Allowances

Do you have them?

When Jordan I merged our finances a couple years ago, we maintained our personal chequing accounts.  We thought that it would good to have some money available each month that we were only accountable to ourselves for – that we could spend without checking in with our partner.

For the last couple of months or so, Jordan has maintained that he would like to eliminate our allowances from the budget.  He had thought that in efforts to simplify things, and stop over using his credit card – this would be the best solution.  I’ve been…hesitant, but unable to really explain why.  I suppose, it was to uphold the original intent – to have money that we’re not accountable to each other for.

I had hinted in my last post – that once our debt was paid off again, Jordan and I would continue the allowance conversation to see where it took us – and that if my needs of family vacation/camping ect. were met – perhaps I didn’t need an allowance any longer. 

Since reading my last couple of posts, and Jordan and I continuing to make positive headway in the way we have our conversations – I asked him a question.  It was simple really, on our drive home from work.

“so, in November – when my aunts and mom come to town for our annual Christmas shopping trip – where will the money come from that I spend on myself?”  While I start on our Christmas shopping then (and we have a budget set up for that), I inevitably spend $200-$500 on myself.  This could be for clothes, undergarments, buying lunch or dinner – or all of the above.

Jordan then said…

“I’ve actually been thinking about this.  I don’t want to get rid of our allowances”

He went on to say that in one of our previous conversations, he had admitted to feeling like he couldn’t spend any of our joint money without checking in – so he winds up using his credit card for both personal and home purchases.  He hasn’t had that feeling since we started spending money according to the New Plan, but said that if we got rid of the allowances – then we’d be right back there.  Where we have to check in for personal expenses.

So – I asked.  If we don’t get rid of allowances and personal credit cards – how will we help you to not spend more money then you have by way of your credit card.  He said that he would still like to cancel it – as soon as the debt is paid off.  That way, he can just take out cash.  He still wants to be able to buy a video game or whatever using his ‘unchecked’ allowance.

That means - allowances are back on.

With that said, our conversation moved to new territory.  How much should our allowances be.  Way back when, when we set this system up – we had decided on $100/month.  It sounded good – but we didn’t have a real good reason for that number.  I thought I would through it out to all of you, to the couples that organize their finances jointly, but have allowances.

How do you do it?  How much do you get?

Credit Card Debt Update

After finishing yesterday's post, we updated all of our spreadsheets and numbers to account for no more auto-debits to our emergency and gift funds which meant we freed up some monthly cash flow to go towards our credit card debt.  We also decided to put the $500/month towards our 'house fund' on hold until the debt was paid off - which freed up a lot more cash flow.

So - here's the updated debt pay off plan:

That's right.

June.

The last time I posted on this we were looking at November.  We've shaved off five months - great news!

When Jordan and I were talking on Monday evening, he admitted that he had been feeling like the money in all of our savings funds were 'off limits' - he felt like he had no say and no access to that money.  I on the other hand, feel freedom and safe when we have money tucked away - so that it's their if we need it.  We both actually want the same thing: flexibility - but have fundamental different ways of going up getting it.

From there we talked about our credit card debt a bit.  He mentioned that his card had a balance of about $850 on it - $300 of which were for repairs for the truck that he didn't want to use the credit card for (the joint one) and didn't feel good about talking about it.

He also has felt like he had to use his card as a buffer - even for normal day to day spending.  That said, he hasn't touched it except for a Valentines day gift for the house since we started our new spending plan - which we both feel a lot more comfortable with.

So, we have committed $300 from April's budget to go towards his credit card for the truck repairs.

We're also going to continue the conversation on our allowances and if we still need them.  Jordan feels strongly that if we didn't have an allowance, he wouldn't use his card and would even rather cancel it and just stick to the joint account.  I tuck my allowance away to help pay for clothes that aren't 'needs' and guilt free purchases for lunches with friends sometimes - but if we find a way to build that into our regular spending, then maybe we don't need them anymore.

Priorities

They change.

Sometimes they don't change very often, sometimes they do.  Sometimes events happen in our life that have us call into question the path that we're on and require some thought about the fork in the road.

It has been ten weeks since my father passed away.

My priorities have changed.



Jordan and I have had some pretty big plans in finishing our house, including a garage, fence, landscaping, deck, basement development ect. - all really big things.  While I still want those things, I no longer feel the need to have them done right this minute - at the cost of our debt load and financial and personal well being.

What I want now, is to spend as much time as possible with my family.  With Jordan's family.

What Jordan and I both want is some calm, some steady peace in our financial house.  We want to be able to go on a trip with friends for a weekend, go camping with family and not worry that we can't because we've got this garage we're building (or whatever 'big project').  We also want to enjoy our house and our space with said family/friends.

So, we've adjusted our priorities.

If you've been following along in our growth over the last few years, you've seen that typically we save for a number of different things at one time.  Sometimes, as many as six or more.  This puts some pretty long sights on all of our goals and means that we don't have to prioritize them if we focus on all of them at the same time.

There's a few things that happen every year: Christmas and Camping - so, doesn't it make sense to save for those right away in the beginning of the year?  We've moved some cash from our 'house fund' into those funds so that they are done.  We've met two goals already and that feels great.

