Now that we’re in our 30’s, the topic of money comes up occasionally with our friends. It is interesting to hear how each couple has a different approach to managing money within their relationships. Some couples view their money as “ours” while others keep it completely separate. Each couple has their own reasoning for how they decided to manage their money.
This is one topic where Christian and I have always been on the same page . We created a system that we love. While our core approach hasn’t changed much over the 7 years we’ve been married, it is something that we discuss and evaluate often to ensure that we are strategically saving for our goals. If you’re looking for a new system, consider this:
Creating the best of both worlds
In setting up our system, we knew it was important to work towards common savings goals and share in the daily expenses. However, we also wanted flexibility to buy things we wanted. We accomplished those two objectives by setting a monthly allowance for each of us and putting the rest of our income into a joint bank account.
What is an allowance?
Yep – we are adults with an allowance! Our allowance is a set amount each month that we can spend on whatever we want. That money goes directly into our personal bank accounts to spend or save as we wish. The key to the adult allowance is the monthly amount. It is important that it’s enough to have some flexible spending, but not so much that we aren’t paying attention to how we are spending it. For example, ours is enough that I can easily go out to dinner with friends, but if I want to buy a designer bag, I would need to save up for it. Like any system, it only works with really good rules in place.
To Start, we had to determined:
- Allowance amount
- What expenditures are part of an allowance spending vs joint spending
What do we use the Joint Checking Account for?
Our joint account allows us to manage all of our necessary monthly expenses as a team. By only siphoning off a small amount each month to our allowances, we control the extra spending and put all extra money at the end of the month into savings/ investments.
While our joint account is primarily for necessities, we use it for anything that benefits both of us. So if we go to lunch as a family, we pay for it out of the joint account. However, if I buy lunch during the work day it comes out of my allowance. Understanding what each of your accounts can/should be used for allows you to have a greater understanding of your spending.