Allowances

Much like the people over at Marriage and Money, Seppo and I have individual monthly allowances. It works so well for us that I am rather weirded out when someone says that it’s controlling/harsh, as the linked post illustrates.

All necessities, household purchases, and bills are paid out from the joint checking account. All paychecks and random cash goes into the joint checking account. We have a joint savings account which holds a relative small reserve of money for emergencies and is directly linked with the checking account for easy access. We have a high-interest savings account that holds most of our money.

In addition, we have separate personal checking accounts, personal credit cards (with various reward structures), and a joint credit card. We put everything on credit cards, so that we can track out spending automatically, then pay them off right away — no need to wait for the bill to arrive in the mail, since I’m always looking at the balances every couple of days.

We spend our moderate allowances however we choose, whether it’s splurging for dinner with a friend (when spouse is not there), clothes, gifts, entertainment, whatever. It’s really nice. Since neither of us spends like a psycho in general, there is no resentment over individual indulgences, and neither of us has to justify anything to each other. And presents feel great when you can buy them with your own personal stash, so you can go nuts if you want.

Since most of our other expenses are fixed, we generally have a consistent amount of money left over every month which gets saved. We’d be throwing it into the highest interest loan (currently, the HELOC for the Georgia house), but since we are saving up for renovating the upstairs, this is all going into our savings account.

Anyway, how do you couples/families do your finances? Do you care to share? Are you happy with how it works? I firmly believe that different people need different solutions, so I wouldn’t necessarily recommend our method across the board, but if you think you share a similar outlook on spending & saving as we do, I’d highly recommend that you give it a try.