Budgeting with spouse
I was hoping to get some feedback from the forum about budgeting with a spouse.
For context, my spouse earns a high income and has always been good at saving money. The chosen investment vehicles have been less than ideal but her money does build up and there isn’t an overspending problem. I think she has a mental budget, where she doesn’t know exactly where all of her money is going but she really wants to see her account balances go up.
I earn less than her but still would consider my income medium to high. I also don’t have a spending problem but do have more curiosity about where my money is going and want to maximize my savings with budgeting. I also think that with our incomes we should be able to budget into an early retirement. I’m worried that if we don’t budget things will be good but retiring early and or building up a large nest egg will take significantly longer.
We have a joint account for our mortgage and monthly shared bills and we individually fund the same amount into this every month. Variable expenses like groceries, clothes for the kids and miscellaneous items we usually just pay for with our own accounts and don’t do any reconciliation to make things “even”. to be honest it’s quite easy to do it this way but it makes our overall view fuzzy. It hasn’t been an issue at all but I honestly have no idea who pays what and how much. With things being separate there’s no way to know.
With this in mind I’ve been mulling over the idea of discussing joining our finances more. The thing is I don’t know if I want that and I know she’s happy with things separate, especially without seeing a true benefit of doing something different.
Does anyone have any experience with maximizing efficiency or building investment accounts by either joining finances or budgeting together as opposed to keeping things separate?
The only experience I have in regards to budgeting with a spouse, is my parents, but I think they have a good system. They have a joint account (we will call it the family account) and then they each have their own checking account. I will just focus on the checking accounts for this, idk what their savings or investments look like.
So all paychecks direct deposit into the family account and that is used for groceries, dining out as a family, all bills, anything to do with my sister and I, you know, "family" expenses. That way, there's no "evening" out that needs to happen, it all pulls from the same account. Then, for them, their bonuses are enough that those get funneled into their individual accounts, and that's their spending money for the year. So all individual purchases get taken from there (haircuts, clothes, friend trips, hobbies). If your bonuses aren't enough to last a year (as mine wouldn't be right now), then I would probably do a percentage of each check, but really it's whatever you and your spouse agree upon.
I'm also commenting to see other's responses and see if there is a better way to do it 🙂 Also, you already took the first step towards maximizing your finances by utilizing YNAB 😊
I so got this!!! I wish I could show you around my YNAB so you can see how we roll because it's actually very similar to your picture with one kinda silly difference in that my husband makes ALL the money. I have a part time job that pulls in 10k a year, and he makes a big income. We fought over budgeting for 16 years of our marriage and for 16 years we had one combined account. One day I had enough and I proposed splitting the money, which made him think I was gearing up for divorce (poor guy I had to reassure him I most definitely was not, I just wanted to try something new to help stop the disagreements). So ours is different from you in that we combine our two incomes and then we divide it up into:
1) Wells Fargo - all bills cycle through here, mortgage, electricity, car payments, insurance, everything with a fixed monthly or annual bill. We did an analysis to see how much needs to go into this account from his paycheck each cycle just like you guys do with the joint account.
2) DHs Credit Union Account - With the money left over after funding the Wells Fargo account, half of it goes in here.
3) My Credit Union Account - the other half goes in here.
The killer thing about YNAB is that you can have multiple budgets! So each of these three setups has it's own budget in YNAB. I have a budget, he has a budget and WE have a budget. And because all three budgets are under one YNAB account I can always cruise over and take a look at what he's doing (not spying... just curious). Unlike you guys, groceries and expenses for our daughter and gas and stuff we like to keep equal so we use venmo to pass money back and forth to each other. And we find this actually kinda fun. We usually try to use emojis to describe the expense and it can get pretty hilarious.
This setup has resulted in no more money arguments and we work on the same page now because we have our own. We actually compete in a fun way around money now. How much did you save this month, how much did I.... it's fun.
When it comes to investing here is where we are at. We decided together how much is going into the 401k. We are still working our way up to the 19,500 max for 2020 in contributions. We just made the joint decision to start funding the HSA in a bigger way since it's tax deferred AND investible! So if we pay cash for medical expenses, and save those receipts we can pay ourselves back for them 15 years later out of the HSA which gets to grow tax free. Lovely little loop there.
Investing beyond that isn't happening right now for us, but debt paydown is. Any big windfalls that come are going straight to debt, and then monthly he and I compete on how much we can save towards debt. And that's how much we put to it each month. It's a fun game when I beat him because he thinks he's the saver.
I hope that gave you one example of how it can work with different budgets. :)
If it ain't broke don't fix it....
That probably sounds harsher than it needs to be. But it sounds like yall have a system that works well enough and is keeping you out of debt.
If she's going to be open to it, then having a conversation about combining might not be bad, but if you think she'd rather maintain doing things her way, then it might be best for you to just start doing things on your own.
