Setting up a multi-person budget

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TonyK
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Setting up a multi-person budget

Postby TonyK » Wed Nov 21, 2012 7:45 am

I am trying to set up a budget for my wife and I. We have one account - all our income goes to the same place. When looking at items that have some sort of individual spending (eating out, clothing, etc.), how detailed should we be in tracking who spends what in each category? Or should we just track categories only?

Thanks for any advice

Tightwad
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Re: Setting up a multi-person budget

Postby Tightwad » Wed Nov 21, 2012 8:00 am

TonyK wrote:I am trying to set up a budget for my wife and I. We have one account - all our income goes to the same place. When looking at items that have some sort of individual spending (eating out, clothing, etc.), how detailed should we be in tracking who spends what in each category? Or should we just track categories only?

Thanks for any advice

Since you are throwing all of your money into the same pile, I'd be as detailed as possible as to who spends what. Inevitably there will come a time when you want to spend a little extra on something for yourself & there's no money to be had since wifey ran into a great sale on shoes at the mall. At least that's how it goes at my house. It tends to create resentment so that's why we have separate accounts.

Good luck.

DoingHomework
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Re: Setting up a multi-person budget

Postby DoingHomework » Wed Nov 21, 2012 9:10 am

I think you have to decide for yourselves. While I agree with what Tightwad says about the potential for resentment I can also hear your wife whispering to a friend in a few years "He tracks every dime I spend..." sand that can also create resentment. You just need to communicate with each other and agree on what makes sense for both of you.

My wife and I have separate accounts that our income goes into. We pay most things on a credit card and then reconcile who owes what each month. Most household things we split but some expenses belong to one or the other of us. Every expenditure on the credit card is marked in one of three categories - his, hers, or split. Our budget though is broken down into a whole different set of categories. I tally up his+split/2 and hers+split/2 every month, make an appropriate transfer from one account to the other and from checking to credit card and that's it.

I could see people criticizing the whole idea of separating things but it works best for us. Any other way for us would likely create problems since we both have a lot of business and other expenses that get reimbursed so splitting everything could get strange and complicated. For us, we would probably each fiercely resent having to live off the other person so our approach keeps each of us accountable for not overspending our own means.

But really, do whatever you both agree on.

TonyK
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Re: Setting up a multi-person budget

Postby TonyK » Wed Nov 21, 2012 10:19 am

The problem is, we can't seem to agree. I think tracking who spends what is ideal and only makes sense. She takes offense at it for some reason, partly because I know she knows she spends way more than I do and she doesn't want to be accountable. She does the same thing in other areas - for instance, saying we need to put our work bags up in the bedroom rather than leaving them around in the living room, yet she consistently leaves her bag around.

DoingHomework
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Re: Setting up a multi-person budget

Postby DoingHomework » Wed Nov 21, 2012 10:51 am

TonyK wrote:The problem is, we can't seem to agree. I think tracking who spends what is ideal and only makes sense. She takes offense at it for some reason, partly because I know she knows she spends way more than I do and she doesn't want to be accountable. She does the same thing in other areas - for instance, saying we need to put our work bags up in the bedroom rather than leaving them around in the living room, yet she consistently leaves her bag around.


Exactly. Being married means solving problems together and compromising. It does not matter who is right. You both need to reach agreement on how to manage your dollars and your bags.

brad
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Re: Setting up a multi-person budget

Postby brad » Wed Nov 21, 2012 10:56 am

We keep our finances entirely separate, which avoids a lot of issues. But it works for us mainly because there's a large financial disparity between us: I earn about three times what she does. So I pay for the big-ticket items like the mortgage, car, groceries, etc., and she covers smaller things like phone bill, electric bill, and property taxes. Splitting costs evenly makes no sense for us (although we each cover our own costs when it comes to travel and vacation). We take responsibility for what we can afford, and we're free to do whatever we like with the rest.

In previous relationships I've had joint accounts and managed our finances as one big pool, and it always led to tensions and resentment. I like it a lot better this way and it has worked very smoothly for us. Even though I've contributed 98% of the money for our house, we still own it 50/50, and I'm fine with that; I went into this with my eyes open and we both have a sense of equality in ownership regardless of the individual financial contribution. Not everyone would be comfortable with that, but we are.

Tightwad
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Re: Setting up a multi-person budget

Postby Tightwad » Wed Nov 21, 2012 11:03 am

DoingHomework wrote:I think you have to decide for yourselves. While I agree with what Tightwad says about the potential for resentment I can also hear your wife whispering to a friend in a few years "He tracks every dime I spend..." sand that can also create resentment. You just need to communicate with each other and agree on what makes sense for both of you.

That's true also. It works both ways.

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Re: Setting up a multi-person budget

Postby sandrark » Tue Nov 27, 2012 12:32 am

Your situation is exactly why we have "his, hers, and ours" accounts.

We know what the household bills are, so we both contribute 50% of that cost each month to the joint account.

For our individual expenses (haircuts, gas for our cars, spending money for work lunches, etc.) we pay for it out of our own account.

It becomes self-limiting: if I don't have the money, I don't spend it.

Neither of us are credit spenders though - I could see this plan being a problem if your wife's answer to "living within her means" becomes "charge it."


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