Money and Partnership
Ahh, the “marital budget.” Even when you’re young and poor and have few financial assets, merging finances – or deciding how not to merge finances – can be tough. Tim and I are relatively young, not all that poor, have several of our own assets already, and would really like to start saving to buy a house, so you can imagine how tough our conversations about money have been. If I were to order the stressers in my life right now from most stressful to least stressful, it would probably go like this:
- Moving (Which is happening next week.)
- Money (Which is definitely part of the moving that is happening next week, so these two might be tied.)
- Wedding (Not marriage, even though that would have added a nice alliteration to the list; I’m actually feeling really good about the whole marriage and partnership thing. Planning the big day, on the other hand? A wee bit stressful. Fun, yes! But stressful.)
I can’t really complain. I am on summer vacation and for the first time in 10 years, I don’t have a summer job at all, so it could definitely be worse on my end, but that doesn’t change the fact that these are some very real issues that anyone has to deal with when they enter into any type of partnership with someone else, including the partnership of marriage.
I mean, we could make this whole process SUPER easy and say “What’s mine is yours” and put all of our money together in one account and designate someone just to take care of the finances and online taxes, but advocating feminism as I do, I have a lot of philosophical-type trouble with the merging of two lives that inevitably happens when you, you know, get married. I’m a pretty private person – I know, it looks like I put my whole life on the internet, but you’d be seriously surprised by what I don’t share! (Makes you wonder, huh? 😉 ) – and I’ve been financially independent for a while now. And so has Tim! He and I have both lived with our parents for two years after undergrad and lived in our own apartments for two years and have had steady jobs for four years. We both paid for our own grad school, we both have loans from undergrad, we both bought our own cars at some point and set up our own retirement funds and… you can see how this all adds up to be quite a financial mess. Honestly, the only way I was able to take care of my own finances was to resign myself to the fact that the money that came in wouldn’t stay there, and couple that with some creative credit card use. How will I ever be able to account for the dreaded joint finances?! I mean, I budget like I diet: “Oh, I’m so going to start eating (spending) less. Right after this piece of cake (this really cute purse)…” I could just let him take care of it, but a control freak like me giving up the death-grip on my cash flow? No way.
Luckily, Tim is really good with money (And by good, I mean he doesn’t shop and can realistically create a budget. And stick to it.) and also understands my feminist-I-won’t-let-a-man-control-my-money-no-matter-how-much-I-love-him tendencies. Also luckily, we both made it through the teacher-cuts this year and have really good jobs for, well, at least next year. And SUPER luckily, because of my parents (especially my amazing mother who welcomed me back home for two years), I don’t have to start this new chapter of my life in debt.
So, over the past few weeks we’ve been able to sit down a few times to hash out our marital cash flow. The marital budget is another story and something that I will release my death-grip from in order to have the pleasure of not dealing with it. Anyway, what follows is an outline of what we’ve decided. Like all money situations, it wouldn’t work for everyone, but I’m putting it here as an idea for those of you struggling with the same issues right now.
- We decided to share almost all of the really annoying expenses that come with adulthood: rent, utilities, cell phone, student loans, car loans and maintenance and gas, groceries, gym memberships, insurance of all kinds, and medical expenses. Oh, and joint entertainment. We still need to have a little fun!
- We get paid pretty much twice a month – once every two weeks to be exact, which means twice a year, we get paid three times a month, and those two months are the best months of my life. One check a month will go to the joint checking account on the first of the month to pay the monthly bills stated under #1. That might not be quite enough, but we’ll have to just test it out and see.
- We both have some some savings. He’s been saving for a house since before he met me, and I’ve been saving for some distant future mostly because the media told me to and this recession has scared the crap out of me. He always assumed his savings would be for us, and I never really thought about it at all, so when I realized I’d have to part with a lot of that money between moving expenses and wedding expenses and, you know, trying to start a life together, that was really hard for me. I mean, it is, after all, my money that I’ve been saving since well before we even met. But, after a while, I realized that I wasn’t really saving it for anything more than a rainy-day fund, so I agreed to give up most of the savings in the name of mutual benefit. (Hey, I can keep a little, right? And he can keep some of his, too, if he wants.)
