The $100 discussion

August 30, 2010 · 45 comments

So, Mrs. Ninja and I merged our bank accounts the other day. What’s mine is hers and whats hers is…hers. Wait that’s not right ;) Seriously though, for us combining accounts made the most sense. Merging accounts was super easy, what’s a little trickier is figuring out how to set up boundaries.

Something tells me Mrs. Ninja wouldn’t be too stoked about me dropping $300 on a sound system without clearing with her first. And I will bust a cap if she stops at Nordies and walks away with another pair of boots.

This is why we figured a spending amount should be set. We initially decided neither one of us should make a purchase over $100 without first consulting the other. But after a little more thought, decided we should lower the threshold to $50.

What we are yet to figure out is how long that $50 spending limit is good for. Say for example I find a sweet camera accessory for $42. The rules say I can buy it without having to run the purchase by Mrs. Ninja. But what if, the next day, I find a $35 jacket that I want?

This is where I think setting a spending limit falls short. Should the $50 threshold be per day/week/month? Now that I think about it, I’m kinda thinking the spending cap is pretty stupid.

Instead of saying “You can’t buy something over $50 without running it by me first”, we should just set up a budget and say we each get $100/month of  “do whatever the heck you want with it” money. It fosters guilt free spending, but still provides the necessary boundaries. Heck, that money could even roll over for the next month. If I only spent $20 of my $100 in August, I could spend $180 in Sept. without having to ask. Not a bad idea right?

I don’t know, maybe I’m over thinking this spending allotment gig, but it’s definitely something that needs to get fine tuned. How do you peeps work the combined accounts system? I need wisdom!

1 Rina

I do the budgeting in our house and the most important thing I’ve learned is that a man needs a bit of cash in his wallet at all times. Hehe. True though.

We don’t make much extra on top of our expenses at all, but we do budget for what we call ‘fun money’. In the past we withdrew that amount in cash, split it in two and what we did with it was our call. The rest of the money stayed in the bank account for automatic bill withdrawals or was paid out for bills. These days we just leave it in the account because we do pretty much everything together, so the fun money is usually spent together.

Because we’re still new homeowners, our bills are higher than what they used to be but prior to buying our house we’d actually set a clothing budget, in regards to your jacket example. This way you’d be ok to have purchased the camera accessory because the jacket will come out of the clothing budget allotment (as long as you didn’t blow it already on some (ew) Ed Hardy crap).

2 Beth M

I’m a fan of the separate “spending” checking accounts. Have your main account together then have two more checking accounts where you can deposit that budgeted guilt free spending money every month. Plus, that allows each of you to “save” up for purchases that might be important to just you (like that sound system or her boots). So, 95% of your money will still be together but those separate, small accounts will just be like cash in your wallets. Or, just use cash I guess? I’m just not a fan of cash.

3 Larry

I would agree. Makes gift-giving a lot easier too. Remember you’re married, but you’re still two people.

4 every little kiss

Yep–we do this too! It was too hard for us to figure out if I spent my money this month and what he spent and how much was left..so we just move the “play money” to seperate accounts. MUCH EASIER since neither of us ever use cash.

5 Mary

Yes, this. We started out with joint accounts, but that turned into 14 years of frustration because only one of us was invested in managing money. We often ended up spending the “extra” only to find the other person spent it first. Or worse, spending the money being held for the mortgage.

Six years ago we moved to 3 working accounts (in addition to the saving accounts – love ING!) All paychecks get funneled into the joint account where bills are paid and transfers to savings account take place. Our allowances are then transferred into each of our individual accounts for unaccountable-to-the-other spending. No more worries about spending money twice or diverting it from bills; no more arguments; no more feeling like someone is looking over your shoulder or having to justify purchases. This way, limits are not arbitrary – which lead to ill will – but rather are dictated by budget constraints.

Key was deciding what constituted joint or individual. Groceries are joint, but going out for lunch at work is not. Replacing tires on vehicles is joint, but my unnecessary smart phone is not. Daily newspaper is joint, boring car magazines are not.

