Ever wondered how Mrs. Vigilante and I do it? How we live this idyllic life while building an empire of wealth – all smiles, never disagreeing on a single purchase, rainbows permanently etched into the ridge view behind our zero-carbon-emission home where the grass tastes just like an expertly seasoned medium-rare filet mignon?1
Ok, things aren’t quite that awesome, but we at least manage to accomplish the part where financial tension is at an all-but-indiscernible level. When we tell people that we do this by having clearly defined financial boundaries, it surprises some. If marriage is about cooperation, how can we have separate finances?
How does this perfect couple manage money?
From the outside looking in, I’m sure it appears that the Vigilante Family has an incredibly intricate – and some would say overcomplicated – structure for our daily finances. Friends have caught us going over receipts, moving money around various accounts, and categorizing purchases on Mint together. Or reviewing allocations and FIRE progress on Personal Capital. To an outsider, it might appear a bit anal due to piles of saved receipts and the time for data entry. (And math – people don’t like math.) An innocent onlooker may reasonably wonder if we’re too focused on “fairness,” and if it will lead to the ultimate doom of our marriage. After all, nobody wants a marriage to be about keeping score!
But being on the inside, we know those assumptions are wrong. Our system is incredibly easy and quick to manage once everything is set up, and the benefits have greatly outweighed the tiny cost in time. It’s not even a chore to us – our system is informative, fair, and actually kind of rewarding.
But what is this magical system that lets us each pay our fair share, have our own separate spending money, and meticulously track each penny without driving ourselves nuts?
It’s important to start with the “why.” We have a common goal that is super general but super important: to lead an active-as-hell lifestyle with the minimum amount of spending that can keep us happy. We find that we can be happy with spending roughly equivalent to the earnings of two full-time minimum wage jobs.2 Since we both earn well over minimum wage and can easily afford this lifestyle, we’ve decided to split our spending (on necessary things) in half regardless of our incomes, save the rest, and deal with any resulting inequity in savings through our prenuptial agreement.
This arrangement simplifies things and should placate concerns for “keeping score.” There’s simply no incentive for either of us to worry. We have no concern with who is buying toilet paper, who pays for dinner, or who get the flowers for Mom on Mother’s Day.3 Since we’re splitting our costs in half, it all comes from the same pot!
If this means that one of us earns a lower income and therefore saves a bit less, it doesn’t matter: We assume we’ll always be working together, so “what’s mine is yours” applies. And if we happen to go our separate ways someday, any difference can be rectified in divorce pursuant to our prenup. There’s no way for either of us to “lose,” but together we easily win the rigged game of life!
Which brings us to the “what.” We have only a few joint assets and debts, but they’re crucial to our money management. We have a house, a mortgage, a joint checking account, and a joint savings account.
Mrs. Vigilante pays the mortgage and I send my half directly to her account each month. At the same time, we each pay a certain amount to our joint savings, which functions as escrow for our property taxes and insurance. Simple, right?
We have only one other debt payment, which I make alone – my student loans. I do NOT want Mrs. Vigilante to pay for my education, since she made the choice to stop at her fully-paid-off bachelor’s degree and start earning a paycheck immediately. I made the choice to go to law school, not her. Sure, she benefits if I get a bigger paycheck due to my education – but so do I! If I sought her help in paying my loans, I would feel as though I’m penalizing her for loving/putting up with me – which is just salt on an open wound, ya know?4
But what I really want to talk about is how we handle paying for our lives and tracking our spending. It’s all about the joint checking!
Which is where we come to the “how.” The joint checking is funded by each of us, equally, from our private checking accounts as needed. Everything we buy as part of the daily course of our lives, like groceries, vacations, and home supplies, we pay for with our individual credit cards. We churn them on opposite schedules: She gets a card and earns sign-up bonuses, then I get a card and earn sign-up bonuses, then she gets another.5
Immediately when we come home from shopping, we do two things. First, we scan our purchases for the National Consumer Panel, which gives us enough rewards every two months or so for a movie date in our neighborhood theater. These few minutes pay entirely for my Marvel movie fetish and Mrs. Vigilante’s obsession with Harry Potter!
Second, we reimburse our personal checking accounts from the joint checking and write “paid” on the receipts, which go in a special jar. Eventually, we build up a healthy stack of receipts. About once a month, we go through these receipts for 10-20 minutes, making sure we have everything correctly categorized on Mint. It would take only 5 minutes, but we go so far as to split each category on the receipts in half just to be able to get perfectly accurate numbers for use on this blog.6 You’re welcome, guys.
