How a Couple Merging Finances Does Money, Two Years Later

Photo credit: Ron Cogswell, CC BY 2.0.

Jennifer is a 31-year-old data professional in Washington, DC. We previously interviewed Jennifer about her finances in 2015.

So, Jennifer, how has your financial situation changed since our last interview?

In a few ways; first, my partner and I got married and we have gradually merged our finances more and more. Second, our incomes have increased somewhat, and I’m actually started a new role end of September that will be a significant bump up in pay.

Congratulations!

Thank you! It will be interesting because I’m moving from non-profit to private sector (though in their philanthropy side) for the first time in my work-life.

Oh wow, that explains the significant pay bump. What are you going to do with the money?

Hopefully, mostly just save it and invest. (Aside from retirement accounts, I’m bad about actually moving into investing.)

Before this new role I was making $98K and my partner makes $85K, so we already make more than enough.

D.C. is not a cheap city to live in, and I’m sure some people who make as much as you and your partner might say they aren’t earning enough. What are your major expenses?

My husband has a pretty significant student loan (about $70K left on it, I believe); when we first merged finances we kept that separate, but now we consider it a shared expense. We spend way too much on food (our closest store is Whole Foods and we both have busy schedules/aren’t great at meal planning).

We’re still in a strange apartment that is now charging us about $925 a month to live about 12 minutes from the White House with two bedrooms; it still doesn’t make any sense. I know that helps our bottom line significantly, though. Other apartments in our neighborhood are in the $2000–$2500 range.

I love that you’re still staying in that apartment! It seems like housing is often the first and biggest expense, so being able to cut back there makes a much bigger difference than, say, going to a grocery store that isn’t Whole Foods.

How much do you actually spend on food per month, if you don’t mind sharing?

So, we budget about $750 for food, which includes going out; it seems like so much, but I know a lot is the convenience factor for us.

There are two of you, so that’s $375 per person, which is honestly about what I spend on groceries and restaurants per month. (I’m including household stuff like toilet paper in my grocery bill.) It doesn’t seem like that much to me!

That’s good to hear! I guess it’s one area where I don’t see economies of scale with us living together; I think my spending went up in this area when we moved in, but admittedly I care less about food than he does and now I eat more well-rounded meals.

Are you still keeping budgeting spreadsheets like the ones you described two years ago? How have those evolved as you’ve continued to merge your finances?

We are; we’re definitely a Google Docs/Google Sheets couple (anything in our life that requires any organization or tracking will be in Google Drive). Basically every quarter or so we review our budget to actuals and adjust. We are lucky that we have enough buffer that we don’t have to be so exact that we check weekly or monthly.

In terms of how it has evolved, the main changes have been a sort of shift from seeing joint expenses the exception to more of the norm. when we first moved in, we considered food, rent, and utilities joint. Now it’s really anything that isn’t an individual fun purchase, so more of our incomes goes into the joint fund each month.

It’s like the inverse of the Fun Budget! You keep some money separate for personal fun and pool the rest. How much do you put in that Fun Money/Mad Money pile?

It fluctuates a bit but is usually in the $450 range in terms of what I put in my own savings, and then I give myself about $15 per work day for anything that comes up (lunch out or what have you).

We still contribute to the joint account proportional to our income, and I think we’ll probably stick with that indefinitely.

It seems fair.

So how have your financial goals changed in the past two years? Have you achieved any? Started any new ones? Let any go?

Let’s see. Growing our incomes wasn’t an explicit goal at the time, but in some ways I’d say that’s been our main achievement. We have done a good job of keeping up with all of our savings goals (and I hope to step that up, like I mentioned above, once I’m making more). In some ways our savings goals have become more flexible. I think I initially viewed our main account that has about $50K in it now as a down payment account, and now I view it as a cash cushion to help us with whatever we need; maybe a down payment, maybe something else.

One thing that I have found is that I’m pretty good about setting up systems and following rules, but with money I actually struggle with goals.

In terms of that down payment account, I’m guessing you want to stay in that apartment for as long as it is physically available to you? 😉

Yes! I actually started that account when I first moved in, because I knew I should never get to used to paying so much under market. So I save the difference between the apartment cost and market. That way my budget can always absorb something happening, housing-wise.

