Fiscal Advice for newlyweds

[MoneyBunnyQ]

Hi all,

I know there have been various threads about this but I couldn't find anything that directly answered my queries.

A caveat to start- I come from a difficult family upbringing where money was a deeply unhealthy issue and I don't feel I have ever been "taught" how to manage money. I am trying to educate myself about this in adulthood.

Newly married and trying to sort out our finances and work out the very best system for us moving forward. I would be grateful for advice about the best system and specific bank account recommendations.

Context:
Married, no kids (TTC)
DH earns really good salary, fixed, with annual bonus.
My salary is very unstable at present (due to being a freelancer in precarious industry- this is something we are changing in the longer term. It it will take a while for me to get new job and fixed income. For now, I can earn roughly a quarter of DH's income each month.
We are incredibly fortunate and lucky that DH's salary basically covers our essentials.
At present we pay mortgage and bills from one account and then the rest of our respective incomes we each keep for ourselves. Therefore joint leisure stuff (eg cinema) tends to be paid by DH and individual treats (eg haircuts) by ourselves individually, but it is all very informal and I think we could be structuring this better. Some regular payments we each make are things I think we could structure /manage better eg gym membership. Also the little things like DH's cappuccino at work- which I don't begrudge him as he works super hard and long hours.

We both use Monzo separately for our own money but perhaps we could instead use a joint Monzo account?

I feel like there are different "levels" of outgoings we need to sort out and manage better. Level 1 would be essential (mortgage/bills) which we are on top of. Level 2 would be "fairly essential / luxury to live a comfortable life" type payments such as our Oyster card, haircuts, gym etc. Level 3 would be leisure/treats/savings/holidays etc. I feel like we are not jointly aware of all spending on Levels 2 & 3 so it's how best to manage these.

Again I hope I don't come across as entitled- I am extremely grateful that we even have money left over for things like gym and haircuts! I realise I may not sound very financially clever and I am determined to get better at this. DH is good at the numbers but probably we both need to step up a gear in terms of being on top of this. We want to get a firm grip on it all jointly, so that we can be as savvy and organised as possible and not be frittering money away, and of course, save for possible baby.

Any tips for how to start off our married life jointly managing this?

We have always put all our money into the joint account except for the same amount of pocket money we each kept back. This is spent on clothes, haircuts, make up or whatever we each want. All joint spending bills, food, family gifts, dates and holidays and no anything child related comes out of the joint account. Now I’m a stay at home Mum the only difference is I have a standard order set up from the joint account so to put my pocket money in my personal account.

I don’t know where that random no came from!

Thanks, sounds interesting. So how do you work out how much pocket money you are both going to have? (And esp now that you're SAHM)?

look at dave ramsey on you tube
moneysavingexpert.com will show you good bank accounts , utilities companies, tips and advice on all sorts of money matters
there is also a free online open university course on money management
use topcashcack and or quidco

Married almost 23 yrs, got a joint account just after marriage - both salaries go in, all outgoings out, no other current account.

We have joint main savings account, separate ISA and pension accounts, 1 joint and 2 individual credit cards each, all paid off monthly by DD. If he is buying me birthday/Xmas stuff that he doesn’t want me to know about (I manage the accounts generally) then he will pay cash. I buy his on my individual card.

I have been part time since having kids 21 yrs ago, DH works on Contract via his own limited company, pays himself a basic salary then dividends, some monthly, some annually - the latter usually go straight into savings or to pay for larger things eg a car.

If one of us is going to cash point, then we will check if the other needs any cash - although we both pay most stuff on CC anyway.

We would discuss major spends, but anything else we just buy as and when. We are fortunate in being comfortable financially, but also we both have the same (careful) attitude anyway, we don’t scrimp but neither do either of us have massive splurges or waste money. Any windfalls go straight into joint savings - my inheritance, a share windfall I got from work, a share windfall he got from an investment, endowment policies that I had when younger.

I find this separate finances when married odd, esp when kids come along.

We have a budget, think we used the money saving expert website. Every now we check how we are actually doing.

All money in one account. It's never been an issue. We talk about biggish purchases but other than that we buy what we like pretty much. For the majority of our relationship DH earned more than me, especially when I was pt when the children were younger. I now earn more than him. But we have never looked as yours and mine it's just ours.

The more important bit is that you are TTC.
So whilst on maternity leave, and on going if you choose or have to be a SAHP (eg SN), your income will drop/cease.

At that point his money should be come 'our money' that goes into a joint pot. If you want to divvy up spending money to separate accounts then fine, but you should not be in a position where you are spending your savings to cover nappies.

