L.P. asks from Uniontown, PA on June 07, 2010
How Do You Budget and Divide Household Expenses?
My fiance and I both work, and thus have our own incomes and back accounts, and we live together and share household expenses. But I am struggling with how to budget for our household and make sure that each of us is equally or at least nearly equally contributing to the household. Naturally, he has his bills and expenses. He has a side business on top of his full time job, so he has expenses related to that, as well as some other bills. I have student loans, and expenses related to my son, that I don't expect him to pay (i.e. activities, soccer, etc.), as well as a couple of my own payments. I am struggling with how to coordinate our finances. First and foremost, we need to spend FAR LESS. But until we get a handle on what we each owe, and what we each have, I am just at a loss. Obviously, we need to get a grip on our individual expenses. Then perhaps things that should be considered household expenses? Then what?
We desperately need to get a budget going in our household. I recently bought Dave Ramsey's Total Money Makeover, and will be reading it immediately, but I need some tried and true methods from the wealth of knowledge you moms hold. (I know about the $1000 buffer, the snowball way of paying down debt, and then saving until you have 6-8 months of income in savings.) But I will read to get more direction as to how to implement these things in our lives.
Right now, though, we have a couple big problems.
We spend with no tracking of our expenses or our purchases, whatsoever. GASP. HORRIBLE, I know. But I tried tracking every little thing I bought several times before, but it's just too hard to do!
We eat out WAY TOO MUCH. Money drain. I know. (But I don't know how to cook ANYTHING and I HATE COOKING! UGH!)
I buy too many unnecessary items. Bad, bad, bad girl. I know.
I have considered taking my debit card away from myself, and keeping cash on hand, but I am so spoiled. I hate the idea of having to go to the bank to get money out. And unless I go during regular bank hours, I'll have to have my debit card with me to get the money out, thus defeating the purpose! I need help here.
We need to get ahead of ourselves, and right now, we are barely treading water. And I see NO REASON we should not be able to live on what we make, and have some left over. We are just doing everything wrong and we need a starting point to get on track, and a plan to stay there. We are thinking about having a wedding and need to save money for it. But with the way we are doing things now, we have nothing left to save (I do put money straight out of my pay into a couple savings accounts, but nothing specifically for a wedding, or vacation, etc.)
Sorry if this came across as whiny... I know it was, I feel whiny just typing this... Looking for some ideas...
B.C. answers from Los Angeles on June 07, 2010
My wife and I have spent and saved together since we were married. Marriage was the committment. My wife's check is not her check. Its our check. My check is not my check. Its our check. My wife and I each have money we can spend for things, just because we want to. I use mine to buy vacations for us and presents for her and tools and other "man stuff". She uses her money to buy what she wants and I do my very best not to question her on the why's.
Buy a budget book. Write down everything you spend during a month. You'll be amazed at how much you spend on various things. At the end of the first month you and your finance should compare spending. If you are ready for the marriage comittment, then you will know it.
Cooking is not that hard. Can you follow simple instructions? If you can, you can cook. There are many 5 ingredient recipe books. When you eat out you are hiring a chef, a butler, a dishwasher and renting a dining room. Its expensive. You learned how to drive. You learned how to apply makeup. You learned how to do your job. If you went to college and passed any core class, or did any of those other things, you have enough smarts to learn to cook. What do you like to eat? Where do you go out to eat? Buy a cook book and follow the instructions. If you want others recipes that they like to cook go to an estate sale. Look through the cook books. When you find a recipe that is dirty and smudged, that's one the family liked. Buy the cook book, tear out the "dirty recipe", and throw the rest of the cook book away.
As far as savings go, pay your self first. My wife an I saved 10% per month, and that's with feeding an clothing 8 kids. After that, we spent the money that's left. We go out to eat once per week at the most. She and I cook well enough that we are kind of picky where we eat. If the chef at the restaurant can't cook better that I do I'd rather stay home and cook myself.
Good luck to you and yours.
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E.R. answers from Chicago on June 07, 2010
Ok, I was married once to a man who lied and DESTROYED my finances. We ended up getting divorced and I became careful to the point of paranoia, lol, for years while rebuilding my finances and getting things together for myself and my son.
Now I am married again to a wonderful, responsible man and I can't tell you what a relief it is! Money is tight, but we had a beautiful wedding for about 60 guests at a lovely bed and breakfast and the entire thing with food, dress, tuxes, cake, etc. cost about $3,000 total. We honeymooned at a small house in the woods that my family owns- not very glamorous, but romantic and private and that was what mattered!
