Handling Finances as a Couple: Individual, Combined, or a Bit Of Both?

Mindy:
Welcome to the BiggerPockets Money Podcast show number 332, where we discuss three different ways to handle couple’s finances with Doug Cunnington and Carl Jensen from the Mile High FI Podcast.

Doug:
I think it’s very personal and every everyone’s relationship is different and we have our various issues, communication, trust with finances and all that stuff. We have figured out how to get to a spot where we feel pretty good. Finances are one of the biggest issues that we have to figure out, and if there’s discrepancies or if you’re moving in different directions, it could be extremely challenging. So everyone, do your best and good luck.

Mindy:
Hello, hello, hello. My name is Mindy and with me today is my favorite Marine, David Pere.

David:
It’s not saying much, but I appreciate it.

Mindy:
I know three more Marines, maybe more.

David:
Yeah, but, I mean, it’s John. That’s who we’re comparing me to, and that’s easy. Okay. He doesn’t listen to the show enough for me to talk smack. I’m going to make him listen to this episode.

Mindy:
With me today is my least favorite Marine, David Pere. How about that?

David:
I’ll take it.

Mindy:
David and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone no matter when or where you’re starting.

David:
Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate or start your own business, we’ll help you reach your financial goals, get money out of the way so that you can launch yourself towards your dreams.

Mindy:
David, today we are joined by Doug Cunnington and Carl Jensen from the Mile High FI Podcast. If you’re wondering, “Hey, Carl Jensen, sounds like Mindy’s husband Carl Jensen,” you’re right. It’s my husband. We’re going to talk to them about how they handle their, well, that sounds weird. We’re going to talk to them about the different ways that each of them handle finances in their relationship and how David handles finances in his relationship too because there really isn’t one right way to handle your finances.

David:
Yeah, and as you’ll hear on the show, we are all very different.

Mindy:
Yup, and I think we covered the gamut. We’ve got completely separate, completely together and a mix trying to figure it out. Today, we’re joined by the hosts of the Mile High FI Podcast, Doug Cunnington, husband of the lovely Elizabeth, and Carl Jensen, husband of the lovely me. My co-host today is David Pere, who is married to the lovely Kimberly. We have three different couples represented on this podcast today with three different ways to handle their finances.
While there’s no one right way to do it, we’re going to discuss these three different ways to handle finances within a relationship. So everybody knows that Carl and I have combined our finances. We don’t really have to go into a lot of detail there. What I earn goes into a pot, what he earns goes into the same pot, and then all of our expenses come out of that pot in investments and whatever. Doug, let’s look at how you and Elizabeth handle your financial situation.

Doug:
So we are pretty much 100%. So I don’t know if it matters much, but we got married when we were about 30 or so. So we had things going on on our own. We already each had our own house and expenses and we were managing our budgets individually. It just seemed easier to do that. Now, before we started recording, I did ask Elizabeth, “Is it okay if I mention this?” She gave the approval. She actually told me that she didn’t trust my financial savvy when we first got married. So she was like, “I don’t want to combine our finances. You may mess it up.” She used different words but, “You may mess it up.” So we just managed it separately.
I wasn’t really making any huge mistakes, but I had a little credit card debt, a little student loans, very much within reason, but yeah, we didn’t combine anything and we just left it the way it was. The good part, once we joined households, we did separate the expenses that would come in. So she would pay for the mortgage and I would cover a bunch of other stuff like cellphone or utilities or groceries or whatever. So it roughly comes about even. The remarkable thing is our net worth has tracked together almost exactly. So it’s almost a 50/50 split just magically. It worked out that way, but that’s how we divide things up.

Carl:
I have a question for you, Doug. We recently had someone on the podcast who also divided their finances, and one of them, the male who we were interviewing, had a very high-paying job and his wife did not. He was talking about becoming financially independent and he said, “Oh, this is just going to be about me.” In the course of the interview, he even mentioned giving his wife a loan. I don’t remember the details. Maybe she was going back to school, but I thought maybe if you negotiated all that ahead of time, you might be okay with that situation. You agreed to it going into the marriage, but how would you deal … Your situation is pretty good because you’re both on equal footing, but if one person made a lot more than the other, do you think this could lead to friction?
I think about this with Mindy and I too. If we had divided our finances, it would get hairy because she stayed home with the kids. So she gave up her career and I continued to work. Have you ever thought about that if your two situations were drastically different? You don’t have kids and you have pretty much equal net worth, so it’s not as difficult.

Doug:
Right. Yeah, 100%. That definitely would’ve caused friction. Unfortunately, even if we probably agreed to it ahead of time, it still would end up, one of us would feel like, “Oh, I worked, I earned this money, I should have a little bit more of a say,” just knowing that we’re humans and flawed like we all are, but perhaps we’re a little more flawed than others. I’m not sure, but yeah, it definitely would’ve caused some friction.

Mindy:
Okay. So I think this is important. Carl mentioned that there are no children in your relationship. How long have you guys been married?

Doug:
About 13 years.

Mindy:
Okay, and there is no plans for kids.

Doug:
Correct.

Mindy:
Okay. So let’s talk about income. Is there any income disparity do you make approximately the same because Carl and I definitely had huge income disparity? He says I gave up my career. I didn’t give up squat. All I did was fund our 401(k)s when I was working. So it was not difficult to stay home with the kids. Plus, I wanted to stay home, but this isn’t about me, Doug. This is about you.