- With the second paycheck we get each month, we’re each going to put a set amount into the joint savings that we will eventually use for a honeymoon or a house or whatever. What’s left from that second paycheck is ours to use however we want for the month. If we want to save it for ourselves, fine. If we want to buy each other or our family and friends gifts or take someone out to eat or whatnot, even better. If we don’t use it for any of those things, we can spend all of it how we choose.
I suppose this sounds a lot like the “put all your money in the joint pot, let someone take care of the bills and the savings, and then that person doles out what’s left as adult allowances” method of financial merging, and maybe it will eventually turn into that, but this seems like a nice way of easing into the money-sharing without feeling like either of us are losing too much of our independence. Also, I hate the idea of “adult allowances.” Maybe it’s just the syntax, but allowances are to be used as a positive reinforcement for children for doing what they’re supposed to do during the week or month or whatever. What would my allowance be for, cooking and cleaning like a good little wife? I don’t think so.
Will this all work out? Only time will tell.
Anyone want to share what works for them? I’d love to hear thoughts!
Also, check out two really great posts on marriage and money from one of my favorite wedding blogs: here and here.
Thanks for sharing this. My boyfriend and I bought a house together late last year and had been living together for a couple years before that, and we’re still looking for the right way to deal with our joint and separate finances. Right now, we put a set amount into the joint account for mortgage and joint bills, and the rest is ours to do with as we please, respectively. It works okay, but we don’t budget super well with the joint stuff. We’re looking into transitioning into a set-up more like yours and Tim’s so that most of our money goes into the joint account and we have less for ourselves (but it would ostensibly go to the really fun, individual, special things, or individual bills). But it’s hard, for sure, to let go control over that money!
I felt much the same as you: Sam was ready to pool all of our resources and, without being able to explain quite why, I just wasn’t willing to give up the control.
We have a joint savings account that we both deposit into for a someday-house and other similar big-dream-future expenses, but maintain separate checking accounts (we each have access to each others, but generally don’t touch). Sam already had all the household bills and stuff in his name, since he lived here first…an appropriate amount of my paycheck just goes straight to his account and he pays them. Personal bills (like credit cards and student loans) we handle individually, from our personal accounts. We basically alternate paying for groceries, meals out, etc., though we’re not particularly militant about it. Whatever’s leftover is our to do with what we want. It’s more reactive than proactive–we’re pretty loosey goosey (as “whatever’s leftover”) demonstrates. I like your approach better actually, I think, and I think we could make more of what we have if we planned a bit better, together.
After about a year of this method, frankly, I’m feeling about ready to pool everything together. I couldn’t have done it a year ago–I needed that sense of independence and control over *my own stuff*–but 10 months later it just doesn’t seem to matter much anymore.
Before Ilya & I moved in together last year, we sat down and had a very difficult and emotional (for me) conversation about money and budgeting. It took us quite a while to hammer out the details, but finally, we came up with something that for the time being, seems to be working. Because Ilya makes a very good salary and I am living off of the bounty of student loans, we decided that the most fair way to split bills was 60/40. We apply this proportion to all of the joint bills: rent, cell phones, utilities, etc. Every three months when I get my loan money, I give Ilya three months worth of rent, and he’s responsible for mailing the rent check. At the beginning of every month, I pay all of our other bills, which I track on GoogleDocs for transparency, and Ilya transfers me his portion when it’s completed. We don’t share any accounts, nor do we have access to each other’s accounts, and right now this is preferable for me.
Since we do plan on becoming engaged/married in the near future, I do expect some of this to change. We’ve discussed opening a joint savings account, but truth be told, until something “official” happens I am hesitant to put my money anywhere that someone else has access to it. I am 100% confident that I will always maintain a separate individual account with money in it for myself, regardless of how we decide to structure out marital finances.
The other consideration we have is debt. On one hand, luckily, we are both virtually free of credit card debt (yay!). On the other hand, once I *finally* graduate from school, my educational debt will be crushing – we’re talking six figures, no joke. It’s going to be a long road before I am making a significant enough salary to cover both my debt + living expenses. That will be, undoubtedly, an enormous adjustment for me, to rely upon his contribution to our home while I am paying down my loans. Luckily, I’ve still got lots of school ahead of me before the loans come due, so we’ll have plenty of time to discuss and plan for it!