Really interesting responses, thank you. @Sophiesdog11 can I ask about your reasons for using credit cards?

I do feel as though separating out the mortgage/bills account from other general spending would be more sensible for us... If you don't do this, and everything is all in the one account it must be harder to track expenses?

Our approach is similar to Sophiesdog11. We keep cash in an envelope in our bedroom and when one of us needs some we just make a note on the outside as to the amount we took and the date.

We also put a lot of things on credit cards as we get 2% cash back on all purchases on one of DH's card and we pay it off in full every month. So we charge insurance, propane for heating, petrol, groceries, etc. on it. The cash back is a nice top up every month and really adds up over time.

DH also uses Quicken to track everything.

MoneyBunnyQ - using CC makes life easier, we don’t have to worry about whether we have cash on us, plus we get rewards from 2 of them. We both started using them in earnest when younger and working away on business.

The third has no rewards but doesn't impose charges when we are abroad so mainly used for holidays.

We are of the generation (50s) brought up to only buy things we can afford, so we are not using the CC to get into debt but for convenience. Plus the security of being able to claim from the card issuer if something goes wrong with a purchase.

We are educating our DC in similar financial ways, DS got a CC with his student account at 18, used it for train fares and odds and sods, always paid off monthly. We encouraged him as a way to build a good credit score. DD will also apply for one this summer, ahead to going travelling, as it will make life easier for her abroad.

Used sensibly, then CC are better than debit cards, they give more protection.

Everything in our joint account, £200 each back out in a monzo monthly to cover individual spending on treats - lunch or meals out with friends, a new top, flowers, Starbucks very occasionally. Spending from the joint for bills, petrol, meals out together, travel, holidays, etc

If .. everything is all in the one account it must be harder to track expenses?

We have a finance spreadsheet, one tab for current account, one tab listing regular payments in and out and their dates, which I move into CA tab as each new month approaches.

I monitor CA regularly and update tab with extra money in/out, move money from savings if we have any large outgoings or when ISA payments due.

The spreadsheet also has tabs for each CC, again I check the online accounts and update those tabs regularly, which also means any unusual transactions become obvious very quickly. As payment dates for CC approach, I enter the amounts in the CA list.

I am quite an organised person so find it easy to keep track of everything.

We keep separate finances and savings, the exception being a sum paid into the joint account each month which covers household costs 50:50 and then a little more.

It probably helps that we earn more similar amounts.

Seperate accounts where our wages go in. We move a set amount to a joint account where all joint bills come out of.

Personal bills come out our own accounts and we have seperste savings and spending

I'm now a SAHM. All money is family money and it was pre-baby as well even though DH has always been a much higher earner.
These are the accounts we use:

1. Shared current account for bills and groceries
2. Linked savings account for joint less frequent purchases like holidays or the annual travel card (we worked out on an excel spreadsheet how much we needed annually and set aside a set amount every month)
3. An account each for equal spending money that goes on whatever we please.

Other money is used for saving and investing, e.g. pensions, ISAs, dealing accounts, mortgage overpayments etc.

Similar to LazyPuppy, we each have our own current account that our salaries are paid into. We worked out our monthly outgoings using a budget planner tool (so mortgage, bills, groceries, an amount to cover expenses that are annual e.g. insurances, car servicing and repairs, Christmas, plus a reasonable budget for joint socialising and luxuries like takeaways). We pay this amount into a joint current account in proportion to our earnings.

It tends to be one of my household 'chores' to regularly audit the joint account, make sure there's enough in there to cover bills and any planned expenses for the month and that we aren't overspending the budget. As others have said we do also use a joint cashback credit card for day to day expenses which gets paid off monthly (so no debt accrued) - I also monitor this alongside the j/acc. DH does have access to both online banking accounts/statement but rarely looks TBH!

Out of what is left from our earnings after expenses, we each pay a % into joint savings (again in proportion to our earnings) - we have several pots of savings including a rainy day fund, medium term fund for house improvements, car replacement etc and a short term fund for holidays. How this is split was agreed jointly, some savings are held in our own names for practical reasons (e.g. you can't get a joint ISA so some joint money is in individual ISAs but we both know how much and where it is and trust each other not to spend without the others knowledge, if you see what I mean).

