It makes sense. Different people have different approaches with money. For example, one parent in my family is a saver; the other picks up plastic, blow-up football figures for the lawn just because.
Matt and I happen to both be savers. But we still had to come up with a plan for our joint, financial approach. We had to sit down and talk through how we would merge finances in the most agreeable, amenable way.
In the end, we came up with a system that seems very complicated on the surface. It involves a lot of accounts and a lot of banks, but, if you remember that everything happens electronically and automatically, you'll begin to see it's actually pretty simple.
Our goals are to maximize our savings (for things like vacation, home improvements, cars, and retirement). We also want to avoid having to ask permission from each other to purchase things (while also avoiding unfair spending by one of us).
That's why this system emerged (see photo above):
- Account #1: This account is home base. All of our paychecks are electronically deposited into this central account at ING Direct. From this account, we have set up several automatic transfers to happen monthly.
- Money is transferred into another ING account. This account is used to pay for joint things like groceries, dinners out, entertainment, Netflix, yoga classes, etc. We don't pay for this directly out of home base because we put a cap on how much we can spend monthly. If we just took out of our central pot of money, we would be much less conscientious and frugal (i.e., you spend what you have).
- Money goes into my Bank of America account for my personal allowance. I can spend this money on whatever I want. New books, clothes, craft classes, etc.
- Money goes into Matt's Wells Fargo account for his personal allowance. We do not have to ask for any sort of permission to spend our own allowances. Despite the fact that we have different incomes, we both receive an equal allowance.
- Money is automatically transferred to our home improvement fund. When we have enough money saved up, for example, we can fix our fence.
- Money is automatically transferred to our vacation fund. Right now, we're saving for a trip to Florida, Christmas vacation, and our honeymoon (oh, there's also Thanksgiving--oi vey!).
- Money is automatically transferred to our car fund. Both of our cars are currently paid off, so now we're trying to save money for our next cars. We want to be able to pay in cash, so we can avoid paying unnecessary money for interest.
- Retirement money is set aside in a Roth IRA through Vanguard and Matt's 401k (we only put in as much money as his company will match; the rest goes to the Roth).
- What are our financial goals together?
- What will help us achieve those goals?
- What are potential areas for disagreement related to our finances?
- How should we prevent those potential disagreements?