Commingling finances: Living together without tearing each other part

Like most couples, my wife and I did not start with the same views on money—she’s a die-hard saver and I’m someone who really needs to ensure that life is filled with fun. It was only through some difficult conversations that we were able to align on a solution to our finances that we both could live with. Actually, I’ll go out on a limb and say it, “I love the way we manage our funds.” That’s why I’m sharing this with you today. I’m hoping it helps remove a sense of strife for you and the people you care about. Your mileage may vary.

Today, I give you our masterpiece, our joint finances!

1. Retirement is non-negotiable. We both fund a comfortable retirement directly from our paychecks, every month, without fail. If we didn’t save anywhere else, and we manage to live long , healthy lives where we can continue to work, this alone assures us autonomy in our old age.

2. We each get our own “fun money.” The monthly amounts have fluctuated over time (in consultation with each other). The amount is enough for us to each have fun, and possibly save towards larger expenses that we don’t want to have to validate to the other person. My wife buys more clothes than I do. I tend to spend on electronics. Go figure. Now both of us are happy…and have guard-rails.

3. We automate monthly investing and “top-off” our cash cushion account as required. Our family cash cushion is about 3 months of expenses. We have significant investments allocated broadly so I don’t feel the need to hold more cash. If you haven’t saved elsewhere, you may need more. Personally, I like having a buffer that is not visible in our joint checking account. It’s at another firm entirely.

4. Whatever is left gets used for bills, budgeted towards future expenses, or consumed in family fun.

5. “Surprise money” gets immediately invested. I get a twice-annual grant from my employer. I hold these funds for a year to get favorable tax treatment and then cash them to diversify into other investments. We treat wins as progression towards financial freedom and we try not use them up on Household bills and expenses (admittedly with varying degrees of success).

6. Tricking ourselves into saving everywhere. We save in our retirement accounts, our taxable accounts, and even within our joint checking account (for future expenses we know will come). You get addicted to seeing your flexibility increase over time. I highly recommend it. If our joint checking grows too large against future expense, I invest it and take it off the table to enforce more savings.

I hope that this helps! Is there anything you do that would be helpful for other couples?

If you like posts like these, follow us on Twitter or sign up for our newsletter. There’s more with this came from!