Doug:
Yeah. We were pretty much equal salaries for a little while, and then when I started my own business, it grew a little bit more, but it’s still in the same ballpark-ish, but yeah, again, when I started my own business, then I wasn’t held back by the normal corporate structure and salaries and stuff like that, but, yeah, for a long time, pretty much even.

David:
I got a question, and I don’t know if there’s a way for me to say this that doesn’t sound sexist, so let’s just pretend that it isn’t a question that sounds that way, but I’m curious, Doug, and you’ll understand the context for me asking this question more as I dig into my story, but how did you feel when your now wife, I don’t remember if she said it when you guys were getting married or already married was like, “I don’t really trust you to run our finances so I don’t want to mix them”? because I grew up in a household that was very everything’s together and traditional. Again, we’ll unpack as I talk through my journey, but we were together and then apart and now a combination, and when we made that split to run things separately, I mean, it is still to this day something that’s hard for me to internalize as a man. So I’m just curious if that was a hard conversation for you.

Doug:
Yeah. I don’t think so, and I was going to say usually I’ll hold a grudge. So I would probably remember if I had an issue with it, but I think I also have pretty thick skin and I was like, “Oh, that makes sense. We’ll see how it goes.” I guess I felt confident enough that I did have my act together and I was like, “Oh, if you don’t believe in me, I mean, I believe in myself. That’s okay,” But I didn’t take it in an odd way because it was personal. I didn’t take it personal for some reason, but yeah, that, totally, that completely makes sense.
Actually, you reminded me of one other aspect, and I’m curious for everyone because we both manage our own finances and then are combined, we have a very good understanding of what’s going on like the big picture, our individual finances as well. So we both have just a little bit more involvement. So yeah, I’m curious with the other scenarios with the combined finances. Is it delegated, one person worries about the finances and then the other one doesn’t worry as much?

Carl:
Yeah. I would say that’s very much the case with us, and I don’t think it’s anything we ever consciously decided on. It’s just that I enjoy the investment part of it. I enjoy looking at the credit card statements. I think there’s something wrong with me after saying that, but-

Mindy:
Dork.

Carl:
Yeah, I’m a super dork. I enjoy spreadsheets and I enjoy looking at that, but I report back to you probably a little bit more than Mindy would enjoy like, “Hey, this investment is this,” or “Tesla is this,” or “Here’s what VTI did today,” and she’s falling asleep while we’re going for a walk, but it’s just our natural delegation. I think there’s a lot of trust in there too. We’ve known people actually who have fully admitted hiding money from spouse, their spouse or lying about what they pay, and that’s just not us. We just haven’t cared. If either of us do make a big purchase, we tell each other about it, and it’s not so much asking for permission. It’s just out of respect. I’m trying to think of, and I’m usually the bigger spender there, what’s something that I’ve spent a lot of money on? I can’t-

Mindy:
Bikes. Bicycles, bicycles.

Carl:
Oh, yeah.

Mindy:
Tesla.

Carl:
Yeah. So I have spent some money, but I always ask you. I run it by you and make sure it’s okay.

Mindy:
Uh-huh. Did you recently purchase a car and then talk to me about it?

Carl:
No. We had talked about that for a long time, and we placed an order, which is perfectly … We can cancel it at any time and not go through with the purchase of the car.

Doug:
Wait. What is this? Is this hot news off the press? What’s going on?

Carl:
So after the tax credit, there’s an EV tax credit. I’m like, “Oh, man, if we buy a Tesla, we can get $7,500 back.” You have to game it so it shows up in 2023. Both our current cars have 200,000 miles on it. So I’m thinking we will probably need a car at a future point. So I placed an order for a model I-

Doug:
A Roadster.

Carl:
Yeah. I do want that if it wasn’t $300,000, and it’s got backseats. We can take the kids in there. I saw one in-person at Peterson Auto Museum, but yeah, I don’t know if we’ll actually pull the trigger on it. I talked to you. I changed the color because of Mindy. I opted for the cheap color, but you were definitely involved in the decision and I could cancel it if we don’t want to.

Mindy:
The way that conversation went was, “Hey, I placed an order for a Tesla. I can cancel it if you want.” I’m like, “I don’t care. Maybe now you won’t talk about it so much,” even though I know he will talk about it even more.

Carl:
Should we change this podcast to just Tesla Talk?

Mindy:
No. No. I don’t want to talk about Tesla. Thus ends the end of our Tesla.

Doug:
What’s the PE today?

Mindy:
So Doug, that was an interesting question. I think there are couples who will take equal responsibility, but I think for the most part it is one person is more obsessed with checking the credit card statements every single morning when they get up, which is their prerogative. It’s not something I’m obsessed with. I will shout out Carl because one time he found a fraudulent charge the next morning and we were able to cancel the card. That’s really awesome, but I don’t want to check my credit card statement every month. Also, because he is so obsessed with it, I don’t have to. He will come to me and say, “Hey, what is this charge?”
I’m like, “I don’t know.”
“Oh, wait, that’s this thing.” I mean, now we don’t have to because we have our spending tracker. So he can just look at what we’ve put into the spending tracker and see, “Oh, that’s a real thing,” but for the most part, he is so obsessed with it that I don’t have to be super obsessed.
Now, that doesn’t mean that we don’t have literally daily conversations about money and investing, and he’s not kidding when he says we’re going on walks and he is talking about it. He is. He’s like, “Oh, let me tell you about this.” It’s usually Tesla. It’s very, very rarely any other company, but still, we talk about it. Doug, how does it work with you and Elizabeth? Are you guys investing together? Are you investing separately? Is there a hybrid situation there?

