I just got Married - Help me avoid mistakes!
Hello everyone! A few weeks ago in the Colorado Rockies near Breckenridge I married the love of my life. We had already been together for 13 years but most of that time, our marriage was illegal (same-sex marriage). Now we have made it official and are married, married. I just started YNAB a few months ago, what tips, warnings, hints, that you might have that could help us decide on how to use YNAB in our marriage before we hit the create budget button. We were thinking of having him have his own budget, and for me, my own budget and that way we could see each other's budget, but we don't necessarily share bank accounts. For all of our life, we have just split the mortgage and utilities, and everything else is usually split up between us. Every month we looked at the bills and mortgage and split the numbers, then he would write a check to me, I would deposit it, and then I would pay all of the bills and mortgage from my account. We have not had any joint accounts of anything. Should we? Are there pro's that we are missing out on by not having a joint account of some sort? Should he have his own budget in YNAB and me have my own? Should we share one budget? Tell me the mistakes you made and what you suggest we do to avoid them.
I don't have any experience budgeting with a partner, but YNAB does have a specific guide just for that!
Some good stuff to be found in there that should be a really helpful resource.
Congrats 🎉🎊, and good luck joining budgeting forces!
I really don't recommend having separate budgets, reason being that you have to double enter everything when money has to move from one budget to the other. You have to "spend" the money in one budget and add "income" to the other just to share expenses. You can keep separate accounts and still be on the same budget. Then you can have categories for you, categories for him, and the joint needs all in one place.
The other reason for keeping at least the budget combined is to easily see the whole picture. You can clearly see how much can be applied to your joint goals since none of the categories can hide from each other.
I can speak more on joint budgeting when I'm not on my phone, but those were my initial thoughts.
Congratulations! Here's my take: keep things as simple as possible consistent with your needs for financial autonomy.
Officially, YNAB is big on combining finances, and I think there are good reasons for that. The best reason isn't touchy-feely stuff about combining your lives and hearts and stuff. It's because a joint budget is simpler, and people radically underestimate the value of simplicity when it comes to personal finance.
I would suggest that if you have any joint goals, you need a joint budget. That doesn't preclude also having a personal budget if you want to have spending money outside of your spouse's purview. In my family, we have three budgets: one family budget, my wife's spending money budget, and my teenager's budget. I do all my spending from the family budget, in which I have a category group devoted to my categories.
But I think a joint account and joint budget is likely to make your life easier overall and especially improve your planning for long-term goals like retirement. It's really just formalizing an arrangement you already have: right now your "joint account" consists of all of the money in each of your personal accounts that's dedicated to joint expenses. Making that an actual account and budget is going to result in fewer moving parts, probably more wealth-building, and yeah, fine, more togetherness. :)
Pragmatically, when operating a joint-budget, I think shared Rule-3 responsibility is crucial but the rest is negotiable.
A single enthusiastic budgeter can handle recording, categorizing and reconciling all transactions. They can follow Rule 1 and give every dollar a job -- hopefully taking their partner's priorities into consideration! They should also consider True Expenses (Rule 2) and prioritize establishing a financial cushion (Rule 4). You don't need equal participation in all of that stuff (though it doesn't hurt).
However, both partners absolutely must engage with Rule 3. If anyone overspends, they need to be accountable for identifying which categor(ies) to move money from. Rule 3 is the critical feedback loop between the real world and the idealized YNAB budget. Without both partners following Rule 3, there's little point in operating a budget.
Rule 3 resolution shouldn't be a confrontational thing: "OMG why did you spend so much on XYZ? How are we supposed to afford that?!?" If the over-spender wasn't deeply involved in creating the budget, then it's not fair to criticize them for failing to adhere to it. Instead, it should be a collaborative/learning process for both partners: "It looks like I underestimated how much we'd spend on XYZ this month; how do you think we should adjust our plan?" Those conversations are where the budgeting magic happens and everyone gets on the same page.
congratulations on being "married married". I recommend that you are now a single budget unit as well. I am not a fan of a his/mine/ours approach to budgets. So ALL income comes into the budget and then gets allocated according to the overall goals of the relationship. If there is need/want to equalize the amounts in some way (which I do not advocate) then I would create an expense category called Private/Personal spending and record an expense to that. I would not then think that there would be a need for that person to have a budget to manage that amount since it should be fairly limited since all the daily expenses come from the family unit budget. For example, if we decided that to "balance" our contribution we need to reduce my husbands contribution by $2000 per month, I would transfer this amount and categorize Private/Personal. That $2000 would not be used by him to pay anything related to the household - groceries, utilities, etc. He can spend it as he wishes or if he wants to invest it, then he can do that. I don't anticipate that there would be a significant amount of transactions happening there that would need the YNAB touch. So if he wants to spend $200 on his vices and save the rest then he would have an account where the $1800 could go and the $200 could sit in the chequing account it was transferred to.
Doing it this way accomplishes a few things. Easier to manage. Transparency on income (as an aside I think its funny that people will see each other naked and exchange spit but won't share their income information with their significant other). Easy to modify for changes in economic situation or the decision to buy something "big".