You met. You fell in love. You moved in together. You’re married or on the way to the altar. Now all you have to do is reconcile her love for $200 handbags, his lust for $2,000 guitars, and the unpleasant shared reality that you no longer have money to burn (as if you ever did). Budgeting can be a horribly stressful task. It can feel like the end of personal autonomy or like you’ll never order that extra tapas plate again.
Don’t fret; there’s a successful budgeting style to suit every relationship. Let’s look at the approaches taken by two couples. They live in the same town, know the same people, and share a lot of the same tastes and habits. Both have been more or less successful at taming the spending beast. Yet their financial attack plans are totally different.
Brooke & Jeremy
These two use what you might call the minimalist approach to controlling spending. “We have three attached joint bank accounts,” Brooke explains. “One is for bills. One is for spending money. One is for savings. Jeremy’s paycheck is automatically deposited into the bill-paying account. My paycheck goes straight into the spending money account, which also covers groceries and other daily essentials. Then -- theoretically, at least -- we put a certain percentage into savings every month.”
It’s simple, relatively low-tech, and transparent, but the real key is the couple’s reliance on good, old-fashioned cash. They don’t have a debit card -- their bank cards work for ATM withdrawals but not for point-of-purchase spending. That means any time they buy anything, they have to open their wallets and part with cold, hard paper currency. Obviously, they know that a debit dollar and a cash dollar amount to the same thing. Psychologically, both find it tougher to shell out a physical buck.
“If I’m at the bookstore, I could totally see myself just grabbing something and putting $30 on my debit card,” Brooke says. “If I have to part with the cash, I think it over. I don’t know why, but it works.”
Melissa & Jimmy
At the other end of the scale, there’s Jimmy -- a self-confessed “budgeting fiend.” He’s the guy tracking household expenses on Quicken and monitoring the cost of their two kids’ clothes. When they got together, the couple (recognizing a strength for a strength) put him in charge of Ye Olde Exchequer. He came up with the following precepts:
- Consolidate all accounts at one bank. Each still has individual accounts, but now they’re linked, and everything is visible.
- Use online banking and bill paying. “It’s insanely easy, impossibly fast, and totally trackable,” Jimmy says.
- Use Quicken with online functionality. “You never have to balance a checkbook again,” he says of the popular expense-tracking software. This allows the couple to track expenses by category.
- Use debit cards instead of cash. Yes, these two use exactly the opposite approach to Brooke and Jeremy, finding it easier to keep track of spending when there’s a record of each and every swipe.
- “Kill your credit cards.” Since they’re already paying a mortgage, they don’t need to maintain multiple lines of credit to boost their credit scores. They’re down to one hunk of plastic, which they rarely use.
With those rules in place, Jimmy prints out all the couple’s spending data every six months or so and presents it to Melissa. She can then look it over at her leisure. Whether or not the details of the couple’s style seem applicable, just about any couple can benefit from its more philosophical aspect. “Communicate,” Jimmy says. “It’s not about spending, really. It’s about managing spending so you can spend on things that matter.”
by Zach Dundas
6/19/08
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