how that might not look “fair” to someone else, but it works for us.
3. The Mr. has more student loan debt than I do. I took out some loans for grad school, but most of mine is paid for by my assistantship – the one that earns me a pittance next to his salary.
I guess for me, a fair way of working out our money has less to do with equality than it does with our sense of shared values. The Mr. can make the salary he does now because of the loan debt he accrued in law school. I can sleep okay at night knowing that some of my earnings help him pay off that debt, because his earnings help me go to school full time and get to live in our home.
Meg – I am always appreciative of these posts that let me read smart, thoughtful responses from other women. The women of APW always make me THINK!
June 4, 2010 6:47 am
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Jessica- your model is exactly how we’ve been talking about setting up ours. My question is how did you decide how much to put into savings and what your allowance was. Was it an agreed upon number or a certain percentage of whats left after your monthly bills? Our problem is that my husband and I cant agree on an amount. I suggested $150/month as an allowance, and my husband wants more cause he complains he’ll use his whole allowance since he buys lunch everyday. The problem is that if we want to put a decent amount of money into savings, we can’t really afford more than that.
June 4, 2010 6:51 am
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Vanessa – We used an excel spreadsheet to work out our monthly expenses, including non-monthly items split into monthly amounts. (Think pet care – my dog costs x amount annually in vet costs, so we divided that by 12 and figured out that cost per month). We subtracted that from our monthly income. This allowed us to have money “sitting” in checking for when the dog got sick/car broke down/etc and not have to immediately hit up our savings account.
With what was left, we talked about a monthly allowance that made sense to “us.” At first, we overestimated my ability to adjust to his frugality. I needed more money in the allowance to not feel constrained by our budget. Ultimately, we went with a moderated version of my monthly personal spending as an amount…which is why he always has money left over! I counted things like getting my hair cut, drinks with my girlfriends, the cost of a new blouse, etc. We settled on that and then what was left went into savings.
We’ve done some more “tinkering” since then – I think being open to adjustments is key to making a budget work.
June 4, 2010 7:06 am
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We both buy breakfast every day (our work cafeterias make awesome and cheap $2 egg+english muffin sandwiches), and we include that in the food budget, which is joint. I figure that even food we don’t eat together counts as food, so it’s a joint expense. Of course, we include general eating out in the food budget too, so that’s more logical than if you only count groceries and think of eating out as a luxury that isn’t included in your regular budget.
So our personal allowances are $200/month and they don’t include buying the occasional lunch or the daily breakfast. This really depends on how the rest of your patterns are. You could set a number and then reevaluate in a few months to see if you felt deprived.
June 4, 2010 7:07 am
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Thanks for your input Jess! We have two cats, one with health problems that we havent budgeted for, but should- every time we take him to the vet its $300!! I will definitely be trying to implement that idea!
Galaxie- Good idea on adding casual eating out to the food budget. That way he can still buy his lunches and I wont have to make myself feel guilty for my occasional latte and croissant splurge!
We dont like feeling deprived so I think both of your ideas will work well in helping us ration our money while still being able to put SOMETHING into our joint savings for the future.
June 4, 2010 7:29 am
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We have a system similar to this, and the “allowance” is based on a percentage of the leftover after paying the monthly stuff. Our monthly stuff includes nearly every expense we can plan for, including healthy savings. I make 40% of the household income, so I get 40% of the leftovers. This has worked great for us in transition — I imagine our allowances will shrink when kids enter the picture and expenses grow, but it really helped bridge the gap between “me” and “us.”
June 4, 2010 7:26 am
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Ooh I really really like this plan!!! THANK YOU!
June 10, 2010 7:00 pm
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I think it is important to talk through the values underlying the decision and consider alternatives. How much do you need to save and why? What does buying lunch at work every day mean to him? How important to him is it and why? Could he take his lunch to work two or three days a week?
I think the best thing you can do is first figure out what your financial goals are.
Do you want to buy a house? When and how expensive?
When do you want to retire and in what style?
Do you have, or are you planning to have kids whose education you want to save for?
Are there expensive vacations or other big expenses (furniture etc) that you want to save for?
How important are these various long term plans? Which are negotiable and which are not?
Next take a look at what you are doing now. You need to know your total assets and debts and also how much you are spending and where? What do those expenses mean to you? How important are they? Where can you save some money and what things would you not feel comfortable compromising on?
For the next step, I would recommend talking to a financial planner. You need to figure out how much you need to save and how you should invest it to meet your financial goals. A financial planner can really help you with this and may also be able to help you find places to cut back.
The final step is going to be to talk, talk, and talk some more. Talk about the values underlying the things you want. Talk about what is how important to you. Talk about the origins of these feelings. Discuss where you may be able to compromise and keep talking until you come up with a budget you both feel ok with. The reality is that almost no one makes enough money to have everything they want (or even that they feel they need, particularly when you fail to clearly distinguish between wants and needs) so you are both going to need to make compromises. You probably cannot buy everything you want now and still meet your long-term goals. Personally, I tend to compromise what I want now in the interest of meeting my long-term goals, but this is a values statement and a reflection of a personal orientation to money. You and your FI may have to negotiate the relative priority of present wants and various long term goals. Doing the work up front will give you the information you need to have a better understanding of what tradeoffs you are making and help you have a better conversation.
Good luck
June 4, 2010 7:36 am
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Just as a further note for anyone who wants to know, I am definitely a saver with some hoarding mentality. For me, the only way to feel comfortable spending money and not feel guilty about it is to first know that the important long term goals are taken care of, hence my approach. My FH and I have talked about money and are generally on the same page, but we have not yet merged finances (although we do largely treat it as our money and have stopped keeping track of splitting everything 50/50) and haven’t yet worked through the process of developing a detailed shared budget (that is on the schedule in two weeks in our premarital work).
June 4, 2010 8:04 am
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Tricia, thanks for your awesome input! I’m getting so many ideas from all of you ladies that I’ve started copying & pasting your answers and plan on printing them out and sharing them with my husband. Its really important to me that we do start having real conversations about exactly where we want to be and not just have broad generalizations. We’ve both said, “yeah someday when we have a house”, etc. Well we need to figure out when we want this someday to be, and start actively working towards it. Being in our late twentys and mid thrities, I feel like in the financial planning aspect we’re not up to par with a lot of other people our age.
June 4, 2010 8:38 am
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hahahaha timing. We just moved in together last week, to the house we are in the process of buying, and had decided our finances would be combined, at least philosophically, as of June 1. So… it’s been 3 days. I’ve been using the cash I already had in my wallet, my first paycheck of this new world is today, we haven’t had any bills in those 3 days, and the only concrete evidence of this so far is that when we got take-out last night and he pulled out his wallet to pay, I started to think “wait, is it my turn to pay? um..’hey, thanks for paying for dinner’..wait, do I thank him for paying when the credit card bill is going to be paid out of our joint funds?” So, yeah, even that super simple thing was weird.
That aside, it’s actually not the household operational expenses that I get freaked out about, it’s the long-term stuff and the broader family issues. He grew up in a family where there was much more intergenerational financial support in both directions, and with his mother in very ill health right now, eldercare costs and filial duties are very much an immediate issue. My family was based more on the expectation that the parents supported you 100% until you were done with school, and then (with the exception of gifts for special occasions) you were a responsible adult expected to provide fully for yourself — but also the expectation that the parents would provide for themselves financially, rather than depending on their children. So we’ve spent the past couple of decades individually planning our finances in light of these separate models, and this is where it is very sticky, on the joint long-term planning, more so than our differing approaches to spending/saving on shorter-range issues, or the fact that I make a slightly higher salary.
