December 31, 2007

Units

Posted in family, money at 7:42 am by Michael

In my experience, one of the most universal “couple” issues is “Money”.  Merge it? Separate it? One common fund for common stuff with contributions from each partner?

I’ve heard of incredibly complicated models where it seems like a form as long as a tax form would be required.

Money issues get more complicated with people coming together later in life, with preexisting assets and debits. Even more complicated when kids get involved – how do you pay for them?

Our solution is very simple. One account, merged. Anh worked until we had Samwich, but now stays at home with him. We still had one account then.

However, we do have a solution for how to set each other’s expectations about spending. We call it “Units”. Basically, this is an amount, per day, that can be spent by either partner on “personal” stuff (non-basics), without “consulting” the other person. Any purchase (or day) that’s going to be over “A Unit”, we have a discussion. Anh’s Unit and my Unit are the same value (this is important).

The value of a “Unit” can vary over time, depending on circumstance. I think of the amount of a “Unit” being the “amount of money I can spend and not think twice about it”.

Right after I got divorced, money was tight, my personal “Unit” was $5.

As things got better – the Unit value went up. It was useful for my own money management as well.

The “Unit” concept works exceptionally well for us. We talk quite often about what the Unit value is, and also have great conversations about things that we each or together want to do that cost more than the Unit value. More than anything, it’s a communication tool, and also a great way to set mutual expectations.

Yesterday we had an idea about how to manage another common couple issue – managing kid time and alone time. With kids, it’s pretty clear that both partners aren’t going to be with each other and the kids 24 hours a day. Everyone needs alone time (and every couple needs time w/o the kids – but that’s a topic for another day).

However, deciding what the “rules” are around that can be just as complex as the money issue. Since the money Unit works so well for us, we came up with the “Kid Hour Unit”. Basically, either partner can leave the kid(s) w/the other for “2 Kid Hours” without “asking’. For example, if Anh wanted to go out, and we didn’t have the big kids (just Samwich), she could say “I’m going out!” and take off for a couple hours, and it wouldn’t be a “discussion”. However, if I wanted to go flying for the day, and we had all three kids, that would be 24 “Kid Hours” (3 kids x 8 hours). That would be over a Unit, and would require a discussion.

Fundamentally, both of these issues come down to expectation setting and clear communication – these are just tools to enable both!