So you CAN have a lovely wedding on any budget- just focus on what really matters- first, the two of you and your officiant or minister, etc. (that's really ALL you need, after all) and then ask- what else means the most to you? Pictures? Food? Little favors? What can you live without? You can do it!
It's great that you want to get a handle on your finances. My husband and I both make roughly the same monthly amount. We each keep a separate checking account and also have one joint account that all the household expenses are paid from.
I use my separate account for my son's child support payments to be deposited into and purchases like my son's camp fees, etc. Also for myself, personal things like a pedicure or a little splurge like that. My husband uses his for when he makes some extra money doing freelance work on the side (he's a graphic designer) and spends it at his own discretion.
Both our paychecks get direct deposited into the main checking account. Having done this a few different ways now, I believe that when you are married, the bulk of your finances DO become one- but BOTH parties absolutely need to stay in the loop and be involved in managing them.
Twice a month (usually Friday of payday) we pay the mortgage and bills and go through expenses. We pay all our bills online with the exception of the occasional check for my son's school or something random like that.
Because I am the more proactive about this due to my previous negative experience, I usually sit at the computer and input everything. But my husband is either with me when I do it, or we go over everything later in the day. Then based on our rough budget, I know how much money we have left for the next two weeks after the bills are paid.
That money is divided up between our grocery budget, gas budget and any other projects we have going on, with a little left over to go out to dinner or a movie. Saving is built into the budget just like any other monthly expense- another 'bill' to pay.
I honestly don't think you need to buy any expensive budgeting 'system'. There are several free forms online where you can write down what you THINK your monthly spending is or should be for these categories. Then you TRACK your spending for a couple of months so you know what you are REALLY spending on groceries, electric bill, etc. and adjust your budget to reflect what you really spend.
As long as you and your fiance work on this together, and stick to it, you will be fine. Figure out a system that makes the most sense for you, and start allocating what you can save for your wedding. It isn't hard once you get into the habit! Good luck and congratulations to you!!
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A.S. answers from Boca Raton on June 07, 2010
The thing that jumped out from your post, for me, was EATING OUT. That is THE fastest way to rack up expenses, at least in my experience.
Rather than tracking every expense, just track your food. I.e., everything you eat, whether it is from a grocery store or restaurant. We track ours from Monday to Monday. You will probably be amazed at how consistent that figure is from week to week (humans are creatures of habit).
The next step is to start driving down that number (change your habit). Make it a game. The reason we do ours Monday-Monday is because we are most tempted to eat out on the weekend. When we see that our numbers are already "up" by Friday, we know we have to mostly eat at home for the weekend or else we will blow our number.
I can't believe there is one woman alive who dislikes cooking more than me. BUT, I homeschool and cook almost every single meal. If I can do it anyone can. I have to because I have a child with 40+ food allergies. The funny thing about it is our ENTIRE family is much healthier (so we owe this kid a debt of gratitude!). Not to mention - we save ALOT of money not eating out! We used to do it all the time.
Good luck to you and really try to watch that food number for a few weeks (without doing anything differently). Hope this helps.
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A.T. answers from Oklahoma City on June 07, 2010
As for budgeting and equal shares you asked about, my hubs and I only did the separate account business for a short time after we were married. It was just easier for us to have 1 checking account and 1 savings account, instead of his, mine and ours. I don't necessarily believe in the 'everything has to be equal idea' but to each his own! When we did do separate accounts here's what worked for us. We had a joint account for utilities, mortgage/rent, food, cable, anything "household". We would put a set amount into the joint account each month or payday. Say our total "household" business was approx $2500/per month. We would each deposit $1250/month into the joint account to pay those items and that account was used for that purpose only! We also had an emergency fund/vacation fund (savings) that we would each contribute to each month as well. Our jobs both had direct deposit. His allowed up to 3 diff deposits of specified amounts, so he could do his account, our household and our savings. Mine only had 2 direct deposits options avail, so I would do our household and my account. Then I had to transfer money to our savings.
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E.C. answers from Fayetteville on June 07, 2010
I work at a bank so i know first hand you must keep a register of all your deposits and debits its the only way you will be balance and know what you have in your account!!!!! I stress this all day long at my job get a check register and keep up with it....Me and my fiance both had seperate accounts also but its much easier to keep track of one account so i got us one joint account. He will be your husband soon so his money is yours and your money is his....I also have begun to hate cooking but i still cook try going to campbells.com it has fast easy and yummy dinners! Money is a tough thing good luck!
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