Aug 6, 2007

Managing Money as a Team

This post by FMF got me thinking about managing money as a family. As the kids get older, we'll bring them into the equation, but for now, it's just Marc and me making the decisions. And although I often write as if it's all "my" money, I'm always talking about our money (literally, since California is a community property state and everything earned during our marriage is legally split 50/50).

I may be the family CFO, but I never make decisions by myself. Marc and I always discuss how we're spending money, how we're saving money, how we're investing it, how we've provided for the kids, how much insurance we need, etc. My role is to do the research so I can explain our options to Marc and to carry out our decisions once they've been made. In between the research and the execution, though, Marc and I talk about what we want to accomplish as a family, what our priorities are, what our comfort level with any applicable risk is, and how we can best achieve our goals.

These discussions began before we were married; in a way, it was part of figuring out if we would truly be compatible for the rest of our lives. Back then, it was a little awkward to talk about money. But we soon came to realize that we share the same values and have the same goals. Marc is a little more averse to risk than I am, though we are both fairly conservative. We believe in living beneath our means, providing safety nets for our family through various forms of insurance, and spending money on education for our kids.

After the first few money discussions, it became clear that I would be the one handling our family finances. I enjoy managing and learning about money, I love bargain-hunting, and I like to plan ahead. But the main reason I had to be the primary money manager in our family was because I was the only one who felt compelled to balance our checkbook to the penny. If it was off by even one cent, I couldn't rest until I had gone back through the ledger and statements and found the source of the inconsistency.

Marc trusts me to keep him informed and to include him in the decision-making, and I would never betray that trust. We work together to grow our family's wealth, which makes for a happy marriage and an ever-increasing net worth.

How do you manage money as a family?


Kim said...

My husband jokes that we manage the money equally. He earns it and I spend it. In reality our situation is much like yours. I handle the nitty gritty, but only after decisions are made jointly. He handles the decisions on stocks etc. because he is more interested in researching the available funds in our 401K. I do the shopping, budgeting, and planning for non retirement expenditures. We save 14% for retirement through the 401K and a bit for vacations and the emergency fund each month. We also have budget catagories for regular expenses such as insurance, kids activities, car registration, and gifts. Saving each month for these things eliminates most of the money drains that caused conflict early in our marriage.

ChiefFamilyOfficer said...

Maine Mama - I think you touch upon a key point when you say that saving eliminates conflict in marriage. If there's money to pay for things, then there's not as much to fight about. Of course, you have to agree on saving the money!