Managing money is an evolving task. It requires you to constantly make adjustments, to learn, and to grow. Managing your money with a spouse is like adding a third dimension of difficulty to the financial equation. It’s takes ninja skills.
Not only do you need to handle yourself, adjust your expectations, and avoid the temptation to go over budget, but you also need to reconcile your wants and goals with a whole other person‘s wants and goals. It’s not easy, but if you want to have a successful financial relationship, it can’t be ignored.
Our Money and Our Relationship
My money relationship with my husband has gone through quite an evolution. We went from teenagers pooling our part time income for carefree nights spent drinking bootlegged beer in his parent’s basement, to cash strapped university students scraping enough money together in our joint chequing account for a craigslisted couch, to where we are today: adults (sortive) with just the tiniest bit of savings.
Although we no longer have to worry about where we’re going to get the cash for our next meal, we still have no idea how we’re ever going to be able to have the things our parents seemed to accumulate so easily. We’ve come to have the most tenuous of grips on financial security, and along the way we’ve finally learned to manage our finances together.
How We Decided to Combine Finances
At this point in our lives, it makes sense to fully combine our finances. Before, when I was paying off debt, we each contributed 50% of our living expenses to a joint account, and the rest we retained in personal accounts to spend as we pleased. This worked out perfectly for me, since the bulk of my left over cash went to paying off debt. This arrangement was a huge part of being able to complete my goal of becoming debt free.
Today, most of my goals aren’t just my goals. They’re our goals. Things we both want to work towards. Things like having a fully funded emergency fund, and saving for retirement. These things will benefit both of us, and we should work towards them together.
Starting in January, all of our money is flowing into our joint accounts, and we’ll be using that money to do some amazing things in 2014. My husband and I are both going to set aside a small amount to spend on ourselves each month. Any freelance income I make, I get to do with as I see fit, although I’ll probably use it to help us achieve our goals. If my husband makes more than his allotted contribution per month (he’s an entrepreneur, so his income is highly variable), the same goes for him.
Honestly, I’m really excited about this. Combining finances means that I have a ton more money to play with in my budget spreadsheets, and even though our expenses are much higher because of the new house, I’m hoping that this means my goal of saving $20k this year will be attainable. I’m hoping.
The Downside of Combining Finances – I’m No Longer a Dictator
Combining finances hasn’t been easy. Now that I’m managing not just my money, but my husband’s money, I no longer have phenomenal cosmic power over my financial decisions. Before, when I wanted to put money towards my debt, I did, and no one could tell me not to. Now, I need to weigh his goals and aspirations with my own, and come up with a plan that makes us both happy.
Fortunately, I spent many nights huddled in bed, hugging my knees to my chest, pouring my heart out to him about how much I hated being in debt and how afraid I was that one emergency would ruin us financially. We’ve talked so much about money management over the past two years that he’s on board with all of our saving goals. He’s a master budgeter and frugal fanatic (and has been for years – long before me), so going over budget or being tempted to spend money we don’t have is never an issue with him.
In the future, whenever I post my budget updates or refer to money put away, remember that my finances are combined now, I didn’t receive a 40% raise or anything like that. It’s going to be an interesting change, but I’m ready to take on this challenge with my husband.
(I’m not a money moron. We still have separate personal accounts, I still have credit products in my name so that I don’t damage my credit rating, and we still have money put away separately. If the worst does happen and we get divorced, everything will be fine.)
Do you have combined finances? Why or why not?