Doug:
It is separately, and we both adopt index funds. So we have a different blend of stocks versus bonds and just different levels of risk tolerance and capacity and that sort of thing. So I feel like it works out pretty well, but we do it individually. I think every now and then Elizabeth will get an individual stock, but it’s a very, very small percentage of the net worth, so almost not even worth mentioning.

Carl:
Do you ever compete? Do you ever brag about your balances or your spending or anything like that?

Doug:
I try to, but I’m always losing. So I stopped doing that. I learned my lesson.

Mindy:
So Doug, I’ll flip that back to you. Since you’re separate financially, do you ever run purchases past each other or is it, “This is my money. I could do whatever I want and I never have to check in”?

Doug:
We do run it past each other. Recently, I’m not sure if you could see in the video, but I have a couple guitars in front of me. So in the last year or so, I’ve been buying more guitars and I actually, I was like, “I want to get one,” and actually, I went behind her and told her after I won the auction. That was actually very bad. However, we made up and everything’s good, and I got another guitar. She was in the shop with me and I was like, “I’m interested in this. Maybe we could check it out,” and yes, we do run stuff past each other. I thought the threshold for discussion was higher, but it’s much lower than I expected, hence the issue with the first guitar there.

Mindy:
Oh, when you say threshold for discussion, you mean if it costs X number of dollars or higher, we need to discuss it before you buy it.

Doug:
Yup, and there’s no formal agreement. I don’t have to submit a form to get approval or anything, but yeah, I mean, it’s probably anything over 150 bucks or something, anything that would be sort out of the ordinary, it’s like, “Hey, I was thinking of getting this thing,” and like you guys, just out of respect, which I think that’s why I ran into the issue and I was like, “Oh, yeah, I won an auction for a guitar that I wasn’t expecting. So surprise. I could cancel it if I need to or change the color.” No, just kidding, but-

Carl:
So I have one followup question for you, Doug, about this whole separation. Does it transcend day-to-day life, you keep your finances separate, so how do you decide who pays for a vehicle? I know you’ve got your own separate vehicles in this case, but, well, let’s go with toilet paper. Do you divide that up or-

Doug:
It’s a percentage of usage. So I use way more than she does. So I do have to pay more for the toilet paper. Now, for a car., I’m not sure. We haven’t purchased a new car in a while, but she did pay for her car the last time that she snagged one. For future purchases like that, I expect we would probably split it. I’m not 100% sure, though. So that would be a whole negotiation process, I’m sure.

Mindy:
How do you decide who pays what bills or how much of each bill?

Doug:
We divide it up so that it’s roughly equal on the expense side. So Elizabeth covers the mortgage, and then I cover pretty much everything else, which goes on credit cards or it’s withdrawed for my checking account. So that includes groceries, cellphone bill, utilities, random other expenses. We have a credit card that we share, so that’s probably important to mention, a credit card that we do share and I pay for that. So that’s how it roughly ends up close to even. I may be paying a little bit more, but it’s fine. It’s just maybe a few percent higher.

Mindy:
Okay. Then you mentioned one credit card that you have together? Do you have any bank accounts that you’d share together except for that credit card just completely separate?

Doug:
Completely separate except for the one credit card.

Mindy:
Let’s go to David who has a different scenario because he was in the military for a while, a really long time, and physically separated from his wife for long stretches. David, how do you and Kimberly handle your finances?

