Money and Relationships: My Squeeze and Me

As my loyal readers will know, I moved in with my main squeeze two months ago. It has been just lovely, but it did bring up some new areas of discussion. We are not just roommates, but we are also not married and do not have legal rights to each other’s property. We aren’t ready for joint accounts yet, but we do have a lot of joint expenses. The bills at his/our place are a little higher than what I was paying before, but it is also a much better location and has a number of perks (like I get to live with my dreamy boyfriend).

Figuring out how we wanted to handle money together is not always easy, but we have had some good compromises and hopefully have figured out a system. It has been pretty pain free. (Ok, let’s be honest…it has been pain free for me because I love personal finance, but D does not love talking about money with me and I can see him squirming every time in bring up the subject with my excessive enthusiasm.)

So to give him a break from squirmily discussing our money, I will tell you all about the system we came up with:

-We set up a private googledocs spreadsheet (a la Lionel and Wilhemina) to track all of our mutual expenses. We put the receipts in a clip on the fridge and/or check our credit card statements, and fill in the spreadsheet each month. Whoever ends up having paid less writes a check to the other and then we start a fresh page of the spreadsheet.

-D is responsible for paying rent and utilities on time, because he lived here first so he already has the accounts set up in his name. We enter it in the spreadsheet and it goes into the overall expenses for the month.

-We pay the bills according to our take home pay. D makes a bit more than I do (but I negotiated my salary very successfully, I’m sure I’ll catch up soon!) so he pays a little more of the bills each month than I do.

We had a big discussion about whether we should divide the bills based on our take home pay or our pre-tax salary (aka, the number they tell you you are making when you get the job, not the amount you get on your actual paycheck). I contribute to my retirement accounts and my flexible spending healthcare account before I get my paycheck, but D is one of the lucky few who will get a pension when he retires, so he doesn’t contribute to a retirement account or a healthcare account.

I thought that I should be contributing based on our pre-tax amounts, because only I am benefiting from my healthcare account but (depending on our future together) either we both will benefit from my retirement savings, or just I will. D wanted to split bills based on our take home pay because he wanted to make sure I had enough to live on without feeling pinched.

It might seem a little ridiculous to be worried about this type of question because it doesn’t actually come down to very much money, but it it is important in our relationship that no one feels they are taken advantage of. This means that neither of us feels like we are paying more than we should, and neither of us feels like we always take out the trash.

Because we don’t know for sure where our futures will end up, it is hard to make decisions that deal with long term financial planning (like will D benefit from my retirement savings in 35 years? Hard to say.) It is difficult to be exactly fair with planning finances now, so we are doing the best we can and making sure we talk about it and we both agree.

-We have also started talking about long term savings goals together. We discussed the amount we are each putting aside (in separate savings accounts) for our savings goals, and we are in agreement on our savings priorities.

-I recently read that you should divide up tasks based on who is better at what in a relationship. In our case, that means I do most of the household shopping because I am a coupon rock star ($38 for $106 worth of home goods today, what what). He is an AMAZING planner, and he is great at taking advantage of Groupon deals and planning sweet dates and activities.

 

Our joint financial planning has just started, but I suspect it won’t be difficult to keep openly compromising. We created a system together, and if it doesn’t work, we will scrap it and create another system together. What is really important is communication, common goals, and that we care about each other more than we care about money. (Vomiting yet? Sorry not sorry!)

 

Advertisements

Relationships and Money, Couple 3: Billy and Lilly

Subjects:

Billy, 28 and Lilly, 25. Billy and Lilly are newlyweds who married last May. They rent a house, share one car and have a good looking cat.

photo-2
Meow!

Billy makes about twice what Lilly makes. Billy and Lilly have a few financial goals that they are working towards. They want to buy a house. In a few years they want to have kids. They want to have enough so that one of them can stay home with the kids. To meet these goals, they live off of Billy’s salary and save Lilly’s.

Billy and Lilly have all of their finances in joint accounts. They put everything in Mint so that they can stick to their joint budget. Billy is responsible for paying the bills (and by “paying the bills” I mean licking stamps and addressing envelopes (or setting up automatic payments), not being the sole breadwinner). Both Billy and Lilly have the passwords and access to all of their accounts.