Since you have separate accounts already, then it's easy for you to start and then slowly offer up more insight as you gain it working with YNAB. Just begin by building a budget for yourself and your account, and then maybe add the shared account, and see what happens. It took me a couple of years of nudging my BF to convince him to let me have access to his accounts and run his budget. He was very much in debt, and very much an ostrich about it, which was SO frustrating to me. But he saw what I was doing with my budget, and the confidence it gave me in spending, and so finally he allowed me to have his passwords so I can check his accounts and spending. It's taken another 4 years to make GOOD progress. He still doesn't enter anything himself, but he will sometimes ask me how much I have set aside for something, and he is happy when I'm able to tell him that I've set aside money for emergencies, or other things. We had a windfall and were able to start paying the car insurance at the 6 month lump sum instead of monthly, and when the bill rolled around this month, and it was lower than expected, he was very pleased when I told him we had over $500 extra sitting there under that category already. So he is seeing the gains, and coming more and more on board slowly. So there is hope that your spouse will join you, but unless you feel like she's really open to the idea already, I wouldn't push it too hard. Just bring her on board by showing her how wonderful it is to KNOW how much you can spend on things.
My husband and I joined accounts when we got married and looked at buying a house. We haven't gone back. I'll admit, he doesn't really do YNAB, but he also doesn't do much with the finances. he listens when I tell him we don't have the budget. He knows it works as we're now debt free. i'm working on getting him more involved.
I would recommend you combine your finances into one account as the accounts don't really matter with YNAB. You could create groups & categories to keep your finances separate, if you want. For us, we each have a fun money category and we get the same amount each month. If it rolls over, great. If not, you're out of luck until it's funded. Anything that is spent on only that person goes into that category. Everything else goes to other joined categories.
We might be different but we combined accounts when we got married and have only worked that way. We were both SINKs (Single Income No Kids) before marriage so we became DINKs at first (Dual Income No Kids). Our budget was setup that we each had fun money to spend (just a line item). If one of us wanted something that we felt was not really fun money related than we would work it into the budget. For instance, my wife wanted a laptop and wanted to use fun money. I didnt feel that was right and should be general fund. Work supplies mine so I can work from family room. She could not but has use for it. So we did some sort of split with it between fun money and general savings. We dont really compare who dips into general more as we view the money as both of ours. So we have just checking and savings.
Now, 19yrs later, we are well into SCREWED (no acronym.... just means u have kids) and still see the system work. We have a quick meeting once a weekend to discuss how we are doing with the budget. We also sit down together before the next month to discuss budget when we pay our bills (we do full month a couple days before it begins).
My wife is a stay at home mom now and prob dips into general way more than I do but her job is way more stressful and demanding than mine at times with our little ones so it makes sense to me. To me the big thing is to create categories for items that become patterns (work life into the budget). Another example that came up in the last year or two is that she wanted to do trips a couple states over to visit family (I work so it would be her and kids over summer). No prob, we work into budget. But we dont have family here so this came up again. So instead I worked it into the budget so now we just factor multiple trips for her and kids to visit family.
I am not sure that helps but to me my biggest thing is full disclosure/transparency and to always view the money as ours (regardless if I am the only one working; bonus or not). The goal is to understand opportunity costs and if we set a goal we must reach it. You cant keep throwing goals onto the pile as it will overwhelm. Keep the goals achievable. We have our own category and can spend on whatever we want and discuss the rest. I try hard to ensure we are pulling together. I would say we both do.
Our biggest goal right now is saving for a new home. This has been our biggest challenge because this goal is taking longer than anything else we have done previously. This has been our biggest...... bump. The problem we keep having now is "I want this more than new house" which is fine until later the conv becomes "why don't we have new house yet?" Lol Long term goals are very hard. Keeping that momentum up and staying motivated is hard. But we are trucking along.
Anyway that is how we do it.
Beige Flute said:
Does anyone have any experience with maximizing efficiency or building investment accounts by either joining finances or budgeting together as opposed to keeping things separate?
My wife and I have joint accounts. This has worked out well for us. I think there are efficiencies to be gained by this since you obviously have less accounts to maintain and as a team you can see where all money is going and how to allocate funds. This should also facilitate each of you maximizing your retirement accounts. We have a line item in our budget to fund our IRA's to take advantage of the maximum contribution amounts. YNAB has a good article on combining accounts as a married couple. https://www.youneedabudget.com/our-controversial-stance-on-joint-accounts/. I highly recommend reading this and think the advice is solid.
Here is another article on simplicity. https://docs.youneedabudget.com/article/1132-simplify. This article discuses less moving parts which also facilitates better focus on the budget.
Anyway good luck as you explore better methods.
We are a couple with one child. Married in ‘community of goods’ so everything is ours really. But we have always had our own account, as well as a joint one to which we pay a set amount each month and from which mortgage, insurance etc is paid. Different amounts for each of us as I make more money.
