Married Money: How we do it in 2018
June 11, 2018
Thanks to being featured by the lovely ladies at Women Who Money, I realized that I should update our money process because it’s evolved since the last time we talked about it.
Ours to have and hold
Budgeting the money
Pretax contributions come out of his paycheck first: taxes, retirement contributions, health, dental and vision coverage, pre-tax FSA, his disability and life insurance. His benefits are way better than my employer’s.
After that haircut, our paychecks hit the joint checking accounts. 30% of our total take-home pay is immediately transferred to our joint savings account for long term savings or investing, another 10% is sent to a savings account, held against the large bills coming up in the course of the year: life, car, home, and earthquake insurance, property taxes (A DOOZY), income taxes if we unexpectedly made more and deducted less over the year. That will need to increase to 15% in 2019.
The remaining 60% covers all living expenses: mortgage, utilities, daycare, credit cards (gas, groceries, discretionary spending, dog supplies and medications).
Organizing the money
We closed our personal checking accounts because they all want you to keep a $1500 minimum daily balance and that’s a waste of time and money.
We have a joint checking account in the name of our trust for any checks sent to the name of the trust – this is important because the proceeds of any sales of trust assets like the previous property can only be sent to the name of the trust and cashed by a trust account.
Our normal joint checking and savings accounts is in our names and is held in the trust but it’s not a trust account. If that’s a little bit confusing, I know, it was weird the first time I was told that our property sale check was made out in the name of the trust and couldn’t be cashed by a trustee’s own account.
The rental has its own set of checking and savings accounts, and we’re hold our online savings accounts for our emergency cash in the trust as well.
Spending the money
We continue to charge almost everything to credit cards, targeting the ones that bring in the best rewards: gas, groceries, utilities, travel, dining out, a couple utilities, dog supplies, medical and vet bills. I no longer juggle credit cards to get the maximum cashback on everything, though, I either churn a credit card or charge everything to a main card. Only so many brain cells can be spent on “how do we pay for this”?
I pay all the bills out of the joint account. I do all the accounting, oversee our investing: all retirement accounts, our brokerage account, JB’s 529, and our rental property. We stopped using Mint for bills reminders – I moved to a spreadsheet system where I record all our transactions in each month.
Communication is simpler
I no longer ask PiC what he’s going to pay – I just tell him where the high spending mark is from week to week. Our mortgage is automated but I’ve gone manual with our rental mortgage payments because that mortgage company is totally incompetent and lost my check three times last year.
We have redirected almost all our financial account emails to the shared household account. That way if either one of us is out of the picture, access to important financials isn’t restricted to my email.
I’m currently working on a summary of all our accounts and bills so that if I ever get sick or incapacitated, he should be able to easily take over my work.
Bonus money
I continue our credit card churning on the side to earn travel money. We didn’t use those points/miles for this summer’s vacation because I had a combination of travel credits to use but they’re being hoarded for now.
Our earthquake and home insurance is due in May so I’ll open another card for PiC since my credit reports are frozen for the near future.
Our credit scores are still in the 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.
Gosh I dunno. I think I tried a bunch of systems and hated them all, but then a decade ago, I created a spreadsheet system. One tab per month to record spending/income, another running Savings Spreadsheet, and a final one with my Net Worth calculations. Seems easy to me but I set it up to my exact needs so…? I go through and update it as I spend $$ and once a month to transfer $$, exchange currencies, and pay bills. Easy once you get in the habit of mentally logging all spending (and keeping receipts on big spend days). Plus I think it is fun to see my NW grow each month so it is something I look forward to doing when the calendar ticks over to the first of the month again. 🙂
Another (encrypted/protected) spreadsheet lists all of my bills, when they are due, accounts, passwords, etc. so that if I pass or become incapacitated, my family (realistically, my Mom) has access to all of it and can make sense of it. Everything goes into a trust and my mom is named trustee and heir on all of my accounts, so should have access to it all immediately. My oldest friend is named my executress in my will so that my family doesn’t have to deal with all of the details in addition to grieving. She lives in my hometown still, has known my family for decades, is like another daughter to my parents, and very wisely handles all of the finances for her family, so I’m very comfortable with that arrangement!
I have a spreadsheet similar to yours for actually tracking everything, I don’t know why I forgot to include that 😀
How wonderful that you have a dear friend as an executor! We do too. I don’t trust family, frankly, and if they’re grieving, they shouldn’t have to also figure out the money. (I assume that most of the ones I don’t trust won’t be grieving, there’s not much overlap there)
Your system sounds so organized! A joint e-mail is something that sounds so simple, but we haven’t implemented yet.
Ours has only evolved a little, and things have been pretty stable since we moved into our house ~4 years ago. I imagine we’ll go through another shake-up as we add a kid and figure out what needs to change for that. i will have to go back and re-read posts on the trust you set up to see if I think we need to go that route too.
The joint email was just an idea several years ago and like anything else, we eased into it. We’re finding that it’s really useful for PiC to know what’s going on with our finances like the rental property where he would normally be totally hands off and just get erratic updates from me.
I feel like I need to write out a similar post, if nothing else but to kickstart the process of having everything in order for my husband we’re anythkng to happen to me. Currently he has access to his one separate account and our insurance payments, but that’s it. The downside of one person handling 95% of the finances is well, that means the other person is clueless to that same 95%.
Angela @ Tread Lightly Retire Early recently posted…Monthly Financial Update: May 2018
TBH, that’s largely part of why I wrote the first posts 😀 It helps me think through and articulate what needs to be done.
I think I’ve talked about our systems before, but it’s all pretty messy yet seems to work out just fine so far. If we were closer to not being just fine I’d have to be more organized and keep a tighter rein on things.
nicoleandmaggie recently posted…Reminder: Sometimes you need to double-check reimbursements
It makes sense to me that it’s working! My systems have always been somewhat messy and they’ve worked. I just had to tighten up in recent years.