Growing up, my parent’s money system was simple. They never spent any money, so what was there to argue about?
Without a clear model to follow, when it came time to share finances with my husband, it meant I could easily adopt my own system based on our own values.
But first, the perennial question: to merge or not to merge finances?
For me and my husband, where the money actually lives was never deeply symbolic. What really mattered to us was a shared vision, trust, and transparency into the other person’s financial life. We’ve got all of that with separate finances.
If you’re commingled, deciding to maintain joint or separate accounts is just the beginning. Then there’s the actual nuts and bolts, like: How much should you spend and save as a couple?
And where do you start?
While there’s no universally “right” way to do money as a couple, if you’re wondering about the logistics of how to settle on a shared money system, here’s the method that made sense to me and currently works for us (no arguments!).
For context, we both are fortunate in that we aren’t financially dependent on each other, got lucky with an under-market apartment, and neither one of us has major money hangups. These factors make managing our money together a lot less of a minefield than say, a scenario when one person is the breadwinner and the other stays home, or when a couple is squeaking by paycheck to paycheck.
1. List Out Who Has What and Where
This was low-key the most terrifying part of talking about money. But I had to know before I would move in with my husband. What kind of numbers would I be working with specifically?
Here were some of the basics I gathered:
- How much each person makes annually
- How much each person takes home per paycheck
- Current contributions for general savings, retirement, and other investments
- Total amounts for savings, investments and debts
- The banks and services each person uses
2. Track Spending for Three Months
If you’ve been reading me for a while, you know I like to balance emotions with data points, so creating a money plan from the ground up would be no different.
My husband had never tracked his spending before. Besides, ask anybody how much money they spend, and I bet you they’ll underestimate it. Knowing that, it was important to me that to get a snapshot of how we were naturally spending money on our own. That way we could start out in a realistic place together instead of randomly making up numbers that sound good.
I set up a Mint account we both had access to and hooked up all of our financial accounts to it. Then we each spent money how we normally would for three months. One month of expenses wasn’t enough info, but with three I could get a more accurate story.
3. Calculate the Monthly Averages
It’s spreadsheet time! It was tedious, but I went through each transaction and made sure they were categorized correctly in Mint. Then I used Mint’s reports feature to tally up the totals.
In the spreadsheet, I made a column for each person, and every category we spent in was assigned to one of the following types:
- Save to Spend
- Expenses, Basic or Comfort?
- Expenses, Negotiable or Fixed?
The spreadsheet setup:
Assigning categories now would make it easier for me to sort through later. Then I divided the totals by 3 to get the monthly averages for each person.
4. Consolidate Duplicate Expenses
Now that I had a spreadsheet with both columns filled in, it was time to work the numbers. I made two more columns (‘Proposed’) that would be our new working budget.
First step, were there any redundancies we could consolidate?
- Would we be saving money on rent by moving in together?
- Did we both have Netflix?
- Could we save on phone service with family plan?
Sadly for us, there wasn’t much overlap at all!
5. Divvy Up Shared Expenses
Next, we split up shared expenses that affect you both, like rent, utilities, and food, and decided which spending would be handled individually. For example, I’d take all the utilities: cable, gas, electricity, and phones. But I wouldn’t contribute to the pets. At least, not formally. Because let’s face it, I’ve found myself wandering the aisles of the pet store, looking for cat treats and cute toys.
6. Make Compromises
There’s a good chance that you won’t like some the numbers staring back at you.
The first places for us to look to cut were categories marked with ‘Comfort’ and ‘Negotiable’. ‘Comfort’ categories were things that made life a little sweeter, but weren’t 100% necessary to be happy: shopping, travel, eating out.
My husband said he’d look for a less expensive gym, and he could do without a cleaning service.
For other categories, I started subtly tweaking the numbers, and I should note that most of them weren’t split 50/50. They don’t have to be. Because we value different things. For example, I have the lion’s share of Clothes and Personal Care. He’s all Subscriptions and Gym.
7. But Decide the Hills You Don’t Want to Die on
Unless you and your partner are clones, you won’t spend your money exactly the same way. But you have to pick and choose what you get on their case about.
In our situation, I wouldn’t spend money on subscriptions like Netflix, Spotify or cable by myself, but they are such a big part of my husband’s life that I’d rather have him cut out the $6 tomato sauce.
Choose your battles carefully and let the rest go.
8. Agree on How You’ll Track Progress
Part of the anxiety with separate finances is not knowing if you’re doing OK. How can you know if you can afford to buy a bag if your partner is off doing his own thing in his own accounts?
For us, the shared Mint account is key. There’s no wondering how you’re doing as a couple; you can just log in and check yourself. Another example of tracking accountability could be monthly money check-ins, using an app like Splitwise for shared expenses, or hanging up a coloring sheet of your financial goals.
9. Align on a Success Metric
If you don’t know what you’re working toward, you don’t know which direction to go. That’s why I think it’s important to outline specific numbers or percentages for each person to track. In my case, I know my husband thrives on rules, and I knew if I give him the number to work toward, he’d follow it to a T.
Instead of deciding how much each person will spend, we focus on one metric, and one metric only: how much each person transfers into savings each month. It’s always the set amount we agreed upon.
There’s no micro-managing overspending on specific categories. The whole point of tracking our spending in detail for the three months was to figure out a realistic number we could both save, not spend.
It’s up to each person to manage how the saving happens on their own. As long as that savings transfer happens, there’s no questions asked. I have automatic transfers set up and my husband likes to do it manually.
The Key? It’s Being Realistic.
As long as each person saves the amount they are supposed to, and it’s visible in Mint, we don’t sweat much of anything else. And while that seems effortless, there was definitely a system behind it that was fairly detailed and came from a realistic starting point: starting with our natural spending habits and making subtle tweaks.
There’s no right way to share finances, so I’m fascinated: how did you and your partner decide to manage your finances together? Specifically, what was the method for choosing your numbers? Any pitfalls or successes?
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