Even with your best effort at reducing spending and increasing savings, everyone wants some pocket change. Working your entire professional life earning without the periodic fun of frivolous spending will wear on even the most organized.
If yours is like most families you and your partner probably both have access to the checking account. Other than that being a recipe for disaster since no one has responsibility and both can spend, spending inequities invariably bring stress to the relationship.
Since you are reading this I’ll assume that you have taken responsibility for the money in your family. By extension I can probably assume that someone else causes spending related stress and even problems by withdrawing money from the ATM and spending it on whatever they want without any planning associated. If both partners in the relationship are not committed to financial planning and savings you are doomed to fail no matter your effort or commitment. There is no way to keep debt out and savings in a relationship when one person remains an over spender.
If you have the problem that many do where one partner spends without planning and keeps you constantly on the verge of bankruptcy, all you need to do is agree on a preset spending limit for each person. Each person gets a bank account and each period the agreed amount is deposited. The money can go out by any method for anything. But when it’s gone, it’s gone until the next scheduled funding. Sounds harsh, huh? Sometimes that’s what it takes to achieve financial freedom, savings and elimination of stress over money.
I once knew a woman who worked hard managing finances for her family. She worked, in addition to her wife. She got them into a house of their own, she prepaid the babies college funds, she made regular contributions to her 401K and made sure her wife set up a 401K at her job and funded it. She even went to the wife’s office one day and marched her into HR to get everything set up. Sometimes it takes a lesbian to get things done right!
One day she looked really strange and I inquired to find out that she discovered her wife accepted one of those unending credit card offers that flow into the house through the mail. The wife had never told her about it and had charged thousands of dollars of meals with the girls and things she never knew about. She came to know about the card when the bill collectors began to call because there had been no minimum payments made. They had nothing to show for the experience except a huge overdue credit card bill.
This turned out to be a case of the wife having to look good to her friends; buy them a drink in the bar, lunch once in a while, dinner out here and there. And before she knew it she was in over her head and brought the family into financial jeopardy along the way. Both partners in the relationship must agree to financial planning, savings and financial stability, or the effort will crash and burn. This difficult problem has a simple solution.
While you are prefunding your expense accounts, fund the personal accounts. Whatever either partner decides to buy with their pocket change is their business. The use of the money is never questioned. But when it runs out, it’s gone. There is no more spending until the next scheduled funding; a bit like getting an allowance as a kid.