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It is fair to say that Tony and I have seen our fair share of financial struggles during our time together. When we first started dating Tony was unemployed and lived in his overdraft, and over time we had a combined credit card debt of £15,000 which we paid off before getting married. Now that we run a Limited Company together and have been married for almost 4 years, I wanted to share how we manage our finances now, and what we have taken into consideration before choosing this method.
Communicating our goals
Tony and I are both very different people, and driven by different things. Whilst I like to push myself to earn more money and see our savings grow, Tony is much more laid back about things. We share some savings goals, like buying a house together and providing for our future, but there are some goals that we don't share. Having conversations about these often helps us to decide how we are saving up for the future. For example, I have some investments that are purely mine for things that I want to do. Sure, if everything goes pear shaped then I wouldn't stop Tony from benefiting from them, but they are investments that I am paying into using my own money, doing my own research and monitoring myself.
How our finances are split
Every month we receive a wage from our limited company, and that gets paid straight into our joint bank account. We have agreed on what the joint account should pay for – some of them are really obvious like rent, household bills, groceries and car costs, but the joint account also covers our cinema membership, gym memberships and meals out. Then from the joint account we both get the same amount of money every month. This money is 100% our own ‘fun money'. Tony spends his on books and Warhammer models, whereas mine usually gets put into an e-savings fund to let them grow. From there I choose to invest them in various places or make a splurge purchase – like the Dyson hairdryer I bought recently.
I have always earned more money than Tony, but we have always both taken the same amount of ‘fun money' every month. Although I am earning more, Tony manages the house more than I do, and I would feel guilty taking more than he does.
We often revisit this as well as redoing our budget to answer some questions:
- Can we cut back on any existing spending?
- Are we putting enough into savings every month?
- Where should any money left over at the end of the month go?
- Is our amount of ‘fun money' right?
- What are our short and long term savings goals?
We use the answers to these questions to make any adjustments.
Saving for our future together
Saving for our future is something that we didn't feel we could afford to do for years. After all, we had a lot of credit card debt to pay off, and then going self-employed before starting a limited company. However we know that we need to prepare for our future and one of the easiest ways to do this is to consider our pensions (The value of your pension can go down as well as up and you may get back less than has been paid in). A simple thing that lots of people overlook is updating their pension to name their spouse as a beneficiary if they die. It takes just a few minutes to do but can have a massive impact if the worst happens.