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!)

 

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Even Lower Maintenance Budget Planning

My friend Marisa said some lovely things about my blog the other day. This is what she emailed me:

Kate- I LOVE your blog. I forwarded it to my sister and my mom and told them to join. You are saving my financial life right now (and Willow too since she sent me her budget spreadsheet), and you’re doing it in a way that makes it funny, easy, and I dont get anxiety about it!

Thank you, Marisa! I really hope that this blog is helping my readers get over any financial-planning anxiety they have. The goal is to make you feel awesome about how you manage your money, instead of guilty and/or anxious and/or head-in-the-sand about finances.

I couldn’t help but notice what Marisa included in the parenthesis, though. Willow’s budget spreadsheet? Willow is our mutual friend (also the best roommate I have ever had) and Willow is an extremely practical person who will put infinite extra effort into things she cares about, but does not like spending time on things she doesn’t give a crap about.

You know what Willow doesn’t give a crap about? Money. But she lives in reality and not in the poorhouse, so she has to do some financial planning just like the rest of us. But she and Marisa don’t want to spend hours on Mint. While I (obviously) love Mint because of its automatic tracking, graphing capabilities and goal-setting, some of my readers might find Mint overwhelming (it is kind of a bear to sign up for Mint) and some of my readers just might not be interested. That’s ok, but it doesn’t excuse you from sticking to a budget.

Here is Willow’s (and Marisa’s, now) budgeting method:

  1. Willow made a spreadsheet on googledocs that she can access from anywhere because it lives online. She is the only one with access to it so the world can’t see her financial information (although even if they could it’s still pretty safe because she isn’t including bank account numbers in there).
  2. For the first three months, Willow compared her estimated spending with her credit card/ checking account spending to make sure the numbers line up and adjusted them when they weren’t working.
  3. She uses her credit card for all of her purchases so that all of her spending is in one place and she can easily compile categories. (And she gets rewards. She just cashed in her rewards for $100. Nice.)
  4. This is not that much work for her because she is not a big shopper (so for example, she only goes to the grocery once a week, so that is four trips a month, just four numbers to add).
  5. She pays off her credit card in full each month.
  6. If she spent too much in one category one month, (her words: “like if I spend too much on socks one month”) she cools it the next month on that category.
  7. It’s a general estimate. She doesn’t give a crap about tracking each penny.
  8. She has an automatic transfer into savings so she doesn’t have to worry about saving money. Ditto into retirement.
  9. She has a “free money” category. This is for miscellaneous purchases, and anything left over in the “free money” category gets transferred into savings at the end of the month.
  10. She has emergency savings, savings for trips and big purchases. She knows when she will be spending a lot of money that is not normal for her budget, and she can plan accordingly to make sure she has enough to cover it.

Want to see how her budget works? I have recreated a template with example amounts for you all to use. Please use it, but I have made it so you have to copy and paste it make your own version in googledocs or Excel so that everyone can use it without overwriting their own personal information.

Hope this method helps you!

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