I’ll go into more detail in later posts about how and why exactly my husband and I plan to keep parts of our finances separate, including how we’re handling the condo. For now, let’s look at what our joint spending plan looks like for 2017. We spent about an hour one weekend in mid-December looking at the categories we counted as shared expenses in 2016 and estimating what we would spending 2017 on those categories.
Note that this plan does not cover our personal spending – that is separately tracked for both of us. We’re following a his/hers/ours formula to our assets and spending, based on what we drew out in our postnuptial agreement. My husband plans to follow his non-budgeting formula which works out great for him and I plan to use Cait Flanders’ Mindful Budgeting Planner to track my personal spending in 2017.
- $9,559.88 HOA monthly and special assessments (known amounts), property taxes (I estimated based on the assessed value of the condo and the 2016 tax amount)
- $2,230 Maintenance – this is the average amount I’ve spent annually since buying the condo. If it doesn’t all get spent, it’ll roll forward as float to cover future maintenance or condo assessments. My husband tried to say that we don’t need to budget for condo maintenance each year because everything this year was a one-off expense. I showed him my data for 2012-2016 that showed that 2016 was exactly in line with average and he agreed to put this in.
- $925.91 Electricity – This is the 2016 spending plus the expected per kWh increase for 2017. Our usage has stayed relatively flat or decreasing over the years and the utility company keeps increasing the cost per kWh each year… I’m not really sure how to budget for heating since I’m home more than I used to be and the heaters are on more instead of being off all day, so I guess we’ll see how this goes!
- $17.88 VoIP line
- $2,750 House cleaning – $110 biweekly, assuming 25 visits
- $809.40 Internet
An astute reader might notice that there is no mortgage payment listed here, which costs about $12,000/year. Did we pay off the mortgage or is it a separate expense? And whose separate expense is it? I’ll answer those questions in a future post.
We generally toss household toiletries like paper towels and toothpaste into here for simplicity.
- $450/month Groceries – our average spending in 2016
- $255/month Restaurants – one nice dinner out and 3 takeouts
- $520/year Costco – we make one trip quarterly
That glorious marriage tax penalty will hit us for the 2016 tax year. We won’t know exactly how much it’ll be until I’ve collected all of our tax forms and can do our taxes in our beloved TurboTax. I have an estimate though that it will be somewhere between our travel budget for the year ($5,000) and our food budget for the year ($8,980). On the other hand, with our income projections for 2017, I expect getting married to save us a larger sum than our penalty in 2016 and that will be a joint bonus. Thanks to my husband’s income increasing by 33% over his 2015 income, we don’t expect to get hit with any underpayment penalties.
This covers (for both of us) one trip for a friend’s milestone birthday, a Christmas trip, a relative’s milestone birthday trip, and one weekend getaway. Some of this might get paid for with credit card points, but we still count it as spending and then the credit card points as income, resulting in $0 coming out of our checking account.
- $1,000 theatre tickets and such
- $10.95/month Adobe Lightroom
- $10.95/month Netflix
- $16.41/month Spotify Family, shared with two other family members
- $4.37/month Pandora
- $25/month: there’s usually reason to take a few Ubers a month
- $30/month: one gas tank fill-up per month
- $500: the January car insurance payment will be my separate expense. We plan on paying for it as a family expense in July, though that’s still uncertain at this moment. This is related to the fact that it’s my car and I’m the primary driver of it.
- $210: annual car registration
- $200: car maintenance is usually pretty low
We’ll donate out of our Donor Advised Fund balance throughout 2017. We also estimated four wedding presents for a total of $880. We’re still sorting out what we’re doing about combining Christmas present spending as one of us likes to be far more generous than the other person.
We’re throwing a wedding reception in 2017 at a local restaurant for our friends and family who couldn’t make it to the wedding. Our estimate at the moment is that this will cost somewhere around $10,000-$15,000. It’s really hard to know how much it’ll cost until we know how many people are coming since the largest cost is the reception venue and that is based on consumption, which depends on how many people come. We are really excited to share this joy with our friends and family! We’ve received some wedding gifts already, totaling about $8,500 so far, which will cover most of this cost, which is why I’m not expecting this to be a huge part of our budget in 2017. Any costs of this which can’t be covered with cash wedding gifts will be taken out of our separate accounts in a 50/50 ratio.
Since we decided to round up the amount we deposit per month to the nearest thousand dollars, I added that extra amount as a Miscellaneous category to cover stuff we haven’t thought of, like when we decide we need a new alarm clock or a new kitchen tool.
This plan adds up to $34,235.23 total for 2017 or an average of $2,942.30 per month. We rounded that up to $3,000 and will each deposit $1,500 per month to the joint checking account to cover these costs.
Currently, we are using two credit cards to pay for joint expenses:
- American Express Blue Cash Preferred ($95 annual fee, though we only paid $75 at our most recent renewal) for 6% cashback on groceries, 3% cashback on gas stations, and 1% cashback elsewhere. This one is in my husband’s name. This will earn us $239.80 per year in cash back rewards versus $169.20 with the no annual fee version of the card.
- Chase Sapphire Reserve ($450 annual fee with a 100,000 point bonus) with 3 points per dollar spent on travel and restaurants and 1 point per dollar spent elsewhere, with the ability to redeem the points at 1.5x on travel with Chase’s portal. This is our primary everything else card at the moment and has a pretty high limit. It has a $75 additional annual fee per authorized user though so this card is just in my name. With the wedding reception counting as a Restaurant in Visa’s books, this card should earn us about $630.08 in rewards in 2017 while keeping things simple.
We will keep a one month buffer in the joint checking account, so the two credit cards are on auto pay and I don’t have to make sure to pay them each month, which is a welcome change from the last few months during the transition.
If we have any future large expenses that come up during the year that our joint accounts can’t cover (like the living room remodel in 2016), then we’ll come up with a budget for the expense and transfer that amount from our separate accounts into a joint account. For example, when we found out the designer’s cost (~$3,000), we each put half of it in a joint account. We didn’t do that with the living room furniture parts since it was going to be spread out over a longer period of time, but had we been married when we decided to take on the expenditure, we would have each put half of the $12,000 budget into a joint account once we had the budget in hand.