Years ago I was out with a friend. We were having lunch and popping into some cute boutiques in San Francisco. She found a dress that she absolutely loved and wanted to get it for a wedding that summer. Rather than making the decision herself, she called and asked her husband for permission to get it.

That moment is seared into my memory.

She called. To ask. Permission.

Naturally, I was curious and wanted to know more about how they managed their funds. She said they combine all their money and before they spend money on items individually, they usually check in with each other to make sure the other person approves.

At that point I was currently unmarried and living with two girlfriends in a small apartment, so managing money with a spouse wasn’t on my mind. But I made a mental note that the approach she was taking was not one that I wanted to replicate for myself when I got married.

I completely understand the need to make joint decisions on purchases that will affect the family finances. And this approach worked for her. But if Jordan called me to ask if he could buy a pair of pants, I would seriously question his ability to make independent, rational decisions.

On the other hand, I’ve met couples that silently seethe over the fact that one person has a shopping habit that far exceeds the other persons. I could see myself falling into the same trap of resentment and realized that was also an approach I didn’t want to take.

We all have likely heard that money is one of the leading stresses in relationships. So when Jordan and I started dating, moved in together, and eventually got married, we were very intentional with how we approached our money together.

It has evolved over the years. How we manage it now that we’re married is different from how we managed it when we were dating and living together. And it may change again as we change.

*By the way, the photo above is from our wedding 5 years ago. I’m loving Jordan’s shaggy hair and the fact that I used to be tan. And young. So, so young. 

The underlying premise of our joint money management is this:

Big financial (and life) decisions are made together. Everything else is simplified.

 

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The Tactics:

We are fans of the no budget, budget (or the automatic budget). Day to day, here’s what this looks like:

  • Both of our paychecks are deposited into a joint checking account
  • Bills are automatically paid
  • Transfers are made to different joint savings and investment accounts and each of our individual retirement accounts
  • An automatic transfer is done to individual checking accounts for each of us. We each get an equal amount transferred to our checking each month and we can choose to spend it (or not spend it) as we please.
  • We are free to spend what’s left in our joint checking on what we need and want for the remainder of the month (rent, groceries, eating out, entertainment, etc)

The transfer done to our individual checking accounts is key of us. To be honest, it might be more key for me than it is for Jordan. I need to have my freedom.

How we decided on this approach:

When we got married we made roughly the same salary, but we both knew it might not always be that way. Career changes, moves abroad, and kids would eventually come into the equation.

As there are so many ways to combine – or not combine money, we went through the different options and picked one that felt fair to both of us.

We could have kept our money separate and only kicked in a percentage of our salary to cover shared expenses. But I know how competitive I am and if there came a time when I was earning less, I wouldn’t want to be constantly reminded that the percentage I contributed was less.

We could have totally combined our money and not had separate spending accounts, but there are some things that I want to do or buy and I don’t necessarily want to weigh how that would affect our household finances. I need some freedom.

Giving ourselves equal spending amounts each month that went to individual accounts helps us both to feel like we have freedom without always breaking down who contributes what to the household finances.

Why this is important for us:

When Jordan was offered the opportunity to move abroad in 2014, salary was a big consideration. At the time we were equal earners. The move abroad was going to result in him making substantially more while I would take a significant pay cut, due to the job market in London. (I quickly learned that my MBA from Duke didn’t matter at all in a different country.)

If we had contributed to household expenses based on the percentage that we earned and his percentage shot up to 75% and mine went down to 25%, that would have been a huge hit to my ego. And I probably would have been resentful.

Though that scenario did happen, because we didn’t look at it based on percentages and who can contribute what, it made it easier for me to stomach the pay cut and focus on the great international experience we were going to have.

In the future as Jordan explores new career paths and I continue to make more, not having to compare who earns what will again be helpful as we navigate those choices.

How we use it:

As I’ve mentioned, I focus solely on making sure my spending reflects what I love. And Jordan does the same. Having individual spending accounts enables us to focus on what we really want to spend on as individuals and not hold back.

Who am I to judge his decision to buy a new pair of skis or fly to the US for a bachelor party? It’s his happiness, not mine.

When we were in Italy last month we went to the Prada outlet. As he debated a leather jacket that was really, really expensive, it was his decision to make, not ours. He knows whether he has money in his account and can make the decision that makes him the happiest, without considering me, our credit card, or our savings accounts.

We’ve both used this money for wildly different reasons. Here are a few:

  • Taking my Mom and my Dad on respective 60th and 70th birthday trips
  • Helping my sister when she had a huge emergency medical bill and needed a quick loan
  • A weekend away with friends
  • Birthday or Christmas presents for each other
  • New clothes, shoes, etc.

And my favorite: when I quit my job to try my hand at working freelance and writing, he bought me my computer. That I’m currently still using. Knowing that he spent his personal money on that because he believed in me gave me the confidence to go out and believe in myself.

When it changes:

Based on our different life goals, we regularly look at our savings rate and determine if we can adjust it. When we decided that we wanted to start saving up for a second home (this one a tiny home), we adjusted our automatic savings transfer by a little each month.

We also realized at one point that the money in each of our individual checking accounts was accumulating a little too quickly. So we cut that monthly transfer by 25% to see if we could still feel comfortable living with that. (We do.)

Of course, this is just one of many ways to combine finances. It works for us because we both get to keep our independence with separate extra spending accounts while combining everything else.

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