Once upon a time, conversations with my girlfriends centered around the ins and outs of dating--the kissing, the first dates, the fights. It was always fascinating comparing how we each handled similar situations with the various people we dated. In the last few years I've noticed a shift in our conversations as many of us have gotten married or entered into long term committed relationships. There are no more chats about having a DTR with someone or sharing the awkward stories of going to bed with someone for the first time. Now the conversations revolve around the adult issues we are all suddenly faced with--taking your spouse's last name, navigating the ups and downs of a family that you were not born into, and planning out how we can all be pregnant and have babies at the same time. And of course there's the big one: managing your finances with a partner. The latter has piqued my interest more than the others lately. I am admittedly not good with money so that's probably why it's so fascinating to me. I had credit cards in college which I quickly maxed out, only paying the minimum balance each month. As a college student, this seemed like a great deal: "I can buy this Marc Jacobs bag now, and I only have to pay $15 for it next month?!" (Spoiler alert: it's not such a great deal after all.) When I did finally get them paid off, I vowed to never have credit cards again. I couldn't be trusted with them. Even debit cards are dangerous for me. Cash is my preferred way to pay for things because I'm forced to watch my money dwindle. Seeing the stack get physically smaller inspires me to think about what I spend it on more carefully, thus saving instead of spending.
As Rob and I were approaching the point in our relationship where we knew we would be spending the rest of our lives together, our conversations turned from where we would go to dinner on the weekend, to how we would handle our finances when the time came. I was very honest about not being great with money and let him know up front that we needed to have a good system so that we could save, spend money separately how we wanted, and still have fun together. The bottom line was that we, especially me, needed boundaries. And these boundaries needed to be in the form of a monthly budget. Without a budget, I knew I would have a hard time saving.
We decided to do a combination of joint and separate accounts. We have a joint checking account and two joint savings account and I have my own checking and savings accounts. Each month I transfer the amount we decided was reasonable for my monthly budget into my personal account. I use that account to treat Rob to dinner from time to time, and to pay for anything I do by myself or with friends. We also chose a monthly budget for the family expenses that I monitor by writing all the money we spend and receive each month in a spreadsheet. This account covers all things we do together as well as anything Rob does by himself. Rob spends far less in a month than I do so having a separate account for him didn't make sense.
We talked to our parents and many of our friends about how they dealt with finances, and what we found out is--there's no one right way to do it. It depends on where you are in your lives and what works for each specific couple.
We have friends who have completely joint accounts, friends who have completely separate accounts, and friends who also do a combo like we do. Rob and I talked about all sorts of different scenarios leading up to and after our engagement and this plan seemed to fit our lives the best. But the two most important things to remember are--what works for us and our friends, may not work for everyone, and you are probably not going to get it right the first time. It definitely requires communication, patience and trial and error.
Rob and I started off our marriage with a really great foundation in a lot of ways, but I am most proud of our financial base. I am confident that how we organize, monitor and talk about money now will help us navigate the financial changes that life throws us in the future.
I'd love to hear how you and your partner share financial responsibility in your relationship!