Zee Spencer

How Kiera and I Merged (some of) our Finances

Having been with Kiera for going on 4 years now; and having lived together for 3 of those years; It seemed a bit unnecessary that we maintain separate budgets for shared resources like groceries, rent, utilities, streaming media accounts, etc. We’d cobbled together a “I‘ll pay for Blue Apron if you pay for the CSA” form of spreading of fiscal responsibilities, but that was getting more and more complicated and difficult to balance to ensure an equitable split based upon our respective incomes.

I strongly value my independence and have a bit of anxiety around financial entanglements. We both strongly prefer a structured, equitable approach that allows the two of us to afford our shared expenses and make progress on shared goals while keeping our personal expenses and goals independent.

Constraints

So we set up some constraints:

  1. Transparency. Either of us should be able to see how money is planned to be spent as well as how money has been spent.
  2. Equitable. Splitting expenses 50/50 isn’t equitable given the compensation disparity between us.
  3. Flexibility. We didn’t want to lock ourselves in to a specific financial plan; as we expect we’ll learn quite a bit about our family’s financial needs over time.
  4. Collaborative. Any tools or systems we used would have to allow both of us to have full read/write/admin privileges.
  5. Easy. We don’t want to enter what we’ve spent money on by hand or upload a pile of receipts. Automatic import of transactions was a must have.
  6. Trust, but verify. Purchases sometimes need to be split between “groceries“ and ”puppy” budget categories and I don’t want get into the habit of ignoring auto-categorized transactions as they stream through.

Building the Budget

I’d been using YouNeedABudget (or YNAB) for a few months now (as had Kiera) and while it has it’s warts it has still been relatively decent. It uses a virtual “envelope” style of budget where categories are defined, income is distributed into the categories’ envelopes, and finally money is taken out of an envelope when a transaction is for that category. It’s also allows a single user to have multiple budgets. This allows us to maintain our own personal budgets while still having access to the family budget.

Since we’d both been tracking our spending on things like rent, utilities, groceries, puppy, entertainment, etc. for about a month it was pretty easy for us to come up with an estimated total cost-per-month for those things. We also set up a category for purchasing upgrades for our home, such as that stand mixer I’ve been eyeing or a TV so we have a slightly better entertainment system than my 11” MacBook Air.

We then summed the total budget for next month so we had a number to split between the two of us. Since we want to be equitable; we took the ratio of our respective salaries to the total budget and set that up as our personal contributions to the family budget:

  • K’s Contribution = (K’s Income / (K’s Income + Z’s Income)) * Total Budget
  • Z’s Contribution = (Z’s Income / (K’s Income + Z’s Income)) * Total Budget

We set up a shared checking account at a local credit union (Patelco) because it has consistently high reviews, a branch literally next door from us, and YNAB supports importing their transactions.

We “seeded” the checking account with our respective contributions for next month as well as a smaller portion to cover this month’s remaining expenses.

Once the account was set up we moved our rent auto-payment, utility bills, CSA subscriptions, multi-media accounts, etc. to the shared account.

Since sometimes we sometimes wind up buying family things using our personal money we set up a shared Square Cash account. This account is used to reimburseĀ us personally when we do a grocery run and forget the shared debit card.

Every Saturday we spend 10~20m reviewing the last weeks transactions, reimbursing personally purchased shared expenses, and making adjustments to the budget. Around the middle of the month we transfer money in from our individual bank accounts.

Takeaways

Budgeting, while stressful, is also liberating. Now we both know exactly how much money is being spent keeping us housed and fed; plus we can start planning for shared things that are too expensive for either one of us to just buy but both of us want.


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