Sunday, October 19, 2014

how to manage money as a newlyweds, how to manage money as a married couple, how to manage money as a college student

Money and relationships don't always go together. When sharing money, what one may think is a great purchase, the other may think is a horrible purchase.

My boyfriend and I got our own place at the age of 20. We thought if we were sharing bills, then we might as well share a bank account and get our checks both direct deposited into that same account. Well, let's just say it did not work out well. We quickly started to fight over how money was spent and we started to come up short for our bills. He didn't agree on me getting my nails done, and I didn't agree on him buying cigarettes every other day. We started to pawn jewelry and borrow money from family. I knew this wasn't the way I wanted to live my life and I had to figure out a different way to budget our money.

After about 5 months, we agreed that it was best to each have our own accounts but still continue to use our "shared" account for bills. Since at that point our bills were pretty consistent, I had an idea of how much we needed a month for our bills. I added every single one of bills together.

Rent - $875
Electric - $80
Cable and Internet - $120
Phone - $160
Car Insurance - $200
Car Payment $265
Total $1700

Now this is just an example, but also a rough estimate of what bills used to be like when we got our first place together. We live in New Jersey and things are quite expensive here. At the time, gas and water were included in our rent. 

After I figured out the total amount, I divided it by 2 since we were splitting it down the middle. (This could also work if you're in college and have multiple roommates.)

1700/2 = $850

I knew every month I had to contribute $850 to our account that we shared and so did he. We got paid every week, so I then divided it by 4. If you get paid bi-weekly, you can divide it up by 2.

$850/4 = $212

Every week when each of us got paid, we would both put $212 into our "shared" account and eventually we set up our direct deposit that way so we wouldn't have to worry about it. The best part about it, is that fact that my bills came out my paycheck first and the rest of my check was MINE. I didn't have to share it with someone else and no more fighting about what we each spent our money on.

Once we figured out this system, our fights about money ended. There were no talks about money because it was already there. Since I was the more money conscious one, I took it upon myself to be the one to physically pay the bills. So, each week when we each got paid, I went online to pay a bill and at the end of the month all of our rent would already be there. It's that easy.

Also, there are some months where there's an extra pay week. We just leave that extra money in the account for those months for when the electric/gas are more than usual.

We still follow this to this day. I do believe in a way it has saved our relationship. It's not fun arguing about money and we all know how "money" talks can be stressful. Been there, done that, but I figured out a solution and it works!

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