First, off-topic, I wanted to share this lovely news story and video about a family that downsized from 2000 square feet to 320:
http://ca.shine.yahoo.com/downsized--family-lives-mortgage-free-in-320-square-foot-home.html
I guess it's tangentially related to my question in that family living is so much about finding consensus and balance.
Last night, AS, NT and I wound up discussing an upcoming (fall) trip AS has planned. She'll be speaking at a university in New York about publishing. It's job-related in that she was asked because she's managing editor of a publishing house. But otherwise it has nothing to do with her job. The university will put her up and feed her, and they'll give her an honorarium to cover airfare. She was talking about trying to find airfare below the honorarium so she'd actually come away with money. It gradually came out that I assumed she would put any extra money into the pot, whereas she assumed she would keep any extra money.
My perspective, which wasn't thought out or necessarily very logical, was that if she was going to be away from her spouses and children, it should be for something we all benefited from. Her thought was that since she'd be working all weekend and getting up at crazy hours for the cheaper flights, she should get to keep the money.
It opened up a larger discussion. We were all pretty tired so it didn't really go anywhere; we just sort of trailed off with an agreement to revisit the topic after we'd had time to think about it. I don't think it'd hurt to get some outside perspective on it as well, so here's the situation:
We all have full-time jobs, and all our paychecks are direct-deposited into the household checking account. This usually includes overtime pay from NT's job (AS and I don't get paid for our OT).
We all have various forms of additional income:
- NT does Pinecone surveys at $3 a pop; AS and I do other surveys mostly for giftcards
- Occasionally one of us will sell personal or household belongings via eBay, Craigslist or yardsales
- AS has a semiregular gig editing books for another publisher, with pay ranging generally from $400 to $1200 per job
- I've gotten very irregular proofreading gigs paying a couple hundred each
- AS sporadically does mending and alterations for $10-$50 per job
- We rarely get bonuses from work (if we do, it tends to be around the holidays, maybe $1000 at a time)
- We get gifts from family (anywhere from $10 in a birthday card to $13,000 pre-inheritance from my dad)
- We get rewards money for using our credit cards
That's all I can think of right now. But as you can see, extra money comes in, wildly different amounts, unpredictable, with varying levels of effort put in to earn it.
Since AS got her last full editing check ($900), her last speaking honorarium ($150) and now wanted her next honorarium, I was starting to feel a bit cheated: She does these things (admittedly hard work) that take her away from us, and she gets way more money than us. So we don't get the benefit of her time or the money. (As a side note, we all get the same allowance and a say in how our household money is spent, even though we make $49K, $41K and $30K, so that may have been part of the "hey, I don't get to keep all the extra money I make" feeling I had.)
But AS pointed out that previously, she has contributed thousands and thousands of dollars of extra income to the household (her extra income and NT's overtime pay are largely responsible for the lawyer fund) without asking for any of it herself, even though it's above and beyond her full-time job. She said she feels weird because it's like we aren't happy with not getting to spend time with her, yet I take the money for granted. It is hard; I love having the extra money to accelerate our goals, but I hate having less quality AS time. And if she were doing it strictly for her own spending money, I'd feel very resentful. But she's right that she's probably only taken about 10% at most for herself, and only very recently.
When we were first starting our journey out of debt, we were in dire straits and every bit of extra income went toward debt. But now that we're in a much better place (though still in debt and not quite where we want to be in savings), we've grown less strict or rule-based; NT keeps his Pinecone and eBay income, AS keeps her sewing money, and parts of our bonus money and credit card rewards are typically divided between us in some way, or (in the case of the credit card money) I'll make the decision to spend it on something indulgent (for all three of us, but clearly something that I thought of and wanted). Overtime pay and other work-related income usually goes toward savings or debt repayment, but occasionally to something like home improvement.
I'm wondering if we should come up with some guidelines for how all of this shakes out, so none of us feel cheated, overworked or neglected. Should we ask AS to limit her extra editing now that we're not hurting for money as much? Should we set up a percentage system of how much each person gets out of their personal "side hustles"? Or a percentage that each of the three gets out of each extra income thing, so if one of us tends to make smaller amounts we still benefit at the same rate (similar to how we all benefit equally from our regular paychecks no matter how much we bring in)?
It's not a huge bone of contention at this point, nor do I necessarily see it becoming one. But it does seem like something that should have a resolution, since all of us had minor complaints and vague feelings of injustice (though none of us thought anyone else was being deliberately malicious or anything like that) and differing perspectives on the matter.
