- December 9, 2023
- Posted by: legaleseblogger
- Category: Related News
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Financial Management in a Relationship: The Struggle of Balancing Expenses
As a couple in our 30s with stable, well-paying jobs, my partner and I share a home and financial responsibilities. We are both earning around $100K per year and have set up a system where he contributes to our mortgage and utilities costs through Venmo, while we also maintain a joint account for shared expenses like groceries and date nights. Despite this seemingly organized setup, we have encountered a recurring issue that is causing tension in our relationship.
The joint account, funded with $600 per month from each of us, is supposed to cover our necessities and leisure activities. However, the funds in the account consistently dwindle to nearly zero by the end of each month, prompting my partner to suggest increasing our contributions to $800 each. This would mean a total of $1600 per month for groceries and dining out – an amount that I believe is excessive for two people without children.
Our differing opinions on spending and saving have led to frequent arguments. I am inclined to cut back on expenses, while my partner believes that our income should enable us to lead a comfortable lifestyle and indulge in dining and entertainment. It has become clear that we have contrasting attitudes towards money – he is the spender, and I am the saver.
This recurring conflict has left me apprehensive about the prospect of marriage and merging finances with my partner. I am concerned that increasing our contributions to the joint account will only result in more reckless spending. I am seeking advice and insights from others who may have experienced similar challenges in managing finances within a relationship.
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Sounds like two you two have very different beliefs regarding the value of money. IÔÇÖd phrase it like ÔÇ£if we spend less we can have leftover in the joint account, then we can use it for world travel, or to invest in a summer home.ÔÇØ
You value the dollar differently than he does, I donÔÇÖt think anything short of him being impoverished will change his view on spending.
Stay at the 600/month contribution, and tell him that you value having money saved more than drinks on the weekend. For two people in their 30ÔÇÖs it isnÔÇÖt a foreign concept, he would have to be willfully ignorant to not see your side and at least agree to those terms.
Edit: as for long term, thereÔÇÖs nothing wrong with separate finances. ItÔÇÖs 2020, while joint finances may provide warm fuzzy feelings, itÔÇÖs just irresponsible especially given the spending history.
Can you make the joint account solely for necessary house expenditures instead of dinners and drinks? You could each use your own money for dinners/drinks. If he wants to spend more, he can. If you want to save more, you can. Don’t let him bully you into a financial situation you don’t want because if he leaves you, you can’t get that money you spent on drinks/dinner back.
Be sure to speak with a premarital counselor *and* a financial advisor if you ever decide to get married because once you tie the knot, he gets access to all your savings and you’ll find he will expect you to keep penny pinching while he keeps spending.
I can make a case for more combined spending, not less, if you guys are serious about a future together.
If you both keep most of your money separate and combine just a little, you only get a say in how he spends that little bit. In two or three years, you could have the savings for buying something awesome, when all heÔÇÖll have is some toys and fun memories. Do you then pay for a new deck or sofa or vacation for both of you without any contribution from him? Do you go travel alone because he canÔÇÖt afford to pay for half?
(ItÔÇÖs one thing to figure these things out when one person earns a lot more than the other. ItÔÇÖs way more difficult to figure out, I think, when one person spends a lot more than the other.)
If, however, you both keep just a little of your money separate for discretionary spending, put some amount into joint checking that you spend together, and all the rest into a joint savings account, you each have some say over how the other spends (or doesnÔÇÖt). ItÔÇÖs all about working together for some shared goal.
Of course, youÔÇÖd have to agree on a budget and goals and the rules for spending/saving joint money. If you canÔÇÖt get on the same page, then you shouldnÔÇÖt combine finances.
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On a side note, how long will he be willing to effectively pay rent to you while you accrue equity in the house (or, heaven forbid, lose a lot of equity in a burst housing bubble)? He wouldnÔÇÖt want to share mortgage payments with you for ten years and have nothing to show for it if you break up. But you also wouldnÔÇÖt want to break up after ten years and then be forced to give up your house because you canÔÇÖt afford to buy him out of whatever portion of the equity in the house he contributed to.
My husband moved into a house I already owned before we married. We had a lot of discussions about how much of any contributions he made to our mutual finances should be considered as gaining him equity in my house. It would have been easier to sell or refinance my house, put equal amounts into a down payment on a new mortgage, and continue forward with equal contributions from there, but there were several reasons why that wasnÔÇÖt possible or practical. In the end, we picked a time when we both felt like we were ÔÇ£even,ÔÇØ having had periods where he leaned on me and periods where I leaned on him. A mortgage statement and appraisal at that time told us what percentage of the house was paid for. That percentage is mine, no matter what we eventually sell this house for. Everything after that point in time is shared, and the percentage of the equity we gain from that point forward is community property. We decided that percentages were more equitable than dollar figures.
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This is less of a question about finances and more a question of lifestyle. Why does he feel that you guys are not enjoying your selves or eating/living well? What does he feel heÔÇÖs missing out on? Does he value the experience of dining out differently than you? Does he not like cooking or feel the food you guys eat is low quality? Is he depressed about something? Or is the issue just that he is getting anxious about potentially overdrafting each month?
It sounds like you are saving the money, but IÔÇÖd like to offer a personal anecdote. I had a girlfriend who wanted to spend money on her own stuff (tens of thousands on bags and shoes). I was left with the pressure of paying for all our dates, dinners, events, and often groceries etc. I valued that time and experience the most, whereas she would have preferred to stay in and spend that money on stuff. She compromised from time to time, but it became a point of contention between us and resentment is the ultimate relationship killer. I know that situation is a bit different from yours. But if heÔÇÖs unhappy about day to day lifestyle, those are the root issues that should be talked about.
