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My new economic life: Marriage and a Budget
MagicToaster
JapanRegistered User regular
JapanRegistered User regular
So, I just got married. I moved into a new apartment with my wife and began a new life from zero. I've had to buy all the things that I had at my previous home that I couldn't take with me, such as food and furniture.
I'm pretty good at keeping a budget, but this first month of living I've gone really over budget! Is this normal? To some extent, I was expecting that the first month would be the most expensive since I had to buy so much furniture and appliances, but I'm wondering if you married people out there have any tips so as to making a budget work in a marriage. How long did it take you to get into a stable economical routine?
This is all new to me, so all advice, pitfalls and life stories are welcomed.
I'm pretty good at keeping a budget, but this first month of living I've gone really over budget! Is this normal? To some extent, I was expecting that the first month would be the most expensive since I had to buy so much furniture and appliances, but I'm wondering if you married people out there have any tips so as to making a budget work in a marriage. How long did it take you to get into a stable economical routine?
This is all new to me, so all advice, pitfalls and life stories are welcomed.
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After a few months, you'll figure out an average of what you spend on groceries, electricity, water (if your apartment makes you pay for that) and other items. From there decide what other expenses you're willing to take on such as Netflix or faster internet.
Then, for the sake of your marriage, don't combine your moneys. What you make is yours and what she makes is hers. At the same time "what's mine is yours" still does hold true, in a way. My wife and I allow stuff like a small game purchase on Steam here, a dress there, but infrequently and with good intent. This gives us freedom to make our own choices and differentiate a little from each other.
We also have a shared savings account where we put some money for savings, emergencies, and sometimes larger expenses like a TV. This way you don't go out and buy a couch without her knowing, and discussing stuff like that is very important. That way you also figure it into the budget and say "we will pay it off immediately, or in x amount of time, and will start putting y money aside each month for that goal."
I hope that helps, there is tons more to know and find out, which I am daily, but you get there over time and with experience.
Also, congratulations!
what
This obviously depends on the people, but I think this is in general a horrible idea. The reason you got married was to be a team, not roommates with tax breaks. You should talk with each other to find out what you each want, but there's no better way to cause stress than have a large discrepancies in incomes and not pooling your resources. "Yeah, I know I'm always buying new stuff while your clothes are falling apart. You should try making more money."
In this day and age it's better to have keep your own bank accounts seperate, but have a joint account that you each contribute money to in order to pay off all the shared bills and expenses.
Unless of course you really feel like getting assraped if your spouse ends up deciding to split on you.
In all honesty, legal marriage is a pretty retarded concept and is only useful for sharing insurance plans/related legal reasons. A non-legally binding marriage ceremony is the way to go.
My friends do this. Half the income goes into a joint account, half into their personal accounts. You buy your own playtoys with your money, they buy theirs. Budgeting is tough, because everyone does have to make sacrifices. Places like mint.com can help you visualize your spend better, but you can also do it on your own if you keep track of things or use the credit/debit cards for everything.
Also, if it's single income - are you planning on having kids soon/is one of of you in school? Dual incomes is good not only for the finances, but helps reduce friction due to said finances. I've seen the single earner get pretty miffed about spend by the partner when they feel they aren't "Contributing".
That said, usually the biggest wastes of money come from eating out or getting food/coffee etc. on a daily basis. If you can minimize those expenses, you can usually come out way ahead.
Obviously discrepancies are meant to be dealt with. This system we've adopted allows us to put trust in the other and know we are trusted. If I say to her, "I'm worried about your spending, so let's combine incomes," that also says, "I don't think you're smart with your money."
If something comes up, or she buys many new outfits, or I buy two games in a month, or even one game per month, we notice it. We're not so wrapped up in ourselves that we ignore the other's finances. That's what the monthly meeting is about, to talk about how finances are.
As far as large discrepancies in paying for rent and such, that's another good reason to have the monthly meeting. Sometimes groceries are more expensive, sometimes not. My wife currently pays rent, and I take care of the rest, and it evens out at times, and doesn't at other times. We talk about it, how she makes more, and come to an agreement on what should be paid by whom.
If my earlier statement made it sound like we're just roommates, then oops, but that's not at all what I meant. Marriage is certainly a teaming up, but you are not one person. Physically, religiously, mentally, there are many overlaps, but to really make it work, you must be individuals, and money is one way to practice that.
EDIT: I agree with schuss, single-income is tough. For a while, we were single-income, and her spending my money, or me paying for all of everything is a very tough thing to go through, but it is still extremely important to talk about it. You get into trouble when you don't pay attention to finances, really, I can't stress that enough. The most important thing is to discuss it, no matter how hard it is.