We also know that we want at least $1,500 in our emergency fund (about one month on EI if anything were to happen) - so, we moved some cash from our 'house fund' into our emergency fund and that's a third goal that we've met.

A weight has been lifted.

I then moved $500 to add to the debt pay off for this month and kept $1,000 in the house fund for some short term items around the house that we want.  Now that we've reached three goals and have the ability to get some things done around the house with out the weight of a garage weighing over us, we don't have to keep contributing to these small goals - so i'll be cancelling those auto-debits and adjusting the budget.  That also means that we can pay off our debt sooner.  Much sooner - but more on that tomorrow.

March Monthly Spend Report

So it's a little late, but here is the monthly spend report for March.  March was the month that we transitioned to The New Plan so about half our spending was on the credit card, and the other half was using our new debit card system.

This is the least we've spent on gas in quite a while and the most we've eaten in quite a while too!  To be honest, I'm not very excited about this post - I'm really excited to share this month's with you in a few weeks b/c it will be the first full month with the new cash management plan!

Budgeting for a Baby

So a weird thing happened this week.

Jordan went to the place of forecasting, guessing, planning, and 'what ifs' and I went to the - I want to work with facts place.

weird.

That is so opposite to most of our conversations.

After we realized what happened, it was an eye opener in understanding how the other thinks/operates most of the time - which was great - but that learning is not really what this post is about.

The conversation was what our financial picture would like like after babies (no, I'm not pregnant - but yes, we plan on a family one day).  Jordan and I both support the idea of one of us staying at home, and while I really want that person to be me, financially I never thought that it was realistic.

Jordan is actually really keen on the idea of being a stay at home dad and while that sounds great, there are some perceived risks associated with that too.  Someone brought it to my attention that while financially it doesn't make sense, it might be harder for Jordan to re-enter the workforce after taking a few years off to raise children.  There could be a perception that he stayed at home because he 'couldn't' find work - or some other BS.

All that aside, we looked at some theory and some facts and of course - I put all of that into a spreadsheet...

I showed off my spreadsheets to Jordan tonight, and he asked me to share them with all of you.  He really wants to know 'how you do it?' - how do you have kids and maintain a household at the same time.

So here it is - first the mat leave budget (including EI (but not my salary top up) - for the first 15 weeks i'll get my Employment Insurance topped up to 70% of my base salary from work).  Beside that, you'll see our 'back to work' budget.  We don't have family available for child care - so we called around and took an average price on what seems to be child care options in our city/neighborhood.

 

We kept our variable spending in our chequing account the same as it is now because we figured while we'll spend less on some things (alcohol) we'll spend more on others (diapers).  While it would be tight - super tight - I'm actually re-assured knowing that if I did get pregnant, we could still pay all the bills.

We also talked about saving up to have a 'baby bank' to top up our income when I'm on leave - using savings on a monthly basis to 'top up' our own salaries.

Here is the 'stay at home' scenarios:

 

We obviously can't consider either of these scenarios unless one of us gets a HUGE raise, we pay off the Escape, and get a side job on top if it.

So there it all is - what do you think?  How do your family's do it?

I got a Raise

It's that time of year again at my company and I'm pleased to share that I received a raise.  This year, I moved up 6.8% to $63,000 (I was at $59,000).  I'm really quite satisfied with the increase and feel as though my contributions to my team and my company have been recognized.  In a time where many people aren't receiving increases (still! which I think is crazy!), I was a bit hesitant to share the numbers - but Jordan and I are really pleased plus it means an update to the budget once again (we're crossing our fingers that he'll see an increase this summer as well).

Here's a bit of a snapshot for those that are curious of my salary progression since starting with my company:

So..you may be wondering, how much I will be taking home?  That's the question I wanted to know too.  I won't show you all the math (there was a lot, including adjusting for my benefit deductions) - but i'll give you the summary:

The first two boxes are what may pay was (bi-weekly) based on $59K the second two boxes are based on my bi-weekly pay at $63K.

The net increases is $175 and some cents (no I didn't share the math for the two months where there's three pays, but it would basically be the same w/out the benefit deductions).

Update

A few weeks ago, I wrote about The New Plan and the Credit Card Pay Off Plan and I thought it was time to update you on how it's going.

The New Plan is in full swing and it's working.

ING Thrive was a bit of a pain in the a$$ but seeing as how they wouldn't allow for two joint chequing accounts - we've had to just get a single chequing that we're sharing one card.  I was a bit apprehensive, but we didn't want ING to stand in our way of trying out this new way of managing our spending.   Jordan and I are together most of the time - so it's been fine sharing the one card.

I'm finding that I'm already much more relaxed about impromptu spending, because I know that all the bills are safe in our joint account - the spending account has only one job - spend.   We've been getting gas/groceries on either Friday after work or Saturday and once that's taken care of, it really doesn't matter what we spend the rest on.  If we run out, we run out.  We have - a couple of times - but it wasn't a big deal because we knew that on Friday we'd get our $300 again and be just fine.

The Credit Card Pay Off Plan is working as well.

We've actually even shortened the timeline by a month already.  I got a raise and also have forcasted when we'll reach our EI and CPP maximums this year and have allocated the extra cash to the debt as well.




So while I haven't been very inspired to write much lately, we're on track and that's a great feeling.