small change toward a rich life

The Conflict-Free Family Budget: Introduction

My partner Jak and I have been together for eleven years now. We blended our money fairly early in our relationship — sometime late in the second year. Ever since then we’ve had a single pool, into which all income goes, and from which all outflows are jointly approved.

Our financial outlooks and spending priorities have always been pretty similar — more alike than most couples, from what I’ve read — but still not identical. Also, they’ve been changing over time, for both of us. In general, I’ve been leading the way down the path of increased frugality, and Jak has willingly followed … about a step or two behind.

tense couple talkingWhich has made for occasional friction. Nothing major, nothing relationship-endangering, but still not any fun. I would grouse about individual purchases that didn’t match my frugal standards; Jak would grumble that he felt micromanaged and constrained. I tried backing off, but then he’d start coveting some expensive new electronic gadget and I’d get anxious.

I suggested we set category limits, like $30 per month on his coffee shop beverages; he agreed, but by the second month he’d gone over, and he didn’t even feel any less restricted. He tried to only buy things that I agreed to, but couldn’t help resenting the lack of autonomy. At one point he suggested a monthly allowance that he could spend however he wanted, but I couldn’t see that stopping me from fretting about whether we could afford whatever he was buying, or whether it was fair for him to splurge when I was sacrificing.

Last summer, after a lot of reading on behavioral economics and with our particular dynamics in mind, I hammered out a new approach for handling expenses. I made a little spreadsheet, calculated some numbers, and then proposed it to Jak.

He had a lot of questions, most of which I had ready answers for, but a couple required that I refine the model. We haggled over details. He was interested, but cautious; it was a pretty big change, and though the potential benefits were obvious, he wasn’t confident that we’d foreseen all the drawbacks. We agreed to try it for three months, after which he could request a renegotiation.

We implemented the new plan on July 1. The three-month mark came and went without notice. In fact, in the last six-and-a-half months we have not had a single negative interaction around spending. Not one.

I want to share this system here on Pocketmint, for two reasons: one, because it underlies or ties into a lot of other things in our lives that I want to talk about, and two, because I think that — perhaps with minor adjustments for individual circumstances — it could be a good approach for a lot of other families.

However, to explain the idea well enough that someone else could implement it, I’ll have to go into quite a bit of detail, which makes for a whole big pile of text. So I’m breaking it up into three sections. Tomorrow in Part One I’ll describe the plan as we implemented it. Then in Part Two, I’ll go over the results, both expected and unexpected. Finally in Part Three I’ll discuss general principles and ways to adapt the budget for other circumstances. Stay tuned!

(Photo by Ed Yourdon.)

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