If you want to budget as a couple but don’t want to use joint bank accounts, this post is for you!
Here at You Need a Budget, we believe that your best bet at attaining financial (and marital) bliss is to work together. To quote, well, us: “When it comes to budgeting with a partner we take a hard line: If you’ve joined your lives, you should join your finances. Joint accounts all the way!”
But, if that approach just doesn’t jive with you—or, worse, it’s an obstacle to getting your other half on board with budgeting—then today’s post may help. Let’s take a look at how you can still achieve a shared, household budget without combining your budget, checking, savings and investment accounts.
How to Budget Together With Separate Accounts
To make this easier to follow, let’s take a peek at how imaginary couple, Jamie and Jordan, manage their individual and shared finances.
First, the basics. For this method, they use the following:
- They’ve got three budgets set up in YNAB: Jamie’s, Jordan’s and one for the household
- Jamie’s personal savings and checking accounts
- Jordan’s personal savings and checking accounts
- Shared savings and checking accounts for the household
Yes, that comes to a total of three budgets and six accounts, not including investments. (You can see why joint-everything would be simpler, eh?
1. Budget Your Paychecks Separately
When Jamie gets an inflow of new dollars, they’ll be budgeted in Jamie’s YNAB account. Likewise, when Jordan gets an inflow of new dollars, they’ll be budgeted in Jordan’s YNAB account. This gives Jamie and Jordan complete control over how to budget their own dollars.
2. Contribute to a Shared Account for Household Expenses
There’s one caveat to this approach: every payday, Jamie and Jordan both agreed to contribute a predetermined, set amount to the shared, household checking and savings accounts.
In the case of Jamie and Jordan, their contributions are equal. You and your spouse might consider contributing based on a percentage of income, which would likely result in differing contributions to the shared accounts.
3. Budget Household Expenses Together
Then, together, Jamie and Jordan use the household YNAB budget to assign jobs to the dollars in the household’s checking account. Those dollars cover shared bills and expenses, like mortgage, utilities, entertainment and food.
4. Fund Goals Individually, Then Together
When they need to fund a goal in the shared budget, Jamie and Jordan save in their individual budgets, first. Then, the month before the goal is due (to be funded), they transfer the money from their personal account to the household account. This is how they manage things like Christmas gifts or semi-annual insurance premiums.
A final note: Jamie and Jordan are wisely thinking ahead, and they’ve set up their household savings account to feed their shared investment account.
The Benefits: Individual Control While Still a Team
This method sounds a bit convoluted looking from the outside, in, but (still imaginary) Jamie and Jordan swear that it’s a cinch. They like this method because:
- They are completely in control of their individual dollars—Jamie likes to experiment with investments, and Jordan likes to travel. With this method, they can prioritize those things on their own.
- Jamie is more of a saver, and Jordan is more of a spender. This system alleviates guilt about different money management styles.
- Jamie and Jordan are totally different when it comes to budgeting styles—Jordan’s always getting into details, while Jamie’s happy to let things go for a few weeks. For them, this method keeps the peace.
- They’re still a team! Even though they retain individual control, they still have a shared view of the money (and how their choices are affecting their future).
What You Could Miss
Now, I need to point out that all of the above can be accomplished (and simplified!) by using one budget and one joint-account—the benefits of which are not to be dismissed:
- Honesty (with each other and yourself!) is built-in
- Less complexity equals less risk that you’ll miss important details
- Greater focus on your true, shared priorities
What About Your Household?
In any relationship, there’s certainly an art in keeping the peace when it comes to money differences. We’re firm believers in the power of budgeting to bring relationships even closer. As funny as it sounds, it has a way of aligning what matters to both of you and putting you on the same page.
If you’re new to budgeting, check out the app that’s saved marriages, brought people together, and gotten couples working together to pay down debt, break the paycheck to paycheck cycle, and operate as a team. Sign up for your free 34-day trial today.