June 4, 2010 6:36 am
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Yeah so we’re just shy of our one year anniversary and we still havent really figured it out. We keep SAYING that we’ll merge our finances so that the majority of our paychecks go into a central “bill paying account” and each have a spending allowance each month, but we havent actually gotten around to it. I’ve added his name to my checking account but he never uses/contributes or even looks at it. Same with my savings. I have no access to his accounts whatsoever.
We’re basically still splitting everything like we did before we were married except now we dont keep so tabs on every little thing. Before every little thing was split right down the middle. Now we still split rent & cable, but I pay for all the food since he pays $400/month for my portion of his health insurance. And we dont really keep track of whose turn it is to buy if we go out. We are each also responsible for our own loans, gas, car insurance, and cell phone bills.
Also neither one of us are really savers by nature. We think in our heads we are, but after looking at my banking statements I dont really need to by breakfast and lunch out half as often as I do, and I certainly dont need to by clothes as often as I do. Funny thing is also that our combined income is less than $60,000 a year so we actually shouldnt buy ANYTHING that is unnecessary if we ever want to save any for retirement etc. We live paycheck to paycheck and I think its about time we figured out a way to NOT be that way. Thank god we socked away all our monetary wedding gifts in savings otherwise we wouldnt have a dime.
Apparently I need some advice on this topic and I’m looking forward to see how all you intelligent ladies are handling the money situation.
June 4, 2010 6:40 am
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First off, I would love to hear your thoughts on couches, Meg, as I am in the market for one as well.
My husband and I have fairly similar attitudes toward money – don’t like to spend a ton of it (frugal, but don’t like to feel deprived. We also so far have our same separate accounts as pre-marriage but think of it all as “ours”. I make a lot, a lot more money than him, and I’m more money savvy in general (partly because I make more so have thought about it more and partly because I’m mildly more interested in it), so I’ve kind of taken charge of guiding money decisions. Scary things, like he looks to me to determine if we can afford the apartment we’re buying, and I feel more responsible for making sure he has access to sufficient funds (in my accounts or his, however we allocate) to pay our bills that depend on our joint assets if I’m not able for some reason. Scary because I don’t know THAT much and I’m partly crossing my fingers I’m thinking about all the right things in making those decisions. At some point in the next year I want to create a joint account or put each other on our existing accounts because I think that is safer for us in case something happens to one of us. I have a brokerage account (with most of my cash and investments) and I did immediately make him my beneficiary of that in case something happens to me, even though he’s not a joint owner of the account yet.
I think an important part of money discussions is thinking about things like insurance and planning for unexpected illnesses and death. Nothing makes me feel more like a (pathetically nervous and inadequate) grown up than the idea of insurance and planning for unexpected illnesses and death. Anybody know how to go about getting life insurance? I have to do that this month before we get a big mortgage he won’t be able to pay on his own if I die. Ya that’s a pleasant thought.
As for dealing with budgeting, we are in the stage of trying to record everything so we can figure out a reasonable budget going forward, and where we could be cutting. We’ve had an income and outflow until now that didn’t require us to monitor things closely (which I think is our natural comfort level with dealing with money), but that income (as I will eventually want to downgrade mine) and outflow (home and future kids) are going to be changing over the next few years so we have to adjust our approach to make sure we make decisions that keep our income more than our outflow (plus savings, retirement, etc.).
June 4, 2010 6:41 am
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An “exactly” wasn’t going to cut it here – totally on the same page with you, not so much regarding our specific financial roles, but about the long term planning. We also have to get our act together on getting sufficient insurance – we have the basics covered at the moment but don’t really understand the ins and outs of it, and really need to get a long-term life insurance plan (currently we have coverage through the bank where our mortgage is, but it’s not ideal). It’s been on the to-do list for almost a year, ignored. Because it’s true, thinking and planning for death and disability are not my idea of a good time. I think this is on the agenda for the first 6 months of marriage.
Also, we are currently DINK’s (double income, no kids) and loving it! We are relatively careful with money but then again, if we want to buy something (within reason), we generally do. And we tend to have the same approach to saving (moderate) so we don’t fight about money. But I know this gravy-train will eventually end as we plan for kids and drop to one income for a time. This is when I think we might run into some more problems, because for the first time we really will have to track our money carefully. So I want to get some practice doing this so it doesn’t come as a shock, on top of diapers and spit-up.
And we are also looking to get a long lasting couch in the next little while :-)
June 4, 2010 1:37 pm
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(i too am on a mad-sofa hunt!)
June 4, 2010 5:58 pm
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(We got back from our honeymoon on a Thursday and spent that first weekend back in town shopping for a couch!)
June 4, 2010 7:30 pm
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I so hear you on the insurance/ill health/death thing! It took us nearly two years after combining our finances to fully address this one. It’s scary and not fun, but so freeing to have those conversations and know you have made a decision you are both comfortable with. That said, M was so unkeen to discuss this topic that I went to see a financial planner, got all the options and quotes, then put a breakfast meeting in M’s diary, took along my laptop and forced us to discuss it all until we reached a decision. Big relief once that was done!
June 5, 2010 1:21 am
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Anybody know how to go about getting life insurance?
You are so wise to be thinking about this. You need to protect your assets with life, health and liability insurance. Term life insurance is easy to get and inexpensive if you are young and healthy. Smoking will triple your rates. Do not lie, though! If the insured dies and the company finds fraud on the application, they will refund your premiums and wash their hands of you. They might also press charges.
Find an agent or a financial planner you trust. Spend a little more to go with a highly-rated company. You hope you will never need to redeem that life insurance policy, but if you do, you want the company to be in business when you do.
We pay $48/month for my husband’s $250,000 life insurance policy. He is rated as a smoker (at one pack a month!) and was 43 when he got the policy. If he weren’t a darn smoker, he would be paying $16/month. Life insurance is not expensive and there is NO EXCUSE not to have it if you can get it. Get it now while you can and protect your family.
Also, it’s not just the husband who needs insurance. A stay at home mom needs it as well. What happens if she dies? Who takes care of the kids? The money to pay a nanny and a maid will have to come from somewhere.
Don’t buy whole life insurance. Buy term. Yes, even at the insurance company where I worked after college, that was the insider knowledge. The company loved whole life because it gave them more cash, but term is what you need. The general formula is about ten times annual salary.
And if you don’t have health insurance where you work, get a basic major medical policy with a $5,000 or $10,000 deductible. Those can be had for $150/month for someone in her 40s, so they are cheaper for younger folks. (You might have to leave the maternity coverage off.) Yes, coming up with $5,000 might be tough if you got sick, but it’s easier than losing your house.
June 7, 2010 1:45 pm
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Great post! Long time lurker here but I feel compelled to add my voice to these big topics.
My fiancee and I have had joint finances for the past five years. No separate accounts or separate credit cards. It made sense to do it this way because of the structure of our mortgage and the need to have all our money sitting against it to reduce the interest. Thankfully it hasn’t caused any issues in our relationship so far, I think because we both have fairly similar attitudes to money and spending, but I do remember one particular friend warning us against going down this road because it can cause a lot of conflict in a relationship.
