Money
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Money is the root of all evil, and yet it is such a useful root that we cannot get on without it anymore than we can without potatoes.” – Louisa May Alcott
When Sweets and I first started dating, we did have some talks about money. Without sitting down to chart our credits and debits, we did talk about how we make, spend and save money. I knew about his school debt. We knew about each other’s credit card use. We knew the sorts of things our paychecks were used to cover. We knew what kind of investments the other had. And we learned we had a similar approach to money.
Early on in our engagement when we moved in together, we agreed to keep separate bank accounts. Even though a lot of couples look to join accounts as they’re getting ready to marry, I think there was some hesitation on Sweets’ part regarding such a merger. And to be honest, it didn’t matter to me one way or another. We were already in our 30s, well set in our personal banking ways. So long as we figured out an uncomplicated way to pay the bills, I didn’t think it’d be a problem to continue keeping our own accounts. There was no ego involved with needing to have joint accounts.
As it turned out, Sweets pays cable, car insurance and for his phone. He pays me monthly to cover his part of our mortgage and cleaning lady. We switch off who pays for the dog walker. And I pay the banks for our home, our cleaning lady (with Sweets’ help), utilities, gym membership, home owners insurance and some other incidentals (HVAC maintenance a couple times a year, etc.). It works for us.
When we got married, we agreed it was time to meet with a financial planner. Neither of us had ever met with one. We’re not particularly astute at investing our money. And we knew we could be better about how we spend our money. Yet, it was a scary proposition. I’m not sure we wanted to have someone tell us we need to change. I’m positive we were worried our quality of life would take a dramatic turn for the worse. And so, we procrastinated.
Why so scary, you ask? Let me ask you this: How often do you talk money, the details of your own money, with others? Do you even go “there” with complete strangers? We as a society really don’t talk money very much. I grew up in a family that didn’t really discuss it. Didn’t teach how to use it. And that’s not a knock on my family. I think most families are probably like that. Growing up, you get an indirect lesson on money: either you have it or you don’t. That much is clear. The details beyond that quickly become murky.
So, Sweets and I procrastinated a whole year. I realized this meeting would be a big step for us, so I got recommendations from friends. And I finally made an appointment, not knowing what to expect. Sweets and I met with that financial planner earlier this week. In some ways, it was unbelievably nerve-wracking. In other ways, I felt this overwhelming calm. Finally, we took the step. Finally, our laundry (dirty and otherwise) was out on the table. Finally, we began making a plan that will work for us.
During the meeting, our planner asked all sorts of questions. What are our short-, medium- and long-term goals (personally, professionally, financially)? What are our salaries? What’s our mortgage? Have we refinanced yet? Why not? How much other debt do we carry? What big purchases do we see coming up in the next few years? How would we like to spend our extra income? And so on. The questions were very targeted and some of them took some thought (it’s damn humbling when you don’t know the answers about your short- and long-term disability or exactly how much money is in what account).
Three hours later, we had some follow-up questions we needed to answer for our planner and we knew we had homework coming our way (this weekend, we need to fill out a budget of our monthly expenditures – what’s fixed, like utilities, phone, mortgage – and what’s flexible like gym, hair and entertainment). Once we complete this budget, our planner is going to come up with a spending plan for us that will allow us to meet our monthly expenditures, put money towards our debt and put money towards savings/investment.
Our planner admitted the first six months are going to be tough. An adjustment. Hard work to stick to the plan. But, he promised that after the transition period, it would feel much more natural to us. And by that time, we’d be amazed at how quickly our financial condition will change.
By the end of the evening, I had this feeling of calm relief. We’ve done it. Taken that first, kind of scary step towards a more secure financial future. And now I have someone else to blame when I’m no longer able to buy presents for friends or head back east to visit family (ha, I kid … I think).
Do you have any financial hurdles to overcome like we just did are in the process of doing?
February 10th, 2010 at 7:18 am
Those feelings that you described are almost exactly identical to how I felt when Shawn and I first saw our financial planner. Also, I didn’t want him to tell me to spend less money on shoes. ;)
February 10th, 2010 at 8:45 am
We only moved in a year ago, and we met a few months ago with someone to talk about the possibility of buying a house – I felt AWFUL because I knew I was the one with debt and I was the one making less money and I was the one that would be holding us back on potentially getting a great mortgage. But it wasn’t so bad – we’d be able to get something good, we just decided to wait a couple of years until after we get married. We’ve talked about joint accounts too but he uses a French bank (which is awful when I use his cards and the pinpads are always telling me things about “achats” and “NIPs” lol!) which he likes, and I like mine for now, so right now I just give him cheques and he pays the bills that way :) It works for now!