They have a generous “Newlywed fund” that they set aside for themselves each month for date nights, vacations, new furniture- basically anything that they will both be involved in that is outside of their normal budget. They also have separate personal budgets (which totals about 1/3 of the newlywed fund for each) that they can spend on whatever they want- clothes, movies, books, games. They don’t have separate accounts for these funds, but they have the money factored into their budgets in Mint and they just tag the purchases appropriately.

They both had savings (emergency funds) all set up before they got engaged, so when they got engaged they reverted back to their old ways of aggressively saving. They were able to save enough to maintain their emergency funds and also save enough for a lovely wedding. Because of that (and with some family help) they were able to get married debt-free (which is a feat!)

The only problem they have encountered is that it is very difficult to buy surprise gifts for each other because there is total transparency in their financial system. In Lilly’s words: “Our method of keeping gifts secret is to say ‘Hey, don’t look at the Amazon order history for a few days.’ ”

Billy’s and Lilly’s system works for them because they are both savers and have agreed to the same financial and life goals. They were able to start off their marriage debt free, which laid the groundwork for a solid financial future. Now if only they could stop spoiling the cat…

Relationships and Money, Couple 2: Lionel and Wilhemina

Subjects: Lionel (31) and Wilhemina (29)

Lionel is in graduate school and Wilhemina is working as a short term contractor. Lionel is living off of loans and Wilhemina is living off of her salary (which is variable depending on whether or not she can get a contract extension, but it is generally renewed every three-six months). They are not married but have lived together for almost three years.

Lionel and Wilhemina have separate finances. They track their joint expenses in a google spreadsheet, with a column for what Lionel owes Wilhemina, a column for what Wilhemina owes Lionel, what the difference is and who owes whom. This way, they only have to pay each other back when the expenses get unbalanced. Lionel is responsible for paying rent so Wilhemina usually owes him each month. This works for them because Lionel has more flexible expenses because his student loans are disbursed in two large chunks each year.

If they go out to eat and intend to split the meal, one of them can just pay for it and the amount owed goes into the spreadsheet. This way they don’t have to worry about cash or writing checks to each other all the time. They have an easy online money transfer system set up so they actually never write each other checks at all.

When they first moved in together, they tried to keep track of groceries and other household expenses on the spreadsheet. They discovered that the expenses usually came out about even each month, so they decided to just take turns grocery shopping and not worry about tracking household costs.

The exception is if one of them has a big grocery trip (stocking up on booze, trip to Costco)- then it will go in the spreadsheet.

If they are having a date night and one person is treating the other, that does not go into the spreadsheet. They can always spot each other cash without worrying about one person being taken advantage of. Neither person feels like they always pay- they already have an easy system set up so that it is very easy to split the bill. This system has been working for them for a few years.

This system works for Lionel and Wilhemina because they have similarly tight budgets, similar spending habits, they don’t worry about counting every penny, they can each spend their own money on what they choose, and neither partner is taking advantage of the other.

Love and Money

Firstly, I want the world to know that when I was googling “How do couples manage their finances” to do a little background research, one of the suggested searches was “How do couples hold hands”. That is sad. Let’s stop googling it, people, and just give it a whirl. The worst that can happen is a little clamminess.

In my life, I hope to have a happy, functional relationship with clear communication and expectations. I am sure you all hope for the same. However, a major reason for divorce is trouble with money….and no wonder! Money is complicated, it comes with a lot of feelings attached, and people have differing values and strategies and goals for dealing with money. Dealing with finances as individuals is tricky enough, let alone letting someone else into the mix.

Here is an example from just yesterday when my boyfriend and I were in the car and had this conversation:

BF: My free subscription to XM radio should have ended yesterday [but the car still is playing XM]

Me: Make sure you aren’t being autobilled for it. How much is it?

BF: About $6 a month.

Me: That is $72 a year! Are you going to cancel it?

BF: No.

Me: Seriously? You would pay $72 a year for XM radio? We don’t even like any of the stations.

[Silence]

Me: Ok, I don’t like any of the stations.

