Well, If you didn’t think I was uptight before, strap in, after this post you will. I want to share with you why my household has a monthly finance meeting, what it involves, and the benefits we’ve seen from introducing it.
Every organisation I’ve ever been a part of has held weekly and monthly finance meetings. Quite rightly so; you would never expect a company not to be paying close attention to its financial situation. I would posit that it is even more critical to pay the same attention to your personal financial situation. Whether you’re rolling in cash or in dire straights, it’s so important to understand your situation so that you can manage it.
How We Used to Manage Our Finances
I would guess, that within most couples, there is one person who has a more natural propensity with numbers or who is generally more organised or task driven. And that they end up taking the lead on (whether after an agreement or just natural progression) the household finances. In my (admittedly limited) experience this has always been the case. In our relationship; that person is me.
Ash is incredibly easy going and was happy to let me take the lead on all our finances once we joined forces; and I absolutely wouldn’t have it any other way. I don’t remember us ever having a conversation about it, I just helped myself to the reigns and got going.
However, I sometimes struggled with feeling solely responsible for our finances if something went wrong. If we had an unexpected expense crop up, or if I had made a mistake with our budget and we didn’t have enough money for something, it felt like an issue I had to solve alone. I had to try to find a way to keep us in the black. I also wondered if at some point in the future Ash would look back and think that he would have made different decisions with our money, paid off less of the mortgage or put more into our pensions etc.
So, I introduced a monthly finance meeting into our schedule and it has helped immensely. Whilst I’m still very much the lead when it comes to our finances, I feel supported and we tackle everything as a team.
(As a side note, I do think it is important that one person takes the lead financially. Rather than having equal roles, which could lead to confusion or duplication; or worse – missing tasks, thinking the other has dealt with it. This does not absolve the other person of any responsibility; rather it ensures that someone holds ultimate accountability.)
Our Finance Meeting
This usually happens on the last Friday of the month (I know, it’s a wild ride living with us). It almost certainly involves treats, whether it be a take-away, ice cream or a bottle of wine (I think it’s important to treat these meetings as a positive thing, not a drag).
I usually spend about half an hour beforehand preparing for the meeting so we can get through it efficiently. I do the following:
- Check the previous month’s budget. Make sure we’re on course etc.
- Update our net worth tracker
- Put together the budget for the following month (these are relatively similar month on month so don’t take me long)
- Check our calendar, make sure trips / birthdays etc are factored in to the budget
- Have a quick check of our long term goals (we have 1, 5 and 10 year financial goals) and make sure we’re on course to hit them
Then we sit down together to have the meeting (I call it a meeting, if you’re slightly less militant than me, you could just call it a conversation). It rarely takes us longer than half an hour. We go through the following:
- Our monthly budgets for the previous month and next month
- Any big expenses that we might need to take into account
- Our savings and investments
- What to do with any extra money we happen to have (for example a yearly bonus)
- Check that our long term goals are still relevant.
And that’s it. An hour a month seems like a small sacrifice for staying on top of your combined household finances.
How things are now
As far as I am concerned, the system we have now is the best I can think of for managing our combined finances. Over the last few years we have endured redundancy, a new baby, maternity pay, starting up a new business, both being self-employed, family emergencies, various home improvements and yet we manage never to fight about money, ever. We both know our situation and are working towards our combined goals together.
A Note From Ash:
I’ve always been pretty laid-back about money. Obviously it’s essential for living and it’s exciting when you have a bit to spend. But at times can feel like another chore. I completely trust George to manage our finances well and make good decisions for our family – George was keen to take the reigns, and it certainly plays to her strengths, being a numbers person! However, there were times (usually whilst at the checkout) where it suddenly dawned on me that I had no idea what the state of play was with our finances. Were funds in our current account earmarked for some impending bill? Had I paid for the groceries from the correct account? What was that mysterious pending transaction? And when big money decisions came up, it took me ages to wrap my head around the numbers before I could make an informed contribution.
Now that we have our dedicated half-an-hour slot to talk finances each month, we both know exactly what’s going on, what to expect each week/month/throughout the year. And we’re better able to plan ahead and make decisions together. The system works nicely for both of us and we’ve somehow managed to make our finances interesting, rather than anxiety inducing!
A word on solo financial management
I didn’t have this system in place when I was only managing my own finances. However, if for some reason I was only looking after my own finances now, I would keep the exact same process in play. I would continue to check in with myself and my budget at least monthly to check it was still working for me.