Financial Friday: The Relationship Edition.
It’s been awhile since I’ve written about my financial status, but needless to say, that’s because everything is right on track! My current credit card balance is just under $2500, which is about half of what it was this time last year and it means I’ve paid off about $5000. I do believe I’m on track to having my credit card paid off by the end of September, which means I will have accomplished one of my 101 things! I’m very excited about that.
In other financial news, my boyfriend and I recently made a big step.
We got a joint checking account!
When we first started dating, it was clear that Erik could not foot the bill for everything we did. Manhattan is expensive. Food is expensive. Museums and theater and movies are expensive. Pretty much everything we like to do together costs money. On top of that, Erik also has a car, so he pays for gas and tolls. Neither of us has the kind of income to support the socializing of two people in Manhattan. We knew right away that our dates would have to be somewhat evenly split, but that ended up being more difficult than we anticipated. For instance, our meals were never equal, so sometimes I would spend more than Erik, or Erik would spend more than me. Since our budgets are both fairly tight, because young twentysomethings, every dollar counts.
Because we’ve been in a relationship for awhile now (a year and a half in June), we spend most of our free time together, but we’re not at the stage where it makes sense to combine our finances officially. My money is my money, and his money is his money. But how do you keep things balanced while dating long-term? To me, it seems fair to “go Dutch” and split things, but it can also be tricky with tight budgets when you don’t know how much you’ll spend on any given weekend.
Last fall, we did a weekend where we used only cash to finance a very cheap weekend. It worked well enough, but it was hard to keep track of change and I usually find it easier to keep track of where and when money was spent when you have a debit card. After much discussion, we decided we would open a joint checking account. We would each deposit $75 a week into the account, and any time we went to do something together, we would use that debit card to pay for it. The discussions of who should pay for what because so-so paid for such-and-such immediately ceased! We have been using this system for 2 weeks now and it’s been so nice in balancing my own personal budget knowing that what we’ll be spending together will never go above $75. It’s also helped with budgeting our own activities, because when the money runs out, it’s gone! But likewise, if we have a lighter weekend, we’ll be able to save for another weekend when we want to do something special, like go out to a pricier restaurant that we normally couldn’t afford.
Personal items, such as if I want to buy a book while we’re out together, will be paid by the individual’s debit card. That way we keep things fair. Now it doesn’t matter who paid how much for what meal or activity, or trying to even things out by discussing gas cost (him) or train travel (me). The same amount of money is being equally contributed to the same pot of money. So far, it’s worked out well financially, and in the two weeks of using the system, we haven’t run out of money yet. It’s also been an easy first step into managing a joint account. Since it’s not a significant amount of money, nothing is at risk, but we’re able to communicate about money and talk about how to spend our money (albeit a very small amount of money).
For me, financially it’s made things more predictable. I usually know in advance when and where I’ll be going out to dinner with friends, but with Erik, who paid for what was always up for grabs at the time, which meant I never really knew how much I spent.
How do you manage your finances while in a long-term relationship? I find not being married but not being in the courtship phase of “the boy pays for everything” makes figuring how who pays for what and sticking to a predictable budget to be a lot harder!