Hating our money life right now

April 9, 2007 2:53 PM

Will budgeting help?

My husband takes home 47k per year, I bring in about 17k, and we split the rent. He pays for the car and maintenance (no payments, just gas, upkeep and insurance), our cell phone service, and most of our food and household stuff. I pay for Internet access, cable, and most of our frou frou crap (shampoo, etc.), plus, I don't know, 80-90 percent of my own girl-type stuff: clothes, makeup, shoes, that kind of thing. Our rent is $900. We have no kids and we got out of debt a year ago, but we're constantly broke.

This bothers my husband more than me. I would like to have more savings, he would like to have more cash flow, but we both see the need for each of these things. Right now we're winging it and suffering for it. For instance, I just got a check for $680 for a contract job which may turn into full-time employment. I kept $300, gave $300 to my husband, and put the rest in our joint savings account. I spent most of my stash on clothes (this is a classier place of work than what I'm used to), and a few non-essential, comfort purchases that I just wanted to treat myself to (the contract job has been brutal as all get out, but they like me and will probably keep using me and I want to keep it that way). So I didn't strictly need to spend all of my half of my money, but I did, and I think my husband's hissy fit this morning had something to do with it. He does these slow burns about my spending habits and there's nothing I can do, I don't think, other than to try to weather it. He does occasionally say: "I'm not going to get upset about those things anymore," but he continues to do so.

In my mind, I'm okay. I gave him half my money and did what I like with my piece. So I spent it, so I earned it, right? Or do I need to be more sensitive about plugging in the gaps in our joint financial situation? Is a budget, which I hate the thought of but would be willing to try, our best solution?

posted by frosty_hut to work & money (22 comments total)

Budgets sound constraining but set you free. You know just how much money you can set fire to by eating out or buying concert tickets, so you can do those things with no second thoughts at all, knowing your long-term financial goals are being taken care of.

That said, it's only one way of reducing your financial conflicts. I recently ran into an old "how do you handle finances as a couple" AskMe question but can't find it just now -- try googling old AskMe questions on this topic -- I remember thinking it had a wide variety of options.
posted by ruff at 3:05 PM on April 9, 2007

Before you write up a budget, you might start by both keeping track of all your spending, so you have some idea of how much is being spent on what. After that, some sort of a spending plan would help.
posted by yohko at 3:10 PM on April 9, 2007

This is not a money question, this is a relationship question. You and your husband need to talk about this when you're not angry. Sounds like you two need to develop a money plan you can both can deal with. Your money is not yours anymore and his money isn't his; you're a team. Get a game plan. What are your goals? Why do you want more money? Having a goal will help motivate you to save. Most financial experts agree you should at least have 3-6 months of living expenses stored away as an emergency fund.

For me (single person), I don't have a budget, but I have a certain amount out of every paycheck that I put into savings. It's the first thing I do everytime I get paid. Start small- decide what % of each paycheck should go into savings. 10%, maybe? That's a little less than what you did with the consulting check; that's a good start. Once I've done my savings, the rest of my money is mine to do what I want with.
posted by ThePinkSuperhero at 3:10 PM on April 9, 2007 [1 favorite]

Step one might be to use a service like Wesabe (or any other similar service) to see where your money is actually going right now -- Wesabe is pretty quick as you can import your bank account details and "tag" each amount coming out. The tags get remembered repeat bills so you can move through a lot of data pretty quickly.

Once you've got that information, at least you and your husband will be able to have an informed conversation about where the money is going, and where to go from there.

(On preview, mainly what yohko said)
posted by ukdanae at 3:10 PM on April 9, 2007 [1 favorite]

This has worked for my wife and I:

We put all our money into one account and we each take an allowance for our own personal spending. So far, when one of us gets a raise, we haven't increased our allowances, we've just increased our household savings. When the savings reaches a certain point, we make a lump sum payment to our mortgage. We do whatever we want with our allowances.
posted by Bearman at 3:11 PM on April 9, 2007 [1 favorite]

I just taught a class about frugality and budgeting. I ran across this site: thesimpledollar.com. It has some really great ideas about saving and budgeting. Take a look-see.

