Disclaimer: No advice please. I didn’t go into detail about any of our accounts on purpose.
So this is all about the ever-so-sensitive topic of money and how to handle it.
Number one: I am utterly shit with money.
My mother asked me recently if there was anything I thought she could have done a better job on — not just so I could be like “OMG TERRIBLE MOTHER” (because jesus, she was pretty great) but so that she could correct any failings in raising my sister. The only thing I could say (and I’m sure she was a bit irritated by how FAST I leapt to this) was money. God, I suck at money.
I fell for every trick the credit card companies pull. Twice. My credit rating is in the toilet, I racked up so much in credit card debt I literally couldn’t afford to make the minimum payment. Without even using the cards, the incredibly high interest rate was making the balance go UP every month, instead of down. I’ve been working with a credit counsellor for over a year to get things back to sanity, and I’m proud to say that my entire debt is currently sitting at about $7000, and it’ll be paid off (and off my credit report) in about 5 years, at the current rate of payment. (Debt management programs drop off 3 years after they’re fully paid.) I may even pay it back sooner to get my credit report fixed up faster.
I also made a respectable amount for someone who lives … anywhere but Vancouver. I honestly don’t have a lot of comparison, except for living in Victoria for a couple of years which has an odd economy of being both cheaper and more expensive than Vancouver in different ways (everything has to get there by ferry, which ups the price of a lot of things.) Rent was certainly a lot cheaper, but that might have had something to do with being a bunch of 20 yr olds living communally.
But I have always, always, always lived paycheque to paycheque. I’ve never been able to figure out how people DON’T live paycheque to paycheque. How do you ever get ahead, living in Vancouver, without making twice what I do? It’s incredibly frustrating, and a problem I’ve simply never had the tools to figure out.
Number two: Something something married.
So figuring out how to combine finances is a common issue. Dan & I managed to do okay to start. He makes a fair amount more than I do, although my income is finally climbing to Reasonable Even In Vancouver levels.
Our previous method was … to kind of wing it. We mostly split the bills. I’d send my portion of the rent to Dan every month, and he’d write the cheques. Whoever happened to buy groceries is whoever happened to buy groceries. Savings kinda happened, or at least they were planned to, but didn’t always work out. In other words, the same sort of haphazard money management that I’ve had my whole life. Nothing grossly terrible, just nothing really efficient either. We’re both pretty bad at haemorrhaging money like if it sits in our accounts for too long, it goes bad. Money: It’s Just Like Bread. Delicious, but moldy in 4 days.
I’ve always hated living paycheque to paycheque, but never really knew how to get out of it.
So we have a new plan: We finally opened a joint chequing account. Dan’s paycheque will go directly into it (well, as soon as our new set of rent cheques go out — for now, they still come out of his account.) My cheques, after a month of building up a bit of padding, will go directly into our ING account. Our “discretionary funds” (for things like eating out, non-essential purchases, and other silly things) get transferred on the 1st & 15th to our own accounts.
So this has been happening for about two weeks now, and some interesting things have happened: We’re both a LOT more cautious with money. It’s easy to spend MY money, it’s harder to spend OUR money. Even though we were essentially splitting costs before, it was still very My Money/Your Money. We’re also trying to live on several thousand dollars a month less, which is quite do-able … which is kind of sad. Jeez, just how much WERE we haemorrhaging? Ok, we eat out entirely too much.
Having the “eating out” budget come from our discretionary funds helps a lot. We only get so much in those accounts, and once it’s gone, it’s gone. Nothing terrible will happen, we won’t starve, groceries come out of the joint account, but we’ll lose a lot of freedom to just… do what we want. The side effect? We do a lot less of “what we kinda want” so we can do more of “what we really want”. I still stopped at A&W yesterday to grab a quick burger on my way into work, but I also brought my dinner with me so I’m not spending $15 on crappy sushi.
I’m not willing to totally sacrifice my lifestyle, though. A lot of people came up with all sorts of helpful suggestions like “cut your cable!” (I haven’t had cable in my entire adult life) or “switch your cell phone plan!” (No. My plan suits my needs perfectly, even if it’s more expensive than yours.) “Buy less tea!” (hahahah no.) Our bills are fine where they are, where I’m cutting costs is by going the extra 2 blocks to No Frills more often, rather than hitting up the more convenient (and much more expensive) IGA. Eating out less. Fewer impulse purchases. A lot of the things that would come out of my discretionary fund, which is … well, considerably less now. I need to save it for what’s important. (Like going to Bret’s Dark Valentine art show. You should come, too!)
And I find that when I AM grocery shopping, I feel a lot more frugal. This isn’t MY money I’m spending, it’s ours. Even though we had essentially combined finances before, now that it’s ACTUALLY combined, it feels different. Apparently Dan feels the same way… I think.
Probably should have done this a year ago, but hey, I’m kinda shitty with money. So yay, I finally feel like maybe I’m getting a grasp on this. So my new goal is to save a little over $30,000/year. And that’s actually do-able. Which is far more respectable than the measly $6000/year that we were attempting (and failing) to save until now.
Next: Once we’ve built up a bit, we’ll actually have a need to talk to a financial advisor about what to DO with all these lovely savings. Fun!