dual income

Girl Ninja always makes things difficult

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Seriously. What’s her deal? We were having a little money talk yesterday, and I showed her a copy of my budget. I was explaining how it was configured and how all the different sections were calculated. We then started to play with the numbers a little bit, making our best guesses as to what we think OUR budget is going to look like. It was freakin’ tricky.

As I mentioned before, GN and myself, have different opinions as to how much of our income should go to rent. She would be totally comfortable paying a little more for a nicer pad, where as, I am all about finding the cheapest place we can live. I’ve blogged about this housing predicament before (here) so I need not bore you with it again.

That said, rent is the single largest monthly expense we have (except taxes) so we need to plan our budget accordingly. The only issue is … Girl Ninja makes my life difficult. Granted, there is nothing she can do about it, because it’s not her fault. No. It’s the stupid economies fault. She’s a credentialed K-6 teacher here in California, and if you aren’t aware let me tell you something… The California budget is jacked up beyond all belief! This means, Girl Ninja hasn’t been able to secure a contracted teaching position. Fortunately, she landed the next best thing: A long term substitute teaching job. She makes $150/day, but receives no benefits (no paid holidays, no insurance, etc).

Next school year is a different beast, however. We have no clue how many days a month she will be able to substitute teach. Seeing that we can’t anticipate how frequently she’ll be working, it gets rather frustrating trying to establish a budget. Variable incomes suck.

After our conversation, I came home and made my best guess as to what I think OUR budget will look like come marriage. Here are three possible outcomes…

As you can see, if Girl Ninja is able to work two days (out of 20+ possible school days each month), we scrape by with a $282 surplus. If she has the opportunity to work about half of the available school days, we should be sitting pretty with $1,582 in discretionary income. And lastly, if she is able to get a sub job every teaching day, I will pee my pants with excitement to the tune of $2,582/month.

I should also mention a few other things that help lighten the burden of her variable income…

You’ll notice towards the bottom of the spreadsheet I have a section called “Side Hustle“. This is all the money I bring in from tutoring, house sitting, and blogging. I was super conservative and only accounted for $240/month in extra income, when I have been averaging between $500-$1,000.

What’s more, 10 months a year I receive two paychecks. We decided to budget our expenses around those two checks, even though I actually get paid three times in April and October. This means, twice a year, we will have an additional $1,600 to put in to savings.

Although Girl Ninja’s income will is inconsistent, we should ALWAYS be able to get by. Even if she is practically unemployed, we should still be able to grow our savings account by $5,000yr (even after contributing to retirement). If she is able to land another long term sub job, or even better a contract job, we should be able to save $20,000 to $30,000 over the next year.

Of course all of this is based off a bunch of assumptions, but I did my best to make these assumptions pretty conservative. Barring a major unforeseen crisis, we should be able to start our first year of marriage with a positive financial outlook and that makes me happy. I’ll be sure to keep you posted as we actually start living these assumptions.

What assumptions did you make before combining money?

How do you, with variable incomes, do it?

Am I overlooking anything?

p.s. I did leave out the clothes/entertainment/etc from my budget, but I did so for a reason. I’ll have to explain it in tomorrow’s post. That’s my fault for not clarifying.

I will gladly give you my student loan

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Are you sick and tired of me blogging about my relationship with Girl Ninja yet? If so, don’t worry there is a $100 giveaway included with this post and if you read on you can figure out how to enter. Anyways, I wanted to take a little time today to write about how Girl Ninja and I are going to operate, financially speaking that is.

First things first. There will no longer be a “my” debt or “my” savings. Nor will there be a “her” checking account or “her” credit card. By getting married we are committing our lives to each other. Yes, that sounds cheesy, but it is true. Remember the part in traditional wedding vows “for better or for worse, for richer or for poorer” well guess what ya’ll; Girl Ninja is going to be in debt for the first time in her life beginning August 8th.

