How to keep control of shared expenses inside marriage?

Question

I've been married for a couple of years now, and we've been playing pretty loose with our finances (we keep separate accounts and like to pay more or less equally for our common expenses). Lately, we've been feeling the need to know where our money is going and keep better track of who pays what at home.

So I wanted to try a software tool that was not a pain to use and that answered two questions:

1) Where is my money going (and hers)? Every tool seems to support multiple accounts and categories, so that should be ok; 2) How much do I currently "owe" my wife, or vice-versa? This seems to be where most of the softwares break down and start being a pain. I tried iCompta, which has nice support for "participants" in a transaction, with percentages for each one, but it kind of breaks when I assign both categories and participants, so I'm back to the beginning.

There is probably a way with current software to model this, but I just can't seem to get it right in my head. Here's a scenario that I think explains what I want:

Say I pay $200 for utilities in a month. My wife paid our rent, say $500. I want to put both these transactions in a "housing" category, so I know we have paid $700 for housing on that month. I also want the software to tell me that I "owe" my wife $150, because she paid $300 more than I did this month. Then, if I buy a $50 gift for a common friend, the software would say I owe her $125 and add $50 to the "gifts" category, and so on.

That's it! I know I could probably hack up something in excel, but then I'd miss the easiness of seeing graphs of how I spend my money, budgets, planning, and these things that most personal finance software products have.

Oh, I live in Brazil, so no mint.com for me, unfortunately.

EDIT: YEARS later, we finally worked out a way that's being perfect for us, lately: We both started using YNAB (youneedabudget.com) and whenever we buy something that's supposed to be 'shared', we flag it with a color. Every month or so we consolidate our shared expenses and update our budget categories. It's been working wonderfully.

Answer 1

Why not start a third account, the "house" account? However you decide to fund it, equally or in proportion to income, you both chip in, and the payments for all joint expenses come from there. Rent, utilities, food, phone, cable.

Answer 2

JoeTaxpayer's answer mentions using a third "house" account. In my comment on his answer, I mentioned that you could simply use a bookkeeping account to track this instead of the overhead of an extra real bank account. Here's the detail of what I think will work for you.

If you use a tool like gnucash (probably also possible in quicken, or if you use paper tracking, etc), create an account called "Shared Expenses". Create two sub accounts under that called "his" and "hers". (I'm assuming you'll have your other accounts tracked in the software as well.) I haven't fully tested this approach, so you may have to tweak it a little bit to get exactly what you want.

When she pays the rent, record two transactions:

1. Debit her checking account, credit Shared Expenses:hers.
2. Debit Shared Expenses, credit Expense:Rent.

When you pay the electric bill, record two transactions:

1. Debit your checking account, credit Shared Expenses:his.
2. Debit Shared Expenses, credit Expense:Utilities:Electric.

Then you can see at a glance whether the balances on "his" and "hers" match.

Answer 3

Being new does not allow me yet to vote on your question, but what a good question it is. We share our opinion in separating finances in our very well going mariage. Currently I have found a sort of okay solution in two websites. These are http://www.yunoo.nl and http://www.moneytrackin.com/. You can actually tag spendings with multiple tags. I don't like the idea that the data is on a remote server, but since I have not found a proper local software solution, I just naively trust their promise that your data is save. Then again our financial situation is not that special.

Answer 4

Websites like neobudget dot com or mint dot com can help you see where your money is going, especially if you use mostly checks, debit cards, or credit cards for your purchases. They are less useful if you use cash often.

Answer 5

I'd say its time to merge finances!

Answer 6

Call me old fashioned, but that sounds less like a marriage and more like a business partnership. Maybe there are business tools that would be useful.