With a baby on the way, Moneywise reader Owain Williams and his wife, Hannah, set about using digital banking apps to keep their finances on the straight and narrow
As my fiancée (now wife), Hannah, and I were rowing across a perfectly still Lake Windermere, tears in our eyes and a brand new ring on her finger, we were blissfully unaware of the impact marriage can have on money. Believe it or not, on that perfect day when we decided to spend the rest of our lives together, we didn’t discuss our finances once.
It didn’t take long, though. After retelling the story of the proposal over and over to all who were interested, I would invariably ask them: “How do you do your money?” The answers were surprisingly varied.
Marriage advice is broadly standardised and consistent: don’t go to bed angry, make compromises, and so on, and it’s always dispensed with such confidence. Answers to my money question, however, lacked any of that cohesion. Evidently, the correct way to manage money in a marriage had not yet been universally agreed upon.
My now-wife and I are in our 30s. We have no great debt, we rent a three-bedroom semi in Salford and are both in full-time employment. We have two cars, two rabbits and a baby on the way.
Neither of us had been particularly bad stewards of our money. However, the only thing that would stop us from buying a new pair of jeans, for example, would be a declined card at the checkout. It took a serious case of matrimony to make us realise that this couldn’t continue. We were, in fact, on a perfect trajectory toward deeper debt.
So we sat down one night, switched the TV off and sorted it. With the help of digital banking apps, we are today living in the financial freedom we both always wanted.
It started with a few basic decisions.
Married couples who use joint accounts seem to neatly fall into one of two camps. Either deposit the exact amount needed to cover monthly bills and pocket the rest. Or put your combined wages directly into the joint account and filter the rest back into said pockets. We decided early on that every penny we earned or owed belonged to both of us. So we chose the latter.
It is then, after all our bills are covered, that the real work began.
Owain and Hannah Williams plan to get their finances under control with the help of technology
These wonderful new app-based banks are nothing short of remarkable. They are incredibly easy to use and have features and customer service that make you wonder what all the big banks have been doing all these years. We chose Monzo, which, like other apps such as Starling or N26, has built-in budgeting tools.
The modest amount of money that we have left after our monthly bills have been paid is distributed to one joint account and two personal app-only accounts.
The amount deposited into our joint Monzo gets split between monthly spending and what we call ‘short-term saving’. The app allows you to save like this using saving ‘Pots’ for which you can set targets. We have Pots for many things, including holidays, car repairs, birthdays and Christmas. These have been a revelation.
No longer do we have to worry in the run-up to Christmas, or get caught out by a flurry of birthdays. Holidays are now genuinely more enjoyable because we are not eating into our monthly budget, while drinking on the beach.
The spending allowance is also neatly rationed. We can tell it exactly how much we would like to spend as a couple each month within a variety of categories: groceries, eating out, transport, and so on. It seems so simple, but without these little guides, we would be spending blind, back on that dangerous trajectory. With the app, however, the helpful graphics clearly show us both if we are spending too quickly or in the wrong places.
There is then the curious case of our ‘personal’ Monzo accounts. Some of our friends who discouraged us from going ‘all in’ with our money made the point that you can’t be truly romantic or spontaneous if all the money is entirely shared and so keenly controlled. It is a good point, but we have so far found our system works to avoid this.
Our personal accounts, which receive the remaining 5% of our income, have not only allowed us to remain generous and spontaneous, but they have negated any grounds for disagreement.
If she wants to treat herself to a £50 ceramic spoon, that’s fine. No questions asked. If I want to spend £100 on a Lego rocket, I can, and I did. It’s bliss.
This is no great folk tale, merely a humble example of how small changes and a little app has helped us to navigate our first year of financial cohabitation.
All we have done is find an easy way to look after the pennies, allowing the pounds to stay in line.
Do you have a lesson you’ve learnt about money you’d like to share? Please email firstname.lastname@example.org