Sorry if this was boring and complicated! I didn't realize how long it would take to write out everything, so that the situation is totally clear. Anyway, if you'd like to weigh in, all viewpoints are welcome and will be respected. Or if you want to write your own Share Your Thoughts blog post about how your family handles similar situations, I'd love to read it.
Share Your Thoughts: What do/would you do with extra income?
June 10th, 2011 at 06:17 pm
June 10th, 2011 at 09:00 pm 1307739633
June 10th, 2011 at 10:33 pm 1307745208
DH and I sometimes diverge on how the additional money coming in should be spent. I like to hoard it (going back to my old insecurities) and he likes to see that money is going toward something "fun", "extra" and "worth-while". We didn't have a vacation last year (two overnights - one to Michigan in Sept and then Wisconsin in March). I worry about whether or not we'll be getting an additional $2K grant toward parochial school tuition and think that I'd like to squirrel money away for that, but DH has convinced me that a trip to Virginia is just as important for family time (he and the kids have been preplanning looking at the Busch Gardens website and Colonial Williamsburg and Jamestown websites. We will spend probably $2K by the time all is said and done (we have $800 saved). DH pointed out that $2K over ten months is $200 - and should we not get that grant we can economize to cover the deficit. I have had to force myself to embrace the vacay idea - and I have bought into it - but still find my feet stuck in hoard mode.
June 10th, 2011 at 10:57 pm 1307746622
Jerry
June 11th, 2011 at 12:04 am 1307750653
For example, anything under $50 belongs to the earner to keep or spend as they please. Anything over $50 is half to the earner, half to the family pot. That way you do get some discretionary money for your extra effort, yet progress is still made towards joint goals.
I have to say, I think all 3 of you must be very skilled at conflict resolution.
June 11th, 2011 at 06:51 am 1307775104
I'd go with the above a certain dollar amount it gets shared, or a certain amount gets put into the pool.
June 11th, 2011 at 01:27 pm 1307798866
As for any inheritance/gift - those maybe should be kept separate (just more legal ramifications).
Beyond that, I can't imagine the concept of "I want to keep it because I earned it." Everything in our house goes to the pot. Period. Otherwise, I think it can get divisive.
I think the only real alternative is to have a rule of thumb, so that everyone feels it is fair. OF course, could take some trial and error - you just have to find what works for you.
As for us, dh and I both have very similar money personalities. I'd say about 100% of any *extra* money goes to savings. I'd say our strategy is to be content with the budget, and so if something unexpected comes along we are happy to save it. But, a lot of that is also personality. For example, if we had any non-mortgage debt, that's it - we wouldn't want to spend the money elsewhere. Debt gone = #1. I've mentioned how I have had more luck with dh even giving me birthday money, etc., if I point out that it will go to the mortgage. You remind him that we have debt, and it riles him up!
That said, we both have x amount to spend on whatever we want, no questions asked. Birthday money (rare) is usually ours to spend, and everything else usually goes to the pot. BUT, this does not mean we can never buy anything else. We really just discuss everything on a case by case basis, and it seems to work for us. It usually goes like this: "I just got a $1k bonus and I'd like to put it in a ROTH." Dh says, "OK." "Can I have your birthday money for the mortgage?" "I need my overtime bonus for the medical bills." "I got a $2k tax refund- putting it to retirement." "I am putting that $500 credit card bonus to the mortgage - if we get more I am donating it to the school." Kind of conversations we had this year. Dh always says "ok" and would do the same if he was working/controlling the money more, anyway. BUT, once we decide we want to buy something, we rarely say no to each other. I don't think we have ever said no. We may disagree initially, and discuss it, but if we feel strongly about something then we get whatever we want. I think it works because we are both savers more than anything, so those purchases are rare and few and far between. Though we are currently of the mindset that him staying home trumps all, before that "Saving for a house" trumped all, so we don't have a lot of spending discussions. It's understood we need every extra bit for our financial goals.
That said, "I earned this so I want to keep this" has never been a discussion in my house. I personally find that off putting in a marriage. Though I admit maybe the discussion has been, "Now that we have the money to justify this - I'd like to buy that fun electronic toy I've had my eye on!" But, steers away from "I deserve it more since *I* made the money for that." As you mentioned, I find whoever brings home the money or the more money matters very little. It affects everyone in some way and maybe you were picking up the slack more at home. I know when I am working an extra 10 hours a week during tax season that it takes its toll on everyone and I didn't earn that extra money on my own!
June 11th, 2011 at 05:47 pm 1307814460
ALL extra $$ is split by percentage to the earner and the family pot. 50/50 or 40/60 or 25/75 or whatever.
This isn't how we do it at our house, but it seems it would be easy to follow and fair to everyone.