I manage all of the bill-paying and accounts, and because of this I probably do more of the worrying about money in the relationship, but we regularly talk about our financial position and what we can/can’t afford and as long as we keep talking I think it will continue to work for us.
June 4, 2010 6:41 am
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Hey, I’m excited to see this! I’m not very far down the comments yet but I was feeling completely out of the loop because of how we handle our finances. We, too, have combined everything. No separate accounts, no separate spending money or debt. I’ll probably post more about this down below, but I’m shocked at how easy and well this works for us. It’s absolutely the most “married” thing we’ve done and although I thought I would hate it–it’s been the best thing for our marriage without a doubt.
June 7, 2010 11:42 am
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I am really looking forward to this series on marriage and money. Your description of your money baggage is identical to mine, and one of the most positive parts of marriage for me has been unclenching my fists, and also letting myself lean on someone else financially (super hard for me to do, as I have basically been financially independent since 16). Although I’ve gotten better at relaxing about money, I do still have my freakout moments and I’ll be interested to see how others deal with this.
June 4, 2010 6:53 am
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I like this topic because I’m thinking quite a bit lately about whether our current system needs to be drastically changed.
To be honest the idea of sharing one spending and savings account totally freaks me out. Me and my fiance have seperate everything. This is important to me because I don’t want to feel controlled and I don;t want to control him.
Both of us have somewhat varying incomes, so sometimes he earns a lot more than I do, and sometimes we earn the same or I earn slightly more. We sort of split the bills, so that he pays slightly more (because he usually earns a bit more). Our arrangement is extremely loose and flexible, because although he usually pays a bit more than I do, sometimes I will pay something because he has less money, another time he may pay for a whole vacation, or another month I pay a sudden unexpected cost because I happen to have the money. Basically, the one who at that moment has money, pays.
We control each other very little. Because we each have our own accounts we don’t see very often what the other is spending. He may grumble a little if I come home with a bag of clothes (again), or I may say something about his pile of new DVD’s, but basically we trust eachother not to spend (much) more than we can afford. Now and then we do sit down and look at what we’re spending, especially if we’re getting into a bit of trouble. Then we may agree that one or both of us needs to cut down on some things. We’re both the same: we don’t spend much more than we have, but not much less iether.
So our current situation is a bit strange. On the one hand we have totally seperate accounts, on the other hand we pay things for eachother all the time, so we may as well have one account. I’m undecided at what is really better, but sharing an account just scares me. We do generally ok, also because we’re both very sure of our incomes (I have a 4 year contract, and he is just very good at what he does) but we have ZERO savings. We will build up a bit, then have to deplete it for something usually within a month or two of having ‘saved’ it!
The pro of our situation: It’s very relaxed, we don’t worry much about who pays what, or paying eachother back. We also talk easily about money, and will let the other see our spendings if they want.
Con: It may be easier to save if we would have a more defined system, like a joint account, with exact amounts agreed on. I don’t care at all about whether we’re paying equal amounts, but I am worried about our inability to save. So, I’m still very undecided about whether to change our system and how!
June 4, 2010 6:56 am
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“He may grumble a little if I come home with a bag of clothes (again), or I may say something about his pile of new DVD’s, but basically we trust eachother not to spend (much) more than we can afford.”
Our system is different, but this sentiment is the same. We’ve got a joint account that we use (we also have separate accounts that we never use anymore), but I’d say that this works because of exactly what you just said. At the end of the day, after the savings are squirreled away, we trust each other not to spend more than what we can afford — and we don’t.
June 5, 2010 7:24 pm
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I really love having merged finances. It’s fun. It looks like the route we took is less common and more old-fashioned than many of the people here. About a year ago my fiance and I had just moved to a new city & needed to get a new bank, and the wedding was in just over a year.
We set up a joint account and put both of our paychecks into it — his goes to wedding savings, and we live off of mine. Each of us has separate retirement savings through our jobs. I make a bit more than he does, and because so much of our collective income is earmarked for the wedding we figure the fairest thing to do is have each of us put everything we make in, take a personal fun allowance from that, and keep everything else for joint & recurring expenses (they’re the majority of the budget). Recurring expenses are included here because it’d be a drag to have my “allowance” perpetually reduced because I joined a gym — the allowance is more for clothes, toys, and other frivolous one-time stuff.
And it’s working out fabulously. We set up a mint.com account to track spending, and we’re big nerds so we love to sit around together and graph how much we spent on eggs. We had a bit of conflict recently over how much we spend on food, but it was actually quite educational so (now that it’s resolved) I’m glad we had it. It wasn’t rooted in how we feel about money so much as how we feel about food and how I feel about what “wives” are expected to do.
Basically, we both have gourmet vegetarian taste (think avocados and locally raised eggs), but he’s used to a thrifty home-cooked Indian budget (potatoes and lentils). So when he said “why do we spend so much on food?” and compared it to what his mom used to spend on 4 people, it sounded to me like “you are bad at being a responsible householding woman and my mom’s way is the only way.” (It sounded like this even though we share food responsibility — I think I’m a little extra conscious of social wife-pressure.) I got upset, but it was hard to explain what I was hearing vs. what he was saying. Eventually I explained it, we discussed how we’d like to continue eating a lot of avocados but maybe we should include more dal, and then we increased the food budget to reflect what we really spend.
June 4, 2010 6:56 am
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My husband and I merged our finances when we decided to get engaged and we moved in together. I love it. It’s not how I initially thought I would handle finances being married, but I find it to be very beneficial. That’s funny that you speak about your food budget. We were just re-evaluating our food budget last week. We have gourmet veg tastes too. We like to eat a lot of avocados and peanut butter zigzag ice cream. I prefer cooking at home and like to try new recipes all the times, especially the ones that call for specialty items. ;)
June 7, 2010 10:53 am
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Oh I also wanted to add that google docs has some great budgeting spreadsheets! I took the initiative to customize it and fill my portion out, just havent gotten around to implementing it. When it comes to the money issue I am definitely a procrastinator. I think it’s probably the scariest thing about marriage, in my opinion.
June 4, 2010 6:58 am
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I think it is the scariest thing about being an adult!
June 4, 2010 8:24 am
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Very True!!
June 4, 2010 8:45 am
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Weird…the timing on this post is uncanny. J and I are going to the bank this afternoon to merge our finances, finally. We’ve been married for almost two weeks but living together for years, and we’ve just now come to the point where we can deal with our finances as a team. Money has been a HUGE struggle for us, mainly because we come from family situations on opposite ends of the economic spectrum, and our individual approaches to money reflect those differences in big, big ways.
I’d like to hear about how other “opposite” couples have dealt with merging money. Are there any couples out there who don’t share the financial planning/budgeting duties? For us, we’ve determined that it will be mostly my job to keep our financial life healthy and under control- partly because I like to do it and partly because I have a hard time relinquishing the reins. I’ve been paying my own way and managing my money since high school, but J….not so much. I worry that it will be years before I can fully trust him with our (read: my) money.