Budgeting is hard. But I think the first thing you need to do is sit down with hubby and figure out what you want (you as in you collectively) out of your financial situation. Do you have any goals you are working toward? It's hard to put money into savings or to save money when there is no designation to that money - even if it's a $500.00 emergency fund or whatever.

I like to treat myself every once in a while, but I do not treat myself when I cannot afford it. There are other ways to treat yourself than to spend money. Just my opinion, though.
posted by Sassyfras at 3:15 PM on April 9, 2007

To prevent just these kinds of resentments, we pay proportionally into our joint account, from which all rent/bills/expenses are paid. Our own shares go into our own accounts, and while everything is transparent (all the accounts are under the same online login) it is none of my business how much money he spends on Starbucks and it's none of his how much I spend on books, because the amount we agreed to pay in is the amount that got paid in.

I guess maybe that's what you mean by a budget? We certainly did have to add up our expenses in order to do the math on how much we pay in (probably about 50% of our paychecks right now), and designate how much of that goes into savings, but it's decided up front and done up front and marital peace reigns.
posted by Lyn Never at 3:16 PM on April 9, 2007 [1 favorite]

For what it's worth, my husband and I make nearly a third less than you two ($25-30k a year, depending on what freelance work I pull in, as I'm in school), and we're never broke. Our rent's a couple hundred dollars less each month, but there are other debts (student loans, a car payment). Because of some temporary medical issues, my parents also help me out a bit. He and I split groceries, utilities, cat bills and rent, but any other money we have is ours and neither of us would ever dream of telling the other what to do with it. We're actively saving for a down payment for a house, too, so I imagine if one of us was blowing all our cash on crazy stuff, the other might get upset about having to shoulder the savings goal, but that doesn't sound like your scenario.

To be fair, we live a pretty sparse life, only because it suits our personalities. We rarely buy new clothes/shoes out, and only eat out a couple times a month. We make a meal plan each Sunday and then buy food for that week. Our entertainment's usually Netflix or something free-ish, but we're total homebodies, and this lifestyle obviously doesn't suit everyone.

So I think a budget would help, at least to determine where the money's going if you're always broke. Because unless you have crazy debts you're paying off or a shopping addiction, I can't see why you would be broke each month. And unless you're spending money that you and your husband have agreed would go into savings or affects his life in some way, I think your husband's in the wrong. It's not his business what you do with your money unless you're plunging your family into debt, which it doesn't sound like you're doing with your extra money. I'm one of those people who believes, however, that marriage doesn't mean you combine your finances or that you own each other's money, so others might disagree.

Bottom line: a budget would help you figure out how not to be broke. But the real issue sounds like communication with your husband - if the money's yours and not affecting him, what's his deal? Why does it make him so upset? I think that's what you need to figure out first.
posted by Zosia Blue at 3:18 PM on April 9, 2007

Yikes, that got garbled. What I meant to say was:

I just got a check for $680 for a contract job which may turn into full-time employment. I kept $300, gave $300 to my husband, and put the rest in our joint savings account.

"The rest" is $80. 10%. That doesn't count for much. And if that was 1099, your eventual income tax bill will exceed that.

Put all your income into a joint account. Get $20 each a week for expenses. Anything beyond that, you both have to agree to it.

You should have in excess of $30k after taxes and rent every year. If you spend $100/wk on food (and you can spend much less) that's still $25k. Spend another $10k on ANYTHING and you still have $15k in the bank at the end of the year.

So where the hell is it? If you can't answer that question, you need to make a budget.

He does these slow burns about my spending habits and there's nothing I can do, I don't think, other than to try to weather it.

Sure, there's something you can do. Don't spend money. At least not in excess of $20 a week.
posted by These Premises Are Alarmed at 3:29 PM on April 9, 2007 [1 favorite]

ThePinkSuperhero: you're a team. Get a game plan. What are your goals?

This is a crucial point -- first and foremost, you need a mutual mindset of being on the same side when it comes to money. All the budgeting techniques in the world won't help, in the long run, if you don't start from that point.
posted by scody at 3:35 PM on April 9, 2007

Do you know where your money is going? Do you know exactly? Can you look in your checkbook, assess your investments, and say "Well, my retirement plan is going quite well so I think I'll spend $300 on comfort items and new expensive clothing."

