This is a guest article by Elle, the author of the blog Couple Money.
Handling personal finances can be an intriguing, challenging, and rewarding process. Being married and handling finances can double those effects. My husband and I have learned through the years that working together can be powerfully effective and motivating. While every couple is different, I thought it might be helpful to share some tips and tricks that have helped us through the years. I hope you’ll share your own stories and advice in the comments after the article.
Merging two spending styles
My husband is a conservative saver. He can live on a shoestring budget and hardly deviate from it. My husband dislikes debt and paid off his small student loan a few months after he graduated.
While I enjoy saving, I know that if I’m going to succeed with my goals, I have to automate the process. I started investing while at one of my first office jobs while in college. I also grew to enjoy earning income from different jobs during my college years.
We could either try to change one another or we could try to use our specific strengths to our advantage. To do that, though, we need to have some goals to share between us to keep us on track.
Defining goals together
For us, being on the same page as far as goals has been a huge help with keeping communication open. When we got engaged we sat down and shared our assets and debts with one another. Once we were married, we decided to set up some general goals, such as establishing a small emergency fund together. As the years passed we’ve created more goals, including:
- Paying off the car loan and staying away from car payments afterwards.
- Buying a home that is well within our budget and paying off the mortgage within 15 years.
- Going on debt-free vacations.
To do this we used own complementary skills to set up our system. My husband created the foundation for our family’s budget as he’s naturally frugal. I made sure our bill payments and savings transfers were all automated. We started small, but we set aside automatic deductions for our retirement savings and we created a plan to reduce our debt.
Creating a financial system that works for us
With our goals in mind and duties divvied up, we had to find a banking system that worked for us. We originally banked with a national bank, but we found their customer service lacking and their interest rates disappointing. We then switched to ING Direct to handle our family’s finances.
Most of our money goes into our joint checking and joint saving accounts. We do have separate accounts for minor personal spending, but for the most part, we find that combining our finances makes things much easier for us.
We currently have a few savings sub-accounts at ING Direct for general and specific goals:
- Joint Savings
- Car Replacement Fund
- Vacation Fund
Since we’ve been married we’ve focused on having a system where we try to keep our necessary expenses under one income and use the second income to reach our financial and personal goals. With the majority of our spending and savings automated, we’ve managed to cut back on the time used for keeping tabs on the accounts. However, we knew we need something to help us stay on top of our money.
Using Mint to track spending
To keep us on track we use Mint to send ourselves email alerts if we go off budget in certain spending categories. Mint is wonderful because you can automatically sync all of your financial accounts, such as checking, savings, credit card, and investment accounts. However, if you only want to track your joint checking account, you can do that as well.
We don’t have to keep every single receipt and enter it into Mint. Instead, Mint pulls our spending data and organizes it. It’s fairly accurate as well — about 80-85% of the time it categorizes the expenses correctly. The only problem I noticed with this system is that certain bill payments have to be sent out as paper checks from our joint checking account.
We’ve had some discussions based on our spending notifications due to some bills that pop up time to time. In the past we’ve talked about moving expenses and then home improvement tweaks that we wanted to make. If we started spending more than we planned to spend, we talked it over and tried to reach a compromise.
I’d like to say that once a system is in place, you’ll just set it and forget it, but that’s not the case with family and finances. It’s constantly changing as our circumstances change. Right now, we’re expecting our first child in July, so as the due draws closer, more spending has been occurring for the baby. We’ve had to talk about what a realistic timetable would be for the both of us and our budget.
Using Google Docs for our family budget
My husband and I are both fans of spreadsheets. When we were working on our budget, my husband decided to set up a spreadsheet in Google Docs to help us manage the information easier than emailing one another back and forth. He’s done a wonderful job on creating something realistic that we can use.
A big advantage of using Google Docs is how easy it is to share changes. It’s a wonderful feature to have one of us update the budget and the other spouse get a notification of the change. We usually don’t make drastic changes to the document, but even being kept up-to-date on minor adjustments is helpful.
Blogging offers us a financial snapshot
When I blog over at Couple Money, I share our financial situation to help others build their net worth together, but also as a way for us to be accountable to one another. I had blogged before at another site when I was a college student and found that writing about what I was learning (from books and life) helped me to easily keep to my goals.
Every month I review the previous month’s income and expenses on the site and share if we’ve increased or decreased our family’s net worth. Some readers believe that focusing on the numbers isn’t too helpful, as things come up and can lower our progress, but that’s not the main benefit of the net worth updates.
To prepare for the post, my husband and I will look at the big picture once each month and see if we could’ve improved our spending or savings. It’s a chance for us to chat with one another about our finances without pressure. We look at the numbers and we celebrate the good that we did and try to fine tune anything that we don’t like.
Thoughts on couples and money
I’ve shared how we handle our spending as a couple, but I know it’s not the only way. I’d love to hear how you do it. How do you handle your finances in your family? What has been the easiest part? What has been the worst? Are there any tools that you use to keep your finances in shape?