February 10th, 2010 at 9:07 am
My financial hurdles are that I have no credit and no one will give me a credit card so I can get credit because it’s a recession and everyone is afraid. So. Yeah. I need some credit, though.
Congrats on going! I need to do something like that.
February 10th, 2010 at 9:34 am
Right now it’s fairly easy since I’m living at home with the sole purpose of saving up money so that I can buy my own place within the next year. (Based upon the market & required downpayments I’m hoping to start looking around November/December for a place to live and get it by this time next year. I’m a little crazy in that I want more money in my savings account than just a downpayment).
I pay my bills, keep a little for me to spend on night’s out and the rest goes straight into my savings account. Since I’ve lived at home I also paid off all my credit card bills and don’t use them at all unless it’s an absolute dire situation.
When I move out, though, I do plan to meet with someone to make sure I’m on the right track. And I probably should realign my 401k investment at some point too.
Curious to hear how the new budgeting/savings plan works out for you guys!
February 10th, 2010 at 9:41 am
I went to a financial planner a few years ago before I met the Hubs, more so to manage my 401k funds when I let my previous company. I want to go and take Hubs with me but, he is not keen on the idea. He has some massive student loan and credit card debts and it affects his pride.
I am going to keep pushing so that we can save for our future and manage our debts today.
February 10th, 2010 at 9:52 am
I like your point about money lessons growing up. My mom is a bookkeeper, and very good with money. But as far as passing that down to me she basically taught me how to balance my checkbook and properly use a credit card (i.e. ALWAYS PAY IT OFF!). Good lessons, but I never really learned how to budget, mainly because there was always money in the bank, and I never really learned how to save for retirement. A few weeks ago, I finally opened an IRA! I think financial issues are an evolving thing that we continually encounter as we age. I admire you and Sweets for taking the first joint steps!
February 10th, 2010 at 10:06 am
I would be nothing short of terrified to meet with a financial planner! But some things have to be done right?
I’m delaying until I HAVE to combine my finances with someone else.
February 10th, 2010 at 10:09 am
You sound so grown up and responsible. I wish we were like that LOL. We’ve done SOME kinda planning. We consolidated major debt last year and paid off a big credit card that was looming over our heads. We’re getting there slowly but surely. This was quite inspirational though :)
February 10th, 2010 at 10:09 am
My biggest hurdle is student loans–primarily from grad school. My undergrad loans were totally manageable, almost negligible and I would have had only two years left on repaying them. But grad school did me in. I know it will help me in the long run, and yes I have enough to provide for myself and put a little away in savings…but if I had those monthly payments back I could do better for myself. That, plus resetting my career in my mid-twenties does make me feel a little behind sometimes.
February 10th, 2010 at 10:11 am
we’re in the midst of chatting about this right now, so i don’t have too much else to say here…
but i do think it’s GREAT that you went together, and it’s something we’re planning on doing eventually also. i like the idea of separate accounts, and maybe one joint account. we already have that established, actually. the joint account is for us to save for things for our place together, vacations, etc. it’s a minimal amount we put in each pay period, but i imagine it will be up-ed when we move in together. right now, it works for us. but i couldn’t agree more that these discussions in a relationship, though at times embarrassing and tough to have, are quite necessary.
February 10th, 2010 at 10:18 am
We’re finally in a comfortable place money-wise. Well, kind of comfortable. We’re used to budgeting and paying cash now, but it was always be nice to have more of that cash ;-) I came in to the marriage with a lot of credit card debt and we made some very unwise money-choices early in our marriage. However, we’ve worked really hard to pay the credit cards off and we are now proud to be *almost* debt free. We’re down to the house payment and one car payment.
Our master bathroom remodel must be the slowest remodel in history because we keep collecting stuff. Buy a light fixture one week, a faucet the next, vanity another week… We’ve done whatever we can to take it on in manageable chunks versus flying through it and using the credit card.
February 10th, 2010 at 10:24 am
I think it is so, so smart to meet with a planner and that is what I would do if I was getting married/married/partnered with someone. Money is one of the main causes for marriage problems so learning how to talk about it and negotiate around it is essential! I don’t think most of us grow up learning about money- at least not in a practical and healthy way. I didn’t. I’ve got a post brewing about that actually.
February 10th, 2010 at 10:24 am
I cry every time I have to talk about money. It’s way too overwhelming to me.
February 10th, 2010 at 10:29 am
It kind of sounds like dieting. You know? All that changing of the lifestyle but in six months you’ll be on a great path for life?
Good for you guys though. We are sort of burying our heads in the sand (and trying not to spend money) until my career situation stabilizes.