I started YNAB after the summer last year, he doesn’t want to budget.... 😕. So I put my accounts and the joint ones in YNAB. The reason for looking for a budget is income insecurity on my side; I’ve been ill and can’t manage my former job any more. My main worry is/was all about shared goals like groceries, mortgage, expenses for our son. So I talked about that a lot. And we do share those goals.
Because of the extra cost and no added value since YNAB, I just closed my own account and put everything in the joint account. He agreed.
He just hates moneytalk, in general. But what I really like, is that he does start making comments in line with my YNAB inspiration; “yes, we can spend on that, but I’d rather save it for....” (mainly towards our son, he never comments on my spending). And just a few weeks ago he asked me to show him how to buy stocks and make an extra payment on the mortgage. Finally! I really wanted that money to do something usefull, but I can’t force him to join accounts or start using YNAB. And now he put 3/4 of the money he had is his account into stocks and mortgage. Hurray 😊
I would love to join forces even more. I think it will happen eventually. He already asked how much there is in the tools category. That is very much his thing. I started a tools category to seduce him into budgetting. Next to some money every month, I put his christmas present from work in there. But when he asked how much is in the category I had a hard time finding the right tone; with him only contributing his usual small amount to the budget, the category isn’t going to fill up very quickly.... And at the same time he still has money in his own account. What is that money going to do then?
Like dakinemaui mentions, it all has a lot to do with the feeling of my/our/his/her money. I used to feel like that too; didn’t feel like pooling everything into a big pile. But since YNAB I realised most of my goals are shared and my own get their own category so don’t get lost. Funny thing is, that feeling of sharing everything and wanting to hold on to his money, go alongside; he bought the stocks in my brookerage account, as he hasn’t set one up.
Sharing all our acccounts still feels a long way away. And it cant’t be forced by one partner unto the other.... I therefore like reading farfromtheusual ‘s story a lot; progress in small steps leads to good things too. And I am quite pleased with our progress so far. As a next step I would like to see some correlation between my fun category and his personal account. I’ll keep coming back here for inspiration 😁
Powder Blue Pony said:
with him only contributing his usual small amount to the budget, the category isn’t going to fill up very quickly.... And at the same time he still has money in his own account. What is that money going to do then?
I'd suggest categories of his choosing in what is becoming the joint budget. Since the budget doesn't care where money lives, you can leave it his account as a mental "crutch". The real win is identifying purpose and thinking about priorities. (Sounds like that's already started...)
Getting a common set of priorities is what "joint finances" really means. Later on -- once the concept that categories segregate funds has gelled -- pitch the idea of moving that money in that one account into a savings account with higher interest rate.
We considered ourselves to have joint finances long before we were married but have always continued to have separate bank accounts and credit cards. We talked about having joint accounts but we saw no added benefits and only potential risks.
We've done this two ways in YNAB. At first, we had a single budget with all the accounts in and supposedly budgeted together. It worked but not optimally. I did all the grunt work and then DH felt like I was restricting things rather than the budget among other money psychology issues. So, several arguments later, we moved to a different system which is working.
We agreed together what we considered to be joint categories and what the standard budgeted amounts should be. We split this 50:50 and, by and large, DH took responsibility for the regular payments and me for the sinking funds that needed YNAB. We both budget towards fuel and groceries to make things simpler. We talked about opening a joint account for these items but felt the hassle of moving direct debits wasn't worth it*. The existing situation was also better for cashflow. It was also designed so that if he didn't use YNAB, it wouldn't fall apart.
We revisit these joint expenses often and have increased the contributions when necessary. If I need to move money between joint sinking funds then we discuss it. Any extra money is personal and can be budgeted as we see fit BUT except in extremis e.g. job loss we can't cover personal spends out of the joint budget categories.
So, in our case we have 2 budgets that relate to the UK household - mine and his. Mine is split into two areas. I have a personal budget at the top and a joint budget at the bottom and I use symbols to make it really clear which is which. I budget the joint budget first up to the agreed monthly contribution and then budget any excess to my personal budget. If I need to move money around then I make sure to stay within the correct budget.
It's not ideal but for us it works extremely well and has minimised resentment. Our finances may not be better off but our relationship most definitely is and ironically DH is now much more engaged in YNAB.
* In retrospect, having a separate account for the joint funds would make budgeting for them easier because we'd just have a 3rd budget for them and I wouldn't need to have devised my system. I was just happy to agree to something that is working.
We’re joining accounts! 🎉
Our bank raised its prices again. So we opened an account at the one other sustainable bank available here and plan to close our current accounts once the new one is fully functioning. And now that the cost was the reason to change things my husband didn’t want his own account enough to pay for one.
So we’ll have all our money in YNAB 😁