One of the scariest aspects of marriage, in my opinion, is money. We hear all the time that money is the #1 thing couples fight about. We hear horror stories of couples hiding debt and purchases from one another or how someone lost half of everything they had in a divorce, including assets that the other person had nothing to do with. It's scary! And I never want to be one of those cautionary tales.
Once upon a time, my goal was to go into marriage completely debt-free. I find it incredibly unfair for someone to take on someone else's poor financial choices, especially when that person is responsible with money. And being responsible and smart with money was one of the qualities I was looking for in a mate. Luckily, I've found that in Luke. Unfortunately, I wasn't 100% debt-free when I entered into our marriage and after 6 months of unemployment, I'm still not. What gives me solace is knowing that it wasn't nearly as bad as it could have been and that I can learn a lot from Luke and how he manages money.
Needless to say, when it comes to overseeing the finances in our household, Luke does most of it and he does a really great job. Still, we view each other as equal partners in our marriage and it's important to both of us that neither of us is completely excluded from any aspect of our marriage, especially finances.
A few years ago, I was a strict user of the envelope system. It was inconvenient to head to the bank every pay day to take out cash to pay into my envelopes, but it served me really well for a long time and I was able to pay off significant debt thanks to my savings. I had envelopes for everything and stuck to it about 90% of the time. Somehow, though, I just fell out of the habit and it wasn't working for me anymore. When I noticed some bad habits starting to pop up again, I tried something else to curb my spending and increase my savings.
I decided to make a spreadsheet to log every single penny that came in and went out. The only things I didn't record were transfers to my own accounts, including credit card payments, because it ruined my monthly totals. To put it super simply on a made up monthly budget:
On the left, it would appear that your net worth is $500, but the reality is that there is now $500 more in savings and $250 less credit card debt. That's how I used to track it without realising why my monthly net was almost always negative. When I started the spreadsheet, I switched to the right. Paying off my credit card was just paying back money I had already spent. Saving money for a big purchase later on was just setting it aside. By tracking moving money around to my own accounts that way, I was basically recording that I spent the money twice. So needless to say, it was a little less stressful when I switched to the one on the right that gave me a more accurate snapshot of my monthly spending.
In November, I suggested that Luke and I start doing that for every pence we spend. We created a Google Sheet that we both have access to and can edit. Luke took my original concept and added some of his Excel magic, but the concept is the same. We record the date, where the money came from or went to, the total with in being one green column and out being one red column, and a notes column where we record what the money was actually for. We also have a column that says which one of us spent the money. We have our totals in locked cells at the top so we can see right away what's come in and what's gone out in the month. He also put in cells to record what we've put in savings and in wedding savings to keep it off the list, but still make it easily accessible.
This month, Luke has made some changed on the spreadsheet to make it work even more efficiently. He's added cells that tell us what category of spending the money is: bills, household, wedding, groceries, travel, "treats", and other and it totals itself right on the side of the spreadsheet! He also changed which one of us spending the money to more specifically tell us if it came from his accounts, my accounts, or our joint accounts. Seriously, he's a genius at Excel, which makes it easy for us to keep the spreadsheet up to date to best serve us.
We've completed three months of tracking our spending this way and it's working really well for us. We're really good at remembering to update it as needed and it helps that we both have Google Sheets on our phone to update on the go. We're able to really easily see where our money is going and identify right away where things may be getting out of hand and make a correction. For example: concessions at the cinema! This sheet keeps us both accountable and doesn't allow for us to hide purchases from each other, which is a slippery slope neither of us want to start sliding down. Even for Christmas, we added each other's gifts on there, redacting where they were purchased from to keep the surprise for Christmas morning. Sure, it kind of takes away from some of the magic of gift giving, but I mean, have you ever shared an Amazon account with the person you're shopping for? It's worse!
My best advice to anyone around money is to find what works for you. If there's one thing I've learned from wedding planning, it's that everyone has a budget, some might just be bigger than others. While we don't stick to a strict budget--like I did when I had the envelope system--we don't see a need to in this current season, but we're open to adapting our current system to best serve us as life and expenses change. Maybe our spreadsheet system doesn't work for you, maybe the envelope system doesn't work for you, but I say just keep trying until you find a way to consistently hit your financial goals, whatever they may be. I've spent countless hours online researching different budgeting methods and reading about people who went from drowning in debt to debt free in a matter of years. I've implemented some of the strategies I've read and tweaked them as needed, but what I can definitively say is that I'm better with money, have less debt and more savings when I have a consistent way of tracking my spending.