As for advice, I wouldnÔÇÖt combine mutual discretionary spending with essential living. Make a separate date/fun fund from groceries or come up with a more granular budget. That said, $200 more a month doesnÔÇÖt sound like itÔÇÖs worth the stress itÔÇÖs causing given your incomes. IÔÇÖd say after bills and essentials make sure youÔÇÖre both maxing out 401k/ira and HSA, save a certain percentage in a liquid account for mid term emergencies as well. Whatever is left, donÔÇÖt feel bad about spending on reasonable quality of life improvements.
Hey! I love your strategies so far! Congratulations on keeping the god money conversations going!
Do you have monthly or semi-monthly discussions about how this joint account is being spent each month?
IÔÇÖve been practicing Kakeibo the last month (so- not an expert by any means). What I love about this way of strategizing is that you (and your partner) need to be mindful about the money you spend together. In addition to setting the spending and savings goals each month (having a pre-spending plan), you consider how well you stuck to your plan at the end of the month and figure out what to do better next month.
Maybe you do need $800 per person a month to meet you spending plan. Or maybe you have a great plan already and do need to get better about sticking to it each month.
YouÔÇÖll have to change the dialogue from a values issue (youÔÇÖre a spender, IÔÇÖm a saver) to a facts issue (how does your pre-spending plan align with your actual spending).
Good luck!
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If you EACH make $100k this is trivial money to worry about.
You each have $8000 per month income, or $5000(?) net.
If you’re in a very expensive home, you’re spending $2000 each on mortgage and utilities.
Even if you each put in $800 to the joint account, you’d still have $2200 each for cars, clothes, savings, etc.
I think that $200 is absolute peanuts in your budget and not worth the fight.
Maybe even bump it to $1000 each and put $400 auto-transfer into a joint savings account.
He’ll feel he’s getting what he wants (more joint spending money), and you get what you want (him saving).
You gotta find the right balance. My wife and I make a similar amount and if you donÔÇÖt count day care or mortgage or joint savings, we contribute less to joint groceries and eating out than you. Sometimes I go overboard with thriftiness, so I try to make a point to splurge on occasion.
Anyways, you sound like you get what IÔÇÖm saying and have a similar mindset. Maybe one way to get him on board is to talk about future goals. Buy a house? Big vacations? Retire early? We have a joint savings for house maintenance, kid expenses, vacation fund. We also max our Roth IRAs and put ~10% in 401ks.
I would say find a compromise, but the cheap side of me thinks $1200 per month is already a lot. But just talk about whatÔÇÖs important (house, retirement, etc or enjoying your high combined income now).
Edit: one quick addition. We have joint and separate credit cards. All the fun stuff we do goes on personal cards. All the bills and stuff go on joint cards. That we we can each spend more or less on fun each month if we want.
Edit 2: I was wrong. We put in ~$3700 biweekly. After mortgage, day care, and savings, that leaves about $1000 biweekly for all other expenses. ThatÔÇÖs with two young children.
You need to close that joint account last week. Y’all have radically different ideas on how money works and that never ends well.
I donÔÇÖt see the problem if you both keep the spending at the same amount. Have an extra $400 towards a joint savings isnÔÇÖt a bad idea (emergencies or vacations). If it will be spent, well heÔÇÖs probably spending it anyways.
TLDR: Stop sharing accounts. Don’t split 50/50. This Post is making me reevaluate st in my own relationship!
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I don’t think you two should share joint accounts. It sounds like you each can have the freedom to budget in your own comfort zones. This has been coming up in my relationship. Here is where we are holding.
My boyfriend spends far more money than I do on eating out, cocktails and vacations. (Full disclosure while I have a well-paying job he does make more than I do.)
For example, Even with a pandemic, my BF will regularly order giant meals from Michelin Star restaurants. He can spend as much as $180 on one meal. In contrast, when eating exactly the way I want to be eating, I will generally spend $40 per day on healrhy, quality, produce. Ultimately, when it comes to food it makes more sense for us not to split 50/50.
Our system is dynamic.
It’s not a perfect system but I value the transparency and discussion that arise. You may think, to avoid an argument, it’s better not to discuss so many transactions but I actually think these are healthy arguments to have. It helps us tackle harder questions like are we compatible? Where do our tastes differ? Where do our interests overlap? What do we both value? Most importantly, are we able to respect each other’s choices.
Your boyfriend needs to respect your spending and should not pressure you to do something you feel is even slightly, fiscally irresponsible. You will not resent his spending habits as much if they don’t impact you negatively.
Separatly, out of curiosity, does he ever ask to borrow money from you?
Men are very untrusted creatures imo. They have their usefulness but I can already see you are feeling taken advantage of here. Honestly I’d have him move out. Sell your place and get something you are comfortable with. Do not marry this person. My first husband and I never had a fight, had the same ideas about money etc. and it still did not work out. There’s absolutely no reason why you need to stay with this person. They are dependent on you like a child. This is not a good dynamic. Just my perspective. Your own happiness is more important at the end of the day.
Well, he’s wrong so the question is can you convince him of that or do you need to break up?
Unrelated question but why don’t you pay your rent from the joint account? Him sending you money each month with a third party app sounds like a hassle to me.
$1200 is plenty IMO for leisure / food etc. Maybe he can increase his input by $200 as heÔÇÖs the bigger spender and you can increase savings contributions by $200.
Or, both of you add $1000 to the account, but $500 has to be left over at the end of the month or else youÔÇÖll have to reevaluate. $1500 spending, $500 saved.
At the end of the year youÔÇÖll have $6000 in a joint account for vacation, new car down payment, etc.