Question of the Month - How do I combine my Quicken finances with a spouse or partner?

Quicken Sarah

There are some added complexities that come with tracking two or more people’s finances. Most commonly, people associate combining financial tracking with marriage, but there are many circumstances that may require tracking multiple people’s accounts and spending. You may be tracking finances for yourself and a spouse, partner, parent, child, or someone in your care. The key to tracking more than one person is to establish a way to keep tabs on each person separately, as well as to track shared spending. Here are a few tools you can take advantage of.

About combining your finances

Before you sit down to combine your finances in Quicken, there are some things you should consider.

Align on the what, who, and how

Even if only one of you is going to maintain the budget in Quicken, working out the initial details together will prevent confusion and frustration later on. This means choosing categories, determining who is in charge of what bills, and deciding on what your goals for the future are. The more issues you address from the beginning, the fewer surprises you’re going to encounter later on.

Meet the person half-way

One person is often more detailed in their accounting than the other. You may also have different spending goals, different budget needs, and different attitudes about income and debt. As much as you may feel you have the right approach, you are going to have to work together to find an approach that works for everyone. Asking someone else to follow a system they don’t believe in is not going to work in the long run.

Establish a good communication schedule to track and share regular updates

Whether you want to review your finances weekly, monthly, or quarterly, each person should be updated regularly. Quicken has a number of reports that are useful for this, especially Spending reports. It is a good idea to review the reports together.

Tracking your combined finances

Depending on your accounts and budget goals, there are three primary ways to track your spending and budgeting separately, even with combined finances. Keep in mind that tracking everyone separately is optional. If it isn't important to you to know who made each transaction, then you don’t need to track everyone separately. There are good reasons to do this though, especially if you need to track spending related to a business or other individual spending situation.

Tracking by Account

People often have different accounts that they are either solely or primarily responsible for. In cases like this, adding a person’s name to the name of that account is a straightforward way of tracking these accounts separately.

• Ted’s Checking Account

• Ashley’s Savings Account

• Marco’s Credit Card

• Alia’s IRA

Separating by account is handy, but works best when an account is solely used by that person. Separating by account is also the easiest way to create separate budgets because you can include or exclude individual accounts from a budget.

Tracking using Tags

When you share an account, one of the best ways to track each person’s spending is with the use of Tags. You can start by assigning each person a tag with their name. That way you can run a report for each tag to track the transactions. You can make this as granular as you want, adding multiple tags per person if you want to analyze their spending more closely. You may also want to tag shared transactions.

• Ted’s Spending

• Ashley’s Income

• Marco’s College Expenses

• Family Vacation

Tracking using Categories

If you need to create separate budgets, and you have shared accounts, then another option is to create categories for each person’s spending. Unless you need separate budgets, this is probably not the best approach because there are many spending categories, and you would need to create new entries for the categories each person uses, which can make for a very long category list.

To track by category, the best idea is to use Quicken’s existing categories, but add the person's name consistently at the beginning or end of the category name. That way, you have some standardization.

• Ted - Auto & Transport

• Ashley - Income

• Marco - Education

• Alia - Gifts & Donations

Separating Accounts

You might want to prevent an account from being calculated as part of your Net Worth. This is especially true if you are managing a bank account for another person, such as a child or someone else in your care. You might also do this if you are tracking transactions for an organization or club. When you edit an account, you can opt to mark the account as separate. If you do this, the account still appears on your account bar, but it is not counted toward your net worth.

In Summary

Combining your finances works best when you work together. Choose a strategy that is appropriate for your situation. It may take extra effort in Quicken, and it may require other changes outside of Quicken, such as modifying bank accounts, credit cards, or other assets. Expect there to be some stress, and some issues to resolve. Be clear on your goals and your needs, and be patient.

NotACPA

I had been managing my fiancee's (now wife's) finances in Q for 2 years before we got married in December 2016.

Since our marriage was late in the year, I just finished out 2016 with separate Q data files while creating her accounts in what became the joint file.

Then, in early January 2017, I just needed to switch over to the joint data file. Her investments were, at the time, few ... so bringing over that history was simple.  The only challenge was determining the "Opening Balance" in each of her accounts ... but that was readily determined from the final balance in the corresponding account in HER file.