Don't be a Fool! Your 'Signot' and the checkbook

Who manages the money in your household? Many of our significant others (signot) think of, and deal with, money in different way than ourselves. It's no cliche' when I say that the most important thing when it comes to couples and money is that you have the same (or at least very similar) financial goals. It's how we reach those goals that may become ammunition for squabbles.

Here are a few rules not to break (and some ideas to help) when it comes to sharing the checkbook and bills:

• Talk about your financial goals and how you plan to save for them... write them down
• Have a budget
• Share that budget with your signot so they know what's up (or down) with the cash
• Designate who's responsible for which bills, make sure someone is accountable for each bill even if its just one of you
• Set up automatic bill pay so you don't forget!
• If you share a checking account, set a spending limit (i.e. $50) that neither you or your signot can exceed in any one purchase without consulting the other one first. 
• Consider setting up a second checking account just for your variable expenses (this way you know you're not spending your fixed expense money... like your mortgage)
• Use cash allowances for both parties; this way, once the money is gone, its gone
• Communicate throughout the month (i.e. "we only have $40 left to spend on entertainment this month... do we want to blow $30 tonight at the movies?")

Two Checking Accounts?

If both you and your signot (significant other) are taking dips out of the same account, how do you know if you're staying within your budget? What if he spends the money that was earmarked for the car payment??!!

We all know it's easy to become stressed about money and figuring out the best way to manage it can be a challenge. What's even harder? When you are co-mingling your finances with someone else. Chances are that one of you spends a bit more than the other- whether its on clothes, or on groceries; but what if the roles reverse one day, does the other person know the limit?

My last post talked about those of us that have a difficult time with budgets and being consistent about tracking our cash. Once you figure out your variable expenses (anything NOT fixed like food, going out, clothes, etc.) you can either take that money out in cash OR just open a second checking account!

When you open a new account, number one, you won't have to worry about losing your cash and two, you can see your spending patterns without having to collect receipts.  With both of these methods, you will know when your spending has to stop (when the money is gone) and you won't have to worry about dipping into money that is intended for a fixed expense, like say your electricity.. or worse, your mortgage.

So figure out how much variable cash you have after your bills are paid, work it out so that money goes directly to your new checking account* (set up direct-deposit in equal amounts from each paycheck). Everything else goes into your primary account and will cover your fixed bills.

Make sure that the fixed bills are being paid when there is cash in that account however, so call any lenders, retailers, or organizations that you are paying and change dates as necessary.

*Make sure you know the details of the checking account you are opening. An increasing banks and even some credit unions are instituting fees to maintain a checking account; some will waive the fees if you have a certain amount being directly deposited- so read the fine print!

Cash Flow is Key

So you have a budget, or at least you know that you are making at least a little more than you are spending. So why does it seem like you run out of money every month?

Cash Flow.

Do both you and your signot(significant other) use your primary account for flexible spending? Maybe you are in charge of the finances so you know not to do the big grocery trip right before you get paid, but do they know that?

Many of our bills tend to be grouped into one end of the month or the other. The key is to spread out our bill payments so that we can maintain a positive cash flow.

Today's tip:

• Jot down all your bills (mortgage, car payment, electric/ gas, phone, cable, internet, subscriptions, credit card payments, insurance, and monthly savings contributions). 
• Divide into two categories so that each side is as equal as possible. 
• For example: 
• mortgage/ rent= $1500
• car payment ($400)+electric/ gas ($200)+phone ($100)+cable ($100)+Internet ($50)+ subscriptions ($100)+credit card ($200)+insurance ($150)+savings($200)= $1500
• Next, look up all the due dates. Since most of us pay our mortgage or rent at the beginning of the month that will be one major expense allocated to the first half of the month. Next, take the bills that are  due in the first half, and see if you can change their due dates to the second half. Sometimes you can do this right in your online account, otherwise you will have to email or call customer support. There should be no reason why you cannot switch the payment date; just keep in mind, you may end up paying twice in one month when you make the switch.
• Finally, set up as many of your bills as possible with autopay; this way you won't forget when they are due, and save yourself from late fees as well!

If you are worried that you will not be able to keep track of how much "extra" money you have left to spend on food and entertainment- check out this post for those of us who don't do well with "formal" budgets.