February 10th, 2010 at 10:42 am
This is so cool. You and I have chatted about this so really, you already know. But basically, we want to start figuring out the best use of our savings, but right now all that is on hold while Torsten tries to get his business off the ground. So, we’ll see.
February 10th, 2010 at 10:58 am
I do talk about money pretty easily. It is not a big deal for me. I have also met with a financial planner in the past. I think it is a good idea for most people to do that.
I know all couples/families do it differently and as long as it works for you it is totally fine. But as divorce lawyer, I have found that keeping separate bank accounts gives a HUGE advantage to the person who makes more money. Once you are married it is all “our money” and you one joint financial future, but keeping money separate makes people forget that. But I would venture to say that separate accounts is probably more common than not.
February 10th, 2010 at 11:59 am
I have no place right now thinking of financial plans since I’m still in student mode and not working, meaning making no money at all. But before this, in my previous, adult life, I was very organized with money and saved quite a bit. I discovered mint.com through Sizzle (thanks Sizz!) and have been using it ever since. It helps my OCDness with having everything organized in one place and quickly allows me to view all expenditures as well as my dept, and usually prompts me to feel a bit anxious about it all. Still, I recommend it, check it out, you might like it too.
February 10th, 2010 at 12:30 pm
Money makes my stomach hurt.
February 10th, 2010 at 12:55 pm
I am terrible at all things money — except spending it, that I have down really well. I do know though that if I ever do get married, I want to keep my own account, I don’t see that as something I would compromise on. After my parents split up, my father (who made more money than my mom) cleaned out their joint account leaving my mom with almost nothing. She worked but what money she had saved up, he took that too. Thats not a position I’m willing to put myself in, no matter how much I trust someone else.
February 10th, 2010 at 1:46 pm
A. and I have separate accounts, and we split things up almost the same way as you and Sweets. All of our accounts go into our budget software that we both maintain, so there are no secrets or anything. We know where we are.
I keep talking to A. about having financial “goals” and he thinks I have been smoking something. He has vague goals, but I think going to a planner would help us identify what we want more concretely. Hmmmm..
Is your financial planner independent, or part of a firm? How would you recommend finding a planner you like?
February 10th, 2010 at 2:17 pm
Great topic and one I have not broached with my BF. When I was married my husband and I had a joint checking account. Hell we had one together from the time we were 19! After getting divorced I am a lot more secretive with my money. I have no idea how much money my boyfriend makes and he has no idea how much I make. I’m sure at some point we are going to have to have that discussion, but after having someone micro-manage my spending for 6 years of my life, I am hesitant to get in a situation even remotely similar. I’m even interviewing for a new job (shhh) and have not once mentioned actual dollar amounts that they are offering to the BF.
February 10th, 2010 at 2:47 pm
I STILL don’t think I’m quite over feeling like I’m terribly irresponsible with money. I never felt that way until I dated my ex-boyfriend who was/is the cheapest man alive and constantly told me I lived well beyond my means. (He also developed an Excel spreadsheet to show that I should get a new job because my salary was too low for us to afford to send two kids to college. This was before he ever told me he loved me.)
The reality is that I have no debt besides my car, never carry over a balance on my credit card, and am aggressively saving for retirement. So probably not that financially irresponsible. But I would like to (and will) set up a system to track my credit card expenditures by category and I’ve implemented some very basic cost-cutting measures.
February 10th, 2010 at 3:32 pm
We have become a one-income family in the last few months. BIG change. I now have to discuss my spending with my husband which makes me feel like less of a grown-up every time. Luckily, I’m a smart-spender, so there’s never any head-butting.
February 10th, 2010 at 4:37 pm
that is really funny, not in a “ha ha” kind of way, but very relieving in terms of knowing that someone else handles their finances in the same way that we do. i can’t say that i’ve met anyone that does and we’re used to strange looks that we get from people when we tell them that we split things down the middle and i pay t for part of the mortgage, etc.
i am the one that has debt, he doesn’t except the house, so we really just feel like we need to take care of our own things, you know? and anything we do together, we’ll do together.
February 10th, 2010 at 5:14 pm
such an intense meeting, but it sounds like you have a very capable planner and things will be taken care of without fear of overlooking anything. i’m still financially dependent on my parents, but i try to be conscientious about my spending bc i know some day soon i’ll be on my own! my dad is an investment adviser and deals with $ every day, but growing up $ was always a bit taboo in our household and i was instructed to never talk to other people about it!