June 4, 2010 7:04 am
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FH and I are from different background, and it’s been a source of friction. My parents weren’t broke or anything, but elaborate vacations and expensive schools were the norm for him growing up. I worked every summer for spending money, he…didn’t. Consequently, I’m a lot more aware of finances than he is and have a better picture of what things cost. He’s no longer on his parents’ payroll, and that’s been a definite moment of disconnect for him as well.
June 4, 2010 4:13 pm
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We merged our fiances, one month before we bought our house a year and a half ago. I was 4 months out of grad school (student loan free, thats another story). So I was broke except for investments I was using for a down payment. My now Fiance had worked for those two years I was in grad school and had payed off his student loan and built himself a down payment about the same size as mine. So we had nothing except our down payment. Everything goes into the same pot, everything comes out of the same pot. There is no tracking of who pays for what. Bills and mortgage just gets paid. It has simplified our lives and really made us a unit ( there are “guidelines” about spending that we have worked out over time). It may be the “old fashioned” yours mine and ours route, but we have to talk about money, we share it! In fact before we got engaged we called ourselves “financial life partners”.
June 4, 2010 7:18 am
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My husband and I do the old-fashioned yours, mine, ours thing.
I never thought I would share money with anyone ever. I didn’t grow up with that model at all and sharing money felt like giving up too much control. However, my husband grew up the opposite. His parents shared money, living off one income and saving the other. We had several discussions about it and talked through my money baggage. I really warmed up to the model. We have beeen doing it for two years now and I really love it. It works for us. Like you said, it has us talking about money consistently and it really makes me feel like we are partners.
June 7, 2010 11:01 am
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Well, I’m not married. Yet. But in my mind I consider our finances merged.
I like to think I have been pretty smart about money over the years. I’ve always been a pretty independent woman, who, like you Meg, feels that money is a form of security & freedom. I like to save. I haven’t always been great at saving, but I have been really good at staying out of debt.
My future husband is a landscaper. He owns his own little company and it’s cute and it’s his dream and it does NOT make a lot of money (well, it does but jerks don’t like to pay their bills [sometimes ever] till too late, and that money ends up having to go right back in the company once/if we do get it). My guy wears his heart on his sleeve, and gets trampled on by certain clients and corporations he does work for. Either way, he is not bringing in the cash flow. Sometimes he’ll go a few months without paying himself, because he’s making sure the couple of guys he’s got working for him can get paid.
Lucky for us, I have a very steady income and I make a decent wage. I also love to save (did I mention that?).
My mom will tell you she doesn’t have a lot of money. She’s broke. Although, I know for a fact she’s not. She’s just got it put away for a raining day, or saved up for her and my dad to travel or whatever. I learned my initial budgeting skills from her. I learned that you can be broke, but not poor.
Now to tie all those bits together: I then learned about budgeting tools from a girlfriend of mine. I took her budget and use it today and I’ve saved thousands of dollars for me & my future husband. Because of his fickle income, I base our budget on my income. I do our budget every 4 weeks, and I balance our budget at the end of each 4 week period. I have an excel spreadsheet set up with categories, that each month, money goes into those categories (the money agreed to by our 4 week budget) and those categories build up each month (obviously unless we spend some, but the remaining money goes into the next month as well). Any money that my guy brings to the table is thought of as the cherry on top.
I have never felt so financially stable in my life. We don’t live a glamorous life, but we live comfortably. There are no surprises. If my (or his) car breaks down, I’m ready for it.
When the time comes to merge accounts, I’ll be ready for that too. Hopefully his company will be in a little better of a position, but if not, we’ll make it work.
** Also, I’d be totally happy to share my excel spreadsheet if anyone were interested. It sounds complicated, but it’s REALLY not. I also know a great book to recommend with the theories behind the budget I use.
June 4, 2010 7:20 am
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Meg, you should have a resources page (or the ability to attach some of these things to these posts or something). I think a spreadsheet like this would be great to make available to the community, especially attached to these conversations.
And thanks so much for having this conversation. Its great.
June 4, 2010 7:51 am
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Oh, I would also just like to add that I’m 23. I’ve only been using this budget since January. I’ve never been in debt, so I got to start it on a clean slate. I have tried getting a coworker (who in over her head with debt) to use my budget, but she keeps saying “I have to pay off debt first” and I’m like “uh…. guess what budgets are good for?!?!” but, she’s stubborn. Whatever.
The girlfriend who I took my budget from paid off her & her husbands debt, of around $16,000.00, in about 6 months using this spreadsheet (and the book).
& a resource page would be awesome!
June 4, 2010 8:01 am
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I have an excel sheet like that too – love it! And, maybe this will help your coworker or other readers. We do have debt, too much. Our excel sheet also has a category for “debt” which then feeds into another page on the spreadsheet. On that page, we have all of our debts listed with the minimum payments. Whatever is entered into the debt category on our budget, feeds into the debts page. It then shows us how much to pay to each debt each month – the minimums + some to one at a time trying to pay them down. And, since I need some additional motivation, it calculates how many months are left until we’re debt free! God, I love excel.
June 4, 2010 6:03 pm
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This sounds like a pretty awesome addition to my budget! I wasn’t even sure how I would add debt “categories” to my spreadsheet, but this makes total sense.
Thanks for sharing!
June 7, 2010 7:14 am
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Oh my goodness. Is it too late to ask for spreadsheet help? We took the Dave Ramsey class this fall and I completely recommend it to ALL couples. It should be a prerequisite for getting married. If anyone has a Ramsey-esque spreadsheet I’d love a copy. mischiefbyloki {at} gmail.com
June 7, 2010 11:53 am
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::raises hand::
I’d love to see a spreadsheet! I need nitty-gritty help =)
jenweds@gmail.com
June 4, 2010 8:15 am
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What’s the book?
June 4, 2010 8:27 am
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Total Money Makeover – Dave Ramsey – http://www.daveramsey.com
June 4, 2010 8:37 am
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Awesome! Girls, I am so excited you don’t even know! Please give me a couple days, I am currently in the process of writing out a simple guide for it. I am by no means a writer and I am a poor instruction giver so you’re going to have to bear with me a little bit. I want to make this easy to understand (since I can’t sit beside you and go through it with you), once you get past the initial set up (yes, there is a bit of setting up, but it’s SO worth it) it’s really a breeze. So please don’t give up on me!
I love this budget & I’m so excited to share it.
June 4, 2010 9:00 am
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me too please :)
katelyn.swartz at gmail dot com
June 4, 2010 10:27 am
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Twist – will you send me your spreadsheet too? I’ve always done my finances in spreadsheets and am currently doing a modified Dave Ramsey thing. I’m constantly on the lookout for ways to improve it! My email is bunnyandcarrot91011@gmail.com.
Thanks!!
June 11, 2010 10:05 am
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Ok ladies, apparently I got a little carried away today. I don’t need a couple days & I just sent off my budget to you!
June 4, 2010 1:55 pm
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is it too late to request a copy? I have our month- to- month budget under control, but I totally need help with the paying down of (stupid credit card) debt.
imabrunette23@gmail.com
June 4, 2010 6:50 pm
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I would absolutely love to see that, if I may?