My husband works in public service and is doing the public service loan forgiveness program (he also recently hit the halfway mark), but we’re both always worried about something going wrong there, so it would be great to be in a place where we could just pay it off if we ever need to. Switching jobs has made me appreciate liquidity and the freedom that comes with knowing you could be between incomes for a bit.

So maybe it will be a down payment, but we shall see.

You were also saying that you struggle with goals—what does that mean? That you can’t decide what they should be, or that you can’t stick to them, or…?

I guess more deciding what they should be. We don’t have a target goal for how much we want in that savings account, for example. Or, I know I should save for retirement, so I put in enough to max the match in my employer-sponsored account, max a Roth (though I think we won’t be eligible for those soon), and then do a bit more in the employer one so that I’m saving around 18 percent, but I don’t have a target amount. The loan is in some ways the most annoying thing, but if public service forgiveness works, rushing to pay it off wouldn’t be wise (reading that book you recommended on debt has helped me feel more comfortable with that).

I love The Value of Debt so much. Glad it was helpful for you as well! And I agree that not rushing to pay off the loan makes sense, cross your fingers.

Fortunately it’s the only debt we do have, so that does help.

When we did our first interview I asked you how you felt about the prospect of merging finances and you spoke about wanting to feel like you and your partner were a unit. How do you feel about your merged finances now?

One thing that I’ve really come to see in merging our money lives is how much I used to think that financial choices were either just the way to do something or else were purely about logic; working this out with a partner has made me much more aware of the meaning I place behind the choices, and how in doing money we’re really communicating a lot to each other.

Feeling like we’re a unit is still important to me, and we’ve definitely become more of a unit financially.

Being intentional, proactive, and thoughtful about how we approach money together is important to me because it feels like one way we’re investing in this vision of a shared future together.

I love all of this. And I totally agree: what we think is logic is often based on choices. Or… past choices we’ve made. Preferences and history.

Yes, and the way we’ve seen other people do money and that sort of thing. My parents merged completely and mostly relied on my father’s income after my mother put him through grad school; it’s worked out fine for them, but on the flip side I’ve done a lot of work in intimate partner violence, so I’ve also seen the importance of having your own safety account no matter what.

For sure.

I want to ask if you consider your Fun Money account your Safety Account as well, but we can skip that question if it’s too personal.

I do; so, my set-up is that I have my own bank account where my paycheck comes in, and I have a savings account there that is my own. I Venmo him for joint expenses which come out of a joint account we’re both on but that is with his main personal bank so it’s easier for him to move money into.

I automatically move $200 per paycheck into my savings, which is basically a catch-all for things like his birthday presents, my own travels, and then money in my own name.

Do you feel like you have to deny yourself fun stuff to save more, or do you feel like your $200/paycheck is more than enough for your personal needs and savings?

The $200 is basically a baseline, and then I’ll move more if I have more after getting through a pay period. Usually I do, and most of my fun expenses actually come from my checking account. Once I have money saved I sort of hate to see that amount go down so I try to not touch it.

Our joint budget actually has lots of treats built in, like our main hobby expense is shared and comes from that, going out comes from that, etc.

Oh nice!

It’s super helpful that we share the same expensive hobby, we both like puzzle games, we both like wine, and he’ll have ice cream whenever I want it even though I’m way more into ice cream than he is. So that’s one way our joint expenses grew, by merging those fun things more.

It sounds like you have a really great partnership. ❤

Yes, I’m very lucky.

So glad to hear it.

Last question, then: what advice do you have for Billfold readers?

I remember struggling with this question last time, having a great thought too late to share, and now of course I don’t remember it. In terms of doing finances with a partner, I’d say to explore different models out there and how they work (there are way more than I was aware of when we were first merging finances) and find what works for you both, and also be thoughtful about the meaning behind what you want and need since being able to make that explicit is so helpful. Being able to say it’s important to me that we do this aspect of money in this way because it makes me feel safe goes a long way, rather than just insisting on it.

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