My wife started an at-home microbusiness (think etsy shop) about 5 years ago as a means of contributing financially to the family. (I am setting aside all her many contributions as a wife and mom for the sake of discussion).
The business continues to grow and this year will net about $25k in profit. The issue we have each year is when we sit down to discuss our financial goals for the upcoming year. We can never come to an agreement on how much should be sent to the monthly family budget (we have combined finances). The business doesn’t require much savings/cash on hand so there isn’t a need to save for capital or anything.
For the past few years, her contribution was capped at $1200-1500 a month, or $15-18k annually. This seemed to be a balance that didn’t squeeze her at all on cash flow. Now the business is making more and she anticipates 2023 to grow to $30k. But any conversation about increasing her financial contribution is met with resistance.
I handle the finances of the family. We are in good shape but more money in means more money allocated to strategic priorities (that we set together). We have and will continue to live primarily on my salary. Her contributions are typically set aside for vacation, home renovations, and general savings. Edit….these accounts are mutually agreed upon joint accounts, not her personal account. I’m implying that her income is in excess of our monthly costs so we pack it away there.
The issue at hand is one of freedom and equity. She wants the freedom to contribute but spend on the side as she sees fit. I see it as an equity issue. 100% of my salary, contracting jobs, and side hustle all go to the family. In our monthly budget, we already set aside some guilt-free spending money for personal items or incidentals.
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Reading this I was absolutely wondering if your income doesn’t go 100% to the family, because that kind of seemed the only scenario where it would make sense for hers to be partitioned like you described.
Seems like you guys set a precedent of this over the past few years though, so it’s quite normalized at this point. Why do you want to change it now, and has she stated why she’s resistant to it?
Stop putting 100% of your income to a joint account. Whatever % she holds back you do the same. Fair is fair.
Or
My wife has a side business too. She enjoys it and gets a lot of satisfaction from it. I make 200k. She makes 20k. That’s all hers. I want her to have some financial independence from me. I don’t necessarily think everything has to be 50/50.
Why not continue $18k contribution to budget, then add another $1k to savings?
My man, you have a very common affliction called “Our Money, Her Money.” What you earn is “ours”, what she earns is “hers”.
Tell her you plan to start withdrawing from the family account an amount equal to what she chooses to retain from her income for herself. She’ll flip out……..but I’m guessing she won’t see the inequality.
She should set herself a salary of 50% of last year’s income. So based on $25k last year she should pull $1,050 from the business every month. Once a quarter she should look at her finances and give herself a bonus based on that. Have a set cash on hand and anything over is paid out in bonus.
So say that the cash on hand should be $5,000. Q1 her cash on hand is $4,350 so no bonus. Q2 it is $8,700 so a $3,700 bonus. Q3 and 4 is a $4,350 bonus. End of the year the household has made $25k and $5k is left in the business.
Next year you take the $30k made last year and she gets a salary of $1,250 and do the process again of each quarter anything over $5,000 is paid as a bonus. This way the family is getting a stable monthly amount that is reasonable, but also benefiting from any increase in sales.
The cash on hand is for 2 things: business expenses and to smooth out any cash flow. Some months she might make $2000 and other months she makes $500. With the cash on hand being $5,000 she can continue giving herself her salary for 4-5 months even if the business isn’t bringing in any money. As her salary increases you should increase the cash on hand amount as well.
Hope this helps
I would be projecting my own feelings and insecurities if I were to answer this. I think we all need to take a moment before answering questions on here and ask ourselves is what I am about to say helping, or hurting? And, am I projecting my own personal issues into this answer? Hope y’all work it!
I find it interesting that married couples don’t always see all income as “ours”. I guess we didn’t early on in our marriage but didn’t take long before both of our incomes were just in a joint account to be budgeted and spent / saved.
Is the $25K profit you mentioned above and beyond the $15-$18,000 of household expenses? How does she view the profits after household expenses from her business?
What is she spending on? If it’s for the family or the home, I can understand her hesitation. Even if it’s for decor or appliances you don’t see as necessary. I know for my husband and I, my standards for the home are higher than his. Women are judged harshly for the appearance of their homes, and you might be surprised how much of a difference she makes in making your home life comfortable. So those purchases I understand her wanting to protect.
What works for most people is to contribute by percentage of income. If you make $100k and she makes $30k, you’d pay 77% of your joint expenses and she’d pay 23%. This would be all your joint expenses – that includes home decor and appliances you see as unnecessary, as well as savings or renovations she might see as unnecessary.