After expenses and savings, we each have a similar amount left over. From this we pay our individual travel/commuting costs (some would count this as a joint expense) and for our own hobbies and personal expenses such as clothes, haircuts, gifts, socialising with friends etc. Some would say this is controversial but we also each have some personal savings that are purely ours and we don't have to account for to the other person - we are lucky enough to have enough disposable income that we can afford to do this as well as have joint savings. This is definitely not an essential and would not prioritise over things like rainy day fund, pensions etc. - but for us it helps us preserve some independence and reduces conflict as we have very different attitudes to money - I am more of a saver and DH a spender, so if he wants to splurge on some really expensive bit of kit he can do so out of his own money without me getting on his case about being extravagant, and if I want to go without new clothes and haircuts for 6 months so I can go on a nice holiday that's OK too and DH doesn't feel controlled/deprived. Again recognise this only works because we are privileged though so wouldn't work if there's fundamentally not enough in the 'pot'!

Joint account since before we got married with both wages, bills come out. Credit card we both use for groceries (cashback and can then keep track of spending on food). We each have a Starling account (similar to monzo) which we put broadly the same amount onto for individual expenses. Sometimes dinners out or train trips sneak onto the joint account / credit card but it works well for us. Leftover Starling money gets saved towards stuff individually (apparently the PS5 has been announced). Big savings is joint towards holidays / mortgage etc.
We currently earn around the same but keep a similar system with the same amount of personal spending money regardless of who is earning more which varies at the moment due to time out for study / maternity leave etc.

A lot of PP's are using credit cards with cash back it seems. Can I ask a couple of questions about that please?
How much cash back do you get and in what format- eg money off your final bill? Does this work out as a significant amount / worth the hassle?
Secondly, those who say you pay off the CC each month, how do you practically facilitate this and organise the payment? Eg from which 'pot'? I can see that having a CC and paying it off each month would be good for credit rating but I would be worried I'd get into a muddle and end up being charged interest or not paying it off properly. (I will be the one managing the day-to-day admin if whatever we end up doing).

What I would do in your position is to separate the salaries.

I'd have both of you living off your husband's salary, including any treats.

Then with your salary I'd split it - 1/3 for savings, 1/3 for overpaying the mortgage and 1/3 for holidays and bigger household items/repairs. If you can live off one salary you should do - you will always be secure that way.

How much cash back do you get and in what format- eg money off your final bill? Does this work out as a significant amount / worth the hassle?

For us it's a bank transfer to our brokerage account at 2% of spending. The card is affiliated with the brokerage company (Fidelity). It ranges from US$40-80 per month depending on how much has hit the card, so pretty significant over time. There's no hassle at all, it's all automatic.

Secondly, those who say you pay off the CC each month, how do you practically facilitate this and organise the payment? Eg from which 'pot'?

When the statement comes DH pays it by direct debit from our joint checking after he's downloaded the transactions into Quicken. His pay (he's the higher earner) goes directly into the joint account. I pay some of my earnings into the joint account every pay cycle by writing a check, which gets deposited into the joint account by smartphone app. It's not terribly burdensome, but I remember when you had to drive to the bank to deposit a check.

How much cash back do you get and in what format- eg money off your final bill? Does this work out as a significant amount / worth the hassle?

We have an American Express (not everywhere accepts it mind you!). They have a range of cards, the silver introductory one pays 5% for new members, we're now on a BA/avios linked one which gives you airmiles. It 'pays' for our flights for our annual holidays every year including long haul (well not quite fully pays as you still have to pay tax, but you also get a much nicer flight than if booking through budget airlines). I would say worth the effort but then I find it very little hassle!

Secondly, those who say you pay off the CC each month, how do you practically facilitate this and organise the payment? Eg from which 'pot'? I can see that having a CC and paying it off each month would be good for credit rating but I would be worried I'd get into a muddle and end up being charged interest or not paying it off properly.

We have a direct debit set up to pay amount in full from the joint account so very little facilitation or effort needed. Only possibility of getting into a muddle and not being able to pay is if we spend more than we have available - I manage this by periodically going through the CC statement (can do this online just like online banking) and making sure we haven't overspent that month's budget - but TBH we know from experience how much we can spend so would generally have an idea if we're going over anyway. The only thing is if we've paid for something particularly expensive such as a car repair, annual insurance, vets bill or holiday on the CC I might need to transfer some from savings to cover it but I'd need to do that anyway if paying on the debit card, the CC just gives the flexibility not to have to do it in advance?

Op, what made a difference for us was using YNAB software to track and plan. We are both freelance, so income fluctuates. Some costs are fixed, some can fluctuate in line with income, and YNAB helps us keep it all in focus. It effectively means all money is joint money, although it is actually spread across a mix of personal and joint accounts, broadly 50-50 in each name.