What the hell is wrong with you people? Who in the eff are you guys marrying that you're so worried about losing everything in a divorce?
Look, OP, having one checking and one savings account between the two of you is perfectly normal and a lot of couples do it. Mrs. Reaver and I started out having our own accounts but we have since closed down our personal accounts and work with one checking and one savings account. We haven't had any problems doing this.
Specifically:
You need to sit down and actually make a budget. Figure out how much you spend on bills, insurance, etc. Then figure out how much you can spend on fun stuff. Make sure you're putting money in to savings before you pay the bills.
Making the budget is the easy part; it's sticking to it that's difficult. You and your wife have to be on board with sticking to the budget and not overspending. If you want to buy Steam games, make sure it's built in to the budget. If your wife wants Starbucks, make sure it's built in to the budget. You should have few to none expenses that aren't already accounted for.
I certainly hope this is not directed at me or any one that wants separate bank accounts. There are definitely reasons for having either separate or joint accounts, but I don't think anyone goes into a marriage planning on divorce and thus has a separate bank account for if ever that happens.
Another good reason for separate bank accounts is purchases online for birthdays or Christmas. Add a little surprise. Just throwing that out there too.
Yeah, from my married friends they said it's great for presents/surprises, but also reduces any pressure when you buy shit for yourself. Often the other person won't fully understand your hobbies to know the costs of the good stuff. Just because they make boots/jackets/graphics cards for under a hundred, doesn't mean you aren't allowed to buy the 2-3 hundo versions. Just reduces stress on all sides as everyone still gets some of the play money they were accustomed to whilst single.
One thing I have come to learn is that open and honest discussion between you both will help immensely. Don't be embarrassed to tell your wife that you have a coffee addiction and spend a bunch of cash on it. And be understanding when you find out how much it costs to keep your wife looking pretty.
For my wife and I we have a a few accounts for different things, because compartmentalizing bills works for us. We have a general joint account that we pay the majority of our bills from. We also have a separate account that handles our mortgage escrow. Also, a third account that handles my wife's student loan payment. We also have a separate ING savings account that we pay into weekly like it was a bill. All these accounts are joint. NO CASH CAN BE SPENT FROM THESE ACCOUNTS WITHOUT JOINT APPROVAL.
Lastly we each have a play account that is not joint. We each get an allowance that is equal (even though our pay is not equal, this is important) That money is totally at personal discretion and can be used for video games and fun stuff, whatever.
My wife is much more of a detail person then I am, so she handles the finances and bills. Our paychecks are auto deposited and dispersed to the various accounts.
We talk about the state of the household frequently, and are honest about our goals. No surprise bills for a new dress, or a new video game. Money can really tear a relationship apart if you let it.
In your case, a single income, you really need to be open so that you don't feel used and your wife doesn't feel kept.
Also, to answer your first question, the first month is always a blowout, you can try your best to spread some of those one time costs out. but Lets be honest, you want your stuff now not in 3 months. so you blow the budget and live like a hermit for those 3 months... comforted by your stuff.
There is a good lesson in there though. Unexpected things happen, your carefully planned budget will be blown up, and you will start over. The more honest you are with each other about spending, the less frequently this will happen.
Good luck!
Setting up a new place is expensive, as there is a million little things you need for a house. Eventually you need to start drawing a line and saying so and so can wait and get it in the following months budget. It's basically sorting needs and wants into needs right now, needs eventually and wants.
Eventually you can figure out that the needs eventually are just stuff you really really want.
Satans..... hints.....
We've talked and she will manage the food bill and groceries, and I'll handle the rest of the bills.
It's at every single person in this thread warning the OP that his wife is going to fuck him two ways from Sunday if they get divorced.
I'm not saying it doesn't happen, but Jesus Christ, you guys are coming at this with the presumption that women are out to "get you" and you have to protect yourself from their shenanigans.
I'm absolutely positive that separate bank accounts work for a lot of married couples. There are a lot of benefits for sure. But I'm also absolutely positive that only having joint accounts works for a lot of married couples too. The OP and his wife need to figure out what works for them. My wife and I can operate under joint accounts without any problems, but that's not necessarily how it's going to work for everyone.
You get married because you love your significant other so much that you're willing to put his/her needs before your own. You recognize that you're better as a team than as individuals. That doesn't mean you stop being your own person with your own friends and hobbies, but it does mean that you can get further with combined resources and teamwork. Bank accounts and money are a significant part of that.
Both methods of budgeting and resource sharing work, but don't bash on the merits of joint accounts just because you had a bad experience or heard of other people having bad experiences.
Was it just because you spent a lot on new house stuff?
Or did you blow each portion of your budget? If it's this case you then need to go through each section and make cuts in your spending appropriately or start selling hobo organs.