No she’s not taking out student loans, buying a new car, or charging up her credit card. She’s actually doing one of the stupidest things she could do…marry me (she’s way out my league). Which means she will also be marrying my student loan. It’s not all bad though, ’cause she will also get to marry my savings account, which thankfully is quite substantial.

While my debt will still legally be solely my responsibility, we are prepared to work through the “for richer or poorer” part together. It means there is no more “mine” or “hers” but everything becomes “ours”. In the matter of a 30 minute wedding ceremony, we will transform from TWO individuals to ONE team (a pretty sexy-licious team I might add).

The days of individual checking accounts will be a thing of the past. Once we’re hitched, we plan to open up joint checkings, savings, and credit card accounts. We wont have any accounts that the other person doesn’t have full access to. Both of our paychecks will go in to OUR checking account, so it can be transferred to OUR savings account, and eventually be used for OUR expenses. Did ya see what I did there? I emphasized “our” because that’s exactly what everything will be…ours.

I personally don’t understand how some married couples (or even couples who are practically married) can separate their financial lives. There are married couples out there in which the man and woman will literally split “mutual” expenses down the middle. Excuse me married couple, Do you and your wife really need to write separate $500 checks to cover your $1,000 rent?

Why must you keep separate accounts and divvy out who pays what bills? If you made the decision to completely and transparently share your lives with one another, why should your finances not follow suit? Is it because you don’t want your spouse to see how much you racked up on your credit card this month? If that’s the case you have bigger issues in your relationship than financial ones.

  • So married couples, do you and your S.O. have joint accounts? Was the process of combining your finances frustrating at all? Anything you regret or would have done differently?
  • If you don’t combine accounts, why not? Is it so both have financial responsibilities?
  • What’s one thing about money you wish you would have discussed prior to tying the proverbial knot?

p.s. Remember that $100 giveaway I mentioned at the beginning of my post. There isn’t one. I just needed a way to keep those of you who don’t care about my relationship involved. Sorry.

Wife = asset or liability?

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Screen shot 2009-11-17 at Nov 17, 2009, 8.15.38 PMSo I have this great plan in my head: Get married and get rich. They go hand in hand right? Okay, I know it may not be all gravy, but I still can’t wait for the days of being a DINK (Dual Income No Kids). I’ve got a gameplan in my head, but I wanted to run it by all you married folks to see if it was reasonable.

The plan is simple: Live off my income, put wife’s income in the bank. Let’s pretend I get married in a year. At that point, I’ll be making $62,000 annually. That is easily enough money for both me and the Mrs. to survive on. Let’s not forget she will be working as well. I’ll assume she will be making roughly $40K/yr. Whatever is left after taxes are taken out of her paycheck, will go straight to Roth IRA’s and savings (probably about $25K/year).

I’m not naive though, I’ve listened to my fair share of Dave Ramsey and it is not uncommon to hear a caller indicate his wife is responsible for accumulating a significant amount of debt without his knowledge (Don’t label me a sexist, I know this works both ways). The power of a larger income can lead to a tendency to live a more frivolous lifestyle. New cars, lavish vacations, and dining out become the norm. High income often causes increased spending.

The main reason I want to be able to survive off my income, and save hers, is I don’t think my wife will work forever. Once baby ninjas enter the picture I want her to have the option to stay at home. If we allow ourselves to become accustom to surviving off both of our incomes, it would be super difficult to take a $40K hit in income for her to stay home. I feel like a lot of people purchased huge homes based on their dual income, and now find themselves struggling as one lost employment or decided to stay home with the kids. I would like to avoid that situation at all costs.

If I play my cards right and buckle down on the budget, future Mrs. Ninja and I should be able to comfortably live on my salary and take hers to the bank. Hopefully accumulate $100K in savings come time to make a home purchase, and then she can quit and stay home with the kids. Am I living in a dream world? Is there something to the DINK formula I’m overlooking? For current Dinks, is it totally awesome? Have you become dependent on both incomes? Has the dual income caused any issues? I need all the info I can get so I can plan accordingly.