6 Liz

I love that idea! I suggested it to my friends that are having some issues with the wife’s spending. (she had an un-reported to mint credit card that she was WAY overspending on then asking her parents to pay off – nice parents! – so now her hubby gives her a spending allowance, but to teach her the value of a dollar, she also has to buy the groceries out of it. It’s a fairly large amount to start with, though!

7 Rae

We do this, too – we each get $100 bucks/month that is ‘personal’ cash, which is for fun stuff and gifts for each other. the rest is joint.

8 PerkStreet Jen

We don’t bring home the same amount of money, so we contribute a large and percentage of each paycheck to a joint checking account. The rest goes into our personal accounts to do with what we wish. We take turns on splurges depending on who has what in which account – it involves pretty constant communication to keep the ebb and flow going, but we never fight about money and we can always pay for the things we need, and even a few we just want.

Then again, we don’t own a home, car, or have kids. Check with me again in a year. :)

9 Brian

We have a “His” and “Hers” budget of $50 each month. We withdraw that as cash and stick in our respective wallets. If you spend it all on the first day of the month, that’s it for the month. Any excess gets rolled over and added to the $50 from the next month. This allows us to individually save for items that we want without impacting the budget. If its something we need, then it doesn’t need to be paid for out of this money.

10 Michael

This is basically what we do although we do not do it with cash. We have a set amount of money each month we can spend “no questions asked” and if we do not spend it then we roll it over and the balance grows.

11 dogatemyfinances

We have a policy for more like $500, but we’ve been at this a long time. I think in the beginning you have to go over monthly bills and talk about your spending and decide what each other finds reasonable. If you are under control (sounds like it), then this should be no big deal. You don’t need blow money accounts or a mommy check where you have to call for every purchase.

I don’t see the need to treat each other like children for a problem that hasn’t happened yet. Have some trust. It’s too much to have to call your husband to buy some boots, especially if it’s a one-off thing and you are usually reasonable people. See how it goes.

12 deerecox

You are both grown-ups – if you need it buy it, if you want it, discuss it, in reading your blog, you seem to be already doing this. You both seem to be on the same page about most things. The limits just piss people off, believe me I know.

Good luck and may you live all the years of your life together.

13 Jared

Hi Ninja,

My husband and I have completely separate accounts, and our system is:

1) Any purchase over $100 needs to be discussed with the other person.
2) As long as we’re meeting our monthly savings/budgeting goals then we should both be comfortable with each of us spending money on something seemingly frivolous to the other person.

My recommendation would be to set some kind of stiff boundary at the start and to go from there. You’ll see what is/isn’t working about it for you as a couple, and it will help to prompt discussions about spending habits.

14 Brent

My wife and I do exactly what you described. 100 bucks of spending money each month and if it doesnt all get spent it carries over into the next month. That way if you decide to save for that 300 big ticket item then it is possible by saving up your spending money. Also, selling stuff that is exclusively used by one person also goes into the extra spending category.

15 Jessie

Hey Ninja,

Jordan and I just went through all of this (we’re just heading into our second month of joint accounts). In our main account we merged all bills, pays ect. – to keep sanity we kept our own chequing accounts.

Our allowance, or guilt free spending money gets automatically deposited into our respective personal accounts from the joint account, every Friday. That way – what you’re allowed, actually can grow if you want it to.

Some things we had to think about were what is a joint expenses and what is a personal expense. For now, we’re both still paying our own cell phone bills, and paying for any personal care (hair cuts, make up, razors ect) through our allowances – so our’s is bigger than most folks.

Each time one of us comes across something new, we talk about it. For example, we decided that educational expenses are joint because the benefit is joint (increased pay). But – what about parking to get to school?! It’s tricky, but with a lot of open conversations – you’ll get there pretty quick.

16 Donnie

My wife and I do $200/month each for “whatever you want” money. It gets direct deposited into separate ING Direct Savings accounts, and when you spend something, you take that much and transfer it into the Joint Checking.

I mostly spend mine on taking us out on dates to the movies/dining out, and she spends hers mostly on unnecessary gifts to family members.