As a tip, if your wife has trouble with her grocery side of the bills sit down and create a menu for the week.
This stops the, I don't know what to cook for dinner, I'm just getting take out.
Satans..... hints.....
I'm a sailor and have seen plenty of horror stories of guys who think they're marrying nice girls only to have them screw them over later in life. Hell, I had one buddy marry a gal he had been with for a while and we all thought they were the perfect couple. They were ridiculously cute together. They had two kids, moved down south and everything seemed peachy. Then one day I start seeing some weird posts from him and I ask wtf is up. His wife decided one day to take one of the kids and left him for his best friend.
People these days do not value marriage. They go into it with stars in their eyes and love in their hearts but ultimately it tends to just get thrown away now. I would never get married without a watertight pre-nup that ensures that my retirement and stuff is safe. Especially seeing as how once I get my 3rd engineer's license I'm gonna be looking at a 7 digit pension later on in life. There are way too many gold digging bitches out there that will play nice just to get a crack at that.
You're doing very smart things, to be sure. You've already recognized problem areas and are taking steps to counter-act that in the future, so pat yourself on the back. Also good job on going to cash instead of plastic. Even with necessary items like groceries or gas, the payment can easily go unnoticed when you swipe a card, but if you hand over cash, it makes it much harder to part with. The only trouble is that it takes more time to get money from the bank, and change money out at the cash register.
Still, good on you.
IMO, there's no real good reason to keep finances separate in a marriage.
Rigorous Scholarship
This. Did you go overbudget because you bought a whole bunch of new stuff? If so then it's not as big a deal, but your budget should include wiggle room for when you need to make a big purchase every six months or whatever. But if you went overbudget in that you dipped into savings or into the savings part of your budget to buy furniture, then that's what happens.
Your budget shouldn't be "we plan on spending $1100 this month," it should be an itemized list that lists out all the different things you spend your money on each month and how much you put into savings. You should have a savings account and a checking account for your bank card that are separate.
So your monthly budget should be:
Groceries - $200
Cell phone bills - $150
Mortgage/Rent - $1100
Water Bill - $30
Electricity - $50
Gas - $50
Cable - $60
Dining Out - $150
Coffee at Work - $30
Lunch at Work - $100
Entertainment - $100
Savings - $700
How are you keeping track of all of this and how do you have it split up?
The quickest way to ruin a marriage is credit card debt the other doesn't know about -or- worse, separate credit card debt you both run up independently from one another without realizing it.
Also, budgets are great and iron clad will is applaud-able however sometimes you do need to splurge - be it on taco bell one night when you guys are just having a crappy day or a scarf she really really wants or a movie out just because you guys haven't had fun in months you know?
Mint.com is an awesome site, and you should definitely look into it. Keep it in your tool bar and check it daily, it really does help. Also, I second the idea of carrying cash around with you. If I just have my Debit Card with me, I go through money like it's water. Like you said, carrying cash gives you a tangible idea of how much you have. If I carry cash, it pretty much forces me not to spend money on extraneous things, and just on stuff I need. It's like, if I run out of cash in my wallet, then I've run out of all my money, even though I know I have more in the bank.
Check out my art! Buy some prints!
This is exactly my point.
The same goes for couples who sign prenups. If you think your significant other is going to fuck you over after you get married, why are you getting married?
The argument on the other side of that coin is: "Do you not trust your spouse to make intelligent decisions on their own?"
There are ups and downs to both methods, it is up to each couple to decide the one that works for them. Some sign prenups because they have seen some messed up stuff, like some of the testimonies in this thread. I didn't, but I understand that people have their reasons.
Marriage, living together, etc. is a lot to handle all at once. Throwing money on top of it is asking for trouble you don't need.
These days, an entire relationship later, I keep myself up to date on the entire financial picture- mine and hers, and we both contribute to a household account while retaining a portion for our own dailies and incendentals. We have discussions every few months, and identify key areas in which we will control spending. I have yet to discuss 'opening up' spending, as that seems to take care of itself just fine.
We also have a 'five hundred' rule in place, which is to say, of one of us would like to spend more than five hundred dollars, we need to consult with the other one. To be totally honest, this is more for me than for her, because if she overspends and runs dry, I end up picking up the additional expenses. Which impacts my spending plan, etc. I am usually pretty cool with this if I feel its a solid contribution to the household, of which (as mentioned by another, and something I also feel is important) her looking awesome can absolutely be considered as such.
What has worked out best for me is management, but not micro-management. Every few months we re-address the financial plan, and set the theme for the coming months. Sometimes it is relaxed, sometimes it is super conservative. We tend to work in cycles; a few months on home-improvement projects, a few months on R&R, gifts, occasions, etc, a few months on saving, a few months on 'required luxuries' (cars, nerd equipment, attire) etc.
