Tips for a young couple using piggybank technique?

grey_eyed_wolf

Hi, I'm a total newbie so if this is in the wrong place please do let me know (nicely!)

I am looking for any tips or pointers on how to get financially organised as a young twenty-something couple, sharing bills and food etc. After 2 years together, we attempted the piggybank technique to get ourselves sorted financially – but we're 3 months into this and it's all gone a bit wrong, and now our finances are more confusing than ever! Please help!

How have other couples started the process of combining their finances? Is the piggybank technique always this rocky at the start, or have we just done things completely wrong?

We've set up the following accounts:

• Food shopping – We each put £120 a month into this joint account (M&S interest free, small but free overdraft) and then once a week we do an online shop with a strict £60 budget. This is kind of working.

• Bills account – This currently is for our electricity & internet (Natwest £3 account fee, no overdraft, fee offset by using our direct debits). It was also meant to have Water bill in it (my partner set up the wrong account for the DD, this should start from next month) and council tax (again, partner was meant to change this from his account ages ago. Didn't, so we're now v. confused on who owes what)

• Personal account – (First Direct, I got money to switch thanks to MSE, woohoo!) I pay for my half of the rent, plus some extras such as Netflix & Spotify that we both use but it seemed silly to add these to bills. I have a phone bill & very low value personal savings account.

• Personal account – (Natwest) He pays for his half of the rent, plus a phone bill and his current account contains his savings.

Okay so my partner has made a few mistakes with putting money into the wrong accounts etc, and this has caused us some charge problems on the Natwest account. We are hoping to fix this in future.

But everything seems so confusing and I don't know how to even start getting this sorted? Our balances for each account COMPLETELY don't make sense, they are vastly higher or lower than expected, how do we correct what each of us has paid or should be paying?

And how have other people spoken to their partners about financial things like this? I find it really difficult and awkward!

Perhaps there are some links to a getting organised spreadsheet, or other articles on sharing accounts as a young unmarried couple – seriously any tips or guidance on how to proceed without killing each other would be greatly appreciated. Thanks in advance!!

Save

Smodlet

Hi and welcome to the forum.

If you want the quick answer, decide what your and your partner's attitudes to money are and, unless you are both exceptionally careful with it, maintain separate bank accounts; yours and his.

Back in the day, when we were new to living together, it quickly became clear our attitudes to money were polar opposites. In a nutshell, he is a spender and I am a saver. We dealt with this by sitting down together, working things out with pencil, paper and calculator and finding out what we had to spend after all the bills were paid. If talking about money feels awkward at first, so do many things, right? You get better at them and if you don't learn to talk frankly and openly about money, you are potentially storing up problems down the line. Just read some of the threads on the marriage and relationship board!

We spent ages trying to work out what our grocery bills were likely to be and found it impossible to guess as it varied widely from week to week. We just had to do the shopping and add up the till receipts afterward, averaging them out over a period of time. It turned out our shopping and eating habits were different, too. I made a list, bought exactly what I needed and not one thing more, got out as fast as I could. I still hate shopping to this day.

OH is a browser. He will happily wander up and down every single aisle in the supermarket, gazing into space, moving at a snail's pace and then come home with all these "bargains"! After a few months, we concluded he should do the shopping alone or we would both end up alone. I would then complain about all the "bargains" on his return.

Over time, he improved and got better at sticking to a list, especially once we decided all the direct debits would go out of my account and groceries out of his. This gave him an incentive to think twice before buying "bargains" as he was spending his money, not ours. The rent we paid half each.

As our circumstances changed, we divided up new expenses accordingly. When OH got a car, I took over his half of the rent and he paid for all the car-related expenses. When we got a mortgage, I would give him what I could towards it as by now he was earning appreciably more than I was. I still continued to pay all the DDs.

We never have a problem talking about money or anything else and have been making each other laugh for twenty-three years. I hope you and your partner are as lucky.

Oh, and we now have a joint bank account!

Again, welcome and HTH.

Vikipollard

Personal opinion - you need ONE joint account for your bills, not three different ones.

You know how much the Council Tax, Gas/Electric, Water, Internet, via DD and Food amounts are per month. Make sure all the DDs are to come from this account, including rent.

