Married Money: How we do it in 2016
August 15, 2016
I asked how you manage your money if you have to compromise with another human. It’s only fair to share how we’re managing ours!
It’s taken years, but PiC and I have a pretty good system for us these days.
Once upon a time, my money was my money, and then it wasn’t. The last time it’s been totally separate was when I was 12. Since then, my own money has been intermixed with family issues at various times for various reasons. After years of hard lessons with my family, I had to learn to trust, and take risks based on that trust again when PiC and I started to cohabitate, and that’s where our money started to intertwine.
It took at least a year after we got married for it to truly sink in that our money was irretrievably connected, however we chose to handle it. I was evaluating our life insurance 4 days after we got married but viscerally, it’s a lot hard to remold “me” into “we”. Over the course of that year, it was a tentative subject and we weren’t ready to say much, but we were slowly aligning ourselves with each other without words, just through actions.
It’s never painless, not when you’re talking about unseating a decade of habits. Our foibles would occasionally pop up and give us some trouble. It was at this point that we began to learn the art of compromising with each other, and realized that neither of us did well with a shared budget and separate finances. It’s taken a few more years and a lot of adjustments but we’ve got a working system now.
Ours to have and hold
Budgeting the money
Pretax contributions come out first: taxes, retirement contributions, health, dental and vision, pre-tax FSA account, disability and life insurance benefits. Those all come out of PiC’s paycheck because his benefits are way better than what my work offers.
25% of our take-home pay is automatically deposited to our joint savings account, this comes out of both checks. We added up all our bills and made sure that it didn’t exceed the remaining 75% which is dropped into our joint checking account. All the bills are paid out of that account: mortgage, HOA fees, rent, daycare, credit cards.
Spending the money
All routine costs that can be are charged to credit cards that bring in the best rewards and that’s paid by the joint checking account: gas, groceries, utilities, travel, dining out, medical and vet bills.
We kept our own checking accounts and credit cards. I pay most of the bills out of the joint account, he pays a couple of the utility bills and his own credit cards. I do all the accounting, oversee our retirement accounts and, since my eye is on early retirement, I actively manage our brokerage account and our real estate property. We use Mint for bills reminders but usually have paid it by the time Mint sends the weekly update.
Pretty simple all around.
Communication is key
Twice a month, I ask PiC what he’s going to pay in the next week. I don’t see all his credit card bills so that helps me keep a bead on the expected withdrawals. Our mortgage, rent, and association fees are automated monthly payments so asking regularly and a quick eyeball of the account tells me if I am going to run short. That really only happens when a big unbudgeted four digit check is cut, but I’ve been burned by keeping too low a balance in the checking account before. Never again!
We also created a shared email account so all our financial accounts go there. That way if either one of us is out of the picture, access to important financials isn’t restricted to someone’s email.
Bonus money
I do some credit card churning on the side to earn travel money, that’s how we paid for our travel to Hawaii and Washington without breaking the budget. I keep that simple too, one or two cards per calendar year for specific trips. This year I’ve already done our second card, but I’m considering a third before the end of the year.
I alternate between cards under each of our names and don’t bother with any sign-up bonus less than $250 value in travel money or miles.
I used to be cautious about keeping old credit lines open, which I still do, but I’ve spent enough years being responsible and carrying no debt that our credit histories are in great shape. I’ve shown that I can carry an auto loan and pay it on time for many years. I’ve got many years of credit card use, always paid in full and on time. Same goes for the mortgages – always paid on time.
This means our credit scores are always in the high 700s or low 800s no matter how much churning I do, so I stopped worrying about preserving it years ago. This is good for anywhere from $500-2000 worth of travel value. Not bad for several days of work.
Never thought about a separate email for financial (and indeed perhaps other important admin things) – duh, genius!
Simplicity, definitely. Not that we have all that many great options to take advantage of here, anyway.
I do some CC churning, because as you point out, you can get a lot of travel money for it. Our vacation this year was partly funded by that (and partly rewards from work travel). I do try to tidy up and close old accounts and have minimal active management, but if I were to draw our system out on paper, it probably wouldn’t look super simple to an outsider. It is a balance.
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