>Her contributions are typically set aside for vacation, home renovations, and general savings.
Isn’t that something you both enjoy though? Or is it just her private vacations? Home renovations sounds like a shared good, and savings as well (if there were to be a divorce, everything is split 50/50).
I don’t see the problem here. If she was using it all for herself then I could see the problem.
If her income is “fun” money. ( vacation, home renovations…) Why is her extra 5k a year becoming a bigger issue? Is that money worth a potentially significant fight or marital discord?
I have a small (tiny only 10 sales) etsy shop I started late this year. Everything I make goes into savings. I feel like I am contributing to household expenses that way but you could put that $25,000 per year into a retirement account or invest it. Just my two cents.
Put the equivalent amount she does into the family pot
The juice ain’t worth the squeeze here, she’s not making that much more money than before when she had 1500 dollar contributions or whatever. This is a sanity call. Do you want her to be happy and still contribute an amount that was helpful, or squeeze a little more out of her at the cost of some level of resentment on her part? Let her enjoy some extra success and it will be ok. It doesn’t have to be “fair.” It just has to be “enough.” Is it enough?
I have my own bank account because I keep the money I inherited from my family separate from our joint account. He knows this and understands (was his idea) and I would expect him to do the same.
With that said, when I was working my direct deposit went to our joint account, but 10% was sent to my personal account. That extra money was for me to do what I wanted, which was usually put into my savings account because I am not a big spender.
Then my husband started making more money and told me to put more into my own account.
When I lost my main job due to covid we figured out that his income covered everything including all the bills, groceries, adding to the joint savings account and still having money left over to spend.
So when I did get a new job he wanted me to put everything in my own account. But we also had me move the payments for *my* bills to my account. My student loans and credit card are paid for by me alone and not through the joint account. I still have money left over after paying that, and our joint account has even more money to put in savings or use for whatever.
If she has a credit card or other bills in her name have her use her own income to pay for them. She is using her income to pay for her own expenses and for that alone it helps your joint account grow and you both don’t feel so me vs you with contributions because she has to use her own money instead of saving it all. She also feels better about herself because she isn’t solely reliant on you to support her.
You aren’t hurting for money. She can still use hers for whatever you need for the house. So I don’t understand why her now making some money is going to cause a sore spot in your marriage. If you *needed* her income to survive I can see why you need it all in one account (that was the first half of our marriage, it took all of our money combined to pay for everything). But treating it like it doesn’t exist and then having it for extras and emergencies can relieve stress instead of adding to it. At the end of the year you can see about using the surplus to pay off a credit card completely, putting a huge payment into a student loan, or putting it towards your mortgage. Or just keep it as a nest egg for retirement since you have everything else covered.
My wife and I have this discussion a lot. I don’t necessarily agree with the approach of showing her how she’s acting by retaining the same % of your income. That’s just petty.
Instead, (and assuming you believe in the “our money” ideology) I think it’s important to really get aligned on the strategic priorities your mentioned. Like what are you saving for? Emergencies? A new house? Retirement? Do you align on all of those? Is there an “average” you can describe based on what you want and she wants? Once you see eye to eye on those goals, I think a lot of the issue is solved organically.
However if you’re more fiscally conservative and have wildly different spending philosophies, you’re going to see this issue, and the. It becomes about compromise.
if you aren’t struggling why is more contribution needed just on the basis she made more money? do neither do you have money for yourselves?
Personally given what you make vs her… if she wants to keep her 10k let her. That just means you get to set 10k aside for you. Keep it moving.
If 100% of your income goes into the family budget which then includes personal spending money, then the same should be true for her. However much she’s keeping for “personal” money you should do the same.
That being said home renovations or vacations etc are things that should come out of the family budget rather than personal money.
We have joint accounts and don’t care about who pays for what as long as it gets paid. We discuss stuff but we both work hard and deserve to reward ourselves and indulge
The way we run our finances is 100% of income, including income from our rental property, goes into the Family Joint account. Once the monthly bills are paid, a portion of the remainder goes to the rental property management account, and then the remainder after that gets distributed to our private checking accounts, and that is split using an agreed upon, pre-determined formula based on percentage of contribution.
At that point, I have my fun money, which I’m saving for a new car or motorcycle and she has her fun money, which she usually spends on trips with her GFs.
Why you expect her to give more contribution if the business goes a bit better?? I don’t get it honestly 🤷♀️
The money should be invested in a retirement account.
