Married couple walking shoreline

5 Tips my Grandparents Taught Me About Marriage and Finances

Tracey Louis, Staff Editor
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When I was “knee-high to a grasshopper”, I always looked forward to hanging out at my grandparents’ house. They weren’t the wealthiest people in the world, but boy were they happy! I can’t say they were dirt poor either, but they certainly knew how to have fun as if they had all the money in the world! How did an all-American middle-class family of five do this without going broke?

In this series, we’re going to look at five things you can do right now to strengthen your shared finances as a married couple. You might be surprised at how some of the “old school” examples my grandparents passed along still apply in this day and age!

5. Participate in a Shared Hobby...Together

Mature couple happily gardening

If you don’t have a shared hobby as a married couple, you definitely need one. My grandparents both loved to garden. My grandma was the president of the local garden club and my grandpa built and maintained a small greenhouse in their backyard for all of her plants. He also planted a vegetable garden that I “helped” him with as a kid (I got to water the plants).

So, what’s the relationship between a shared hobby and your finances as a married couple? First, most hobbies that married couples share don’t suck a lot of money out of your bank account - especially if you have a fairly inexpensive hobby like gardening (I can’t speak for the couples who buy fancy cars together). Second, the time you spend with each other is worth more than gold. And when you spend quality time together striving toward the same goals, the stress from worrying about finances has no room to invade your brain. And last, but not least, a shared hobby will keep you away from more expensive toys like consumer electronics and other unnecessary items that can waste your time and money. Ideally, you’ll both like your chosen hobby, so you probably won’t bother nit-picking each other when you splurge on it every now and then.

4. Go Places and Do Stuff

Fun road trip with the kids

One of my earliest memories of a family vacation is when we went to the Grand Canyon for the first time with my grandparents. It was an amazing experience for an 8-year old kid who loved rock collecting, geology, and history (to this day, it remains the biggest hole in the ground I’ve ever seen). But aside from the great childhood memories, I now see how important it is to get out of the house and do stuff.

My grandparents made it a point to get away from the daily grind as much as they could. They both worked, so it was a priority for them to go on small trips every now and then. Sure, they could have stayed at the house, but they realized it was healthy to go places and do things.

One thing they didn’t do while we were on vacation was spend their hard-earned money on fancy restaurants and expensive souvenirs. My grandma would usually pack breakfast, lunch, and dinner in the family cooler and stow it away in the back of the station wagon. We stopped regularly at rest stops to eat, or we’d enjoy a nice picnic wherever our trip took us. And if my grandparents did happen to buy a souvenir from their travels, it was usually something cheap like a magnet or postcard. Pictures were more important, and I’m glad because I now get to look on them fondly.

These days, I see so many people eating at expensive fancy restaurants when they’re on vacation. Don’t get me wrong — my wife and I love a nice meal every now and then. And we’ll spend a little more for some delicious lobster from a high-end restaurant. However, we don’t spend money on restaurants every time we’re on vacation, no matter how much our take home pay is. Sure, the experience is pleasant, but how many times do you remember the experience from a fancy restaurant versus a memorable family picnic while out of town?

3. Share a Checking Account

Writing checks and budgeting

I’m not sure if it’s a recent trend, but I’ve noticed lately that a lot of my married friends keep separate checking accounts. While I’m sure there are less debates about money this way, I don’t know if I see any other advantages to maintaining household finances using separate accounts.

There will always be some tension when it comes to money as a married couple. How many times have you heard, “Why did you spend that amount of money on ______________?” I’ve been on the receiving end and I’ve also asked that question multiple times throughout my married life. Needless to say, the outcome was usually never good, regardless of who asked. It led to arguments over something that can easily be fixed.

So...what exactly is the fix? Communication is key. Talk to your partner before you spend money on yourself or your household. Let them know the pros and cons of why you’re spending money ahead of time so there are no surprises. When my grandparents bought things for themselves, I always heard them ask each other beforehand if it was something that they could both agree on. I rarely heard them argue or fight and they both usually got what they wanted in the end.

The obvious advantage in maintaining a shared checking account if you’re both working is the amount you can both save while keeping each other’s spending “in check” (by discussing things with each other as mentioned above). Just the fact that you’re working as a team to save keeps a strong sense of accountability when it comes to your spending habits.

For example, if I were to buy something trivial like a large fountain soda when I stopped for gas, I might think twice about doing so, knowing my partner might question my decision. It sounds silly, but even little things like snacks and soda add up! If I had my own checking account, I’d probably rack up over $100 in snacks and soda for the month, and I’d be unhealthier because of it.

As you can see, there are advantages in sharing.

2. Create and Maintain a Solid Monthly Household Budget

Calculating household finances

If you haven’t created a monthly household budget as a married couple, now is the time to do so. My grandpa was always the enforcer and made sure no one exceeded the budget — and he was the first to mention it if he knew there was even a slight chance it would go over. We always got a little irritated when the A/C was monitored during hot summer months at my grandparents’ house, but now that I’m an adult, I can see why he did it. As I mentioned above, I still had fun, even if I had to sweat a little.

If you’re new to household budgets, start off simple with a few key categories and enter them in a spreadsheet (Google Sheets is free and you can access it from anywhere you have an Internet connection). Budgets don’t need to be complicated, and you don’t need fancy (or expensive) software to maintain one.

