This is my Valentine’s Day column, and it’s not about how to save on flowers or where to buy the top ten gifts guaranteed to impress your sweetheart.
No, just as couples come up with their own holiday traditions, I think they should come up with their own financial traditions.
Sounds extremely romantic, yes, but bear with me: I’ve been happily married for almost 17 years, and my wife and I had our first date just before Valentine’s Day, 1995.
Going through changes
When my wife and I were first married, in 1996, we knew almost nothing about managing our money. We knew we wanted to combine our incomes and not keep track of whose money was whose, so we threw all our income into a checking account and used that account to pay our bills, shop for groceries, pay for movie night, and save what was left over.
That didn’t work, of course. We never had any leftover money any more than we had leftover cookies. We didn’t have anything budgeted for unexpected expenses. Sometimes we forgot that we had a bill coming in that would drain our account long before our next payday.
Then I read a short article by a guy named Greg. I don’t know his last name, and I wouldn’t recommend taking financial advice from some random guy on the internet (uh oh). But this article, about what he called the Stackbacks budget system, appealed to me immediately, and my wife wanted to try it, too.
Here’s the short version of Stackbacks: You set up two checking accounts. All your income goes into the first one, and you use that account to pay your recurring monthly bills and contribute to savings goals.
Then you set up an automatic recurring transfer from that account to a second account, and use the second account for groceries, dining, entertainment, and small household expenses. In other words, you give yourself an allowance.
It’s enough to make you feel like a kid again: sure, you can screw up by spending your whole allowance on something dumb, but there’s always another allowance coming next week.
That’s the system we used for years, until we realized we could do better.
Yours, Mine, and Ours
Most weeks, the daily spending account worked just fine. My wife and I would go out into the world with our debit cards and come home with delicious ingredients and receipts to be entered daily into Quicken.
Some weeks, however, one spouse would swoop in, eBay-style, and spend all the money before the week was over. The other spouse would get sulky about this. (Honestly, we took turns filling these roles.)
It took us way too long to figure out that no amount of fraught conversation could solve this problem as well as a simple procedural change: like King Solomon, we split the daily spending account in two.
Because I do most of the grocery shopping, my account gets a bigger weekly allowance; if my wife goes on a major Trader Joe’s excursion, sometimes she asks to take my card, and that’s fine.
Other than that, however, we can spend freely from our accounts without running anything by the other person. Our bill-paying account is still “our money,” and all of our paychecks get deposited there.
This system has cut down on petty (pun intended) money conversations significantly.
It’s my fault that it took so long to work this system out, because somehow I got the idea that separate accounts would be the equivalent of separate beds, and real couples sit down and talk about their money problems rather than siloing their money off so they can spend furtively.
First you mock the system…
This is nuts, of course. We’re talking about grocery money.
Financial advice is like parenting advice. Some of it is absolutely universal: put your baby down to sleep face-up, strap them into a carseat, and don’t let them day-trade stocks. Most of it, however, is something you figure out through trial and (lots of) error.
When you read about credit cards (use them for everything! never use them ever!), saving, budgeting, or any other personal finance topics, it’s hard to distinguish whether the author is talking about principles or a process.
Staying out of high-interest debt is a principle: it’s good advice for everyone. How to get there and stay there is a process.
Everyone insists their system is the best, but they can’t all be right, unless you understand that they’re actually saying, “This is the system that works for me. Give it a try and see if it works for you, too. If not, try something else.”
The system we’ve come up with for our family probably won’t work for yours. In fact, I’m betting our system strikes you as weird and overly complicated, just like your some of your friends’ parenting moves.
But it works for us, at least until we invent the next wrinkle, and given that we’ve been married for 17 years already, plenty of wrinkles lie ahead.
P.S.: “Yours, Mine, and Ours” is not only the name of a movie and a family spending plan. It’s also the title of one of the most romantic albums I know, a 2003 release by the Pernice Brothers full of beautiful, catchy tunes, and sad songs that make you happy.
Find it on Spotify or wherever you buy music, and listen to it with your sweetie.
Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.