This is a touchy one I think. My husband works and pays the bills, I work, but I don’t put my money into the joint account. Instead, I pay for everything extra outside of our agreed budget, example, clothes for the kids, school supplies, gifts, etc all comes out of my paycheque. My pay also goes towards our debt. Not out of his pay. So I think it depends on what exactly she does with that money.
Your finances are pretty healthy, so you could withhold some of yours as well so its fair to you too?
I guess I’m not really understanding why you both don’t have a set “fun” spending amount?
If she is truly profiting net $30,000 next year & her contributions to the shared account are say $18,000 for the year she can retain $12,000 as her “fun” money. The same would go for you, retain $12,000 as your “fun” money.
If the problem is there *isn’t* anything left over of your salary then yes she’s being selfish & you should find an agreeable amount of fun money you both can indulge in.
If the problem is *you* unilaterally think every extra cent should go to mortgage/retirement then I think you need to take a step back & access why you feel the way you do. Do you think it’s a waste to spend on fun? Is FIRE the ultimate goal? Did you grow up in poverty? Etc.. Then communicate the specific feelings to your wife.
Also, she has access to all joint accounts, right? And she has a seperate “nest egg” away from your joint savings in case things went awry?
All depends on how much you’re making my friend.
I have a small business. I am a mom now and I work FT so I don’t really make much money from it anymore but when I did I’d put it all into our joint savings.
In my marriage, what’s fair is that we each have the same amount of spending money to do with as we please. I never considered keeping the small business profits to myself.
Keeping in mind that all you can do is project future income when it comes to a business–if she actually makes 30k and has 15k or whatever (don’t feel like doing the math) to herself then you should take 15k for yourself.
If you can’t afford to do that without compromising the family’s finances then she needs to compromise and put more money into the family pot.
You say you are setting aside her contributions as a mom and wife… i don’t think that makes it fair.
Is she aSAHM?
Is she using her free time and leisure time for this business…?
Does she have an IRA? She should contribute the max to an IRA first. Then if she wants to retain a portion of her income, you should be doing the same. Either the same dollar amount or same percentage as her. Whatever you both agree is fair. I’m all for shared finances in marriage but it needs to be consistent with both of you.
This is just one among other reasons joint bank accounts are a bad idea. Solution: both you and your wife have separate incomes. You both, not just you should pay for all household living expenses instead of you paying for everything.
Keep your own separate accounts. Make your own investments. Save your own money personally earned. When you decide to do something together like a vacation or home renovation, both come up with their half for that expenditure.
This keeps the finances fair and equitable. Not you paying for all household expenses and then thinking she should give more money because she has increased the revenues of her business. You aren’t entitled to any of her increases, but she should pay for half of all household expenses.
I would dump everything together 100% and then set up an account that can flow into buckets at a defined percentage. Individual personal, vacation, repairs, savings, emergency, and whatever else and from the original account have it disperse out.
Firstly, with flexible income you should really be evaluating your financial goals on a more regular basis… minimally monthly.
I would ask her why she feels the need to keep money set aside. Perhaps she does not feel financially safe? I feel like there is more than simple greed going on since you both have an agreed-upon “guilt free spending” amount.
Maybe she would like that amount to be higher. Open up a conversation about WHY this money is being kept to the side.
Ok so she doesn’t want to put 100% of her income toward family expenses, you stop doing so. If you’re not going to have fully combined finances you have to figure out a percentage of each of us contributing if you’re both working.
For us, we focus on both having the same amount of disposable income. I don’t think it’s fair for one of you to live like a pauper while the other loves like a prince. What is she using her profit to do? If she is investing it back into her business, then she should be allowed to do so. But if she is taking the profit and adding to her disposable income, which then is higher than yours, that’s not fair.
If you have a joint account, how does she keep money from you? Does she just keep it in her business account, or does she have a separate personal account? Alternatively, if you were short on cash or something needed fixing in an emergency, would she use her disposable for that or just pretend it wasn’t her problem?
We don’t have a joint account, but we have free access to both accounts, and both use them interchangeably. Is there a chance she’s just stashing money for a rainy day because you aren’t good at saving?
I will never understand this. OUR money goes into OUR account. Not mine, not his- it’s all ours. So bizarre.
> We can never come to an agreement on how much should be sent to the monthly family budget (we have combined finances)
I don’t think you understand what combined finances means.
I think what you have going on is great. I’m not seeing the problem. Are you not the husband, the provider? So much tit for tat here. I would have a problem if my husband acted like he needed me to give him money when I make so little. Idk.