IF you both earn comparable amounts (say £25000 each), then add the amounts above together and divide by two. That gives you the monthly amount to transfer via standing order from your personal/wages accounts into the joint account.

If there is a difference (say one on £30,000 and the other on £20,000), add the amounts together and the higher earner would pay 60% of the bills to the joint account; the lower earner 40% into the joint bills account.

That way you still get to keep control of 'your' money, but there is no fannying about with who covers what.

System

Hi,
I'd really recommend YNAB - you do have to pay a sub for it - but it is a fantastic online budgeting system. It will do all of the piggy banking for you. There's a month free trial and loads of online training.
It's revolutionised our spending and is really helping us get out of a debt mountain.

Ramble x

rogue999

I would say first if all - well done for trying to get a handle on things early on, you are doing the right thing even if it seems confusing for now.

Agree, just have one joint account and have all the household bills and grocery money from that. We have one and each pay £750 per month into it on payday and that covers everything for the house and car. What's left in my account then pays for bus fares, toileteries, makeup, clothes for myself etc and savings.

For now, whoever has paid a DD from their account instead of the joint account just reimburse them from the joint account.

Good luck - don't be disheartened as you are tackling this well and with a little rearranging it will work great!

grey_eyed_wolf

Thanks all for such thoughtful replies. What a nice place!

Smodlet – yes we are also very different in the way we do food shopping, and in what we eat too! I plan & cook all our meals, but find it hard to account for those 'bargains' and snacks when they find their way into the trolley. But then, he wouldn't spend all that money on aubergines, if he could help it! Also doesn't help that I need to buy food for my lunch, but his lunch is paid for direct from his salary etc. So many variables!!

I find myself constantly trying to keep track of it, but life is far too complicated.

Thanks ramblehan for the YNAB tip – I'll give the free trial a go. Looks like it's American, I'm guessing you can change the currency to £?? And hopefully two people can use the same login, so my partner & I could both view the budget online. It certainly sounds like the type of thing I'm after!

I guess the problem with a budget tool would be that we have combined MOST things, but not all things… oh boy. They should really teach this stuff in school :rotfl:

Save

Smodlet

Thank you, grey-eyed-wolf, I knew you would be cool with that user name.

As for teaching this stuff in schools, I believe our Martin, who art in MSE Towers (no offense/disrespect/heresy intended) has been pushing for this for years. I can't believe they haven't done it yet, he's an O.B.E., !!!!!!. (I learned that on here)

I agree with the other posters re having a joint a/c for bills, I just think, until you know (unless you already do) you are in it for the long haul, it is not a bad idea to keep some of your money under your sole control in separate accounts; it can help avoid arguments. Multiple a/cs were not common when we were starting out but then, stegosaurus roamed the plains...

You sound as if you have your head firmly screwed on and I wish you and bf all the best. If you need to ask, discuss or just plain vent, you know where we are... and don't think there ain't trolls on these here boards, there are.

inkie

Daughter just got married, and they are having one current account to pay household bills from. They will put half in each to cover the cost. Rest of the money will be in their own accounts.

lhead123

When me and my partner moved in together one of the first things we did was get a joint account.
We had been living together in a student house before this and paying our own rent and sharing food/not really paying attention.

We used to each put 1/2 the money needed for all bits, rent, food, car costs etc into the joint account and then whatever we had left was our own to spend. We were earning more or less the same amount. When oh was earning more than me, he put in 2/3 of what we needed and I put in 1/3 which was proportional to the difference in our income.

When we had kids and I stopped working so much we charge get tactics.
Every single penny we have incoming (wages, child benefit tax credits ets) goes into the joint account. If there is anything left over we split that equally and have that for our spending money to spend on whatever we want. I must say though this is often only about £20 each per month most of the time...Having kids is expensive!

Since we had

lhead123

Sorry about typos. My phone is having a fit and won't let me edit

Willowpop

Hi wolf....just a quick thought. You say you're both putting in 120 a month for groceries. Be carefil of them 5 week months, in my experience they tend to bite yiu on the bum. Perhaps putting a little more in each month will give you some money there for the 5 weekers?