It is nice to live like we can spend our money however we want to and as long as we put a little bit away we'll be OK in the end. But life isn't like that. It is a blessing and a curse that money's behavior in low-risk accounts is so predictable. A blessing if your financial life is well-planned because you know you're prepared if one of you loses your job or has a medical emergency. But a curse, because if you are not well-planned, you know, deep in your heart, that if something happens you are totally fucked. But because we are not taught proper financial sense, we prefer to ignore the cold realities of money and pretend if something happens it would "work out", as if a magic money fairy will bail us out of our problems.

If you're depending on a magic money fairy, prepare to be fucked. Otherwise, it's budget time. If I were your husband I'd be pissed too. You guys are one financial unit, not a business deal where you get to spend your profits however you like. Check out Get Rich Slowly and The Simple Dollar. Financial planning/budgeting websites written for the common man.
posted by schroedinger at 3:40 PM on April 9, 2007

I think it's nice you gave him even half. My girlfriend and I keep separate accounts and pay exactly half of all bills and rent (soon to be mortgage payments) each. That way it's totally fair. She earns a lot less than me, but we live to her budget rather than mine, since she wouldn't feel an equal if she didn't pay exactly half. That prevents headaches like this, but might not be an option in your case.
posted by wackybrit at 3:40 PM on April 9, 2007

For those who really hate budgeting, there are alternatives. My personal rule is to save 20% of whatever comes in, pay the bills as soon as they come in, leave enough of a cushion to deal with unexpected expenses, and don't sweat the details when it comes to the rest. You might refer to the book "All Your Worth" which tells you to save 20% of your income, spend 50% on essentials (which means: get utilities, rent, gas, etc. down to 50% of your income), and spend the remainder on whatever you feel like.
posted by Jeanne at 3:49 PM on April 9, 2007 [1 favorite]

I think the two of you need to set specific mutual money goals, and talk about how you're going to meet those goals. How much more do you want to save? What is realistic? How much is fair for each of you to have as extra cash? Once you know what your mutual goals are, it's not wrong for each of you to go about achieving those goals separately. But you really have to stick to your plan.

"Save more" is not a good goal. You need to be specific. How much money in the bank would make you comfortable? What portion of your paycheck do you and he want to save? Maybe you think 10 percent of your check is really good -- meanwhile your husband thinks 30 percent is better. You need to discuss this. When you have specific numbers attached to what you want -- $x,xxx in the bank, x% of every paycheck going into savings -- then you need to follow through.

You can develop a budget of how much to spend on food, how much to spend on clothes, how much to spend on your car, and have a line item for every recurring expense if that works for you.

If its' too restrictive, you could try to just divide it up: This minimum amount of money must be saved, this maximum amount of money can go to fun stuff, everything else goes toward essentials first. After that, you should come to an agreement with your husband: beyond the fun stuff, the necessities and the savings, what do you do if there's money left over? I think you probably should put it toward savings until you reach your agreed on goal, then maybe reward yourself with something fun before you sit down and develop new goals.
posted by croutonsupafreak at 3:49 PM on April 9, 2007 [1 favorite]

fwiw, my friends, who all make about the same as me, always wonder why i seem to have money... the only answer i can come up with is that i am the only one that creates a budget and money management plan and sticks to it. it's funny how simple planning can make it seem like you have more money.
posted by blueplasticfish at 3:59 PM on April 9, 2007

My wife and I just started doing this. We make a lot more money than you, but we also spend a lot more (two kids certainly impact our spending, but so do our terrible money-management habits.)

So recently I took over money management, and it's been touch-and-go -- I screwed up some things last month, and I'm still getting in to the rhythm of it -- but we've had some big wins.

Here's what we did:

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1. I started tracking our money in GnuCash. Any double-ledger accounting system will do (GnuCash is not for everybody), just stay away from Quicken and the like.

Double-ledger accounting systems seem more complicated (and you'll probably spend several hours learning how they work) but then you'll have the aha! moment and find yourself understanding exactly where your money comes from, and where it goes.