My email address is catherine.turner@postgrads.unisa.edu.au
June 4, 2010 8:06 pm
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OMG, I’m totally over my head with financial stuff. Is it too late to request a copy, too??
emtimoney at gmail dot com
June 7, 2010 5:37 pm
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I might be too late for this, but if possible, I would love a copy of that spreadsheet! My FH and I are young and so while initially hesitant, we combined our money. I’m still glad we did it, but BLAHHHH so much work! It’s seriously our biggest issue. Between my loans, the wedding, and this effing shitty economy money woes plague us constantly…
anyway, sotonaomi(at)gmail.com is the email :) thanks!!!
June 8, 2010 5:21 pm
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This is actually a much discussed topic in the world of personal finances blogging — while money isn’t normally openly discussed in real life, there is a cohert of bloggers who talk about it.
Personal “smart woman” stories: http://alwaystheplanner.blogspot.com/2010/04/becoming-wife.html and http://littlemissmoneybags.blogspot.com/2010/05/combining-finances.html and more.
More “how-to” stories are also out there, and most any bigger personal finance blog has covered it. http://www.getrichslowly.org/blog/2007/09/28/ask-the-readers-how-do-you-move-from-separate-to-joint-finances/
Anyway, to share my position. We are both savers by nature, but we also can convince ourselves to spend on things we value. We were married 1.5 months ago, but have had a joint credit card (of sorts) since we moved in together and started sharing most costs. After the wedding, we haven’t really made any immediate merging changes, mostly because I don’t want to deal with tracking his grad school stipend which comes in spurts, and there is no real good reason to make the change right now. But I do think of my money as his too, and vice versa. It’s just logistics at this point. We will slowly merge accounts as things go forward.
This is definitely stuff that should be discussed pre-marriage! Thanks for putting it out there Meg
June 4, 2010 7:25 am
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We’re weird. We’ve always been really open and sharing with our money. Finances merged pretty quickly when he moved in. We were very young and really had nothing then, so it was easy. He doesn’t like to handle money at all, so he just keeps out what he wants to spend and surrenders the rest. I decide what to spend and save, take care of the bills, and make plans for the future. It’s sort of tradition in my pants wearing women lineage.
June 4, 2010 7:26 am
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I agree with your mom, it really helps to start it when you’re young and poor. My fiance and I met our first year at college, and shortly after we graduated moved in together, where we were poor recent grads struggling along together. At times, one of us might have a good job and the other one of us didn’t, and we helped each other cover each other’s bills and our, of course, shared bills. We both had significant debt from going to an expensive college (that maybe wasn’t such a good idea, 17-year-old self). I guess we just started out with a “We’re in this together for the long haul” view of things, with the knowledge that if one of us ended up underwater, it would affect both of us.
Now we’re 28 going on 29, both have real jobs, but he works in an industry that at its base simply pays a lot more than mine. We didn’t actually merge our bank accounts until last year, when we realized we’d been basically living like we had merged finances anyways.
We have pretty similar views about money, and that helps, though I am the one generally freaked out about money and he’s the one more likely to be feeling a little spendthrifty. But, I think it’s good to have that difference, because it means that we talk a lot before making any big purchases, and we re-evaluate how we’re spending money every now and again.
June 4, 2010 7:33 am
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Thank you for this post! This is my post – this is where the rubber meets the road with marriages. After my husband and I married last July we went to the bank to do our merger. Before that I spent many sleepless nights fretting about it. I had some major hang ups about merging our accounts. Granted there wasn’t much there to freak out about – we both have some serious student loan and other debt. The accounts were merged and I pushed my anxieties aside. We are in this together and it isn’t that I don’t trust my partner.
An interesting phenomena has happened in our relationship. When I was single, money was easy come easy go. Then I bought a home and Mister moved in it was like a switch was flipped. My irresponsible non-money brain changed into a fretting, checking balances, budgeting, & up at night worrying brain. I find it very ironic that I’ve become the money person in our relationship. I’m the one campaigning for a budget, I’m the one saying no that’s too expensive – in short I play the wet blanket on a lot of ideas.
June 4, 2010 7:39 am
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Thank you thank you thank you!! Can’t wait to hear more… I need this help!
June 4, 2010 7:42 am
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Meg the couch thing you mentioned struck me as funny, eerily similar kind of funny. I am David, and my FI is you. We have been in our apartment for months . . . .no couch. Hello! Welcome, please come have a seat on our comfortable. . .rug. Ughh
June 4, 2010 7:50 am
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One book I found helpful (despite it’s gimmicky title?) was “Get Financially Naked: How To Talk Money With Your Honey”.
Love and money have been two very difficult things for me to combine especially because I was brought up to keep personal finances close to the vest. This book sparked a lot of dialog between my partner and me about money – and boy did we need that!
June 4, 2010 7:54 am
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I’m loving this one-two punch, Meg.
I had done David Bach’s Smart Women Finish Rich and last weekend just bought Smart Couples Finish Rich for my fiance and I to work through. I’m definitely more of a saver than he is, and the hoarding mentality is not unfamiliar to me. Currently everything we do is separate, but when we marry we will be joining up our assets more. Hopefully Bach’s book will give us some insight on how to do this. But here’s what we’ve figured out so far.
-I’ll be the main one in charge of finances (at his insistence)
-We’ll be living in the house I’ve bought, and I’ll continue to pay for the mortgage as he’s paying down some credit card debt.
-We’ll both get an allowance to spend as we see fit (I’m more insistent on this than he is…he just wants to make sure he has enough money to go to the movies but I know he has times when he buys his whole class Superbowl t-shirts)
The issues I know we’ll face:
-His car & student debt…does it come out of joint expenses or out of his?
-His mom…he helps to take care of her financially so is that a joint expense, or his?
June 4, 2010 7:55 am
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I *loved* Smart Couples Finish Rich. It helped my husband and I get our collective sh*t together and really helped make financial matters manageable for us. The first couple of chapters are especially helpful because they have you talk about your values and your attitude towards money with the goal of figuring out how that does/should influence your finances.
June 4, 2010 10:24 am
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I read Smart Women Finish Rich a few years ago when I was single and it really helped me get my finances in order. I didn’t realize there was one for couples. Thanks for the heads up. I will have to get myself a copy.
June 7, 2010 11:08 am
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I’m planning on buying the Smart Couples book so we can go through it this fall! I’m glad to hear it was helpful. It looks really good.
June 11, 2010 10:07 am
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I think there may be an awesome, helpful book out there! Have you heard of Get Financially Naked by Manisha Thakor? I haven’t read it, but her other book, On Our Own Two Feet, is really awesome and emphasizes that women should get their finances in shape with the idea that they WILL NOT some day be rescued by a rich Prince Charming who will wipe away all debt and provide for a happy future. Get Financially Naked is geared toward couples and I have to assume it’s as smart and savvy as her first book.
In my own relationship, I am the financial planning nerd and my boyfriend is pretty much clueless, so earlier this year we sat down and I taught him how to budget, start a Roth IRA and check his credit report. I love transparency when it comes to finances and hate the shame and secrecy that so often surrounds money matters. If I could, I would be like a blunt old Chinese granny who just asks you how much you make and how much your house cost. Something to look forward to in my old age….
June 4, 2010 7:58 am
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I can’t wait to read about this. I have some issues around finances- sharing income and student debt scares the crap out of me. mostly because I make SO MUCH more money than Andrew does…. and he (hopefully!) will be a student in grad school when we get married.