Once that’s done, the receipts can be tossed unless we have another reason to keep them, like a possible return or a health care expense reimbursable from my HSA.
The catch: Sometimes, money’s tight.
Every once in a while, one of us runs out of checking account money to contribute to the joint checking. It’s usually Mrs. Vigilante these days, since my income has risen enough this year that I could enable her to max out her 457(b), reducing her take-home pay. Is this a source of conflict to disrupt our daily bliss?
Slow down, Negative Normies! We thought of this.
We keep a spreadsheet related to our prenuptial agreement that shows how much money I still owe Mrs. Vigilante for her extra inputs into our currently largest asset, the house. When she runs out of money, I just cover our expenses temporarily. Her half of whatever contribution I make to the joint checking is then added to the spreadsheet in my column, reducing the amount I owe her. If I ever overtake her,7 then she would owe me the difference in a divorce, regardless of other factors. Just like I owe her the current amount if we divorce tomorrow. Simple and elegant solutions are often the best!
As I understand, some of the marriage police feel this is wrong.8 That we are making our marriage a business. The marriage police fundamentally disagree with us on a key detail: Once we involved the government in our relationship, a business is precisely what it became. We could have been together regardless of a license, but we chose to take on certain legal benefits by partnering in the eyes of the state.
That partnership benefits both of us, but it also grants each of us certain automatic rights to one another’s earnings. Given the common sense that our quickest path to FIRE is to maximize each other’s savings, we need to make sure those rights don’t disrupt us by causing a bitter, uneven situation from developing. For example, we want to avoid a situation where she spends wildly while I pay all the bills, or where I spend wildly while we split our important expenses evenly.9 So, we customized those rights in our prenup, and we use a joint account to make our lives sustainable with equal effort and equal reward.
It’s not that we treat our marriage like a business because we don’t feel romance or don’t care about one another; we treat it like a business because we care so much about one another that we want to make sure that we’re both taken care of, and one-size-fits-all divorce laws never hurt either of us!
How will you manage the little things?
Since that’s a lot to read and we all prefer the Cliff’s Notes, I’ve drafted them for you! If you’re in a relationship with another wage-earner and want to figure out the best way to handle your money, feel free to reference this with your new flame to spark the most romantic conversation ever:
- Both short- and long-term financial goals, explicitly and completely. If you’re in disagreement here, you’re gonna have a bad time.
- Prioritize your various goals. You may not agree, but at least know and respect the other’s priorities. You can work toward different short-term goals without cutting the legs out from the long-term ones. If you do things to harm the long-term goals of your significant other, you’re gonna have a bad time.
- Split the basics. The mortgage, the groceries, the cable bill.10 This might not apply to stay-at-home parents and other who make non-financial contributions to the household. But for two wage-earners: If you feel as though you’re paying all this and your significant other spends wildly on useless shit, you’re gonna have a bad time.
- Track spending together. If you give less-than-full disclosure on things that clearly effect your significant other, you’re gonna have a bad time.
- Cover for each other. Bad things happen, sometimes, and that’s why you have each other to lean on. If you won’t bail out your significant other and can’t rely on him or her to bail you out,11 you’re gonna have a bad time.
If you’ve figured out an easy way to keep yourself and your spouse happy, let me know in the comments!
- Did I go too far? I went too far. Damnit.
- Aside from our mortgage principle and interest and my student loan payments, which together account for well over half of our spending.
- Or the beef for Father’s Day, since that’s what we literally just bought.
- Really, it’s a wonder I could get her at all…imagine asking her to pay me for this!
- Not that this is a limitless game as simple as I’ve described. There’s an art to doing this without hurting your credit score or running up debts you can’t afford. Our cards are all paid off every month, and they are eventually closed before paying any fees. And so far, we’ve managed to have continually rising credit scores. But more on churning later!
- All we have to do to get an accurate reflection of annual restaurant spending, for example, is log in to Mint and add our numbers together. It’s perfect every time, even if there’s some time that one of us went out to eat without the other and didn’t pay it back for some reason.
- Which seems likely, but years away. To the point we might be retired before I pay her back in full!
- Ugh, feelings again.
- This would be unfair to her, since it would be a greater proportional share of her income.
- Just kidding. Who has cable these days?
- Something both me and Mrs. Vigilante have done plenty of over the years! She paid off my car loan, she put far more money into our house, and I am rebuilding her emergency funds and making her IRA contributions as repayment, while also paying her grocery bill periodically. Works for us!