Author Topic: Trying to sort out finances for the better - Need some advice  (Read 1644 times)

chowdan

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Hey everyone,

I'm a lurker here and of the blog. I don't interact(unfortunately) much with the forum here. My time is focused on my career, and life goals of being FI by the time I hit 35 or so.

Anyways, I'd like some opinions from more advanced mustachian's around here. I'm sure someone will have a good idea, or at least be able assist in sparking one of my own.

I'm trying to figure out, what is the best way to go about tracking my girlfriend and I's spending, and categorizing it so we can pay the bills in a fair way. I make about 20k more a year than my girlfriend, and therefore i should pay a higher percentage of the bills.

Note: We have seperate accounts, however she has 1 single checking/savings account while I have 2 checking and 2 savings accounts. 1 checking account is used for "bills", the other has $200 put into it ever 2 weeks for my "weekly" spending. The 2 savings accounts are just that - savings accounts, though due to my poor calculations(lack of having a handle on exactly how much we spend), causes me to dip into the savings accounts to cover the bills.

Here is how we currently handle our bills:
1 - Chase CC used for groceries and sometimes misc date night meals/movie trips. SOMETIMES the GF will use her card to pay for groceries or misc outtings
2 - All other spending generally goes onto my barclay CC
3 - Every month she transfers me a flat amount regardless if we spend more or less that month
4 - At the end of the month, i pay off all the bills(generally CC/Internet bills as rent/utilties is auto paid to our landlord).

I'm fine paying all the bills, it doesn't bother me and doesn't take too much effort. The problem is that I want to get our finances organized enough to the point where I can pinpoint exactly how much her share of the bill should be. I'm sure some of you married men and women out there have experienced situations like this before.

How did you folks go about keeping your finances organized prior to you getting married and merging accounts?

On a side note, I started using Quicken a few months ago and have learned their product is complete garbage. Its nearly a weekly routine(which caused me to stop using it) where I have to go in, remove an account and re-add it to get it to sync appropriately, anyone have this issue?

TravelJunkyQC

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Re: Trying to sort out finances for the better - Need some advice
« Reply #1 on: June 17, 2016, 08:26:02 AM »
Hey there! I'm in a similar situation with my BF. We split our bills pro rata according to our income, but keep separate accounts. The way we manage this is as follows:
1. We figured out all of our fixed expenses that we both share (rent, internet, electricity). It's a bit complicated because we live in his condo, so the "rent" is actually his mortgage + condo fees - the principal on his mortgage (I don't have a share in the condo, so I'm not paying his principal). For simplicity's sake, if you guys rent, just use that amount.
2. We figured out your pro rata rate (percentage of the household combined income that each of us make).
3. We opened a joint checking account, as well as a joint credit card. All expenses that we jointly share (groceries, gas, rent, whatever) come out of that account.
4. We deposit on a regular basis, the amount we need for the fixed expenses, plus a surplus amount for non-fixed expenses (such as groceries or other), into the joint account according to the pro rata rate.
5. If, for some reason, one month we don't have enough to cover, we just redeposit into the account, again, according to the pro-rated rate.
6. At this point, we're pretty good at knowing how much we need every month, so we rarely, if ever, make extra deposits. After a few months, you'll be good at knowing what you spend on average. One month will be less, one will be more, but the lean months, the surplus will still be there for the more expensive months.

We have a credit card that has decent points, since we use the joint card for pretty much everything (we aren't spenders, so our only expenses are necessary living ones, hence, joint card). If our salaries change, we simply readjust the pro-rated rate as needed.
As for the expenses tracking, Quicken, Mint, or just Excel for a few months should give you a good idea of how much you'll need in your joint account generally. Hope this helps!

Choices

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Re: Trying to sort out finances for the better - Need some advice
« Reply #2 on: June 17, 2016, 08:49:17 AM »
It's good that you aren't completely joining accounts before you're married, but Mint can import all of your transactions and you can share a login so you both can see and track them. We've been using it for years and have had a good experience.

AFTER you're married, you'll have the option of completely joint everything or dividing up the responsibilities.
My husband and I consider it all to be the 'same pot' of money since we'll share our net worth in retirement, so we both work to save where we can.

But I'm more nerdy, so I handle the utility, insurance, etc payments and he handles our travel plans. We transfer money to each other as needed to cover these costs and put the rest in savings/retirement.

Catbert

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Re: Trying to sort out finances for the better - Need some advice
« Reply #3 on: June 17, 2016, 09:10:42 AM »
Hey there! I'm in a similar situation with my BF. We split our bills pro rata according to our income, but keep separate accounts. The way we manage this is as follows:
1. We figured out all of our fixed expenses that we both share (rent, internet, electricity). It's a bit complicated because we live in his condo, so the "rent" is actually his mortgage + condo fees - the principal on his mortgage (I don't have a share in the condo, so I'm not paying his principal). For simplicity's sake, if you guys rent, just use that amount.
2. We figured out your pro rata rate (percentage of the household combined income that each of us make).
3. We opened a joint checking account, as well as a joint credit card. All expenses that we jointly share (groceries, gas, rent, whatever) come out of that account.
4. We deposit on a regular basis, the amount we need for the fixed expenses, plus a surplus amount for non-fixed expenses (such as groceries or other), into the joint account according to the pro rata rate.
5. If, for some reason, one month we don't have enough to cover, we just redeposit into the account, again, according to the pro-rated rate.
6. At this point, we're pretty good at knowing how much we need every month, so we rarely, if ever, make extra deposits. After a few months, you'll be good at knowing what you spend on average. One month will be less, one will be more, but the lean months, the surplus will still be there for the more expensive months.

We have a credit card that has decent points, since we use the joint card for pretty much everything (we aren't spenders, so our only expenses are necessary living ones, hence, joint card). If our salaries change, we simply readjust the pro-rated rate as needed.
As for the expenses tracking, Quicken, Mint, or just Excel for a few months should give you a good idea of how much you'll need in your joint account generally. Hope this helps!

I think this basic technique would work well for you.  Of course you may need to tweak things for your situation.

2Birds1Stone

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Re: Trying to sort out finances for the better - Need some advice
« Reply #4 on: June 17, 2016, 09:38:06 AM »
Always find these threads fascinating.

My SO and I split rent 50/50, then we each pay for our own individual bills etc, I pay for more of our entertainment/travel expenses since I make more than her. Our income varies a lot year to year but I have made no less than 2X what she has over the past 7 years.

This system is very informal and works well for us.