David:
Yeah. So that’s actually changed a lot over the years. So when we first got married, I was active duty Marine, and I had a duplex. So we had everything together. We had pretty much the same income. She was a high school counselor. I was a military enlisted dude, and everything was joint, and it was whatever, nobody cared. Honestly, that was probably good because she’s very good with finances. She’s conservative. She doesn’t spend a lot of money, and I’m, I think, a byproduct of growing up in a household that was like that. So now when I have money I’m like, “Ooh, I can buy the name brand version instead of the …” I don’t know.
So that worked out well for a while. Then what happened was we lived together. We were stationed in Hawaii for three years. I got orders to California. I was looking at getting out of the military. She couldn’t find a good job in California. She got a job offer from her old high school and the kids. It just made sense logically to have her relocate back while I spent the last 18 months exiting the military. I could focus all in on the business and she could get her career going again and settle down with the kids and everything.
Note for anyone thinking of doing this. terrible idea as far as your actual relationship goes. Logically, it was great. I achieved financial freedom, left the military I’m home, I don’t have a job, yadadadada, but the relationship is still healing from being a part that much. Now, we planned on seeing each other a lot more, then COVID happened. So it was a weird year and a half, two years.
During that time, I had started buying a lot more real estate and reinvesting everything back into the online platform and the business and all this other stuff. I guess my wife started to feel as though her income was going into this pot, and then if there was leftovers, I was spending it on the business, and in my head I was like, “We’re growing this thing. It’s going to be great,” and in her head, what is she even working for? I, as all good husbands, missed all of the hints around that. It wasn’t until the day that she was like, “Hey, I got my own bank account and my account. My check’s going there,” that I realized that there was a problem.
That was actually really rough for me. I mean, partially ego, but partially I just felt, and I’ve told her this, we were not in a great spot. So when she made that change without saying anything, I took it as, “Okay. Are the divorce papers coming? What else?” This to me was a huge, I don’t want to say betrayal, but it was something we should have talked about beforehand.
So I was not cool with that, and we butted heads on finances for a while because I just felt like that could have been communicated better, but then at the same time, I didn’t pay any attention to the hints. So we were separate completely up until about four months ago. Actually, it might have even been two months ago. It’s not very long. Finally sat down and said, “Look, I understand that you’re much more conservative.” She doesn’t like the debt. She doesn’t all my high leverage real estate and all of that.
So we just came to the terms of, “Okay. Why don’t we set up a joint account and we pay all of our personal bills out of the joint account?” We come up with a number that is fair, whether that’s a 50/50 or a 40/60 based on our incomes and everything else. We each contribute to that joint account every month, and that joint account covers the mortgage, all the primary residence expenses, the cars, the insurance, anything and everything.
I think the only thing that’s not in there right now is health insurance because I forgot to calculate it. So I say that because still military health insurance so it’s very cheap and it’s not like most people’s bill that you wouldn’t forget. So everything goes into this pot. We each contribute 1,000, $1,200 a month, whatever, goes in there. All the bills get paid out. She has control of the checkbook, which she likes and she feels very comfortable with and I like because I don’t care about the details and we just put everything on autopay and hope that they tell me if I missed a payment.
So she gets to … I don’t even have login for the account. I just don’t care, but I’m like, “Here, I’ll contribute my money and you pay all the bills,” but it feels good because we’re doing joint on all of that stuff, and then whatever’s left over from what she puts into the joint account, she spends. I would say the same for me, but the reality is that whatever’s leftover basically gets pulled into businesses or rolled back into stuff.
Actually, my accountant got mad at me the other day because I’m an S corp now, and apparently that means you’re supposed to pay yourself and I haven’t been. So she’s like, “What are you even doing?”
I’m like, “I guess I need to find a salary for myself in here,” but it’s just so easy to write everything off. So yeah, so that’s where we’re at now is compelling. All of our expenses are paid joint and eventually the plan is to also have an emergency fund and a vacation or boat or whatever fund in that joint account, and then everything else will just be completely however much you want to make, however much you want to spend.

Mindy:
Okay. Let’s just for context share the amount of real estate debt that you have right now. It’s not like one mortgage.

David:
It’s, I don’t know.

Mindy:
Ballpark it.

David:
Yeah, somewhere around four million probably, five million.

Mindy:
Okay. So I can see a lot more of her side to this story knowing that number and knowing … She’s saying, “Wow, I feel weird about our money,” and you’re like, “Oh, it’s fine.” You know it’s fine, but she doesn’t know it’s fine, and she hears you saying this. So I get where she’s coming from. What it boils down to, though, is communication. Doug and Elizabeth communicated when they were getting married, “Hey, let’s do separate finances.” Then there’s no question.
I actually don’t think Carl and I communicated. I think it was just like when we get back from our honeymoon, “I’ll put my name on your checking account because you already have bill pay out of everything and I don’t, so I could just close mine and it’s no big deal.” Do you remember that, Carl?

Carl:
Yeah, I think we did have one conversation about money and it did not go well. Do you know what I’m referring to? There we go.

Mindy:
I do too.

Carl:
I know you’ve since changed your mind on this topic, but I brought up the idea of a prenup and you were not thrilled.

Mindy:
That is not even the right way to say that. I was so offended that he would just assume that our marriage was going to end by bringing up this prenup that I was like, “If you ask me again, we will not get married. No, we’re not getting a prenup.” Also, in my defense, we had a dollar in net worth. We didn’t have anything to protect, and that was way before David and I recorded episodes 301 of the BiggerPockets Money Podcast with Aaron Summers, the author of a really awesome prenup book called The Prenup Prescription, where he describes how prenups aren’t about money. They’re a guide to how you handle your relationship. It’s not just about money and how you’re going to split it up if you get a divorce. It can be about pretty much anything you want. It’s like a guide for how your marriage is going to go.
When we were recording with Aaron, I absolutely changed my mind about the prenup, but unfortunately, 20 years ago, Aaron wasn’t around. Well, he was, but not by us, and yeah, that was the one time we did talk about money beforehand. Although there were some context clues, where we were both cheap and we knew it. So you can pick out the cheapies.

David:
I was going to plug that prenup episode as well. That thing blew my mind and that’s partially why we set up the joint account. The other thing, so when my wife doesn’t necessarily feel the financial security with our situation, which will get a lot better once, I think I’ve mentioned on the show, but I dug into a hole with a project manager that wasn’t … I’m overbudget on some projects and so I’ve had to lay more capital into them than I wanted, and it’ll all come back once they finally sell, but once that happens that I have no more personal debt, it’ll be a lot easier because it’ll just be the real estate and that’ll feel more secure.
The other thing is she’s a high school counselor. She’s on salary. She gets paid. She has bills. It’s very fixed. It’s very secure. It’s very stable. I do wholesaling. Well, I don’t anymore, but I was doing some wholesaling. I was doing some house flipping. I’m buying apartments. I’m selling. My income is ridiculous. If you look at my tracker, I broke … Two months ago, I think, was the most gross revenue I’ve ever brought in without considering the sale of a business. It was 90 something thousand dollars, and then I spent all but 4,000 of that in the same month on other things.
So if people were to look at … I’m one of those guys where it actually makes sense to have a line of credit to run everything through because one month I’ll make tons of money and have no bills and the next month it’ll be the exact opposite, and so I have to have a way to stabilize it. So I can understand why it’s like everything’s always ticking up to the right, but it’s a stressful way to do it because it’s not stable. It’s not secure, and there are definitely months where you’re like, “Oh, my gosh, where’s the next check coming from?” Then there are months where you’re like, “What am I supposed to do with all this? Where do I put it?” So it’s a weird game.