Having this knowledge gives you a clear view of where the wastes are, and what your true monthly minimum requirements are. Quicken is SUPPOSED to do this, but single-ledger accounting doesn't enforce balancing of in/outflow the way double-ledger accounting does, and so it's much too easy to be sloppy and lazy -- two things you don't want to be if you want your money under control.

2. We started giving ourselves an allowance per week -- we're doing $50 each a week right now -- as discretionary income. That is, you can each spend that money on anything, without telling the other person.

I use mine mostly for eating out for lunch, as does my wife, because this is an area we have always been quite wasteful in. $50 allows us to continue doing this, but also caps us if we're overdoing it (and allows us to eat well without allowing five $20-per-person meals a week, which is what we were doing.)

The restriction of "without telling the other person" is simply this: peer pressure. How do you spend $100 a week on lunches alone, if you have to explain it to your spouse (who is only spending $35, and then buys you a gift with the remaining $15?)

3. We keep cash on hand in a box that we each have the key to, but that we agree to discuss the use of in advance.

This money is tracked in GnuCash just like our bank accounts, so that neither of us can "lift" money without owning up.

More importantly, we try to anticipate our needs and pull cash for it, rather than going to the ATM. Paying in cash means maintaining the connection between the money we spend and the costs we incur; at least one study (linked on MetaFilter somewhere, I believe) suggests that it's a lot more painful to part with cash for a purchase than to purchase with deferred (ATM, credit card) payments.

4. No auto-pay bills!

Know where your money is going, and force yourself to manually write checks/pay online when paying bills. This, like paying cash, helps increase the awareness you have, and the pain you feel, when paying your bills each month.

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We're not out of the woods yet, but we're getting better every month, and we've got some hard habits to overcome. Budgeting is absolutely worthwhile, and has already made us feel like we have more money, even as we spend a lot less. Good luck.
posted by davejay at 4:07 PM on April 9, 2007 [2 favorites]

In my mind, I'm okay. I gave him half my money and did what I like with my piece.

This is not the best approach to joint finances in a relationship. It's not about have a "50/50" attitude to everything numerical. Rather, think of all of the money is yours and all of the money is his.

I think you also answered you're own question that a budget will absolutely help. With a budget there's no need to have an argument because nothing unexpected will happen...provided you stick to the plan. And as I mentioned above, with a budget its not like 50% of all expenses should go towards one person. Rather, its what expenses work for both of you to achieve satisfaction. (For instance, yes you do spend more on retail but he probably eats more than half of the food expenditure. Since you've budgeted for that its not a surprise when the itemized bill shows this.) Good luck!
posted by dendrite at 4:20 PM on April 9, 2007 [1 favorite]

I am in a similar situation that I make significantly less than my significant other. We have an agreement that we both put forth the same percentage of our income toward shared household expenses: rent, utilities, food, costs of pets.

Otherwise we pay for our own cars, cell phones, clothes, "girly" stuff.

Do I sometimes get a little sad when he buys some expensive gadget and I am using crappy shampoo? Yes, but he also is a bit kinder about taking me out to fancy dinners.
posted by k8t at 4:48 PM on April 9, 2007 [1 favorite]

Reviewing, sounds like Lyn Never does the same thing.
posted by k8t at 4:52 PM on April 9, 2007

One big (and common) mistake is to overlook the "implicit spending" that occurs as you use various possessions. Take a look at this post (includes link to download Excel Spreadsheet) and see if that helps.
posted by LeisureGuy at 4:53 PM on April 9, 2007

You're still thinking about money like a single person.

Sit down with your husband sometime when you aren't already angry, and talk about what your financial goals are, and what each of your expectations are of the other.

Yes, you need a budget. Everybody needs a budget. A budget can be as simple as, "$50 goes in savings and the rest gets spent on hookers and blow" but you do need to have some kind of plan.
posted by joannemerriam at 5:21 PM on April 9, 2007 [1 favorite]

I thnk you meant Get Rich Slowly (with a .org).
posted by charlesv at 9:04 PM on April 9, 2007