While I was moving into my new home I found a box with some of old notebooks from about 10 years ago which I used to keep track of my finances in. It was an eye opener for me how differently I managed my money then. I used to spend hours planning out money for the coming months, writing down each paycheck and the bills that would be paid out of it, logging my loans and deducting the principle each time I made a payment, and hand writing out my budget.
In addition to the notebook I would also enter every transaction into Microsoft Money, categorize it appropriately and carefully watch how I was tracking to my budget during the month. This made it incredibly easy for me to do my taxes at the end of the year or identify areas that I could cut back on to create more funds in my budget. It was Microsoft Money that informed me that I was spending $80 a month at the coffee cart by my house and that I should kick my coffee habit.
It made me think how my money management has changed over the years. I no longer keep a notebook or use Microsoft Money. Being recently married we still are working to find the groove in how to handle our money and we’ve been able to create some processes and find some tools that have really helped us. Still, I am realizing that possibly due to having time and a larger comfort level in what I’m doing I am not spending the time and keeping the same level of details I did 10 years ago. Since I’m one of those that really enjoys working out my budget and scrutinizing over where each penny I spend goes I wonder if I should maybe revert back to my old ways a bit?
Managing finances jointly
Shortly after my husband and I moved in together we decided that we’d need to figure out a way for us to manage our joint bills. The struggle for us was that we had both always managed our own finances and also were the main ones who handled them in previous relationships. We are both self-proclaimed money experts and dare I say…control freaks. So with money being in the top three areas of conflict between spouses it really was something we were concerned about. So how did we make this work? Here’s how we’ve handled it:
• Maintained individual accounts
We both like maintaining our financial autonomy so we both maintained individual checking and savings accounts. We both have our paychecks deposited into our individual accounts and manage our personal budgets independently. It’s funny because we still find ourselves fighting over the bill at dinner sometimes because our money is still very much our own for these types of expenses. So if I decide to splurge and buy a purse that is way to expense, he can’t say anything because it came out of my personal funds.
We each have an investment property that we rent out so we utilize our personal savings accounts to manage the income and expenses of the rental properties.
• Opened a joint account
We felt the best way to manage the joint housing expenses and saving goals would be to open a joint checking and savings account. We added up all of the housing expenses and then divided up proportionally by the amount of income we bring in. Since we don’t make the same amount it wouldn’t be fair for us to divide the bills in half. We add all of our bills in here including his car and my student loans. We are together so we see these as joint expenses.
After decided on the process the big debate on who was going to manage the joint account? Remember, we are both self-proclaimed money experts and control freaks. Well, though my husband was quite good at managing his finances he was still in the dark ages because he balanced his account with a paper account register. Whereas, I utilized Microsoft money and had all of by transactions categorized and compared to my budget. So it was decided that I got to handle the joint accounts!
So far this process has worked great for us. We only utilize the joint account for joint expenses that we agree on. Neither one of us wants to short the joint account so usually there are many expenses that we would agree to take out of the joint funds but instead we work to pay for them out of our individual budgets. The result has been a very healthy joint account balance at all times, allowing for more money to go into the joint savings or to be spent on fun things like family vacations. Still, on the other end that does mean there are many times where our individual accounts are quite low. Luckily we get paid on different schedules so usually the other can help out when needed.