Best way to account for allowance spending as married couple?
Hi all, not new to YNAB but new to using this software in the context of marriage finances. We are sharing all accounts, but have set up separate checking accounts into which I divert $500/month. This money is meant to be used as our respective "allowances," so these accounts are off budget. The remaining 90% of our income exists in our joint account.
This has worked well so far, but I am struggling with how to account for personal spending that occurs on one of our shared credit cards. In these cases, here is the approach I've been taking:
Ex: $100 personal purchase on Discover card
1. Categorize $100 purchase on Discover as "My Spending"
2. To reimburse this expense, transfer $100 from personal checking account to joint checking, from which the credit card bill is paid monthly. This transfer is categorized as "To Be Budgeted" since the personal account is not on budget.
The first step here is what I don't like, but I'm unsure of a good solution. In my mind, I don't need a "My Spending" category or a "His Spending" category because I have already budgeted our allowance for the month so I don't care what category the spending falls into. Here is what it looks like:
It seems like I'm double budgeting - am I going about this the wrong way or making this harder than it needs to be?
Any help is appreciated!
We have fun money categories that get the same each month, and we can use however we like. Sometimes we spend in that category, sometimes we move the money to another category to fund a purchase there. Sometimes we let it roll over and accumulate. We know we're being fair because we each get the same budgeted amount each month ($13.24 for us, up from $5).
Your way is complicated. This is how you do it, though.
Keep the allowance accounts on budget. Budget $500 to each Allowance Category. Categorize any spending within those accounts to the proper allowance category. Categorize any appropriate CC spending to the proper allowance category. When you make a CC payment, you'll have to calculate how much should come from each Allowance account (you can look at the activity).
You will get no insight on the type of spending beyond the payee.
After you're tired of syncing the allowance accounts to the allowance categories, nix them. Or, don't use this way at all, because you should be looking at YNAB category available amounts to inform spending, not bank account balances.
See this recent post about allowances:
Scroll down to the part that Scott wrote.
I do something similar but with categories. Each month I fund $500 into two flex categories, one for each of us. You could record personal spending against each of these categories directly, or you could do what I do and accurately categorize spend and then cover that spending with a move from my flex account. This tracks both how we spend money overall as a household while also tracking how much we've each spent electively. At any time the flex money can be moved to cover a wish farm item or even a shared category goal. If there's unspent budget in the flex category at the end of the month, roll it over to the next month and add another $500 to the budget.
Another option would be to set up separate category groups for each of you, with separate spending categories in each (so you'd having a clothing category for each of you). This lets you track how each of you is spending money, but doesn't easily give a "whole household" view of your spending habits.
Note that YNAB doesn't keep track of moves between categories and this method is a little time consuming.
You could simplify the process by just eliminating the unnecessary checking accounts.
My vote as well. Record the spending in the Allowance categories when you actually spend that money. Use whatever payment method you want (credit card, checking account, Venmo tied to checking account, whatever).
The dedicated checking accounts aren't really doing anything but making things harder.
We each have a category for our "allowance". One is Jim and the other is Sherrie. No separate accounts. If I buy something that is for my "allowance", the category is simply "Jim" and if she buys something, the category is simply Sherrie. It does not matter which account is used for the transaction. Very simple and no moving money around is required. If it's something that I buy her for a present, I just don't put the transaction in until the event has passed or disguise it as something else. My policy is keep it simple.