Seriously. can’t wait Meg. :)
June 4, 2010 8:09 am
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Ooooooh! (If you could see me now, I’m rubbing my hands together at the thought of discussing finances! That probably makes me a little crazy.) I am one half of a two-lady pair, so my pronouns will be hers/hers, but I’ll try to keep things clear. I also love a numerical list, so forgive me in advance.
C, my lady, and I have recently merged our finances and we had a number of discussions on how to proceed – basically, she doesn’t really care about money (except to make sure that she has enough to generally do what she wants to do) and I love dealing with the money – planning, budgeting, etc. So it was fairly clear that I would be a bit more hands-on with things, provided I kept her up to date on what was happening. I also read a lot of finance blogs and had a few ideas about how to set things up. It has taken a month or two, but we are on the verge of having our system ticking along nicely.
Initial things to know about us/our approach to money:
(1) Generally, we both believe in shared money as a couple, i.e. that my money is her money and her money is my money. It doesn’t feel very appealing to me to have some huge chunk of cash to take a vacation if C can’t come because she makes less or saved less or something. This is no judgment on couples who proceed differently, it is just important to how we approach our system.
(2) I was recently unemployed for almost a year, so working towards the establishment of an emergency fund (one that can cover at least 3 – 6 months of expenses) is a very important goal for us in case something similar ever happens again.
(3) I am currently employed full time and C is a student, so we are dealing with both regular paychecks and lump sum loan payouts. (Sidenote One: I don’t explicitly discuss C’s loan checks below. Basically, we divide the amount she gets in each check by the number of months it is supposed to cover and add that to our monthly income as we budget for things. We then have to be a bit clever about figuring out how much of each check should go where to be there when it is needed, but eventually it works out. This will be a lot easier when she is done with school and has a regular paycheck to contribute.)
(4) Neither one of us likes to worry about our budget on a daily level. That is, I don’t want to have to call C when I buy a latte at Starbucks and vice versa (provided lattes don’t begin to equal one half of our spending in a given month). I also don’t want to worry that I exceeded the amount I am allowed to spend on gas or trash bags or any other thing because I only budgeted for $20 worth of Tide that month and it wasn’t on sale – I’d rather just deal with a chunk of money, subtract stuff I buy, and make it work by spending less when I start to run out of money.
(5) It was important to both of us to have some money that was just our own – an allowance to spend on gifts for each other, as well as on random things that the other might not deem worthy of joint money. Judgment-free money, if you will.
With those points out of the way, I will try my best to explain our system. (It sounds complex – and it is a little time-consuming to get it set up – but once you do, I can’t recommend it enough. I also highly suggest taking advantage of the fact that your company’s direct deposit can likely pay out to several accounts in a given pay period – for example, mine can go to two checking accounts and three savings accounts.)
Basically, we have two joint checking accounts, one individual checking account each, one online savings account in a bank where we have no other accounts (to house the emergency fund in a place where we’re less tempted to touch it), and then several online savings accounts with ING Direct. So where does it all go?
(1) First and foremost, a sum goes to the emergency fund every month. No discussion, end of story. (Sidenote Two: If you are not currently saving anything, PLEASE start now. Even if it’s just rounding your paycheck down to the nearest $100 to save $25 a month. Please also contribute to some type of retirement account. Thank you.) We don’t touch this money and won’t unless/until it is really, really needed. It is gone.
(2) We use the first joint checking account as our bill-paying account. An amount goes in (from my paycheck/Cyd’s loan check) every month that covers the mortgage, student loans, the gas, the electric, cable, etc. Any bill that happens regularly. (I also have almost all of these set up to be paid automatically, so we rarely have to touch that account. I just check it every now and then.)
(3) We use the second joint checking account as our household/daily life account. We put in a set amount of money each month that we use for groceries, gas, dinners out together, Target runs, and so forth. We don’t have an explicit rule for what constitutes a household expense vs. a personal expense, but that is evolving over time. (Happy hour for me and a buddy while she’s out of town? Personal. The two of us deciding we need new sheets? Household.) We also have a general rule that if one of us spends more than $50, we let the other one know (even if it’s just a “hey, I got laundry detergent and trash bags and a few other things and it was $65″).
(Sidenote Three: When we were discussing this system, C was acting a little nervous. It took some prodding, and some tough conversations, but eventually she confessed that she had never overdrawn an account in her life and that she generally just pretty much knew her balance at all times. The thought of someone else spending from the same account as she did made her really nervous that we might overdraw someday by accident. So we agreed on the $50 rule to avoid one of us making a huge purchase without telling the other.)
(4) Individual checking accounts. We each get an “allowance” amount paid into our individual checking accounts each month. This money is for each of us alone to spend on whatever we like – coffee at work, lunch during the week, happy hours, gifts for each other, splurges on shoes, and anything else our little hearts might desire. We can save it or spend it without the other saying a word.
(5) Finally, the ING accounts. So far, we only really use one. We call it the “Big Stuff” account. Each month, a chunk of cash goes in to this savings account to be used towards bigger things that don’t happen regularly enough to be considered bills. Plane tickets, furniture, new pots and pans, writing a check for your share of a vacation house. These types of things. It’s intended for any expense that’s not regular (although they come up regularly enough!)
Big Stuff also gives us a small cushion against minor emergencies (to help out before we’d have to tap the big E-Fund). Like last month when we had to replace a pipe in the basement and write a check to the tune of several hundred dollars. It’s really nice just to have some money hanging out and to be able to use it when you need to. Someday, we plan to use some of the other accounts to save for specific things like travel or redoing parts of the house or what have you. But for now, Big Stuff pretty much covers it.
The beautiful thing about this system is that our saving is automatic and the bills are always paid before we get to spending anything day to day. I never have to worry that the groceries I’m buying will mean that the mortgage check doesn’t clear that month. I also have my own allowance to spend if I want to ignore the tuna sandwich I brought to work and go out for Thai food, so C doesn’t get mad because she ate the gross tuna sandwich to help US save. We’re also working on being covered against the REALLY unexpected (i.e. no job) and, in the meantime, we have a few hundred bucks set aside in case one of us needs to fly somewhere or the air conditioning in the car gives out.
The only account we really have to keep an eye on is the household account, meaning that towards the end of the month, we might have to say “gee, we still have a week till payday and only $100 left – guess we can’t go out for dinner tonight.” But those conversations have lost a lot of their stress factor because we know that even if we’re down to $5, we’ll still have electricity and a roof over our head. Our system is by no means perfect, but it seems like it’s going to work for us.
Some other thoughts/points (I promise I’m almost done):
(1) Credit cards. You might be wondering where they fall in this system. We are paying off the last chunk of our collective credit card debt (we treat that as a fixed expense – paying off debt is a topic that could be a whole other comment for me) but generally, we try to only use credit cards for things we have enough cash to cover so we can take advantage of frequent flyer points or cash back offers. Then we immediately pay off the balance. They are, of course, there in case we need them.
(2) Setting budget numbers. A lot of people suggest keeping a money log to see what you spend on things. Personally, that annoyed me. Instead, I printed out our bank statements for the last several months and went through with a highlighter, marking all the “set” expenses (student loans, cable bill, electric bill). That gave me a pretty good idea of what we needed in the bill account each month and a ballpark number for the household account (although we may tweak here and there). If there’s extra left over in any given month in either account, we can sweep it into some savings account or pay off debt or travel or just go out for dinner.
