Doing Money Series: Why Michelle and Her Husband Budget Separately

Photo credit: Cindy Shebley, CC BY 2.0.

Hi Billfolders! I’m Michelle, and I volunteered to write a Doing Money series in which you get to follow me for a to-be-determined amount of time and see how a married, thirty-something tax accountant mom does money. I’ve changed our names and have been purposefully vague in some areas to protect our identities. Despite that, I’d like to be as interactive and transparent as possible with all of you — so if you have questions or would like to know anything more specific about how we “do money” for a category, let me know down in  the comments and I’ll address it in future posts.

In my first post, I covered who we are, what we do, my budget (from pre-tax income to take-home pay), and how we currently “do” debt and savings — and your response was overwhelming! I’m so glad so many of you are interested and I’ve already learned so much from interacting with you in the comments. For this post, I want to share how we “do money” as a couple (separately, for the most part) and why it works for us. Also, I’ll be sharing how my actual spending lined up with my budget for August.

How we do money as a couple has been a constantly evolving process, and has had a lot to do with what our individual upbringing and financial pictures looked like when we started our relationship. I could go on for a while about our upbringings and how they impacted our relationships with money emotionally, psychologically, and practically — but for the sake of brevity, I’ll just explain how we budget, how our budgets look different, and why our system works for us.

My husband and I have always budgeted separately. There are two big reasons for this. First, we’re lazy. The amount of time, effort, and coordination it would take to link accounts and move direct deposits and auto-pays is not something we’ve been interested in doing. We’ve been together for seven years and married for four years now, and didn’t even open joint checking and savings accounts until this past spring. Second (and the main reason, honestly), is because we manage our money very differently. My husband has a thousand-foot view of his budget, pays his bills on time, manages to save, and can tell you exactly what he has in his bank account within $50 at any given moment… and it’s all in his head. This gives me hives. I have YNAB, a color-coded, pivot-table-boasting Excel workbook, record every single transaction… but I can only tell you with confidence what my balances are if you let me check my banking apps. For everyone’s sanity, we decided it would be best to maintain our own budgets.

Here are some of the differences in our budgets:

  • My husband owns our home, which he had owned for a few years prior to us meeting, so the mortgage, taxes and utilities are all in his name. I contribute $1,000 a month to a joint account which covers what we deem to be a fair share of the mortgage ($1,300/month), taxes ($10,000/year paid in January and September), and utilities (around $500/month for water, electric, internet ,and cable). He makes his own contribution to cover the rest of the bills and handles the payments.
  • I cover the cost of daycare for our kiddo (and will for child #2 also), plus all incidentals like clothes, toys, diapers, and any other supplies we need. Daycare averages $440 a month currently and will go up to $910 a month after our new addition arrives. This covers two full days per week plus breakfast, lunch, and snacks which is (believe it or not) insanely cheap for the metro NYC area because the daycare is on site at my workplace and my employer heavily subsidizes the cost. I looked into a center affiliated with the same chain closer to our house and it would be exactly double this every month. The other three days a week, my parents and in-laws watch our child (and will watch our future child) — which we are very lucky and grateful for.
  • Husband covers the cost of food and vet visits for our dog.
  • I have $70K in student loans. My husband graduated without any. For purposes of comparison: my husband attended an in-state school from 1999–2002 where tuition, room and board was $10,000/year, and he will never need a master’s degree. I’m seven years younger and I paid approximately $40K for my senior year of college at a Tier II school in 2008–2009, and needed to get a master’s degree to fulfill a credit hour requirement for my CPA license and to advance in my career to management levels (another $40K). Our parents ended up contributing roughly the same amount to our respective college educations (thank you Mom and Dad!) but his parents’ contribution covered his full college costs. Since I went to college when it was more expensive and got a specialized master’s degree, I also took out student loans.
  • I currently lease a car for $280/month, which is for a three-year lease with a 15K mileage allowance per year and routine maintenance included. The lease will be up in March. My husband has a paid-off vehicle that was passed down to him from his parents. The car insurance for both is bundled with our homeowners’ insurance. and my husband includes those payments in his budget. We also got life insurance once we had child #1 (#adulting), and my husband pays the policy premiums semi-annually.
  • My husband covers all meals where he dines out separately or when we dine out as a family or together with friends. I cover our grocery and household spending, as well as my personal dining out expenses. I use YNAB, so I start the month with $900 in groceries but it gets moved around as necessary between dining out, meals at work, and household.

We discuss our money frequently and openly. We don’t get into the nitty-gritty of line-by-line spending. Instead, we talk about what we want our overall goals to be and how we can adjust our budgets to get there. For example, you know from my last post that currently our main goal is to eliminate our credit card debt while simultaneously building up savings so we don’t fall back on the cards in emergencies and incur more debt. All of my extra funds are diverted to debt, while he builds our emergency fund. When I got pregnant, we discussed how we would fund maternity leave (which I’ll discuss next month), and when I get my bonus in the spring we’ll decide, jointly, where we think the money should go.

For us, clear communication and a feeling that we are splitting expenses “fairly” in light of our different financial pictures is what makes this method work. It also helps that we have fairly simple wants and needs at this point in our lives. We don’t want to do major travel with small kids, neither of us wants a luxury car or a vacation home… we’re content to just be able to buy some “non-necessities” for ourselves occasionally, have our kids be well-provided for, and take our one (inexpensive) vacation upstate each year.

