On Marital Finances

Having been married almost eight months at this point, you'd think Chris and I would know by know how to handle our finances. The truth is, we have been trying different things for random periods of time and nothing has stuck. Part of the problem is that neither of us has any idea how other couples keep track of and plan for their money, so we are limited in our knowledge of options.

We have tried keeping two different bank accounts, which works to a point: splitting bills and other incidentals becomes difficult when due dates, pay dates, and income levels differ. We have tried sharing one bank account which, due to our exclusive use of debit cards as a payment method, gets pretty confusing (especially when one of us doesn't keep track of his spending). We have considered taking out a certain amount of cash as an allowance for each of us for the week, but have not yet taken the plunge.

And we have no experience budgeting. This, I know, will be the key to savings and to keeping better track of our money, but to be honest, I've never known where to start. While at the library last week, I picked up Personal Finance for Dummies and The Money Book for the Young, Fabulous, and Broke, and placed a request for The Total Money Makeover (I'm number seventeen on the request list, so if I get to read this book before the year is out, I'll count myself lucky). The knowledge in these books will probably help, but it won't tell me everything I need to know, and it certainly won't implement anything for me.

For now, after much discussion, I believe we have formulated a plan that may well get us at least halfway to where we need to go. First, to combat the "We have no idea what we have spent, what our balance is, or what needs to clear" situation, I made a bank ledger in Google Documents (the perks of which are that it is accessible from anywhere, we both have access to it, and it's easy to use). Then I found a better one on the Google Docs Template Directory that calculates your balance for you (my ledger had to be calculated manually). We have begun using this with success. In addition, to make sure we keep track of absolutely everything, when out and about we have begun sending text messages to our email accounts with where, when, and how much we have spent for input into the ledger when we get home. It's a bit lo-fi, but as long as we're on top of it, this should work.

Second, there's the budgetary issue. The biggest barrier we've faced in creating a budget is that when we're ready to do it, we want to get it done. To get it done, we need the past month's worth (or more) of transactions and what they included, so they can be categorized. We don't save m/any receipts, so this is a problem. Enter Mint. You can plug all of your account numbers into Mint, and it pulls your statements and shows them on the Transactions page, automatically categorized (some of these need to be fine-tuned, but once you classify something, you can set future transactions to be categorized the same). From there, it does many magical and helpful things. One of the best ones, I think, is the section showing how much of your money goes into a certain category - video games or hockey tickets, for instance - and creates a typical monthly budget based on your spending history in that category. Another cool feature of Mint is that it will alert you when your bills are due for the accounts you have plugged in (we have our car loan and credit cards in the system, as well as our checking and savings accounts).

The only thing that could be better about Mint is that you can't enter anything that hasn't cleared your account. You can view your statement, and it shows you a current balance, but if you have transactions that are pending or checks that have not yet cleared, the information is not up to date. I would totally be using Mint as a bank ledger, too, if I could put in this information. Overall, just using the transactions and categories to show us where our money goes is extremely helpful, and you can change your budget in each category as you wish, too. It keeps track of each category's budget on a little barometer (though keep in mind, the barometer is about two days behind, depending on how quickly your bank clears transactions), which is pretty neat.

We still have some work to do, particularly when it comes to setting the budgets. I know that having all of our spending in one place and categorized will make this much easier, however. For the moment, I'm interested in how other couples (married or not) manage their money. What can you tell me about how you budget and keep track of your money? Does it work?

1 comment:

Jenn said...

For figuring out your budget - eh, I'm not really the expert. What we did was figure out how much we wanted to be saving each month (retirement/college funds), then also subtract all our monthly bills from our monthly income, then look at what was left and say "Ok - this is how much we can spend."

The only way we've found to actually stay on budget is this - every month we move a certain amount from our main checking acct. into a little local checking acct. and use a debit card instead of a credit card. You and your husband could each have one, if that would make it easier. With online banking, even if you are really lazy about entering things into your register it's easy to see what your current balance is before you head out for Target.

Works for me. Good luck figuring out what works for you. :)