As some of you know, I’m getting married in September. Wooohooo!
My fiancee, Kelly, is terrific. One of our shared qualities (that makes life easy!) is how closely we align on our personal finances. But everyone gets out of sync occasionally. It happened to us last weekend.
It was an important reminder that finances complicate relationships. And if it can happen to us, maybe it can happen to you. It’s a lesson worth learning.
P.S. this is Kelly here real quick…and I approve this article 🙂
Budgeting Differences
One small area where Kelly and I differ is the granularity of our budgeting. #NerdAlert
As I’ve written here before, I’m a budgeting zealot. I monitor and track every penny I earn and spend.
Kelly is more normal. She funnels spending through her credit card and monitors it occasionally throughout the month. She’s painting in broad strokes, not thinking about every detail.
We don’t mind the difference because we keep our finances (mostly) separate. To each their own.
Enter Problem #1
But our separation of finances changed this month thanks to an untimely identity thief.
No – I didn’t just spend one penny at EZTRUCKX. I’m walking my dog. DAMN YOU, IDENTITY THIEF!!!
So I’m waiting 7-10 days for my new credit card to arrive. In the interim, I’m using my “backup” card, which is on Kelly’s credit card account. The money I’m spending right now shows up on her statements. And really, it’s her money (that I’ll owe her back).
Enter Problem #2
And then we took an awesome weekend trip to Pittsburgh to hang out with some friends. We did tons of fun stuff as a group—and that usually means we rotate who picks up the tab. And then we settled up who owes whom after the fact. Perfectly normal stuff.
But it adds another wrinkle to Kelly and my shared finances. The weekend in Pittsburgh was hard to budget and reconcile. “We spent $30 at the corner store. Was this a solitary expense, a couple’s expense, or a group expense?” That kind of thing.
This uncertainty isn’t the end of the world for us. But we like to feel like we’re rowing in the same direction.
The Result
As my boss, Chris, says, “…it’s all about setting expectations.”
Kelly’s credit card bill ended up $100’s over her expectations without a clear explanation. Who spent what? How much of this is Jesse’s spending? Or group spending?
So we went through her statement line by line. I owed her for A, B, C, etc. Then I went through the Pittsburgh weekend to reconcile what I owed her (and what I owed my friends).
With that precise data and detail, the bottom line of Kelly’s credit card statement made sense. Everything was accounted for. Expectations now met reality. But for a few minutes, our relationship fell prey to that haunting demon of financial disagreement.
But the Stranger Things fans get it 🙂
And yes, it was frustrating! We didn’t argue or yell. But we did need to communicate and meet in the middle. Kelly felt I was being blasé with her credit card. I thought things were fine, but I didn’t have my usual level of detail to know for certain.
Here are some lessons we learned from the experience, and a few more generic tips:
- Setting expectations is important. When you share finances, be clear what the expectations are.
- Hard data solves problems, especially in personal finance. Run the numbers. “In God we trust. All others, bring data.”
- Flexibility is key. Kelly was flexible with me, letting me use a credit card on her account. I was flexible with her, going the extra mile to ensure we (eventually) got our financial ducks in a row. Flexibility helps!
- Keep purchases out in the open. Sunlight, as they say, is the best disinfectant.
- Talk, talk, talk. Lack of clear communication is almost always a culprit in financial fights.
- If you share accounts, you’ve really got to share. You can’t combine your water into one bucket and later reconcile whose drops are whose. Shared accounts aren’t quite as entropic, but they’re similar.
May your relationships flourish, and may your financial disagreements be short and civil!
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-Jesse
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P.P.P.S. Thanks Kelly! Love you!
Yeah, we do it more simply in that we don’t separate expenses at all. It’s worked for the first 44 years of our marriage but time will tell. I think there are lots of ways to do money that work as long as you communicate and agree with the plan.
Great lessons learned. I don’t remember now all the specifics of when my wife and I combined our finances, but I do remember that she was tracking everything to the penny in Quicken where I most certainly was not. It took some adjusting, but eventually I came to see the value in that data, and now I’m the one who most often will take a look at how much we’re spending on groceries year over year, or some such comparison. Setting expectations and being flexible are really important.
Thanks a bunch, Gary.
I’m learning about the adjustment phase myself 🙂
I think Kelly and I are both meeting each other in the middle. It feels good to do so!
My wife and I have a joint account and joint credit cards where all our join expenses get paid out from. Both my wife and I make have similar income so it makes it easy to balance expenses and we take turns transferring money to the joint account. She transfers money into the joint account on even months and I do odd months. You are right communication is key and any non-standard expenses are discussed and for large purchases we transfer 50% each into the joint account. I am lucky that both my wife and I are savers. They do say that money problems can lead to an unhappy marriage so it should be something communicated even before the wedding.
I like this strategy! Thanks for sharing it, Tech.