  • Total Combined Income — The main part of your combined income will come from your monthly pay (after taxes). Be sure to include any bonuses and tips either of you receive. If either of you bring in a secondary source of income, make sure you include that as well. Since this is a guideline for simple budgeting, we won’t get into income from investments or stock options here.
  • Total Combined Bills — Enter all of your combined monthly bills. This includes things like mortgage, rent, car payments, insurance payments, utilities, school loans, credit card payments, and even entertainment (Netflix, Hulu, cable, etc.).
  • Total Combined Expenses — Expenses include groceries, gas, and other necessities like diapers or prescriptions. This category is where you’ll have some flexibility as far as where you want to be with your budget. If you’re spending too much on groceries every month, try buying generic brands. Looking to cut down on gas? Try staying home and watching a movie instead of going to the theater.

Now that you’ve entered the three categories above, add up your total combined bills and your total combined expenses. Subtract this number from your total combined income. Depending on the result, you’ll see that you either have a surplus or deficit.

If you have a deficit, make some corrections in order to get back to a monthly budget that’s balanced. More than likely, you’ll see that budget cuts will start with the entertainment category. Think of “want” versus “need”. If you’re in credit card debt, make sure you try to pay off the lowest balances first, and then tackle the higher balances. With each card you pay off, you’ll become more confident in paying down the next one...and you’ll have extra money to do so when you don’t have a minimum payment due on the ones you pay off.

If you find that you have a little extra every month, congratulations! You’re on your way to saving (and investing)! And that makes a perfect segue into the number one thing my grandparents taught me about marriage and finances...

1. Categorize Your Savings Account

Happy couple planning their budget together

As I mentioned above, my grandparents didn’t have a lot of money, but the money they did have was spent (and saved) very wisely. They created a lot of fun memories together without the need to spend lavishly, and they provided tons of fun for each other and for their family (including grandkids).

And that was mostly because they saved a percentage of their money and put it into different savings “categories”. Although both of my grandparents have long since passed, they left behind lots of memories in the form of pictures and letters. But one of the other things they left behind was a detailed, handwritten record of their finances. Most people would have tossed these findings and saved the pictures and letters. I, on the other hand, found them to be quite intriguing and useful. I kept their savings breakdown and continue to use it to this day.

Here’s an example of what I found in a little dusty record book buried deep in their garage:

Savings Breakdown:

  • Emergency Savings: 75% of cumulative monthly surplus (when cap is hit, this gets routed into investments)
  • Health Care Savings: 10% of cumulative monthly surplus
  • Vacation Savings: 6.5% of cumulative monthly surplus
  • Car Maintenance Savings: 5% of cumulative monthly surplus
  • Leftover “Anything” Savings: 3.5%

As you can see, this looks like a budget, but it’s a little different. Let me explain:

For most people, a monthly budget is determining the “cap” that your spending shouldn’t go over each month and then enforcing that budget (making changes as necessary). What I found in my grandparents’ little dusty record book is quite the opposite. It takes the surplus from your budget and segregates the money you save into multiple categories. Obviously, the surplus could have been directed into one lump sum (that’s how people normally do it). However, I found that separating your savings into categories can be beneficial in many ways.

Here’s an example:

Let’s say you and your spouse make a combined total of $4,000 every month after taxes. If you have a solid budget in place and save, oh, let’s say $1,000 of that after all your bills and expenses are paid, you can break it down as follows:

$1,000 Surplus for the Month of January

  • Emergency Savings: $1,000 x 0.75 = $750
  • Health Care Savings: $1,000 x 0.10 = $100
  • Vacation Savings: $1,000 x 0.065 = $65
  • Car Maintenance Savings: $1,000 x 0.05 = $50
  • Leftover “Anything” Savings: $1,000 x 0.035 = $35

Grand Total: $1,000

This is an example for just one month. If your monthly surplus is fairly consistent and you want to get an estimate of how much you could save by the end of the year for each of those categories, simply multiply the totals by 12:

  • Emergency Savings: $750 x 12 = $9,000.00
  • Health Care Savings: $100 x 12 = $1,200.00
  • Vacation Savings: $65 x 12 = $780.00
  • Car Maintenance Savings: $50 x 12 = $600.00
  • Leftover “Anything” Savings: $35 x 12 = $420.00

Grand Total: $12,000

Multiply each of those category numbers by 5, and you’ll get a 5 year savings outlook:

  • Emergency Savings: $9,000 x 5 = $45,000.00
  • Health Care Savings: $1,200.00 x 5 = $6,000.00
  • Vacation Savings: $780.00 x 5 = $3,900.00
  • Car Maintenance Savings: $600.00 x 5 = $3,000.00
  • Leftover “Anything” Savings: $420 x 5 = $2,100.00

Grand Total: $60,000

I have to emphasize that this type of savings is not to be touched before the expiration you set. For example, if you need a routine oil change, take money out of your shared checking account. The money in your savings is going toward a set goal. After you reach that goal, you can decide how you want to allocate each category (I assume a good chunk would go toward investments).

If you and/or your spouse aren’t frugal, or you just aren’t good at saving money, this article might contain the steps you need to get a jumpstart on your finances as a married couple! And if you already have a solid financial plan in place, we hope you at least found a little insight on streamlining your future!

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