17 Makky's Mom

Over here we have categories with spending limits, broken down into 2 wk amounts. Our budget amounts are very low because we’re raising 4 children and other than the necessities of life, most of our spending goes to them it seems – not much left over for us to spend, but for example, we have a “miscellaneous purchases” category that covers pretty much anything that isn’t grocery, personal care, car gas, entertainment or kid expense, and we get $50 to share, every 2 weeks. When one of us spend some of that $50, it gets written down and deducted. We are both mindful of the other person’s spending needs so one person doesn’t typically grab the $50 and buy themselves a new jacket, for example. If one of us WANTS a new jacket, regardless of the price, it gets discussed and decided upon together. In our house all unnecessary purchases are discussed first. We don’t have “allowances” where we can spend without justifying or tracking. It’s just what we do, wouldn’t work for everyone though.

18 FinancialCat

we totally have the allowance system. We each get a set amount of money per week that is just for us. It’s our guilt free, no questions asked money. If I choose to blow it on bubble gum then I can and Boris doesn’t get to have a say! and vice versa of course

19 Techbud

My wife and I simply discuss all purchases after the monthly bills are paid, food is purchased, etc. Just a good form of communication all around.

20 Forest

I love the idea…. If you are putting cash in the saving, have paid off all debt then why the hell not have the $100 a month… Just don’t go over it!

21 Jessica

My husband and I do a 300.00 a month for whatever you want. It works out because we both drive pretty far to and from work so gas eats up most of that but then if we want to buy something for the other it works out well that way. He’s in charge of the finances but I do have an idea what’s going on. We are on each others accounts but hold separate accounts. I think you just have to figure out what works for you and roll with it.

22 David

That’s what my wife and I do. We write an allowance for each of us, to be used purely at our own discretion and without oversight. This allows us to treat ourselves when we really want something and can’t convince the other it’s a good idea, without them getting resentful; it allows us to treat each other, and actually have it be more meaningful than “I’ll cover this with our money – go me”; and it allows us to buy each other gifts without spoiling the surprise.

23 Allison

We have yours, mine, and ours accounts. It isn’t much but we each get $25 a week or $100 a month to spend or save however we want. I like this way especially because if I decide to save up for a month or two to buy the hubby a special gift he can’t see how much I spent and it feels more like I’m using MY money to buy it for him rather than OUR money.

24 Sara

We share an account that only is used to pay for things we share – bills, groceries, going out to eat (we put this one in there because we are trying to limit how much we spend on eating out). There’s an auto transfer every month of a set amount to cover that, and then the rest of our paychecks we keep to pay our own things such as car insurance (still separate because we like our companies & get really good rates), gas, gifts, clothes, etc.

25 Angie

We have put ourselves on an allowance system, much as you are considering. Each month, 100 is transferred into his checking account (really, it’s in both of our names, but he is the only one who uses it) and I pull my 100 out in cash. He saves up for big things *like upgraded transmissions* and I prefer to enjoy lunches out with girlfriends. We still have regular budget discussions, and are totally on the same page financially, but this allows us each some autonomy. We also have a clothing line item in our budget so if I see a new blouse that I want, I know immediately whether or not I can buy it (and if I want to save up my clothing budget and have a big blow out shopping spree, I can – guilt free).
The important thing to remember as you are new to this marriage/joining of finances thing, you will probably make mistakes, and that’s ok. By seeking to follow the Lord, and aking the advice of people with more experience you are putting yourself in a position to truly become one with your wife in all ways – including financially. I wish I’d had your insight 13 years ago!

26 Budgeting in the Fun Stuff

We’re another allowance system couple. I have budgeted categories for all of our normal bills, savings goals, and pop-up stuff, but we also each get $125 a month to spend on whatever we want. I put it in our ING Fun Money Accounts and we withdraw what we spent overall at the end of the month to our checking account to cover all those extras on the rewards credit cards. So far, this system is working great. Good luck!