(3) Goals. You gotta have ‘em. No budget/system/plan is worth anything until you do. And, as a couple, you must both be on board with those goals. Our current goals are (a) finish paying off the credit card, (b) fully fund the emergency fund, and (c) save a certain amount for what we are calling “the next big thing.” Could be babies, could be some huge trip, could be an additional down-payment on the next house… We just want to be ready for it.
(4) Communication. We are working on this one the most. As I said, C doesn’t find it fun to think about money and I do. However, she wants to know about our money (and totally deserves to know about it), so we’re working on a regular way of communicating about it. We thought about setting a monthly meeting to review stuff but we mostly fail at artificial meetings with one another. More recently, I’ve taken to shooting her an email on Monday mornings that tells her our bank balances and any big things we have to pay for that week. Plus, because I like her and value her opinion, I check in when we need to decide if we should buy something – we discuss which credit card would give us a reward, whether we actually need the thing, if the money would be better spent elsewhere, etc.
(5) Flexibility. Don’t be afraid to adjust your numbers. I keep telling C that if we find that our allowances or household account doesn’t cover what we spend in a month, we can adjust – either by looking for places to cut back or by budgeting in a few more bucks here and there that we take away from other places. In the end, we want it to be something that we barely have to think about.
Phew! Sorry this became so epic. I think this topic is so important and I wish more people would feel comfortable talking about it! If anyone out there has questions about our system, please feel free to ask.
June 4, 2010 8:12 am
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This is fantastic, thanks so much for sharing. In my own individual finances I very much like separate accounts for separate purposes (something I figured out as a way of avoiding overspending – I am very much an “if I see it sitting there, I will spend it” person). I’m not sure how this will work when we merge, but it gives us some great ideas to talk about. thanks!
June 4, 2010 8:28 am
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Your system sounds like a slightly more complicated version of the one my husband and I use. I love the freedom that comes with taking care of the important things–savings, rent/mortgage, etc–first and just having one or two broadly-categorized accounts for daily expenses. It’s nice to only have to worry about the balance of one or two accounts, instead of having to worry about how much money is left in each specific budget category (e.g., groceries, eating out, entertainment, etc) at a given time.
Also, I’m curious about what financial blogs you read. I’m completely fascinated by the topic, but I wouldn’t even know where to begin. Any suggestions?
June 4, 2010 10:16 am
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Hey Laura! Two of my favorite personal finance blogs are Get Rich Slowly and Five Cent Nickel.
They both feature daily posts that cover topics from budgets to savings to retirement. I’ve read several of the books suggested in other comments and they’re pretty good, but if you are perhaps one step further along and want specific advice in one area or another (i.e. should I have an IRA? What the heck IS and IRA?), I think these are pretty good. They also have lots of links and archived posts.
For more formal stuff, you can also check out MSN Money (the personal finance section) and Bankrate – both have some good resources and calculators. Our system is loosely based on the 60% Solution – the idea that you break your spending up to 60% for committed expenses, 10% for retirement, 10% for long term savings (emergency fund, house downpayment), 10% for short term savings (vacation, furniture), and 10% for fun (whatever you want).
Hope that helps!
June 4, 2010 10:42 am
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Thanks, this helps a lot!
June 7, 2010 4:32 pm
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Thankyou so much for taking the time to post this, I found it enormously helpful.
June 5, 2010 3:52 am
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OH MY goodness this is so timely I can hardly believe it. Don’t get me wrong, I loved reading yesterday’s post, but I seriously need a smart conversation with smart women about money management right now. Off to read the oodles of really long comments and come back with more thoughts.
June 4, 2010 8:15 am
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I look forward to reading the “how to” next week, Meg. Finances are something that have been a big topic of discussion for us throughout the past 10 years of our relationship. We are different styles of spenders/savers, but that is something that has evolved over time until now we are much more similar – something that was important to us in feeling ready to get married & merge finances. Our family approaches are very different and perhaps reflect the difference between 2 relatively equal earners, and 1 high earner + 1 teacher. Now we are in the 2nd category (like his parents) and planning to follow the “completely merged, all in one pot” plan. Neither of us are comfortable officially merging until we’re officially married, and so for right now, before the wedding, we split things roughly equivalent to our income levels so it’s something like 70/30. Whoever said earlier “fair doesn’t have to mean 50/50″ hit the nail on the head, although this was hard for me to adjust to. I am the 30%, and have had to struggle a lot with feelings of inadequacy and fairness and guilt over spending, etc. Did I mention I’m also the one bringing huge amounts of grad school student loan debt to the table? My partner views it all as “ours” and has no problems taking on “my” debt and financially it will all work out fine, but it has taught me that many of the issues surrounding money are emotional ones, not just mathematical, and that they need discussing & airing out, too, even after the budget is balanced!
I am also curious to hear how people determined their monthly “fun money”/spending allowance amounts, that’s the one piece we haven’t gotten to yet.
June 4, 2010 8:19 am
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I find the whole topic of finances terrifying, and we’re young and poor. I’m graduating from college next week, getting married in February and have no job prospects. Fiance barely makes rent and went to film school to become a screenwriter. my engineering degree was supposed to support the both of us but right now no one is hiring engineers with no experience. I feel a ton of pressure to find a well-paying job and I don’t really know why, Fiance has told me that it’s not my responsibility to be the breadwinner. But I’m the one with the practical and well-educated degree. I don’t want him to feel all the pressure either and have a dead end job kill all his creativity. Neither of us have savings. We have very wonderful and supportive families, but maybe its my independence speaking when I say I DO NOT want to rely on our parents for financial support.
June 4, 2010 8:21 am
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Hi guys! I am a financial advisor so I am very consumed about making the money combo work for us. I have great examples of friends that handle it very badly. One extreme split everything 50/50. The wife made less and they sat in 100 degree weather waiting for her to save enough for a new A/C. husband had the money in the bank. Other one combines everything and dictate what the other can spend and eventually have huge fights about that. My fiance, a non financial person, came up with a great solution, Ill add the emotional conversations we had. DITTO MANDY Im the spender, he’s the saver….this role gets quirky at times cuz I worry about it more.
1) We decided what we are going to live on – Getting married means you get the biggest pay raise of your life. What are you going to do with that extra rent/mortgage payment? I would much rather stay home with my future children than have a nice house. SO, we decided to stay in my tiny condo for a few years and sock everything else into savings so we can have the freedom to go on one salary for a few years.
2) So we made our goal is to live on one salary (we are fortunate enough that both are fairly equal and very comfortable). We sat down and picked the biggest salary and decided how to split that – not figuratively – actually, with monopoly money – How much do you want to spend on clothes in one month? (Very different!) If we disagreed on something small, it will come from our separate accounts, if its something big, we just have to hash it out. At the beginning of the month, we both move the equivalent of the smaller salary into joint savings.
3) We get paid into our existing separate accounts and then we transfer the a majority of the funds – 85% to be exact- into a joint account which we pay savings, mortgage, utilities, food, clothes, haircuts, etc. We made a few rules to prevent overdrafts but nothing major.