Carl:
I’ve got a comment and a question. So Doug and Elizabeth have very similar finances and probably similar goals. They do the same thing with their money. They do index funds. You would say that, correct? You don’t do any exotic stuff.

Doug:
Yup.

Carl:
Now, David and his wife are very different. You’ve got your commingled account for the common expenses, but, David, let’s just say, and I think this probably will happen, you absolutely kill it with real estate, and in 10 years you’ve got some eight figure net worth and your wife still has her job as a social worker. Have you thought about that or will that cause any tension? How do you plan for that? You could be living on a yacht on some bay in Hawaii and she’s got this job that … Yeah. How do you reconcile that?

David:
That’s one of the things I think we’re hashing out in conversations with the counselor as we’re trying to get back to living in the same instep after me moving back in. She grew up, she is the daughter of a farmer, and they raised cattle, and they might have gone on vacation once when she was growing up, and they’re very … I’m like, “I’m going to travel the world and we’re going to do all these things,” and she’s like, “You can go do that. I’ll be here,” and that’s not her thing.
So there have been some, as we’ve come to more realizations of that like, “Hey, my income’s increasing and I have the ability to go do these things and you don’t really want to. How does that work?” I don’t know that there’s going to be any animosity. I think it’s just a matter of trying to find the balance for, “Okay. Well, I’m going to stay home this much.” I mean, she could stop working and she just enjoys her job. So it’s weird. I mean, she’s happy, she’s content. She wants to be a homebody and I’m totally okay with that as long as I also get to do the other things. So yeah, we’re working through that. Ask me again in five years and I’ll give you a way better answer, I’m sure.

Mindy:
Does Kimberly invest?

David:
She has the school, whatever, 403(b) or whatever the school’s version is. Outside of that, I don’t know, not really. I mean, the primary residence I guess you could consider an investment because of how well that area is done. I lie. We have 10 head of cattle, and so you could consider that an investment because they do pay dividends in steak and they do actually pay for themselves and they pay for the back five acres we bought. So we probably bring in, I don’t know, four, five thousand dollars a year in cattle and deep freeze full of beef. So it’s great.

Mindy:
Let’s see. Oh, how long have you been married?

David:
Six years, six and a half years.

Mindy:
Okay, and you have two children.

David:
Yes, five and 13.

Mindy:
Okay. So-

David:
For those of you doing the math, yes, the 13 is a stepson in case you can’t figure out how I … He’s also three inches taller than me, and it’s great.

Mindy:
Okay. So how do you decide who pays which bill or is everything pulled from that one joint account?

David:
Yeah, everything’s pulled from that one joint account, and I want absolutely nothing to do with any of it. She loves balancing checkbooks. She likes writing checks and balancing a checkbook and I’m like, “I don’t want a checkbook for that account. Put it on autopay and call me if there’s a problem. I don’t want to see that. I don’t want to deal with it, out of sight, out of mind,” but she likes, she enjoys remembering that there’s a bill due on this day and writing the check and doing the balancing, and I’m like, “You just take over all of that and tell me if I need to contribute more to the account. I don’t care.” So yeah.

Mindy:
Since you’re separate and together, do you run purchases past each other or is it just a free for all?

David:
Yeah. So Doug’s wife would probably kill me if she saw some of the value purchases that I’ve made without even bringing it up. When I was thinking your threshold, I had a zero tack on to where you were saying, “I think this is the …” When you voiced the threshold, I was like, “Oh, I see why my wife doesn’t like how I run things.” So I mean, we run things by each other, but the problem is that 80% of what I buy is a justifiable business write off. Like if I’m buying a new camera lens, okay, that’s a business write off. If I’m buying a drone, that’s a … So I’ll go and spend … I bought a $300 drone the other day and I was at the house paying cash for the drone and my wife’s like, “Oh, how much is that?” I’m like, “Oh, I just spent …”
So when it comes to personal stuff or things that could affect each other, we absolutely talk through everything, and when it comes to groceries, we buy those together, and when it comes to fuel, we help each other with that, and all of those things, but when it comes to spending money inside of the business or spending money on the day-to-day to keep things afloat on my end, I don’t really know that she cares at all as long as I don’t bankrupt myself in the process.

Mindy:
Carl, you want to share our situation?

Carl:
Yes. So all the money goes into the same pot, and I manage it. I control the investments and I pay all the bills. There’s really not that much more that goes into it. I’ve never really considered it. I think a big part of this is having the same values and the same goals, and not that you necessarily have to have them. I’m thinking about you, David, but we do. So in our case, it works really well, and we also have really good communication, I feel, and trust. You came home from the thrift shop. Doug and I were just talking about clothes and you had that jacket, some designer. I don’t get into fashion except for Costco fashion, which I love.

Mindy:
Oh, Michael Kors.

Carl:
Yeah, that sounds fancy. Is that related to the beer company Coors?

Mindy:
No.

Carl:
Okay, but it is. How much would that jacket have cost new and how much did you pay for it?

Mindy:
I think it’s a $500 jacket. It’s an overcoat, winter overcoat, but I found it at the Goodwill Bins and it was a $1.50 a pound. So what? Maybe three or five dollars?