27 Money Maus

I’m not married but I get a lot of insights from married friends. The ones I know do the his/hers/ours account system so they can save/spend as they like with their $. Each pay day the majority of their individual paychecks go into their joint account and the rest is fun money :) I really like this idea! Especially since as a female, I can easily drop $100+ on a pair of heels or clothes in one go and would like to just be able to do it with my money.

28 Tracy

Just set a budget. Or maybe open up a savings account so every paycheck you deposit money in there so that you can save some money and get things that your really want.

29 ashley

Right now we are paying off my student loan, but come January when that heifer is out of my life, the hubs will have $150 free spend and I will have $150 free spend. Hellloooooo Ann Taylor Loft.

30 Beating Broke

My wife and I don’t do anything. We both are aware of our situation and any bigger expenditures, we end up checking with each other anyways. But smaller stuff like a $40 pair of shoes or whatever, we just trust each other to only buy what we truly need. However, if you need to do that, I know you won’t be alone in it. I think that if we ended up doing something like that, it would make a lot more sense to do the “you get $xxx a month to spend” and just take it out in cash each month. Then, you don’t have to worry about “banking” it, you can just keep it in an envelope. Or, you could keep it in separate savings accounts. Those are good for buying each other gifts too. That way she doesn’t see the transaction to Victoria’s Secret right before valentines day. Bottom line is that you have to do what works best for you and your wife. Give something a try and just be open to changing it if either of you doesn’t feel that it’s working.

31 eemusings

He has his own checking account where he has ‘fun money’ and lunch money.

The rest is is our joint one (which is really just under my name, but we call it our joint one as joint expenses come out of it.)

I love the allowance system!

32 Jessica

We have budget set up, and we have a category called Fun Money, we each get $100 a month IN CASH to spend however we want. If we don’t spend it all then we get to keep it til the next month, and so on…so like right now I have $15 left from August, and I will get $100 more on Wednesday when September starts. We like how this works, and it works best for us, so that is what we do.

33 Ryan@theFinancialStudent

I like Donnie’s idea. It keeps you from having to have so many completely separate accounts.

Merging finances can be tricky though – If I have an iPhone but the Mrs. just wants a simple flip phone, I’m adding $30 per month to our phone bill for something only I use. Transferring $30 over every month would be annoying without electronic transfers.

The only other solution is that we both get iPhones! ;)

34 StackingCash

I think setting boundaries is telling the other half you don’t trust them. Then again, most people need those boundaries.

We don’t have a set limit, it’s more of an understanding. I have never had to question any of her purchases, they are never really too expensive. If it is, I treat it as a generous gift from me :) I’m pretty simple in that I don’t feel I spend a lot of money on toys either, or she just can’t say no to me :) The only time we consult each other is when we consider something a joint purchase that both of us will use and enjoy like homes, cars, electronics, vacations, and going out to eat.

35 Tom

In a way it is a trust issue, but it is also a fairness issue. Any type of partnership can lead to free rider problems:

http://en.wikipedia.org/wiki/Free_rider_problem

Take a spender/saver couple for example. Let’s say that the “saver” likes to by a big toy every once in a while, but the “spender” enjoys regular small purchases. Do you see the problem?

When the “saver” buys an expensive toy after saving for months, the “spender” will complain that he/she should get an expensive toy too! By using separate allowance accounts, both people will know that the relationship is fair. This is called transparency. It can build trust by letting both parties see all the facts.

36 Sandy L

$50 seems a bit low for a threshold. I spend more than that on a trip to the grocery store.

We have separate accounts and we split who pays which expenses. We did this out of sheer laziness as it was too much of a hassle to get a 3rd account. I agree with the posters that said you should have your own fun accounts to do with as you please.

As a girl, I’ll tell you, I really wouldn’t like it if my husband scrutinized every purchase I made.

I would suggest making your spending money a reasonable amount and if you think you can do better tighten up in a month or two. I think that’s less likely to cause marital strife than starting with an “allowance” and working your way up to a sustainable amount.

37 Scotty

No blog today!!!? Whats really up…

38 Angie

I hope your AWOL status today is due to something fun. Hope to see you tomorrow!

