Tuesday, February 22, 2011

Newlywed finances

Like all newlyweds starting their life together we've had to sort out our finances.  Regardless of whether you've lived together before marriage or not things can get interesting after the I Do's.  I've read up a lot on different people's arrangements/situations/opinions on the money subject.  I'd like to share our methods to our success. 

Unlike couples who have complicated systems with multiple accounts, %'s of income that get split up, each paying for certain things, and those who have 'fun money', we do none of that.  I was very surprised to read about how many newlyweds (& others) who live by this individualistic system.  I guess it's the modern couple thing to do.  I can't imagine owing money to your spouse, or not saving for the future together.  Now to each their own but this would never work for us. 

We live by the 'everything mine is yours' philosophy.  We have 1 joint checking account and a few joint savings accounts.  Both our incomes go into the 1 checking account and from there we pay all our bills and cover all our expenses.  It's that simple.  We transfer money to each of the savings account (set aside for different goals like house, car, kids, emergency etc) that are held at different credit unions.  We keep our credit union accounts active for the high interest rates and membership for the great mortgage rates in the future.  Almost all bills are auto deducted from our checking account so we don't spend money or time on envelopes or stamps.  This means everything is paid on time and we don't have to worry about bills.  We keep track of everything including loans, retirement accounts & investments on mint.com.  It makes it easy for us both to see what's going on and to track our spending.  It automatically puts transactions into categories so sticking to a budget is simple and the graphs are easy for even us to understand.  We both have the iphone app so we can check up on it anywhere - and do.

We also have taken each other's debt as our own.  I know lots of people can't imagine asking their partner to pay down their debt (even after marriage) - but not us.  We're a family now and we think as a team.  No matter how much each of us earns individually.  We are paying off the highest interest rate loans first - starting with my car and then his student loans. 

For us this method is working great!  We spend how we please and typically consult each other for larger purchases - say $100 or more-ish.  We don't have to stress over owing each other money, switching money between personal accounts, keeping purchases secret, feeling guilty or spending all our allotted personal money.  We have very similar views on how money should get spent so we're almost always on the same page on things.  We're pretty frugal but still enjoy dinners out once a month, eating semi organic, and hobbies like coffee experimenting.

For many working out how to combine finances once married can be a struggle, and even discussing it can be taboo.  But for us it's been easy going and smooth sailing so far.

6 comments :

  1. i love your view on married monies! i think that is how h and i will manage our finances once we are married. we already have a joint account for our groceries and shared bills and it makes things a LOT easier. xoxo jcd

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  2. My Boy and I are not married, not even engaged, but at 4.5 years together, 4 of which have been living together we're reasonably sure that's where we're headed.

    The big catch, however, is that I want nothing to do with his debt. It sounds a little cold and heartless, but my reasoning is this;
    We are 13 years apart. My debts are currently limited to massage school student loans, as I just got my car paid off.

    His debt involves opening a business, moving said business, and remodeling said business. Not only do I not want that debt hanging over my head at my age, but I don't want to handle any complications of that debt.

    I would very much like for us to reach the point where we could do things the way you do, because I like the idea a whole bunch. (Perhaps when I've agreed to marry him based on him clearing up said debts? Lol.)

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  3. I give you a lot of credit for managing your finances this way. I, like C, am not married nor engaged. I'm the only one with debt (in the form of student loans) and my girlfriend and I also don't have overly similar spending habits. Her spending habits don't bother me, but I prefer not to mix my assets with hers. I am also more financially conscious. While things can get super complicated splitting expenses, I wouldn't feel totally comfortable any other way. Consider yourself a very lucky girl!

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  4. hubby and i have been living together for 4 years, married for about 6 months. for a while, we have had our cell phones joined, a joint credit card, and always consult eachother about big purchases. We have a joint savings account, but do have separate checking accounts. but this is mostly due to the fact that we have just been a little too lazy to get out to the bank and combine them :). Neither of us have credit card debt and we both have our cars paid off, so our shared debt consists of our mortgage and my student loans. We are definitely a "whats mine is yours" couple

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  5. I love your approach! I'm not married, but since we started living together we've done pretty much what you mention here. We don't have loans except for the mortgage, so that makes things easier I guess.

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  6. We're not married yet, so it might change after the wedding, but right now we keep everything separate. I keep track of all the bills, and the once a month tell him how much he owes. It feel a little weird getting a check from him every month, but for right now it's working.

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