February 10th, 2010 at 5:54 pm
At the moment my financial hurdles are my student loans and tuition fees but I don’t have to start paying that off until my income reaches £15k/annum or more. I also have a large credit card bill but that gets paid off every summer with a full time job :D I have monthly worries because my spending is erratic – one month I’ll spend nothing, the next everyone’s birthdays seem to happen! Plus I smoke which adds to my expediture, and that’s what I spend the most on – hopefully not for long though!!! I don’t tend to get worked up about it all though because I’m 21, and I know people in their 40s who have far larger financial worries than me :)
My friend and her husband have their own seperate accounts and it works great for them too. At first when she told me I thought it was a bit odd but now it seems like a secure and safe way to do things! I’m lucky that my friends and I are quite open about our money telling each other what we earn and what we spend so we can give advice etc. I don’t share a lot of that info with my parents though because they’re very, erm, careful I suppose? Even the smallest amount of debt troubles them.
February 10th, 2010 at 9:11 pm
I came from a family where we didn’t talk about money at all, and it is the primary reason my parents will be divorced next month after nearly 36 years of marriage. Two years ago my father sweet talked his way back into the life of an old girlfriend from 40 years ago because he wasn’t man enough to deal with the money problems he’d created. So now he lives with her in Florida and she is his sugar mama. Seriously. Sweet story, right?
Lucky for me, my husband and I have been transparent when it comes to money since we moved in together six years ago. We are kind of in a crunch because we still have a house in Vegas (underwater), but the property management company has *finally* rented it out and that will mean we can start to build up some savings. If there was one thing I would do, it’s go back in time and tell our past selves that the house? It’s not such a great investment. But as it is, we have to deal with it, and we are.
February 10th, 2010 at 9:48 pm
I still owe $15,000 for my college education. Uh, and working at a homeless shelter you can guess how much of a chunk of that I am working on. Your right! Not much!
February 10th, 2010 at 9:51 pm
is it weird that i find some comfort in the fact that you are just now doing this? i’ve been putting of talking to a financial planner for years as well.
i know it’s something that i need to do yet i just don’t know how to go about it.
i keep thinking i don’t make enough money to warrant a planner, even though i know i do.
ugh. i need to get my shit together.
February 11th, 2010 at 3:47 am
I’m not sure what a financial planner could really do for me. I know to the penny what goes out and comes in every month and i don’t have a single expense (other than food) going out that i’m not contracted for. I’ve never been good with money but i am learning to get a handle on my debt and work out how to deal with it without paying someone else to tell me what to do
February 11th, 2010 at 12:27 pm
Our financial situation is pretty straight forward, but separate. My entire paycheck goes into my wife’s account and she pays all the bills. I have access to her account via a debit card for lunches, gas and other stuff. I have my own checking and credit card accounts that I manage as well. My own money to do whatever (from side jobs and other residual income I get outside of my day job salary). We will most likely never have a joint account and both of us are fine with that. This is what works best for us and we rarely have any issues with this.
Any big financial decisions we make are discussed at length and agreed upon before acted on. So for the most part, we are on the same page.
February 11th, 2010 at 2:50 pm
Shortly after the Hubs and I got engaged, we merged our bank accounts. We figured we were sharing everything as it was, what’s the point of a you-pay-for/I-pay-for check listing? The guy at the bank was impressed and even suggested we set up a savings plan while we were at it. At this point, we have managed to save nearly 40% of all that we have earned in the last few years (some 401K, some bank account, etc). Of course this percentage will soon drop when we get a new car and move, but it’s been a source of pride that we have stuck to our plan and have managed to save for the inevitable rainy day. Though based on how much I am spoiling these dogs, at this point, we might not have any money left if I have my way! ;)
February 11th, 2010 at 4:19 pm
I think you guys are really smart for doing this. I have friends who were about 20k in debt, never thought they’d get out from under it, and a year after they met with a financial planner, they were able to buy a house!
Whenever I watch Susie Orman on TV I feel like I should be doing better. I save, I don’t have really any debt at all…but I think I should be taking bigger investment risks and I could probably be saving even more than I do.
Maybe I’ll procrastinate dealing with all this until I’m married… :)
February 11th, 2010 at 10:28 pm
Money is such a touchy subject. I’ve never had a relationship that was serious enough to have the money discussion…. it’s definitely not something I would be super comfortable talking about.
My goal right now is to pay off my student loans as fast as I can – or as reasonably fast as I can. I am also saving to buy a house/cover a small loss on the sale of my condo. I am so ready to be a home owner.
I would totally benefit from meeting with a planner like you did, though! I have really tried to cut down on my discretionary spending, but there is def since room for improvement!!
February 17th, 2010 at 11:11 am
I’m glad I’m not the only one without a financial plan. I definitely think that meeting with a financial planner was a great idea to getting off on the right foot. Congrats.