Thursday, July 20, 2017

Marriage and Money: How We Handle Our Finances

Nathan and I have been together for fifteen years, and married for nearly five. Like most couples, we've faced a variety of challenges and fought about pretty much everything under the sun. How to stack bowls in the dishwasher. What to watch on Netflix. Whether or not to get twelve more dogs. You know. Normal stuff. 

One thing we rarely fight about, however, is money. I suspect this is because we have similar values, similar goals, and not a lot of cash to spare. After all, you can't argue about what you don't have.

That said, the way we handle money within our relationship has changed over the years, and the biggest shift happened shortly after we got married. I love learning how people handle their finances, so today I'm going to do just that - reveal our system, and hope it helps other couples who want to argue less about their spending and saving.

The boys love free fun.

Money Before Marriage 

Nathan and I started dating when we were naive college students who thought money was a necessary evil in a corrupt, capitalist society. As such, we mostly lived off student loans, credit cards, and meager wages. (My first job after I graduated in 2004, right after I moved from NY to Texas, was at a bookstore where I made $5.75 an hour. I earned an extra quarter because of my degree.)

Back then, we didn't talk much about money or the future - why would we? We had all the time in the world and very few needs. We lived in East Texas, where rent was $300 a month, we rode our bikes everywhere because our town was so small, and we didn't go to a lot of restaurants and bars because there simply weren't any. We mostly drank beers with friends, swam in lakes, did a ton of yoga, and played disc golf at the local park. (Now that I think about it, Nacogdoches prepared us well for a life of frugality.)

We each had our own bank account, but that was about it. We didn't save anything, we didn't have a budget, we lived paycheck to paycheck, leaned on credit cards, and took out extra student loans to make up the difference. I'm cringing as I write this, while at the same reminding myself that I was only 25 and in the midst of learning many life lessons.

Marriage! It only took us ten years.

Money After Marriage 

We got married on our ten year anniversary, which put me at 30 and Nathan at 31. I was in grad school, again. We were living off loans, again. We had jobs that didn't pay hardly anything, again. But - and this is where things began to change - marriage qualified me for a USAA bank account, since Nathan comes from a military family. At this point I was tired of separate accounts. While I liked the independence, it made paying our bills and keeping track of cash arduous. I never knew exactly how much we had, and I hated adding up what we owed and asking Nathan for his half. Plus one of us was always in school, so it was never a 50/50 split.

"Let's just open a joint bank account with USAA," I said. "We'll deposit everything we earn into that account and use it to pay the bills, buy the groceries, and drink the beers." Nathan agreed, and that's what we did. Later, we opened a joint savings account for big ticket dreams, like a down payment on a house and a new-to-us car. (Instead of USAA I chose Ally for our savings account, an online bank with a great interest rate - 1.15%! These are the things you find thrilling in your 30s.)

We also kept our personal accounts open. The original plan was to withdraw allowances to be spent on whatever we wanted from the joint account each month - equal amounts, because we both contribute equally to the household, even if our salaries don't reflect that. Five years later, we're still not at the point where we can afford those allowances. Our personal accounts remain empty but optimistic.

Nest eggs - get it?!

For Richer, For Poorer

For a while, the joint account worked well. I could log in and see our balance, with all income and spending accounted for. I could pay the bills as they were due, without waiting for transfers to clear. We never had to decide who would pick up the tab when we went to a movie or the brewery - one swipe of our joint debit card and we were done. We still didn't argue about money, because we still didn't have much. Everything was just sort of... fine.

And then I got tired of "fine." I wanted to look at our finances and think "fabulous." I wanted more control, more savings, a better and clearer idea of where our money was actually going. Over the years we'd attempted to institute a budget. There was a short-lived affair with Mint, and an extremely complicated Excel sheet, and a running tally on a dry erase board, updated daily. Eventually we discovered YNAB, and it was like the locked door on the budgeting part of my brain swung open. (You can read the whole story of this transformation on the YNAB blog. And if you want to try YNAB, use my referral code - we'll both get one month free!)

You might notice that while this post is about marriage and joint bank accounts and sharing finances, I keep saying "I" and "me." There is a very simple reason for that.

Downtown Wilmington, just because.

Chief Financial Officer 

Every relationship is different, and in ours I'm the one in charge of the money. Both Nathan and I are thrilled with this system. I'll be the first to admit - I'm a tiny bit of a control freak. For example, I must know, at breakfast, what we're having for dinner, right down to the side dish. (This is why I'm also Chief Meal Planner.) Nathan, on the other hand, prefers to focus on the big picture. Instead of checking our bank account five times a day and meticulously monitoring our interest rates, he's mapping out a complex system for water filtration that will work in multiple apocalyptic scenarios.

This requires a lot of faith on his part, since he basically gives all his money to me and trusts that I will handle it responsibly. It also means he has to check in before making any purchase over $20. He's definitely the spendier one in our relationship (apocalyptic scenarios ain't cheap), so this means I often have to tell him "No, we can't afford that." Sometimes I feel like a kill joy, which isn't pleasant.

One way we've learned to overcome this is by asking ahead of time. If Nathan wants to spend money on a project, he figures out how much he'll need and lets me know so I can budget for it. This means he rarely gets to do a project on the spot, but that's beneficial, too - more time to plan and make sure it's something we really want or need. (You wouldn't believe how many brilliant ideas don't seem especially awesome a week or two later.) The more we talk about what we want to do with our money, the more mindful we are about how we spend it. This is the best thing about a budget - when used correctly, it forces you to have those conversations. Which brings us to my final point:

A rare selfie in honor of Valentine's Day 2016. 

Communication Is Key

This system - the joint account I control, the budgeting app we use, the allowance we'll cash in on one day - works because we talk daily about our goals and plans for the future. We know what we're saving for, and how every dollar we spend pushes those goals further away. I give Nathan regular updates on our budget, and he doesn't grumble or resent me when I tell him we need to curb our spending or put something off. We still argue plenty, but never about money. Now we just need more of it.

Are you married or partnered? How do you handle finances? I'd love to hear your stories in the comments!

PS: That time I learned about the marriage penalty in the middle of tax season + my tips for surviving on one income