BF: Plus, there are no commercials. I think that is worth $72 a year.

(Later in the day the XM radio actually did get cancelled and we learned that XM also provides live traffic updates to the navigation system. In our traffic-jam-filled city, that is well worth $72 a year to me, too!)

See what happened there? We have different values and opinions when it comes to money and music and radio commercials. This was a tiny conversation, but every time we buy something out of the ordinary we are going to have to have a similar conversation (provided, of course, we are consulting our partners on our purchases). That is a lot of navigation to do! $72 a year really isn’t a big deal, but one day bigger purchases will come into the picture.

Since I started writing this blog, I have been asking many of the couples I know how they manage their finances. The answers I have been getting back have varied quite a bit- as have the structures of their relationships. As I am only in one relationship, I can’t address how other relationships deal with finances. After my initial worrisome google search, I discovered that the internet also thinks this is a complicated topic (I read quite a few depressing stories, which is why I am even more convinced that writing about this is important!) I am interested to hear (as are my readers, hopefully!) how some of you deal with your finances as couples. Do you think your system works? Are there any tips or pitfalls? Would you be interested in writing a guest post (or just telling me the deets and I’ll write it up for you)? Comment below or email me at twentiesinyourpocket(at)gmail.com if you want to share.

Here are some of the things that can add complexity to financial planning as a couple (mind boggling, really):

  • One or both of you have kids. Maybe you have kids separately, maybe you have kids together. Maybe one of you has a kid from a former marriage. Who pays for what? Does your new spouse pay for the stepkids? Even if it’s the simplest situation (you each made half of each kid) it’s still complicated.
  • You might be committed but not married. How do you deal with buying property when you don’t have the legal protection of marriage?
  • One of you might make significantly more than the other.
  • One of you might feel like it is your role to “provide,” while the other partner may or may not agree.
  • One of you might have huge amounts of debt. Is your partner expected to pay for the debt left over from your shoe splurge? Is that what partners do for each other when they love each other? Or is that your responsibility?
  • One of you might stay home with the kids instead of working.
  • You might think your partner buys stupid crap.
  • One of you might come from money (please send me information on how you got that trust fund).
  • One of you might want to go to school instead of continuing to work. Along those lines, one of you might want to switch careers to a more fulfilling but lower paying job.
  • You might be a saver, your squeeze might be a spender.
  • One of you might be much closer to retirement than the other (this could be particularly contentious in May-December romances).

You get the idea. Lots of pitfalls. But my general philosophy regarding finances is “Make a plan and try to stick to it.” The only thing that makes couples finances different is that it should be “Agree to a plan and try to stick to it and then communicate with each other.”

My boyfriend and I are moving in together next month and we began the conversation about how we want to handle joint expenses. We are dealing with a few of the complications I listed above (sadly, no trust funds) and we are going to have to work out a system that works for us. As soon as we come up with a system we feel awesome about, I will let you know! Until then, I look forward to hearing from you about how you deal with love and money.

Can’t Buy Me Love

Can’t buy me love- but you can buy your squeeze dinner and a movie. But dinner and a movie might just blow your entire month’s entertainment budget (have you seen movie prices these days?!!) and (hopefully) you want to see your squeeze more than once a month. What’s a Romeo or Juliette to do?
To date without breaking the budget, you have to get a little creative. The main thing that makes a successful date is a little planning- not spending. Here are some of my best suggestions for dating on the cheap- each city I have lived in has different resources so some of these may be appropriate for different areas of the country.
My boyfriend calls these Kate Dates (if you just vomited in your mouth, I apologize. We can’t help it).

