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Financial Friday: The Relationship Edition.

April 23, 2010

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!

  1. April 23, 2010 11:24 AM

    Great post! And big congratulations – both on the big step and on the progress, that’s so awesome. Every weekend is “cheap weekend” for us in that we get takeout and sing Rock Band karaoke and watch Dr. Who marathons 🙂 We’ve talked about joint accounts and it’s a great idea, but he’s set on staying with his little French bank and I don’t speak French! So we use cheques and I take out a set amount in cash at the beginning of the week, so I know what I’m spending. It seems to be working well 🙂

    • April 23, 2010 1:38 PM

      Even take-out is expensive in Manhattan! We just can’t win. 😦

  2. April 23, 2010 11:26 AM

    Congrats on being that much closer to being debt-free! I paid off my credit cards about a year ago, and I wore a huge grin on my face for about a week. It felt THAT good.

  3. April 23, 2010 11:36 AM

    Man, I love this idea. My boyfriend and I always struggle with this…who should pay, or one ends of feeling jilted, and this really takes care of things neatly. What a great plan! Might have to adopt it as my own 🙂

    • April 23, 2010 1:38 PM

      This, my friend, is why God invented blogs. Happy to inspire!

  4. April 23, 2010 12:30 PM

    That’s a fantastic idea! That way, no one is bearing the brunt of the money spending. And you can budget way easier that way. Good for you guys for taking control of the situation. 🙂

  5. April 23, 2010 12:44 PM

    My boyfriend and I have been together 2 years and we live together. We split the “house” bills evenly (including groceries). But he pays when we go out. Mainly because I have two kids and more bills than he does. So he foots the bill when we go to dinner/movie/etc.

    I think it’s great that you and your bf have worked out a system. That is a GREAT idea!! I’ll be suggesting that to some couple friends of ours 🙂

    • April 23, 2010 1:39 PM

      We’ll probably change things up when we move in together. It’s definitely challenging keeping things fair!

  6. April 23, 2010 12:45 PM

    Congrats! I’m glad you guys found a system that seems to be working 🙂

    And, wow!! Almost two years?? I didn’t realize it had been that long, although now that I think about it, I guess it’s been awhile since you celebrated your 1st year together. Hopefully, we can look forward to more news of combining assets, umm, so to speak 🙂

  7. April 23, 2010 1:27 PM

    I heard you on the dating in NYC thing! So pricey! This sort of thing has been on my mind lately for my boyfriend and me…not for right now, but in the future (like where you are in your relationship). Last weekend was a perfect example of how a joint debit card would’ve been so convenient. We went out with friends for brunch, and he paid for my meal saying that I could just get his ticket when we go to the movies later. It wasn’t much of a difference, but my meal was more than his ticket, but I have the policy that it’ll all work out in the end, but it’s hard to keep track! (and I don’t want to nickle and dime things, I don’t think that’s healthy for a relationship) One day I’ll bring up this idea to my boyfriend and see what he thinks! Thanks for sharing!

    • April 23, 2010 1:37 PM

      We hated nickle and diming each other too and often did exactly what you guys do, but it always got to the end of the weekend where Erik was like “I went over my budget” and then there’s me who never keeps track of how much she spends over the weekend but would end the month going “Why the hell do I have $13 to last me four days?” Sigh.

  8. tmana permalink
    April 23, 2010 2:14 PM

    We set up a joint account when we decided we eventually wanted to move in together; the idea was to save for the move (we figured we’d need to fork over three months’ rent when we signed a lease). While our changing goals and financial conditions are enough to write a soap opera, having something you can call (collectively) yours (whether a checking account, a deed, or something else substantial) is an important step in establishing the permanence of your relationship.

  9. April 23, 2010 4:39 PM

    I think that’s a great idea! As I’ve discussed before me and my Eric have a joint SAVINGS account which we’ve used for joint purchases like: a big screen TV, camping stuff, this trip to Europe we’re going on etc. We then have our own spending accounts for our own things.

    We’ve lived together and apart so I have experience for both. Our spending money on outings is not down to a perfect science at all though. We try to switch up who pays but I know Eric usually ends up paying more often when we go out to eat and stuff. At the same time, he does make A LOT more money then I do!

    It works for us for now!

    • April 23, 2010 4:52 PM

      I think if I was still in school and Erik worked, he would definitely pay more. I technically make more than he does, but I have more debt than he does, so it’s hard to figure out who should end up paying more so we try to keep it even. I think a joint savings account is a good idea, but right now we’re not really jointly saving for anything.

  10. April 24, 2010 6:34 PM

    The ‘who pays for what’ problem is so common – and I love your solution. I have a group of friends that I go out with every Wednesday and we have been doing that for almost a year. Even now, there is still the dance of who is paying for what. I wonder if a non-dating group has ever gotten a joint account for their hang out times?! 🙂

  11. April 27, 2010 9:41 AM

    I think finances can be a thorn in any relationship’s side. And I think that money is a lot like diabetes … what arrangement works for some, may not work for others. Joe and I have been married for 7 years(wow!) and started out with nothing when we were first married but now are in a much better financial situation. How we keep our money has worked very well for us over the years … separate! We do have a joint account where some money is kept however he has his own checking account and I have my own. We split the bills; not so much straight down the middle but more as a ratio of what we each bring in. The rest of his money is his to spend(save) and same for me. I think all you can do is give it a try and I hope it’s a system that works well!! 🙂

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