My financial journey changed drastically in 2016. I had an okay start financially at the beginning of my nursing career in 2010 and a huge financial mistake in 2014. I finally started tracking my expenses in 2015. Then everything changed beginning of 2016. I married my best friend, and two financial journeys became one story. My story changed to our story.
The Couples Money Talk
When we were dating, we didn’t talk too much about money. Financial geekery is a sure way of scaring off most potential partners. Once we were engaged, talking about future finances was a very sensitive subject that usually resulted in tears at the very mention of a budget.
My wife, then fiance, thought I wanted to talk about how we were going to have to restrict everything she loved to do, especially her very active social life. She is a wonderful person, and very much an extrovert who highly values relationships with others. So the thought of having a budget meant her losing all those people and relationships.
We finally had a premarital counseling session that forced us to talk about how we were going to handle our finances once married including budgeting. I shared my experience budgeting and how it had freed me in many ways. We discussed budgeting as not so much restricting ourselves as it was tracking our money and keeping ourselves accountable with our hard-earned dollars. Once she understood budgeting didn’t mean restricting her social life, she was onboard 100%.
Our Budgeting Framework
We decided that we would pool all our money together in a joint checking and savings account while closing out our separate accounts. Our checking and savings accounts serve as the buckets for our money while the real action happens in our YNAB budgeting program.
Our budget let’s us decide how we want to spend our money during the year. When we first discussed budgeting, we talked about what categories we wanted to fund each month. This is something that we periodically discuss and change as needed. So for example, my wife values going to a local musical theater with her friend. We have included as a yearly expense her theater membership. I value my gardening endeavors, so I have a certain amount of money set aside for that pursuit.
A crucial category in our budget is our fun money. We each receive an equal, fixed amount of fun money each month. We can spend our fun money on whatever we want. I tend to buy books and other hobby related stuff while my wife usually uses her fun money for hanging out with friends. This eliminates having to discuss with each other every time we want to spend money for ourselves. It’s a financial relief valve in our relationship as we move together in our financial journey.
Our Credit Card Agreement
We also got on the same page about credit cards. We use credit cards to capture reward points for our spending. We specifically try to capture Chase Ultimate Rewards points. We always pay the full balance on our credit cards every month and never spend more than we have in our checking or savings account.
Using a budgeting program, it automatically integrates our credit cards, so the risk of overspending our cash savings is very low. We’ve probably saved thousands of dollars in the past couple of years since we’ve been married using our credit cards for most of our expenses. The danger with our credit card reward plan is spending more than you normally would just because you know you’ll get reward points.
Our 3 Financial Goals on Our Financial Journey
We also created some financial goals. Our goals are pretty standard honestly. We wanted to pay off debt, save for a house, and save for retirement. Our goal for financial independence has really only crystallized about 2+ years after being married.
Pay off Debt
We both came into marriage with debt. I had $27k of nursing school debt and a hefty car payment with $14k left. She had $15k of grad school debt. That’s a total of $56k of debt between us. We paid off her $15k of grad school loans and my $14k of car debt our first year of marriage in 2016. Fall of 2016, I started a family nurse practitioner program full-time, so we began taking on student loans again.
I graduated my NP program this past June with $42k in grad school loans. This is a small step backwards towards our paying off debt goal, but hopefully in the next 10 years having done grad school will pay big dividends. We now as of October 2018 have $47k in debt, all nursing student loans. We plan to pay paid my nursing student loans off completely in 2019!
Buy a House
We haven’t saved anything for a house yet as we are still getting our financial ducks in order so to speak by focusing on paying off debt and gaining momentum on the financial independence path. But we plan on starting to save for a house in 2020 and hopefully buying our first house in 2024. This part of our financial journey has yet to unfold, and I plan to blog about it as it does actually unfold.
Achieve Financial Independence
I came into marriage with some retirement saving habits as I blogged about in my financial journey. My wife had saved some money for retirement in an IRA with Fidelity, but it wasn’t invested in anything, so it wasn’t growing or working for her. We invested her Fidelity IRA in a the Fidelity Total Market stock index fund which has done quite well for her. She also didn’t have a 401k setup with work, so we got that going for her with a low-cost stock index fund.
We have primarily invested in our IRAs at the end of the tax year due to the tax breaks that traditional IRAs often bring. We just started this summer including monthly deposits in both our IRAs throughout the year in order to avoid the lump sum or crisis investing when we are doing our taxes.
So far as of October 2018, we have grown our financial independence savings to 100k+. We use a free Personal Capital account to track our progress. We have a long way to go in our financial journey, but it is shaping up to be an exciting adventure!
UPDATES: May 2020 FI progress