  • Picnics are always a good idea! Go to your local park with a blanket (put down a shower curtain liner or a dry cleaning bag underneath if it’s wet). Make some sandwiches, grab some sunscreen and some books, buy yourselves some sparkly lemonade or those individual wine boxes that my family calls “juice boxes” (there are no children in my family, it’s totally cool.)
  • Go for a hike or a bike ride. Pack a picnic! Alone in nature with a view and the one you love…sigh.
  • Check out community events. There are probably historical tours, guest speakers, interesting/and or funny museums, outdoor movies (this is very common in the summer), festivals, free concerts, holiday parades. Everywhere I have ever lived (urban or rural- and I mean RURAL) had community events that were worth checking out.
  • Speaking of museums, check for free admissions days or night openings. I know of a few museums that had jazz nights or cocktail hours in the evenings- not necessarily cheaper, but you got more bang for your buck when you got to hear music and see art at the same time!
  • Gallery openings have free wine, cheese, interesting art and interesting people.
  • If you are a theater fanatic, see if you can volunteer to be an usher. Being an usher is more of a regular commitment, but you go early, help people to their seats (or take tickets) and get to watch a free show! This is a great way to see a large variety of performances.
  • Colleges and universities often have concerts, sports events and performances that are very affordable. No major league baseball in your area? Grab a bag of peanuts from the grocery and check out your college team. No college nearby? Check out your local high school teams!
  • Hopefully one of you has a reasonably clean kitchen. Why don’t you try learning a new recipe together? Have a frozen pizza on hand just in case.
  • Watching movies at home becomes a lot more romantic if you planned a gourmet popcorn and a special cocktail or drink for the night. My favorite popcorn recipe: put olive oil in a smallish pot with a lid. Add salt. Let it get hot. Add popcorn kernels to cover the bottom of the pot and add some fresh or dried rosemary. Cover and shake over high heat. Stop when the pot is full of popcorn (DON’T BURN IT!). There you go: incredibly impressive Olive Oil Rosemary Popcorn for about $.17 total.
  • Spending too much on movies at home? Check out the selection at your local library.
  • Make a string of dates around a theme, like “Finding the best donut in town.” Sounds like multiple trips and multiple donuts…yum!
  • Try to check out popular locations in the off season or play hooky on a weekday to avoid crowds. I once visited my friend in LA and instead of going to $90 Disney world, we went to $30 Knotts Berry Farm on a weekday in the off season. There was no one there and we went on every single ride (except for that one that drops you 5,000 feet because we are weenies). Sure beats paying more to stand in line all day!
  • My family is full of board game fanatics. You know what is a fun date? Board game night! You can make your famous Olive Oil Rosemary popcorn!
  • Take a day trip to a nearby city that you don’t know very well. Be tourists! If you want to stay overnight somewhere, I have had good luck with AirB&B as an alternative to hotels or hostels.
  • Actually, most people miss out on tourist attractions in their hometowns as well. Pretend you are moving in six months. What should you have done in the area that you just haven’t gotten around to doing? Go do it!
  • Going to or live in NYC? Check out todaysthedayi.com for some creative activities in New York that you probably wouldn’t find on your own (written by my beautiful and talented friend Lydia)
  • You know what is romantic? Stargazing. Especially if you have done your homework and know what’s what up there.
  • I am a sucker for sunset picnics at the beach.
  • Bowling is usually pretty affordable and also pretty fun. Ditto darts or pool. A little friendly competition never hurt anyone (and if it does, dump him/her immediately. Life is too short to date someone who can’t lose gracefully.)
  • Pay attention to little perks you might pick up from your everyday life. Your work might offer free sports tickets or tickets at a discount. This year I got a 4 pack of major league baseball tickets for free because I bought bras (that I was going to buy anyway, all I had to do was take a photo of the receipt) and I also got a 4 pack of Steve Winwood tickets (I know, you are totally jealous) because I subscribe to the Sunday paper. Both of these events required me to do about three clicks worth of work with my phone, I don’t get any spam mail because they are from two companies that I already buy from and the total value of the tickets is over $400. Awesome.
  • Groupon, Living Social and Restaurants.com all were invented so you can live like a manager on an entry-level salary.
  • What if you volunteer together? Pick a cause you really believe in or work that you enjoy. I have had a number of lovely days helping out with Habitat for Humanity and I picked up some home repair skills, as well!

I’m sure you get the idea. To have a successful date you

1. need to like the person you are with and

2. need to do a little planning.

Other than that, you can wine and dine your squeeze while not spending a lot of money, as long as you have spent a lot of thought! Have fun, you two!

I would love to hear about your own successful Kate Dates.

Blog at WordPress.com.

Up ↑