dollars and mints

After we got married there were a few things that we were sure as a married couple that we wanted to do when it came to finances. First, we were both on the same page that my money was her money and her money was my money. Secondly, because of this we decided that we would have one joint bank account for our money. Basically, all of our expenses would be paid out of the same pot and from the income we both contributed. Don’t take that last sentence in the wrong way if there is only one income coming into the bank account because the first principle still holds true.

We have seen other married friends take the approach that they have their own accounts and each pays certain bills out of their own account. I am not saying this can’t work, but there is a lot of room for one spouse to misuse or spend outside of the financial goals of the marriage. Having one account does not insure that there will not be bad judgment by one spouse. With one account if one spouse was to go rogue the damage could possibly be worse, but with one account there is a union and trust that must be there just like the marriage. You might say that once you become “one flesh” you should become “one account” as well.

When we were first married my wife was still in her last year of college so she set up the accounts and managed the finances. After she graduated and was hired for her first job she continued to pay the bills and managed the checking balance. She did a great job and always kept the finances up-to-date and accurate. A few years ago, she came to me and said that she wanted me to start handling the finances. She felt that it was a job that I should do as the head of the household and a way that she could show her trust in my leadership of the family. We have been on the same page for a long time on how we spent our money, tithing to our church, and investments. My style was not going to be really any different from her, but her perception that I was making the financial decisions and she could respect and trust me with this part of our marriage was the big difference. That being said, if you are not capable of managing your family’s money in an open and honest fashion, making solid decisions that do not put your family’s financial affairs in danger, or have a habit (drugs, alcohol, etc.) that may be too tempting for you to be in control of the money, then you should own up to that, have your wife maintain the records, and even potentially put up some barriers for you to have access to the accounts.

After I started managing the checkbook, my engineering background began to kick in. I didn’t want to just balance the checkbook. I wanted to figure out how I could project expenditures in a given month before they occurred. I noticed immediately that those ledgers that come with your checkbook are pretty much useless. They probably served well when everything was paid by check, but these days most bills are paid through online banking and direct withdrawals. I could go through a dozen of those checkbook ledgers before I would go through the checks in one book. So I purchased an accounting ledger like you can find at one of the office supply stores where I could list 35-40 items on one page. I think I actually got the accounting ledger at the flea market for a quarter, but the point is it is much easier and you could even print out a grid with a name, date, $ out, $ in, and balance line and still be much better off than with the checkbook ledger.

My second big discovery was that I wanted to be able to get a handle on our family budget. I could track our bank items pretty easily, but most day to day purchases are paid by credit card. You don’t really keep a ledger for your credit card purchases usually, but it would be good to incorporate what you are actually spending your money on to be able to budget where your money is going. After looking around I found a site called Mint (www.mint.com) that looked interesting as a family budget tool. Mint allowed me to sync up my banking accounts, credit cards, and investments in one place. Mint goes out and gets the data from all of my accounts and puts them in one place automatically. From there you can place all of your entries from each account into categories and even subcategories. With this knowledge you can see where your money is going. You can know how much you are spending on groceries, gas, or doctor visits each month. The longer you use the program the better your data set is and you really start to get a great feel for your month to month budget. For the first year, I would look at my monthly budget categories and could adjust them up and down a little bit every couple of months as I saw more or less expenses in those categories. After a year of using the program my adjustments had pretty well targeted what my month to month category average would be. I could also start to tell which months we tend to spend more or less in and adjust wisely to anticipate the needs.

Mint is a free site to use and is very user friendly. They also have apps for Iphone and Ipad that allow you to use the program away from the computer. Another great feature is the availability to graph lots of different sets of data to get a better picture of how we are spending our money. You can even set up the program to send you email alerts when some bills are due or large purchases are placed on an account. Mint isn’t perfect and it is only as valuable as the time you spend setting up your personalized categories and updating transactions that might not register in a correct category.

I am sure there are other tips and tools for handling your family finances. Feel free to comment with any of those you might have. This is just one easy way that I have found that kind of makes it……fun.  If your wife was doing the books before it might even make her a tad bit jealous.