I’ll be honest: sometimes it feels like we’re struggling, especially because we’re so focused on putting every spare dollar into savings and getting rid of this debt so more of our money is ours. However, we truly do not want for any of the essentials, and we are so beyond lucky and grateful for that. In reality, we have amazing health insurance, equity in our home, more available credit than I hope we’ll ever need, great life/disability insurance, and we live in an area where if either of us were to lose our jobs, we would most likely be able to find one relatively quickly. Our major financial difference is that my husband acknowledges and has internalized our relative financial security, while I understand it mentally but am always panicking because we have debt and nowhere close to a six-month emergency fund. I grew up on the edge of that catastrophe-will-destroy-us line, and even as stable as we are now, I haven’t been able to overcome that psychologically yet.

Whew. That was a lot. Let’s move on to how I did in August!

August 2018 (Budget/Actual)

Net monthly take-home pay: $4,600 / $4,548

FSA reimbursements: $385 / $385

Other income: $- / $300

Total monthly income: $4,985 / $5,233

“Fixed” monthly expenses

Mortgage/utilities/taxes: $1,000 / $1,000

Daycare: $440 / $404

Student loan payments: $600 / $600

Lease payment: $280 / $280

Wireless bill: $85 / $85

Other misc (Patreon, Netflix, iCloud): $32 / $21

Total “fixed” expenses: $2,437 / $2,390

Financial priorities

Credit card minimum payments: $190 / $190

Extra credit card payments: $ – / $953

Savings (short-term, long-term, kids): $950 / $164

Total financial priorities: $1,140 / $1,307

Variable expenses

Groceries: $900 / $401

Gas: $160 / $131

Tolls: $50 / $ –

Diapers: $50 / $ –

Everything else: $248 / $1,021

Total variable expenses: $1,408 / $1,553

The “everything else” spend was as follows:

Clothing: $159.89 — replacement nursing tops (x6, all at 50% off), replacement laptop bag

Dining out: $120.47 — an embarrassing amount of Starbucks card reloads + three lunches out

Fun stuff: $55.65 — Renaissance Faire tickets ($45) & dog treats

Household: $113.41 — curtains for kiddo #1’s new room ($52), waterproof pillow protector cases ($11), and household sundries like toilet paper, paper towels, etc ($50)

Kid-related: $403.00 — toddler gym class

Meals at work: $14.77

Music & books: $38.68 — I fell down the Nook hole

Nail appointments: $116.00 — the one “luxury” I recently started to allow myself to help cope with the uncomfortable-ness of pregnancy. Gel manicure + pedicure bi-weekly ($58 each time).

For the most part, my income and fixed expenses were what I expected for August. My parents contributed $300 (that’s the “other income”) towards a toddler gym class that I enrolled kiddo #1 in. The class is on a day my parents usually watch him, as they wanted to do more fun out-of-the-house activities with him. This’ll also help me out on maternity leave, since both kids will be at home with me, and sending kiddo #1 to gym class will give me a bit of a break!

My “other misc” line will be adjusted down going forward because we got a one-year break from my Netflix subscription courtesy of my brother. He moved into a new apartment and part of his cable deal allowed for a year of free Netflix, which he applied to our (shared) account. Yay for family! Also, daycare is $101/week currently so I’ve averaged it over the year into $440 per month. The actual may be more or less depending on how many weeks there are in a specific month.

A major accomplishment this month was that I wiped out the $900 balance on a balance transfer card before the 0 percent intro APR expired. I’m realizing now I didn’t account for that card in my first post, since I had paid it off prior to submitting the post to Nicole. I also took advantage of some balance transfer offers that were currently available (at 2 percent transfer fees vs. the typical 3 percent) to move all of my outstanding credit card balances and give me an additional 18 months at 0 percent APR to pay them off. Now, my monthly minimum credit card payments will go down to $160 and the credit card debt picture looks like this:

Card 1: $5,150 at 0 percent APR until 2/2020 ($60 minimum)

Card 2: $ –

Card 3: $10,000 at 0 percent APR until 2/2020 ($100 minimum)

Card 4: $8,000 (husbands, $80 minimum)

It looks like I spent $17 more than I earned this month, but that isn’t really the case. I had a small balance in my checking account at the beginning of the month so in reality I broke even. I dump whatever is left in my checking account at the end of the month (aside from $10), into my savings accounts, and start every new month fresh.

I have to say that knowing that I was going to report back to everyone really kept me in line this month. In July I spent WAY more on non-necessities. I really made an effort this month to grocery shop sales, use all of what I bought, and bring more food to work. I habitually overspend on and waste groceries, so I’m really proud of myself this month because we had almost no waste. I also found myself stopping before making a “discretionary” purchase and asking if I really needed to buy it. For the record, the replacement of the “so ratty they can’t be used” nursing tops took a long, agonizing amount of time while Starbucks always got an immediate yes — I’m a mother of a toddler and I’m only human. I hope I can keep this momentum going into next month. I want to pad savings as much as I can to help cover maternity leave before I start receiving reduced pay.

Michelle is a thirty-something, color coding, tax accountant wife and mom who is just trying to do the best she can with what she has. At capacity for lattes, but always has room for help!

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