39 MollyMurr

We each have our paycheques deposited into our own chequing accounts, then we both transfer money for groceries, gas, etc. into a shared “budget” account. So basically it’s like roommates, we share the essentials and get to keep what we make over that basic amount. I know this wouldn’t work well in one-income households though.

40 TwinsMama

We have 1 joint account and then of course our joint other accounts like savings and holidays…etc.

We like the joint account method. It makes sense for us and because we know each other enough to know times of year when we both can be crazy spenders (of course after all the necessary bills/savings are taken care of)…for him football season and for me Jan – Dec.

But we are also both very money conscious. We do our budget together monthly and re-evaluate as needed. We both believe in saving saving saving…so once we determine what we have left for fun…we tend to use it up.

The advice a couple of other have said about trying things out along the way is good. After a while you may find that you guys just fall into a pattern and don’t be surprised if it doesn’t look anything like how you thought it would.

41 Khaleef @ KNS Financial

My wife and I discuss every purchase. We hardly ever buy “discretionary” items anyway – still trying to get out of debt – so it isn’t that hard.

I like the idea of a small account that houses your “fun money”, even though we would probably never do this. I like us being accountable to each other!

42 laura

I don’t like allowances – first of all, because I’m a grown person and the concept just annoys me, and secondly, because there’s a reason I spend more than my boyfriend – I enjoy buying things more than he does. I value it more. “Fair” doesn’t really apply; he doesn’t tend to spend money on things, so each of us getting an “allowance” doesn’t make sense.

We’ve figured out an amount of spending money that we’re comfortable parting with each month, so each month we withdraw that amount in cash from our one and only joint account. If one of us wants to buy something, we take the cash we need for it. If its a whim, or we end up needing more than the cash we thought we would, then it gets paid from the debit card and as soon as we get home, we round up and shift that amount of cash into a “to be deposited” envelope. We both always know how much cash is left available, because we can physically see it every time we grab some. If either of us wanted to use all or most of it at once (anything more than like $60 I think I’d give/expect a heads up about), or to buy something that went over the monthly amount, we’d have to talk about it first and save or plan something out.

I like it because with cash, there’s no scrutiny – all he needs to know is that I spent $20, not that it happened to be on a $5 latte and a $15 lipstick – but there’s still communication and it all feels like OURS. I hate the idea of “mine” and “his” because then its all about what’s fair, who contributes and who deserves and all of that resentment-inducing limit-setting. If I continuously blow through all of our spending money, he’ll just say, hey hold on now, this is a problem, and we’ll talk about it. When it starts to get to the bottom hundred or so, we’ll usually check in with each other and see if the other was planning any particular purchases or how much we each expect to want access to. It works for us because there’s just enough flexibility, just enough of a limit set, and just enough communication required.

And at the end of the month, whatever’s left over or in the to-be-deposited envelope gets subtracted from the next amount we take out, so we always start with the same amount each month – no rollovers – which creates a nice little buffer in our checking account, which we can then save or have access to for emergencies.

43 Mo D.

We each get an allowance every 2 weeks to spend however we want (mani’s, cosmetics, and the occasional lunch at work and coffe for me… sporting stuff for hubby)…. we have a joint back account and can easily track our purchases on line, and we move money every month into an Emergency Fund account… works for us!

44 Andrew

This is a cool post and good to learn from. I definitely think the “do whatever you want with” max is a great idea. That gives at least some wiggle room for both sides to splurge (but with a max) each month. And maybe one option for a more expensive splurge is to use up future months to combine into the current month’s purchase. But I guess this raises the issue of tracking and all that which now goes against “simplifying” things.

45 Steph/seenonflickr

I really think it’s important for adults to have money to spend that isn’t accountable to anyone. Does it matter if it’s on a fancy coffee, a pedicure, or a book? (But it should be an amount with an agreed-to-by-you-both limit.)

I carry mine over to the next month if I haven’t spent it all. As someone said above, it means I know how I need to save if I want to buy a specific gift, go on a major shopping day, or whatever.

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