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Jess and I have for the most part merged our finances.  Jess hates dealing with money, so we sort of decided that I would be the CFO of the family.  Based on this post, one of my goals for this year was to get us paying off some of our debt (student loans, cars, etc.).  We also would like to buy a house in the future.  We’d also like to enjoy at least some of the “riches” that we deserve from 13 years of undergrad and graduate school combined without having to worry about whether or not we can “afford it this month”.  I came up with an initial plan but Jess didn’t like it because she wanted to be able to have an account I didn’t see…..”duhhhh duh duh duh.”  Nothing sinister about it.  She wanted to be able to buy birthday/Christmas presents without me seeing where things were coming from, which sounded reasonable.  With these requirements, I set about my task of coming up with a way of balancing everything and coming up with a way for doing all of this.  I thought I’d share the experience so that young couples like us would be able to maybe make use of a similar plan:

• Our plan is a very loose variant on the “stackbacks” system.  We have a family account that all of our direct deposits from work go into.  This is what is used to pay bills from.  Some of it is automated online through the payee, some of it, I do automatic bill pay through my bank.
• We added up our monthly bills and subtracted from what we earn a month.  The balance is what we have to live off of and pay off debt.  Jess and I agreed on an amount to live off of and an amount to pay off debt.
• The amount we’ve decided to live off of is the amount that we use for food, gas, and our “fun” money.  This money goes into one of our separate bank accounts that we have set up.  Jess uses a “brick and mortar” bank.  I use an online bank.  With that money, we need to split groceries and gas.  The leftover money is what we use for our “fun money”.  If I want to build my own PC, I save up the money and pay for it out of my account.  If Jess wants to buy beads, she takes the money from her account.  We will be responsible for having enough for groceries for the month, (This may be a sticking point…we’ll have to experiment to see how things go in the future, since it’s all so new.) but beyond that I don’t have to beg Jess and Jess doesn’t have to beg me for the “fun stuff” that we want.
• From the money we have left for paying off debt, we’re using a very perverted form of Dave Ramsey’s debt snowball.  The snowball is useful for people who are trying to pay off debt over years and years and need incentive to keep going.  Jess and I can pay off ours in a relatively short amount of time so we’re trying to maximize how quickly we can increase our monthly income.  (Based on the minimum payments for the debt.)  We arrayed the bills with this thought in mind.  What we follow of the “snowball” is that we pay the minimum on the rest and focus all of our payoff money on the first bill in the list.  All extra money that is saved from paying off a bill gets put towards paying off the remaining bills.  This plan actually resulted in us being able to increase our monthly living expenses while paying off our bills within the window that we wanted to pay it in.
• We have a small emergency fund to pay for expenses like doctor’s appointments (this is not too big of an issue because our insurance has a health savings account that the company contributes to, so we don’t have to worry about out of pocket expenses unless one of us gets really sick.)  If worst comes to worst, we have a credit card that we can use to pay expenses and then pay off with the money we’re using to pay off debt.  A catastrophic loss of income would impact us (both of us losing our jobs, getting sick, etc.) but we’re both working for companies that, while they aren’t recession proof (and are certainly sensitive to government spending), they are not retail/consumer industries or financial, so for at least the year, our jobs are probably safe…long enough to begin building savings.

This doesn’t answer every single detail of finances (We’re still trying to decide on how to save up for really large expenses for the both of us…large vacations to Hawaii, car downpayments, etc.) but this is where we’re starting.  Any ideas or feedback, please let us know.

Matt