Debt Reduction

Spending cuts on the homefront had a fabulous article this week talking about “How couples should negotiate spending cuts.”

I have to be honest – there are so many ways that Future Husband and I are beyond the honeymoon phase in so many parts of our relationship. But the future prospect of sharing finances scares the shit out of me. FH knows my downfalls about as well as the rest of you do – takeout food, overpriced coffee and unplanned spending. But whereas my habits are just inconvenient and delaying my financial freedom as a fiancee, what is FH going to think of these spending habits when we’re married and potentially sharing a joint checking account?

And here’s another fact about our relationship – right now, FH and I haven’t had to institute any drastic spending cuts. I like to think that we’re relatively frugal as it is (aside from my takeout habit) and we’re usually on the same page about where our joint funds should go. But I’m sure that the future holds changes in our spending habits, especially when we decide to have kids.

I’ll be asking peoples’ opinions in the near future about how they negotiate banking with their spouses, but I’m curious … how do folks negotiate spending cuts with their loved ones?

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3 thoughts on “Spending cuts on the homefront

  1. It’s a good idea to give yourself an “allowance” – a predetermined amount of money that you can spend however you want. Could be for coffee, take out, etc. FH would get this same amount to spend on his wants. The trick is then you have to STAY WITHIN THE AMOUNT, no going over. SO say you have $50 a month, once that amount is gone you are done for the month. So it allows you freedom, but within a spending boundary so you each don’t go hog wild, and it’s within your overall budget/plan. Amount can be whatever the 2 of you decide is reasonable. You’ll find the limit will help you curb your overall unplanned spending. Good luck!

  2. I found it fairly easy…I just sat down with them and said, Look, if we ever want this, we’ve got to do this. Then we went over all our expenses and found consensus on what was important to us and what could get cut.

    After that, you put all your money in one pot. You pay for your shared expenses and put an agreed amount toward paying down debt or saving for the future. You each get the exact same amount for discretionary spending per week, and that’s for expenses/luxuries that only pertain to you.

    If one person makes more at one point or another, or is out of a job, that shouldn’t matter. All the money goes in, expenses get paid, savings build up, and each person gets the same amount out for themselves. I guess I have a socialist household, but to me it’s the only way to operate without tensions. 🙂

  3. Those are both fantastic ideas – I think the main thing though is find something that works for the two of you and stick to it. And it does vary from couple to couple and economic situation to economic situation. For me, my partner and I added up all of the “joint” expenses (utilities, mortgage, etc.), and then split them up proportionally based on our respective incomes. If one of our incomes changes, we just re-figure the amounts (I am a geek and have it all in a spreadsheet so it’s really easy). We include in this “joint” amount big things like making an improvement to the house, buying a new piece of furniture or major appliance, etc. – so when those things come up, we just plug them into the spreadsheet and kick in our respective percentage and buy whatever it is.

    All non-joint expenses are our own responsibilities respectively – so he has his car payment, phone, discretionary, etc. and so do I. We’ve found this to work VERY well for us, and have never had a single argument about money – we’re both free to do whatever we want with the rest of our money.

    I do have to qualify this one, as it really only works if both people have regular incomes that aren’t COMPLETELY disproportionate – but it takes into account whatever the “gap” is between the two incomes.

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