Carl:
So explain what the Goodwill Bins are. You buy your clothes by the pound?

Mindy:
You buy your clothes by the pound. They just take boxes and all the stuff that you donate that’s, I don’t know, I think it’s overage. They dump it into these four foot by eight foot tables on wheels that are about six inches deep, and I think they separate it into clothing and soft goods like blankets and things and everything else. So at this particular place, I got a few. I got some clothes. I got a snowboard, a pair of skis, some glassware, a globe. It’s just the most random. You go into a Goodwill, look at all the weird stuff that’s in there. Yeah. This coat was $1.50 a pound, and I’m so excited. It’s so nice.

Carl:
So I think we’re both super frugal, and that helps out a lot. Car order aside, our newest cars from 2010, it has 200,000 miles on it. We just don’t care. We’re DIY people and we just don’t spend a lot of money in day-to-day life. I trust you with the shopping and you trust me with the finances.

Mindy:
In that regard, I will say that we’re more like David Pere in that we spend a lot of money on real estate stuff.

Carl:
We do spend money on real estate.

Mindy:
It’s fun to spend money on.

Carl:
Yeah, but that’s going to bring money back. So I don’t mind spending 500,000 on a spontaneous house purchase, which we just did.

David:
It’s like a high yield savings account.

Doug:
Oh, so I have a question for you guys. So you just took the big trip to Germany, right? That was pretty expensive, and you mentioned you’re both frugal. Was that tough spending that much money?

Mindy:
Yes.

Doug:
I know the flights were a little expensive and you just don’t know how much things are going to cost over there. So yeah, how was it?

Mindy:
I bought the tickets, and I will say that I, God, we have to give some context here. So our oldest daughter was going to Germany as part of a school trip. The school trip was arranged through EF Tours and EF Tours takes a lot of kids on these school trips. So the rules don’t apply to them. They can book their airfare three minutes in advance and it’s fine. It was three weeks before the trip they book their airfare. For those of you who don’t book international travel a lot, three weeks ahead of time is not enough time to really get a great deal.
So we didn’t get any great deal. We paid the price and it was, I don’t know, the most that you have to pay. It was $6,000 for three round trips from Denver to Germany and another extra trip back home because the older daughter was riding home with us instead of with her school trip because we were extending. She went there and then we went there a week later.
It was really hard to spend $6,000 on these trips. I would’ve loved to put it on a credit card so I could get points. I mean, to put it on a credit card but not lift on a credit card to get extra points. I couldn’t shop around because it was either go or go. There was a city that I had to go to. I couldn’t look around for nearby cities. I felt a lot of pressure to do this only one way. So in that respect, there was no flexibility and that part really bothered me, but if you take a zoomed out look, does that $6,000 ding our finances? No, not even a little bit.
So it’s hard to zoom out and think of it from that context, but yeah, it was once I do zoom out and think about that, I’m not still obsessing about it even though I just talked for 10 minutes about how much it cost me to go to Germany for a week, but I mean, once we were there, prices were fairly reasonable. Don’t you think, Carl?

Carl:
Yeah. It surprised me by how not bad it was. The hotels were a little bit more because it’s a very popular time to travel, but yeah, no, the food wasn’t that bad. The beer is cheaper than water, which was a glorious discovery.

Mindy:
That’s strange.

Doug:
Oh, that’s wonderful.

Mindy:
Bottled water is $2 and a beer is $1.80.

Carl:
Yeah. I think the way I look at these things now is we’ll always be frugal, but we’re frugal so we can spend money on things where it really matters. I think that trip was great. I wouldn’t take it back for anything. It was awesome.

Mindy:
David, let’s talk about saving for college. I know you have two kids and I know that you have the GI bill available for your kids. Are you saving anything additional? If so, how is that split between you and your wife?

David:
Yeah. So honestly, the theme of this has been that we had some financial struggles, not necessarily financial struggles, but relationship struggles revolving finances, which honestly is financial struggles is one of the main reasons people struggle with relationships, so it makes sense. We’ve started to come back together, and I’m working to pay off personal debt so that we feel more secure. I think the conversation around collage and more investing stuff will come more in depth down the road.
Currently what we have, so we joint. We each have a term life policy, which if something happens to either one of us will be covered during that timeframe. Outside of that, I guess we took all of the, I can’t even think of the name, stimulus checks over the last two years. We did buy a four-wheeler with part of the leftovers, but that’s a write off because we have cattle, so it’s an ag write off, ag expense on a farm.
Outside of that, every dollar from the stimulus went into VTSAX, UTMAs for both of the boys. So there’s $10,000 in each of those and growing and I contribute a couple hundred bucks a month to each of them. So those, not necessarily a college fund, but a fund that they’ll have when they get to that age. Then I’ve earmarked, nothing like what Brandon did, where it’s like I bought a fourplex for Rosie, and I just have earmarked two properties and said, “Hey, when they get old enough, we can talk through selling one of these or whatever, and that’ll be their emergency fund for that.”
Yeah, as long as I don’t mess anything up timing-wise with the military, well, I have transferred, but they’ll be able to use my GI bill. If not, I’ll use it and just the money that I would be making in housing allowance I’ll put into a fund for them for college. So the GI bill is huge.
The other thing though is, not to go down the rabbit hole of veteran benefits, but technically, I’m a disabled veteran. I hate that term, but I do receive disability pay, and there’s a few issues that are getting revamped with that. I’m at 80%, and the issues that are essentially, theoretically, I’ll hit the 100% disability metric. I mean, I’ve got some things that, whatever. We could ramble the world doesn’t need to hear all of Dave’s brokenness, but if I get to 100%, my kids will qualify for grants for school as well.
So I think it’s $1,200 or $1,250 a month through chapter. I’m going to mess all this up. It’s either chapter 34 or chapter 31 benefits. You can tell how much I’ve researched this because it doesn’t apply to me yet. So why waste the time researching it? Essentially, it will pay enough to cover state tuition for them in the state. The reality, though, is that I can’t say that either of them is going to go to school. I don’t know.
The older one is very much like me, and the fact that he doesn’t really like school and was athletic and I could see him doing trade school before college. Younger one seems smart, but he’s five. So who knows, right? As of this week, he wants to be a chef because then he can cook his own hot dogs.

