Or is that actually an example of personality differences? Just because your spouse doesn’t want to spend endless hours going over spreadsheets, charts, and forecasting, doesn’t mean that they are disinterested in the finances. Or at least that’s the case in our household, where we both had money management systems in place when we got married. I could also imagine that one spouse being intimidated by the other spouse’s financial knowledge could resemble “disinterest”, but I don’t want to speak to that since that wasn’t our situation.
As I said in a previous post: one of the lessons I’ve learned so far about married finances is that the tools and systems that worked for each of you single are not necessarily the same tools and systems you should use when you are working together as a couple. It’s important to take into account both spouses’ preferences when you’re figuring things out.
My husband’s system when he was single was pretty simple. He had Mint connected to all of his accounts and looked in on it every few months. He maxed out his 401(k) throughout the year and had a portion of his paycheck direct deposited to Vanguard directly. He contributed the full (Backdoor) Roth IRA contribution at some point in the year when he felt his cash position had some room to spare. He carefully researched purchases before selecting items. A month or two after his bonus(es) would hit his checking account, he would rebalance his taxable Vanguard account. He would occasionally check in on things and exclaim about exciting milestones! and round numbers!
Does that sound like someone who doesn’t care about his finances? No, not at all.
My systems, in contrast, were pretty complicated. I started tracking my money before Mint started in spreadsheets, and then in software custom built by myself. I would excitedly download my pay stubs every pay day, as soon as I got the email notification a day or two in advance and update my tax spreadsheet with the exact numbers to the penny. (An ex-boyfriend was worried I lived paycheck to paycheck because I was SO excited about pay day!) When I got a raise, I would re-calculate what % I needed to contribute to my 401(k) to max it out with my last paycheck of the year and I would adjust it. I checked in on my 401(k) transactions every month, to make sure they happened as planned. There were months where I would adjust my 401(k) contribution allocations every month, which was completely overkill. I was never a fan of splitting my direct deposit, preferring to split it myself exactly on pay day so I could allocate the updated balance of my savings accounts to that month. I budgeted down to the penny every month for years, checking in on my spending daily for years until I slowly reduced it to weekly, biweekly, and then mostly monthly. I allocated my bonus(es) within a day of them appearing in my accounts, preferring to allocate manually rather than set up automatic savings or investing other than my 401(k).
My level of caring about my finances constitutes a hobby. I like to compare it to exercising. How much time do you need to spend exercising to be reasonably healthy? Anything past that becomes a hobby. If you average 20,000 steps a day and go to the gym daily, exercising is more in line with being a hobby for you than being strictly necessary to be reasonably healthy.
Compromise in any relationship is important! No spouse should dominate the decisions and both spouses preferences and dispositions are important. I was always slightly jealous of unmarried couples who split expenses by both partners regularly updating a spreadsheet! That is not us. I am the spreadsheeter and my husband is not.
Our first attempts at tracking our spending together resulted in me doing my exact single systems for our joint spending and for my own personal spending, which turned out to be a lot of work. I was spending far more time than ever doing the manual work of entering receipts weekly (one hour) and reconciling and pulling into a spreadsheet once a month (at least an hour). It turns out that two people can make a large number of transactions – not a day goes by without us making at least one transaction. We’ve averaged 160 transactions per month (which counts a transfer as two transactions) through April of this year in YNAB, which works out to 40 transactions a week – no wonder it was taking me an hour just to enter them! That was a huge time commitment for very little value. YNAB is far more helpful at accomplishing the parts I do value with less time commitment than our previous system was.
My husband’s employer switched from paying him monthly to biweekly recently, which caused me to suggest that we allocate new money more often in YNAB. My husband said that our current system of allocating new money on the morning of the 1st of every month seems to be working, so we should keep with that. Since we can fund the whole month on the 1st, that seems like a reasonable compromise to me (more frequent fidgeting is fun, but not strictly necessary), though it certainly is difficult to watch the “To Be Budgeted” stay really full for a couple weeks now since all of the May income actually came in around mid-month. I am patiently waiting until the 1st because I would rather allocate the money together than do it by myself now without my husband’s buy-in. In my parents’ relationship, for example, one of them does all the budgeting with no buy-in from the other spouse, which results in the other spouse just spending freely and “blowing the budget” every month, to the frustration of the budgeting spouse. That’s not how we want our relationship to work.
For us, the best money system is one that both spouses contribute to, not just one spouse.
I still have fun with spreadsheets! I occasionally do budget forecasting, but I never save it unless we were doing the budgeting together. I update the net worth spreadsheet on the 1st of the month, rather than throughout the month like I used to. This means a lot less time spent on spreadsheets and a lot more time spent reading books and exercising. Every month, I show my husband the month’s updated spreadsheets and charts and ask him what his favorite of the charts is. In February, the chart he thought the coolest was the one that showed we had lost tens of thousands of dollars of our investments in the stock market.
I spent the time researching mortgage rates and presented all of the options. We made the final decision on which new mortgage to pick together, but I did all of the research. There are plenty of other times that my husband does more research than I do, e.g. the hours he spent researching which new camera lens to buy recently and the hours he’s spent researching a barbecue that he still hasn’t decided between the final two options after many hours of research over the last six months because he just isn’t sure it’s worth spending $X more for a specific feature. To me, it’s perfectly reasonable for one spouse to do more of the research, but both spouses should be on board with which funds to actually allocate their investments in or which mortgage type to choose in the end.
Readers, how do you compromise with your spouse on your money management systems?