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Handling money as a couple

It's one thing to have your financial ducks in a row as an individual -- climbing the financial ladder, heading towards the 50/20/10 goal, figuring out retirement. Once you add another human being to the mix, things get an order of magnitude more complicated. (And if you're parents, you get another level of complexity -- and less time and energy to handle it with!)

Here are a couple of strategies that can help.

The foundation: money time

First and foremost, I recommend "money time". (Silly name, serious strategy!) Implemented and used properly, this can be the foundation on which all future financial success can be built! By setting aside dedicated time for "money work", you can ensure that you and your partner stay on the same financial page, and are making steady progress towards your financial goals.

What does that look like? Simply put, money time is a weekly 30-60 minute meeting, with no distractions, at the same time each week, to work on your financial goals. There's a lot packed into that sentence, so let's break it down bit by bit:

Money time: This is money time, not a date! I encourage you to incorporate wine or coffee or something you like into it, but this is no substitute for actual quality time with each other.

Weekly: I recommend you do this weekly. Not daily, not monthly, but weekly; this strikes a good balance between "too frequent to be realistic" and "too infrequent to be effective". (If you occasionally miss one because of a vacation, that's fine; weekly is frequent enough that you won't miss anything huge, as long as you don't make a habit of skipping.)

30-60 minutes: Some times there will be a lot to talk about; some times, less. Adjust money time to fit your current situation.

No distractions: No TV, no other people around, and especially no children -- they should be in bed or otherwise occupied. Several of my clients do their money time over Saturday or Sunday morning coffee, when their kids are sleeping in. The quiet allows them to focus deeply and think clearly.

The same time each week: If at all possible, be consistent; the more consistent you are, the stronger the habit will become. I know how hard it is to carve out time for things, but 30-60 minutes a week for one of the most pervasive aspects of your life is, I think, something worth committing to!

To work on your financial goals: So...what do you actually do during this time? If you're tracking your spending, this is a great time to categorize your transactions for the week. If you're budgeting, this is a perfect time to give your dollars their jobs. You can use it to figure out where you are on the financial ladder, and how you're going to get to the next rung. This is a space for keeping each other informed, and for putting heads together to solve problems and make plans.

Want something more specific? I've got a whole article on what to do during money time. Go forth and prosper!

The framework: your household account system

If money time is the foundation on which your other financial strategies are built, then your household account system is the framework in which those systems are implemented. By "household account system", I simply mean how your bank and credit card accounts are set up: where does money go? Who owns what account? What expenses are paid out of what accounts, and by extension, who pays for what expenses?

Your household account system is deeply personal, and one you should absolutely personalize to fit your household's dynamic. That said, I recommend you consider a variant of what I call "Yours/Mine/Ours". It looks like this:

All income goes into a shared account. Paychecks, bonuses, refunds, bank errors in your favor -- it all goes into a joint account. You're a partnership, whether both of you are making money or not, and this reflects that.

All joint expenses come out of the shared account. Mortgage/rent, groceries, date nights, child care -- they all come out of the shared account. Both partners have equal control over and visibility into this account.

Every month, some money flows from Ours to Yours and Mine, to be used for individual expenses. Boys' or Girls' Night Out, that gaming console one partner wants or the fancy outfit the other partner wants -- these come out of Yours and Mine. This is your money to do with as you please, without negotiation where money is concerned. (If it affects shared space, well, you'll have to negotiate that.)

As a bonus, gifts to each other come from these accounts, and thus are (a) hidden until the time is right, and (b) more meaningful, since they're coming from "your" money!

How much goes into those accounts? That varies greatly from couple to couple! I will say two things:

  • It must be fair -- and you have to negotiate what "fair" means. For some couples, it means the values transferred to Yours and Mine are proportional to income. (I do not recommend doing this for couples whose income are wildly disparate; this will almost certainly breed resentment!) For others, this means dollar-equal transfers. For others, an adjustment may be made for the fact that one partner, through no fault of their own, has higher individual expenses. (Example: society expects women to spend much more money on their appearance than men.)

  • Expect to renegotiate this over time. What you thought seemed fair at the beginning may be something you actually come to resent -- and that's normal! (The same holds true for what counts as a joint v. individual expense. Some expenses exist in a gray area, for example, things that will benefit both partners but only one really wants to spend money on.) If you feel tension building, even just a little, address it in your money time and figure out where to redraw the line so that you both are satisfied. Don't let yourself say, "eh, it's not that big a deal" -- that's the perfect time to deal with it, before it becomes a big deal!

Credit cards are tied to a particular account. I don't recommend using the same credit card for Ours, Mine, and Yours purchases; that makes things much more complicated than they need to be. In fact, it's often simpler for people to just use debit cards for their Yours and Mine accounts; the values are generally small enough that the advantages of rewards credit cards are outweighed by the complexity of juggling so many cards. (Not to mention the really bad situation that occurs when one partner runs up debt on a credit card they've hid from the other. I've seen it happen more than once, and it's ugly!)

The inverse variant: Ours/Yours/Mine? Honestly, since this system starts with money in Ours and goes to Yours and Mine, I should call it "Ours/Yours/Mine", but that just doesn't flow as trippingly off the tongue. But what about the inverse, often used by dual-income households by default, where each partner's paycheck goes directly to their individual accounts and from there flows into a joint account? It's up to you, but I recommend money go into Ours first. It emphasizes the primacy of the relationship, it states a position of trust (and helps to build it), it encourages communication, and it allows for "personal income" based on what you have decided is fair, not what the job market thinks someone is worth.

To put it another way: if you feel reluctant about putting money into Ours before Yours and Mine, that may be a sign that there's an issue in the relationship that needs addressing. Or it could just be that your current system works well enough for both of you that it's not worth it to you to change things around, which is fine! As long as you discuss it and agree.

Other systems

Between money time and a household account system such as Yours/Mine/Ours, you'll have a good starting point for financial success as a couple. But those are just two systems, albeit ones that have enjoyed wide success; what about you? Do you have other habits and systems that you've employed to keep your family moving forward financially?

Britton is an engineer-turned-financial-planner in Austin, Texas. As such, he shies away from suits and commissions, and instead tends towards blue jeans, data-driven analysis, and a fee-only approach to financial planning.

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