Carl:
Costco food court.

David:
Yeah. So I don’t know that that answers your question at all. Other than that, hey, it’s a conversation that we’re getting to where we’re comfortable enough having that conversation, but we do have some safety net.

Mindy:
Yeah. Well, if you’ve got some time and school’s going up every year, but something that we didn’t really discuss a lot now is the enormous benefits of the military and the GI bill, and you transferred 1% to each of your children on the chance that they would go to school, then you could transfer more. So you could 50/50. You could discover that the young one is going to go to chef school and he needs the whole thing while the older one went to trade school or whatever that we do need trades. We are down a lot in the trades.
Timon Crawford on I think episode 41 shared his experiences of getting his two-year associates degree in just six short years by because he also did not like school, but you graduate from high school and then you go to college and that’s what you do, and that’s what he did and he’s like, “I hated it.” Now, he’s an electrician working for himself and he’s so busy he can’t … His book is filled forever. So if you don’t want to go to college, then don’t because it’s not the right path for everybody.

David:
I guess there’s one other piece to this puzzle too. In Missouri, they have what’s called the A Plus scholarship. I don’t know all the wickets. You have to have a certain attendance. You have to do a certain amount of volunteer hours and basically be a decent student in Missouri. As long as you meet those wickets, you qualify for it, and it is basically two free years at tech school. So you could go to Ozark Technical College here in town and go for two years for free if you qualify for the A Plus scholarship. So a lot of people will get that scholarship and then they’ll transfer to Missouri State for their last two years or whatever.
So I guess the unspoken part of our plan is my wife is a counselor in the high school. So our kids are going to do what they need to do to qualify for that scholarship because she’s going to make sure of it. So that’s always a good backup, nice benefit. So yeah, definitely worth knowing your local state stuff because there’s a lot of cool programs at different states.

Mindy:
Yeah. That’s a good tip. That’s a really good tip. Doug, you don’t have children. So this is going to be a pretty short question for you. How are you saving for college? You’re not. Carl, this is very interesting.

David:
What if Doug has a half a million dollars in a fund right now and he is like, “Oh, no. We are ready.”

Doug:
No, there’s nothing.

Mindy:
Doug, tell me all about your-

Doug:
It does make FI much easier. The math is far easier to make it work out with no kids. So just plug for that.

Mindy:
Yes. Yes. Carl, we, all four of us on this episode, have the benefit of or have something in common, we have all saved the exact same amount for my children’s college, which is $0. Even though Carl and I talk about money all the time and we both have podcasts about financial independence, we have saved nothing for our kids college. Why is that, Carl?

Carl:
I remember looking into 529 plans. I didn’t like some of the restrictions around them. So that’s one reason. A second reason, along the lines of what David said, is I think college is overrated. I remember when I was a kid my mom always tell me, “You’re going to go to college,” and it turns out I was the first one to go and I graduated and it was great, but I ended up doing something that had no tie to biology and chemistry, which I studied. I think college is overemphasized. I think there’s such a need for … If you really want to make money, become an electrician or an HVAC tech or something like that, go to school and start your own business. Probably one of the most wealthy people I know in town here is a plumber. He’s got his own business.
There’s such a need for that, and you don’t need to go to school. Hell, even to become a computer programmer, which is what I did, you can go to a boot camp now, so you don’t have to spend four years learning English and history and all the other stuff. You can just write code and have a really good job in a short amount of time.
I think the third, well, the third reason is we have savings and we probably will help our children out, but I don’t think it’s our obligation to pay for them. I’m going to make sure, if they want to go, I’m going to make sure they find a way to go, but I think there’s nothing wrong with them having some skin in the game as well. I definitely had that when I was a student. I had all my skin in the game because no one paid for anything. My thought at the time was, “Well, if I’m paying for this, I’m going to make it really worthwhile.” I think there’s some value in that for your kids. So no 529 plans, but we will help our children with whatever they decide to do.

