It doesn’t bare repeating that times are getting “tough” (if they weren’t already), and that consumerism is at an all-time low. Yet, things get really interesting when these rough times hit just as you’re trying to settle through a financial merge… and it’s the first time you’ve had to make savings/spending decisions with someone else.
I’ve always been a penny pincher, but it has gotten very difficult to adjust my ultra-savings ways into a 2-person household. I have irrational savings habits that I’ve tried to impart onto poor Mr. M, and I’ve realized they’re more annoying than helpful. It was only through reflecting on our “home savings” process that I realized that budgeting wasn’t our answer…
You see, when we were saving for that giant chunk of a down payment/closing/move-in costs pile, we did it by socking away big chunks of money with every paycheck. So, that is what led us to live our financial life by the “save it before you see it or spend it” plan. [First, to clarify, we have completely unified assets, meaning we share all of our income with each other] We’ve divided up our money into tons of accounts… all with their strict savings and spending purposes. Then, instead of hoping there’s money left at the end of the month to save, we can spend the money that’s left without too much worry.
Here’s how it breaks down:
‘Da house bills fund: $ deposited to pay mortgage, insurance, taxes, utilities (gas/electric, sewer/water/trash, satellite, phone/DSL & cell phones)
Retirement: 401k/403b matches before paycheck, and the rest goes into IRA fund savings
Fun money 1 & 2: We each have our own “fun money” spending accounts and only have access to our own records (no way to cheat and look at others)
E-fund: break in case of emergency
Medical bills: $ pulled out every paycheck for prescriptions/Dr’s apts… the year-end balance is spent on over-the-counter medicine, eye glasses/contacts
General stockpile of money: where the rest of it lives! $ for food, travel, gas, furniture, Target purchases, home improvement, etc.
Future savings accounts TBD: we’ll open as many as we need for monthly direct deposits to meet whatever needs we have
Our little formula is far from science, but it’s helped me ease away from my frantic money worries little by little. It’ll need to be refined now and then, but our basic categories have held up so far. Now when I see our “general stockpile of money” account balance, it’s nice to know that it’s really what we have available to spend… and budgeting that money is much easier than worrying about the whole chunk of it!
….and when I want to feel rich, all I need to do is check out our account balances at mint.com and see everything laid out in one place!