(Closed) Help me figure out how to manage our finances-need discretionary spending tips?

posted 7 years ago in Married Life
Post # 3
Member
3977 posts
Honey bee
  • Wedding: May 2011

What we’re trying to get rolling–still in the middle of it–is this:

One primary account where paychecks go and through which bills are paid and groveries are bought.

Each of us has a separate account and a set amount is transfered every 2 weeks into our separate accounts for “other/fun” money.

We’ve set up the accounts but we still need to sit down and decide on an amount, since we’re pretty poor atm.

Post # 4
Member
3564 posts
Sugar bee
  • Wedding: August 2010

It sounds like the biggest problem is that you guys don’t agree on what is an appropriate amount of fun spending. Why are you penny pinching if he’s spending his money on whatever he wants? I think you need to have a conversation about that and say, look paying the credit card debt should be our priority right now. That means that we need to set up a monthly  budget, in which we each can spend up to x amount on “fun” stuff.”. That way it’s clear, and you don’t feel like you’re the only one saving, because that doesn’t really seem fair. 

I’m a little confused by your description of how you guys do stuff…if you’re each on each other’s bank accounts, why should be be writing you checks? MY Darling Husband and I also have two bank accounts, because we didn’t want to give up our banks. We added each other onto the accounts, and we both withdraw from them whenever we need money, or use either one to pay bills, depending on how much the bill is/how much is in that particular account. We also have two joint credit cards, and we pay each credit card out of the accounts, again depending how much money is in each one.  We don’t have a limit on our “fun” money, since it isn’t an issue for us at the moment. 

Post # 6
Member
10366 posts
Sugar Beekeeper
  • Wedding: September 2010

So, we have the discretionary spending accounts that you are talking about. We each have an account that $150/month gets automatically transferred into. It’s a small amount right now because we are aggressively saving for a 6-month trek through Asia and a house – otherwise it’d be more like $250. Purchases for hobbies/extra stuff we don’t need individually come out of that. (for example, let’s say my winter boots wear out. If I get the reasonable replacement pair, that comes out of joint funds. If I want the awesome $300 pair, I make up the difference out of my own account. Or, if I want to buy camera gear, that always comes out of my own account). Food and going out come out of a joint account, so for us, that’s not included in the “allowance”.

Figure out what dollar amount you guys are comfortable with and what the ground rules are that you are comfortable with!

Post # 7
Member
10366 posts
Sugar Beekeeper
  • Wedding: September 2010

Also, if one of us really wants something and it is more than our individual accounts, we talk to the other person first. I really wanted a $1200 camera lens for our trip but obviously $150/month won’t support that purchase! We decided it was worth it, that we make a lot of money, and that I should get it. Just because you have groundwork to make yourself aware of spending habits doesn’t mean you can’t bend the rules!

Post # 8
Member
1 posts
Wannabee
  • Wedding: July 2011

IMO it works great to have one bill account and each spouse have their own checking.  Each paycheck, put a portion into the bill account to cover all bills.  Then agree on an amount to save each month.  Put that in a shared savings account.  The rest is spent individually.

Post # 10
Member
4824 posts
Honey bee

How we do it:

50% goes into a joint account that pays for all “our” stuff, insurances, grocery, bills, and when we go out together. Anything we dont spend just accumulates, but not usually very high because vacations etc come out of this, furniture etc.

Pre-tax we max out our retirements so 15% is automatically going into 401K

The other 50% goes into our personal checking. We agree how much we are going save in cash and that gets automatically transferred to a joint savings. 

We don’t touch our savings unless its a discussion and we agree. We will however give each other money from our “personal accts” if its needed for a larger purchase.

The remaining amt is used for “us”. Fun with friends when the other is not there, lunch out at work, shoes etc. 

 

Post # 11
Member
4824 posts
Honey bee

So it looks like this:

Pretax check 15% to 401K

50%- joint checking account for all shared/housing expenses

15%- joint or personal savings

35%- personal checking or “fun” money

 

Remember, money is “fungeable” meaning it can be moved around to pay for things. The important piece is to remember that you both are on the same page in regards to spending and saving and investing.

Have a long term plan on what you want out of life. This helps put on on the same page. 

Do you want a house? how much will you need to buy one? When do you want to buy it?

Kids? How much do you want to be able to save first? Once you have the kids what are your expectations for vacations, college? This will help you determine how and where you want to spend money now.

etc..

Post # 13
Member
4824 posts
Honey bee

@oracle:

We do have two debit cards for the joint account which we rarely use except to get money.

But I pretty much use my personal CC that has a great rewards program and I pay that bill from our joint account often due to the type of expenses.  Its such a good program that I am getting Darling Husband one. Itll still be my account, but hell have his name on the CC to use.

I do most the shopping and when we go out I pay with that CC so pretty much all expenses go on that. I pay it several times a month so its always a 0 balance, but I pay it from different accounts depending whats on it. I dont worry about exact dollars so is always “about”. So if most the expenses are grocery except for one lunch out then itll come out of the joint. If its a clothes shopping trip but also a dinner out with Darling Husband, then itll come out of my account.

 

Post # 14
Hostess
16195 posts
Honey Beekeeper

The easiest solution we could think of is what others already mentioned:

  • Joint checking
  • Joint savings
  • Separate checking for fun/discretionary spending

It will take a while for us to get our system down. But we will end up doing the same as previous posters said, giving ourselves an “allowance” of sorts for individual spending.

Post # 16
Member
2201 posts
Buzzing bee
  • Wedding: August 2010

Here’s how we do it:

Darling Husband and I had separate checking accounts until a few months before we got married. We decided to move everything to my bank because it’s nationwide and therefore more convenient than his credit union (it sounds like maybe you guys need to draw up a pros/cons document for each of your institutions and then pick one to use for your joint stuff – it will def. make it easier).

Then we set up a monthly budget (we calculated our ongoing expenditures – mortgage, car payments, cable, gym memberships, insurance, etc. – that we can’t really change and figured out what we had left over, which became our “monthly budget”).

For our monthly budget, we each get $150 that can accrue for our “discretionary funds”. We track this on an Excel spreadsheet along with the regular budget items.

The other joint expenses that we document are: groceries, gas, social activities (dinners out, drinks with friends, weekends away, etc.) and a household discretionary purchases (hair cuts and other random things that you need to live).

One caveat we just made for the “social activities” is that it needs to be a joint event (i.e. both of us go for drinks with friends). If I’m going out with the girls for dinner, it comes out of my discretionary funds. That way, one person doesn’t use up the money on his/her activity and the other person has to eat at home all month because there isn’t any fun money left for going out.

For the discretionary funds, we did put a rule in place that if it costs over $250, it still comes out of your discretionary fund, but you need to clear it with the other person first.

Every month, we print off the spreadsheet and put it on the kitchen counter so it’s easier for us to write down expenses as we go, then every week we tally it up to see if we’re on track.

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