Mindy:
So I’m going to tag off of that and say my parents paid for all of my college and I did not have that same attitude towards college. College was probably not the best choice for me. I am not a really great student. I did not really apply myself. It was more of fun, and I studied fashion design, which is not anything that I care about. So having that, if I would’ve had to have skin in the game, I might have chosen a different career or a different major where I was actually learning something. I can sew really good, though, but yeah, I could sew really good before I went to school.
With regards to the 529 plan, I need to clear something up and I’m still not sure where I got the information. We did look into 529 plants a hundred years ago and I am pretty sure that at the time we looked into it, the state of Illinois would only let you use their plan in Illinois, and if you didn’t use it in Illinois, then you only got back what you put into it, not any of the growth. I think that might have been the case, and this is I’m talking 20 years ago. Maybe the plan has changed. Maybe I misread it, but this has somehow been associated with all 529 plans in my mind.
So as I have said many times on this show incorrectly that you don’t get any of the gains from the 529, that’s not true. It turns out that if you invested a 529 plan and then your child does not go to college, you simply pay a 10% penalty and you can take that money out. So I’m not actually sure about the taxes on that, if you pay taxes or if you don’t pay taxes, if it just grows tax-free. It doesn’t really sound like it would grow tax-free if you’re going to take it out, but we can look that up and let you know in our Facebook group, which can be found at facebook.com/groups/bpmoney. Okay.
Doug, I would like to give you a moment to wrap up any thoughts that you have about this show and how people in a relationship can handle their finances together or separate.

Doug:
I think it’s very personal and every everyone’s relationship is different and we have our various issues, communication, trust with finances, and all that stuff. We have figured out how to get to a spot where we feel pretty good or at least I feel pretty good, I guess I have to double check with Elizabeth in the spirit of communication, but we’re in a great holding pattern, and it’s been going for a little while. I wouldn’t judge anyone for how they’re handling their finances, but as you mentioned, David, I think finances are one of the biggest issues that we have to figure out. If there’s discrepancies or if you’re moving in different directions, it could be extremely challenging. So everyone, do your best and good luck.

Mindy:
David, let’s hear from you. Any final thoughts about how someone can handle their finances?

David:
Yeah. My thought is to go back to … Oh, you put it on the notes for me, 301, episode 301. I don’t know how you remember all these episode numbers, but the prenup episode because that’s ultimately what led to me having the conversation with Kim to like, “Hey, here’s a solution that would allow us to have separate and also have joint so that I feel better because we’ve got stuff together and we are doing things as a couple from the emotional standpoint and you feel better because you have the ability to save money and know it’s going to be there or to spend money and not feel like you’re taking away from the business.” So that prenup episode was great because he talked about, he was the one who said, “Hey, I like the idea of having a joint account for expenses, a joint account for travel and emergencies, and then two totally separate accounts, and you guys just spend that and it is what it is.” I thought that was good.
So I mean, ultimately, I think the answer is … My personal belief on this, I think, is that it’s much less important how you handle finances together per se than it is to have the conversation about where your finances are before you get married because Kim and I are super different. I have a massive tolerance for risk. I am okay risking whatever and taking on debt and all of the calculated risks, and she’s much more conservative, but we both came into the marriage with virtually no personal debt and we were cash flowing out of our W-2s and we weren’t hurting, right?
She had, I think, $11,000, no, not even left of personal or student loans, and I had car payment, but neither of us is, even with my crazy “spending habits”, they’re within reason and there’s always leftovers at the end of the month and the net worth goes up. So I think it’s just important to know where you guys are before you get married. Then as long as you’re having those communications through it, I think you’d be all right. I’m also the youngest and most newlywed person on the show. So I could be way off on all this, but we’ll find out in a decade.

Mindy:
No. I think you’re spot on. I think both you and Doug said communication is key, and Doug said it’s very personal. How many times do you hear me every single episode say personal finance is personal? You don’t have to do it the way that Mindy does it or Mindy and Carl. You don’t have to do it the way that David does it or the way that Doug does it. You just have to do what works for you and your partner, and you both have to talk about it and come to an agreement.
Then David, you said something very interesting. You said it has changed over the years. It doesn’t have to be, “Oh, we agreed this one time. So that’s it. That’s all we’re going to do.” Have the conversations over and over again. All Carl and I do is talk about money and Tesla, which is money. Carl, do you have any final thoughts?

Carl:
Yeah. David said something about how many marriages failed because of money, and I think that’s true, but deep down, the underlying cause is probably values and how you apply money to your values. So if two people are together and they have vastly different values, you better have good communication because if one person values eating at home and the other person is more into travel or expensive cars, you better make sure you’re on the same page and you communicate this and your partner is okay with it. So yeah, I think if there’s any common theme for all of us, it’s just you got to have communication.

David:
I know you’re making generalities, but I feel like you have been just living in my house. You’re like, “Oh, yeah. One person likes to eat at home,” Kim, “and the other wants to travel the world and buy a Ferrari.” Dave. I mean, you nailed it. Right on the head.

Carl:
If I buy a Tesla Roadster, I will share it with you. We could have some shared custody agreement with it.

David:
I will, 100%.

Mindy:
That’s my Tesla Roadster.

David:
I’ll ride shotgun with you any day, Carl.

Carl:
Okay. Apparently, we have to give Mindy some time with it too, but we’re communicating with it now. So it’s all good.

David:
You’ve got a back seat.

Carl:
Yeah.

Mindy:
Oh, my goodness. Get out, all of you. Okay. This has been a fantastic episode with Doug Cunnington and Carl Jensen from the Mile High FI Podcast. Doug and Carl, tell people where they can find you.

Carl:
Milehighfi.com is our website, and YouTube forward slash Mile High FI Podcast. Is that it, Doug?

Doug:
Yeah. If you just get to the website, there’s links everywhere. It’s on all the big podcast directories. You should be able to find it if you look for it.

Carl:
Yeah, milehighfi.com.

Mindy:
Great. Thank you guys so much for your time today. From episode 332 of the BiggerPockets Money Podcast, he is David Pere and I am Mindy Jensen saying, “Got to go friend. This has to end.”