4) Then I dropped a bomb, how are we going to spend our separate accounts? He said, none of each other’s business. I think it is though. I don’t want to come home to a new entertainment center, even if he pays for it 100% out of saving in the separate, smaller account. He agreed to NO large size purchases (furniture etc) without consent and no spending over $1000 without checking in (note the difference, he can still spend it, even if I don’t like it – cuz it comes from the smaller account – our discretionary funds) . I made these rules because I think I will eventually stay at home…my separate account will become an allowance from him and I don’t want to start habits that end up in my loss of freedom in the future…or him spending all the money :)
So far, its worked…that being said, I am waiting for the day when he accidently overdrafts the account. But thats what our line of credit covers so we should be okay.
June 4, 2010 8:21 am
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I have a question for anyone… I make a LOT less than my guy, but up to now, we’ve been splitting everything down the middle (rent, utilities, etc.), more like roommates. It’s been tougher on me (but I insisted on this method), but then he usually insists on paying for dinners out, movie tickets, etc. so it kind of balances out … at least in our heads, if not in actuality.
We were discussing the possiblity of splitting bills by percentage of income, and while I understand this method in theory, it still seems unfair somehow, to have him pay e.g. 3/4 of our rent… and he’ll probably still want to pay for my movie tickets, etc.
Any thoughts on this?? Do you feel this leads to a feeling of more equitablity or less?
June 4, 2010 8:23 am
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My fiance and I have been living together for four years, and we’ve always split bills by percentage. When we first moved in together, we tried to split everything equally, but I was working for a non-profit at the time – and for the first 3 years we lived together – and making no money. So we realized pretty quickly that splitting everything down the middle wasn’t going to work because that left me with literally $50 at the end of the month. The percentage thing works out really well, and we both find it very fair. I started my own business last year, and as I began to make more money – though still nowhere near what he’s making – we changed the percentages up a little bit, so I could contribute more. He still usually insists on paying for dinner and whatnot, but I try to treat him every once in a while too.
It was skeptical of the percentages thing at first too, but it really has worked out well, and made up both feel like we were contributing our fair share – and leaving both of us with plenty of money at the end of the month. So I highly recommend it. Good luck!
June 4, 2010 8:32 am
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If we had split exactly according to our income levels, it would have been about 99/1. So we split the rent 70/30. That is because I felt strongly I needed to contribute to our household but he felt strongly that 50/50 was just ridiculous given our situation, especially while I was in school. We also do things like I cover groceries and he covers all eating out, he pays all phone/electric/internet/cable bills, etc. It makes me feel really good to “provide” for him by making sure the fridge is stocked (I am also the one who has time to go grocery shopping and eats lunches at home). So I feel I contribute to the household that way even if in actual dollars it is still less than our going out bill.
June 4, 2010 8:36 am
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Hmm. this is almost exactly our situation. He earns A LOT more than me. We just bought a house, and our mortgage is much more than our rent was.
The system has been, we split the mortage equally and he pays the bills, with me putting my spare cash into the wedding. But doing that meant my disposable income wasn’t enough to pay for my basic expenses, like gas and groceries, so he ends up paying for all the fun stuff and still has money over to buy us the big things (like a couch).
I HATE THIS. Persuading him it’s better for us if I don’t feel like a kept woman, and rebalancing who pays what so I can buy him dinner once in a while has been hard work, but we’ve got there and I feel 100 per cent better for it.
June 4, 2010 12:57 pm
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So thrilled to see this topic being covered! I have been waiting for this. We are getting married in October, and really have no idea on how we want to merge finances. We’ve been living together four years, and everything has remained separate. So now we’re faced with… keep things the way they are – which we both have mixed feelings about – or merge – which, we also have mixed feelings about. We haven’t started fighting about it or anything, but I want to get it sorted before we do – and before the wedding.
June 4, 2010 8:23 am
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Meg, I love how you have a knack for addressing the issues we all need to hear the exact time we need to hear them. I hadn’t thought much about the money topic, since we’re still 78 days away from our wedding and I keep thinking there’s soooo muuuch tiiime to address this, but there really isn’t.
My fiance B and I are very different about how we keep track of our bank accounts. I save my receipts and write down every transaction, so I always know exactly how much money I have. B never keeps receipts and will call the 1-800-bank number to find out what he’s working with right before we go out to dinner. This drives me crazy.
Because of this, I’ve been really hesitant about (even adressing the topic of ) merging our accounts. Also, B was recently laid off, got a speeding ticket, his birthday is this weekend, and I’m supporting both of us while trying to continue saving up money so we can actually PAY for the wedding/honeymoon coming up in August. Maybe it’s time to address our issues instead of sweeping them under a rug, or onto a credit card. Thank you Meg and APW, for reminding me I’m not the only overwhelmed money-conscious woman/bride out there!
June 4, 2010 8:38 am
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I earn more. A lot more. And I have a huge hoarders pile of money in my virtual mattress because it makes me nervous otherwise. I have a fully funded 401K. I give myself splurges each month to keep my hoarding on track but I find it difficult to spend any real amounts of money (of the vacation fund. I can’t spend it either. It physically hurts, even though I save save save for these trips I want. Him, not so much. Some savings, some retirement money, no irresponsible living, but nothing like my obsessiveness. Also, nothing like my income.
I think this is why I’m terrified of totally joint finances. The control issues win out over the future-fairness issues. We set up a joint account when we moved in for joint bills, and it’s a baby step that helped. But I hate the idea of merging most things (except for an equal allowances in separate accounts each month) because I feel bitter about the inequality in income and approaches, but I love it too. I want the security of sharing and being on the same page. I want total transparency in everything except our own-account fun money. But I want more of it because I bring more of it in and that’s the way it’s always been and I want my freedom, darnit, if I’m earning it. Until I realize that, when we have kids, there will probably be a few years when he brings in more and I’m part time and then I get uncomfortable.
So yes, I want to hear these conversations.
June 4, 2010 8:46 am
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This is so great.
I’m a recent college grad experiencing a lot of grown-up firsts – first job (ie first salary, 402K, retirement fund), first apartment (first lease, rent responsibilities), first utilities payments. Also first time living with my boyfriend of three years. Yeesh! We have somewhat similar spending habits (I’m a hard-core hoarder, he likes to save and then make occasional big purchases), but there’s some debt inequality (he’s got college debt and is in grad school; I have no debt and a full-time job), so balancing accounts has been a little challenging.
Mint.com looks like a great resource, but I’m also wondering whether anyone would be able to share tips for creating a budget spreadsheet. Just something simple to track salary, rent, utilities, transportation, plus savings. My Excel skills are fairly limited, so I’m talking “Budgets for Dummies.” Does anyone have any recommendations for how to create a simple budget spreadsheet?
June 4, 2010 9:00 am
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*401K, duh*
June 4, 2010 9:00 am
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Jenna-
Google docs has great free resources and everything is already formatted. You just adjust the percentages that best fit your spending habits and and input your “data”. All you need is a google account, plus you can share it with your bf so you can both be on the same page.
.http://www.google.com/google-d-s/spreadsheets/
June 4, 2010 9:07 am
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The day after our honeymoon we went and added each other to our checking accounts. We still each have our own credit cards. The house is just in his name (he bought it two years before we got married). The student loans are still just in my name.
At the beginning of each month we sit down and go over our monthly calendar together so we know what each other has planned. And we pull up the budget and look at that and see where we’re at there. He pays the bills, but I can see exactly what’s going where.
June 4, 2010 9:25 am
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