I have also found that one, especially when owning thier own house and two vehicles, needs to set aside a 'WTF' fund of about 250 a month. Some unexpected thing always comes up, and for some reason it always takes about 250 to endure, fix, upgrade, etc. The exact nature of these things seems random to me, but you can pretty much count on something happening. If it doesn't happen one month, it'll happen more so in the next one. It's really quite consistent in its own freakishly chaotic way.
Overall, I'd say frank and open discussion about every aspect of one's financial state is extremely important. If that is not possible, I would suggest those issues need to be worked out in a way that it becomes possible. Otherwise you've got two separate lives co-existing, where I feel marriage or really any long-term live in relationship is healthier when it is two people growing together towards a common vision.
As for general advice - my wife and I have a similar rule to Sarcastro, although we have a lower threshold. It's less "asking permission" and more letting the other know that something has been purchased. I am fairly stingy so I don't spend much money on myself, and my wife is a bargain-shopper, so it works out pretty well for us.
The advice about a "hedge" amount is dead on. One month it will be a vet bill, then a doctor's bill, then car maintenance, then a broken A/C unit, etc. Whatever you do, you should be budgeting money that goes into some kind of savings for these kinds of events. The rule of thumb is 3-6 months of salary available in liquid savings (i.e., something you can easily get the money from if needed in an emergency). We use an online savings account that automatically transfers every month from our account.
As for you guys sharing an account - my wife knows how to access our mint/bank account statements online, but leaves it up to me to manage it. You need to be ready to discuss with your wife if she is spending too much money, just as much as you need to be ready to explain why you're spending more than normal on your "hobby" spending.
I honestly don't see how joint accounts relieve this - we simply just budget "fun" as a separate category, and we treat it just like the budget for groceries or anything else. I use it on video games, golf, or whatever, and my wife uses it on shopping, books or whatever she wants. If my wife was getting upset at how much I spent on video games, I don't know how having my own account to do it with would help, unless she has no way to know what's in it. Hiding that kind of information from each other seems totally counterproductive.
I hope this helps OP :P
I like what you said because I think it unintentionally stresses the most important part of whatever the OP decides to do: communication.
You have good communication so I am certain almost any mutual arrangement would work out for your marriage. With bad communication, even the best arrangement would not be strong.
Some people would think it is crazy to have 5 separate checking (3 joint and 2 individual) and a savings account, but my wife and I never argue about money so it works for us.
The only hiding of purchases is for gifts to each other, which is another perk of the separate account.
We started off for the first year and a half with only a joint account. Unless I was checking constantly (and this is both time-consuming and can feel like you're checking up on the other person) no matter what we'd planned, we'd end up down to 0 balance or overdrawn at the end of the month. Even when he thought he had an 'idea' of how much was in our account there'd be something he'd have forgotten to account for, or he simply didn't realise how much $5 purchases here and there were adding up.
Another thing that can be hard to gauge is big purchases vs small purchases. I rarely go shopping, so when I do I might spend $200 at once. One month we were overdrawn and he blamed me, citing a $250 shopping spree I'd had. Once we actually sat and studied the bank statement, his 'little' purchases added up to over $900, while mine totaled $300.
Good communication helped us sit down and discuss the problems without being accusatory - but it didn't prevent the problems from happening in the first place! Even if we'd have set a strict budget, like I said, he wouldn't have been aware of how much he was spending.
I do think joint bank accounts do work, but I'd have rather started off the marriage with separate accounts, if only to get a feel for the differences in our spending habits. And, sometimes, one person just isn't good with money.
We're now single-income, with me being the sole earner. Our income halved, yet I've actually started to save money. I opened up a separate account anyway and started to put $200 per paycheck into it. Now I'm thinking of opening up an account for him, too. I'm thinking money to cover all the bills, rent and emergency money (Sarcastro is absolutely correct, a WTF fund is entirely necessary) will go into the joint account, with the rest of the money divided equally.
So, so true.
As an aside, my husband doesn't like to have to manage his money and he was also very much against us having any separate accounts, so for a while we managed (this was his idea) by me keeping his debit card on me and giving him cash for the week. You mentioned doing this for yourself and I think it's a great but not always practical idea. We struggled to find fee-free atms in our area. There were also a couple of times he had to make emergency purchases and the card would've been useful to have. Also, it's not always practical or wise to carry large sums of cash on you (change starts to get very heavy!). Perhaps you could use a pre-filled card, or put some money into a checking account that you can't overdraw?
I also highly recommend accounts that give you text alerts - I receive messages on my phone when my balance goes below a certain amount or when I spend over a certain amount in one transaction. It gives me considerable peace of mind.