- After my wife and I graduated from college and moved in together, we reevaluated our money strategy.
- We've been balancing personal and shared expenses with both individual and joint bank accounts.
- This article is part of "Milestone Moments," a series about financial planning for major life events.
When I moved in with my now wife, I had just graduated from college and begun working my first full-time job, so my experience with long-term saving and budgeting was limited. I was eager to learn and grow but needed to do so on my own terms. This would help me become a better partner and contribute more effectively to my wife and our shared financial goals.
We wanted to keep our primary bank accounts separate as we embarked on the next chapter of our lives. But we also saw the value of having a joint account for shared expenses, especially because we decided to split financial responsibility 50/50.
At first, juggling rent, groceries, and living expenses in tandem with personal interests and hobbies was overwhelming. Figuring out how to split up our shared and personal expenses encouraged us to improve our money-management skills and alleviated financial stress in our home.
We took four steps to combine our money without sacrificing our financial independence.
1. We opened a joint bank account for shared expenses
Upon moving in together, my wife and I first opened a joint checking and savings account for shared expenses. Although financial independence and personal growth were priorities, we needed a joint bank account to cover shared expenses like rent and groceries and accumulate funds for long-term savings goals.
Initially, we used the account solely for shared home and living expenses. After we established the groundwork of our financial plan, our joint account also supported shared activities like dinner dates and concerts.
Our joint account became a powerful tool for collaborative financial planning. My wife and I used it to track our monthly expenses more closely, set joint savings goals, and build an emergency fund together. It also became the primary destination for our paychecks, as joint living costs often constitute the largest portion of our budget.
Simplifying what was going in and out of this account has streamlined how we approach our budget, making it easier to identify potential saving opportunities. For example, if we spend too much on groceries one month, we can see it on our bank statement and correct our budget for the next month. If we know one of the cats has a vet bill coming, we can set aside money in our emergency savings ahead of time.
Our joint account also gave us a space dedicated to shared long-term savings goals, such as a wedding and a house.
2. I pursued my own financial education to be a better partner
My wife and I allocated a small portion of our paychecks to our personal savings accounts to grow our money-management skills and allow room for our individual goals. Just because we were meshing our lives together didn't mean we didn't have our own interests and aspirations.
After we moved in together, I realized I needed to take ownership of my financial education to better support my wife and my financial future.
The money in my individual savings and checking accounts was solely mine to manage, allowing me to practice financial responsibility and independence.Separate from the joint account, I was responsible for setting up and managing my own budget, credit card, savings goals, andbrokerage account.
That's not to imply that it was always smooth sailing. For example, the first Christmas after we moved in together, I learned a valuable lesson about budgeting for holiday expenses. Unfortunately, it took me months to recover from my festive splurge. The next year, I opted for the DIY crafting route instead.
3. We created our own spending rules
Since we were separating "joint" expenses from "personal," we needed to clarify which expenses fall in each category. Joint expenses covered shared living costs like rent, utilities, groceries, and car payments. Personal expenses covered individual needs and wants, such as clothing, hobbies, and personal care services.
While some costs were straightforward, others required discussion. For instance, we decided to classify haircuts as a joint expense as they contribute to overall well-being and hygiene, while hair coloring was a personal expense.
Categorizing expenses isn't always black and white. As our lives and priorities evolved, we continued to revisit and adjust our decisions based on circumstances around the purchase and the health of our budget. Multiple savings buckets made approaching money decisions easier to navigate, even when we were low on funds.
4. I had to get comfortable talking about money
We quickly realized that open communication was key to our financial success. Discussing money wasn't always easy, especially when it involved cutting back or budgeting. But we overcame the discomfort to strengthen our relationship with money and approach hard topics. We nicknamed these sessions "scary hours."
While these conversations weren't always easy, they helped us better understand our financial goals and habits. This improved our ability to navigate challenges like rising costs, wedding planning, and job loss without compromising our financial stability or our relationship.