Straight talk about family budgeting: Women share what works

Every couple – from newlyweds to seasoned veterans – has their own way of tackling the family finance plan. We asked women what system works for them and found a diversity of methods organized around similar core principles. All agreed that the key to any successful system is strong communication and the alignment of long-term goals and priorities.

Joint or separate accounts? Either one.

Planning the family budget is really about coming to terms with the reality of a limited income and of our own spending behaviors vis-a-vis family priorities. For some couples, having a joint account is crucial for better communication and teamwork. Other couples prefer separate accounts, while still others opt for a hybrid of both. The system that works best for you depends on your own communication dynamics, goals, and spending patterns. Here is what works for some of the women we consulted:

Julia: “We’d absolutely recommend joining finances because married couples need to communicate and approach decisions together.”

Victoria: “We have joint accounts, but a couple different ones that we use for different things. I pay all the bills and keep everything balanced. Communication is key!”

Lisa: “We have separate accounts but our names are on them and we have equal access. We do this because we are dual income and it’s easier to manage if I put my money in my pot, his money in his pot. If I were a stay-at-home mom, we would have only one account.”

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Kelli: “We have both joint and separate savings accounts because when we get paid we have automatic transfers to each account. When I get paid, I pay some to our savings and some to my savings. This allows me to purchase things I want without using our joint account money.”

Mary: “We have separate accounts. We each pay certain bills on our own each month. Basically, I pay the big-ticket items, and he pays everything else including food. I get paid once a month, so it’s easier to arrange it that way.”

Even when couples have joint savings and checking accounts, many keep their credit cards in their own names for a very practical reason: if one spouse dies and leaves a credit card balance, the other one is not burdened with a post mortem bill.

Divide tasks according to talent and inclination

Some people are long-term strategic thinkers; others are more attuned to the daily details. Some people genuinely enjoy budgeting, while others loathe it. Part of the adventure of marriage is learning who is best at what task, and allocating responsibilities according to each one’s talents and inclinations.

Carrie: “I do the big-picture financial strategy stuff. He executes the plan and pays all the bills.”

Julia: “He handles everything because he’s a finance professional. We have tried to get me involved with more detailed budgeting, but it only led to arguments about how to do things and when, so I leave it to him to handle now. He consults me for most decisions, but his planning is what keeps us on track for retirement and college savings.”

Rebecca: “I take care of the vast majority of finances except he pays the monthly amount on a few bills that were his prior to marriage. Why? Because I like doing finances and he hates it.”

Sarah: “I do the day-to-day tasks like bill pay, taxes, etc. He handles the long-term issues like investment and retirement. We work together about twice a year on the big picture (benefits and big job decisions) and keep each other updated day to day as needed. He prefers not to bog down in the day-to-day details … and the long-term stuff doesn’t go well with my anxieties, so it’s a good balance.”

Track spending meticulously

One of the most fundamental rules for building a strong financial plan is for both spouses to know where their money is going. Women who are satisfied with their current financial situation report that their first step was to track every expenditure with ruthless accuracy.

Anne: “For three months we tracked EVERY SINGLE TRANSACTION. What we paid, how much we paid, what for, etc. It made us realize we had more money going out than we thought. Seeing every transaction made us more aware, and we ended up not spending as much on excess items because we didn’t want to explain ourselves.”

Krista: “It isn’t what you make, it is what you spend. We started out with a budget; now we just have a spending log (write down every. single. thing. you. spend) to track where our money goes. We ALWAYS talk about big purchases over $100.”

Tracking spending and planning for future expenses go hand in hand:

Eva: “If for Christmas he wants to splurge (within reason) for the kids, I just need to know what the target is so that I can start a fund for it a few months before. He in turn will work a couple of extra shifts to fund it. I, in turn, try to be frugal and responsible with household spending. I coupon where possible, negotiate where necessary, and meal plan/cook often and carefully to stretch the budget.”

Save and invest aggressively

Budgeting is about maximizing today’s resources for the future. The most successful couples not only keep track of their spending, but execute an ambitious savings and investment plan.

Lisa: “It’s NOT enough to spend less than what you make. For example, if you make $100 and spend $99, you will never meet your retirement goals. You have to spend WAY less than what you make and save 20 percent of your gross income every month and frontload it (i.e. from a payroll deduction) so you never have a chance to spend it. Also start saving for retirement as early as possible. It’s not TIMING the market, but time IN the market that generates the growth.”

Find your gurus and tools

Few of us are financial experts; most of us really need someone else to guide us through the bewildering world of money management. Among the women that we consulted, Dave Ramsey’s system was hugely popular, but some women pointed to other practical tools as well.

Tanya: “Dave Ramsey, Dave Ramsey, Dave Ramsey. It saved our finances and our marriage. We’ve paid off $27,000 in debt in the 18 months since we did Financial Peace University.”

Mary: “We are just now in the process of getting Mint set up so we can do a better job of planning/saving.”

Anne: “We both use YouNeedABudget so I go in and reconcile our accounts there weekly.”

Rebecca: “I haven’t done this yet, but I’ve been thinking of using Personal Capital for keeping tabs on the budget and our investments.”

Tanya: “I keep a simple Excel sheet to make sure the math is accurate.”