Supplemental Income - Belongs to the Family or the Spouse?

[pensmama87]

When I’ve made “extra money” (and it’s never been a lot), it’s always been put right back into general budget.

I know when my mom used to substitute teach, she would consider her entire earnings for the day hers to spend, which would drive my dad absolutely wild, as the taxes still needed to be paid on her earnings.

I wonder if it wouldn’t be helpful to point out to your husband when you run short? “I wanted to buy some of the nicer XYZ you like [cheese, bread, ketchup, ice cream, whatever], but I was short of grocery money, so I bought the cheaper kind.” Let him figure out whether the decrease in standard of living is worth it to him. But that won’t work if you’re already buying the cheaper XYZ.

What is your timeline for finishing the debt repayment?

It depends.

This month is shaping up to be $20-$30 extra on the snowball, which is very little (I plan out extra on utility bills, so usually get some wiggle room there.) If every month is like this month, we’re not done until 2020.

I will probably resume babysitting next year, and that by itself will help a lot. DH is looking for a new job. At some point I’ll stop having to put $$ towards a new furnace or roof, so the home repair fund will be smaller. I WANT to be done by the end of 2017, but a lot of that is out of my control at the moment.

 

[UbiCaritas]

I’m curious how other families handle this when it comes up. If you or your spouse earns extra money, does that money belong to the person who earned it to spend as he or she pleases, or does it go into the household budget? (Or something else, decided on a case by case basis, maybe?)

Here’s the background: I earn some extra money, not from a regular job, but from things like online surveys, research studies, cash back for online shopping, etc. The amount is not great but it’s not nothing either - around $200-$300 a year if I do well. I have always put that money right into the household budget as supplemental income. I don’t spend it on myself (though our household budget does make room for “pocket money” for each spouse to spend on whatever we want).

My husband also earns some extra money from blogging and one long-term research study he’s been involved with since he was a kid. He feels that the money is his. He earns significantly more than I do this way - up to $1000 a year sometimes. He spends it like he would his budgeted pocket money, though sometimes he will spend some of it on things for the family (eating out, for example, or as extra money for gifts). But those things he views as “treats,” not part of our overall income and not an obligation on his part.

He and I disagree about what we should do with this money. We are agreed that we can spend gift money however we choose (such as for birthdays), but IMO this is money that we earn by spending our time on it, so it counts as “work” even if it’s not a “job.”

We are on a tight budget and have a significant amount of debt we are paying off. If we didn’t have the debt and had more breathing room just from our income, it wouldn’t bother me nearly as much. But there are some months that if it wasn’t for that little bit extra I am bringing in, we’d be in the red. I probably wouldn’t even do several things if I didn’t feel they were financially necessary for us to get by.

So I’m curious to see how other families handle this - would the money be yours to spend how you please? How do you account for the time that endeavors like that might take away from your family in addition to a paying job?

I’m a SAHM, and don’t have a side job. DH and I have the same amount of spending money each month, and the only “found” money we really have is birthday present money, which of course we each spend however we want to.

However, one thing I can do to “earn” a bit of extra money is this. With household repairs, we often have two options, because I’m handy enough to do a lot of them myself. Option a) is that we hire someone to do the repair. Option a) is acceptable to both of us because while yes, I often could do whatever it is myself, I would have to do it while DD is napping or asleep, thereby cutting into my (very limited) free time. Option b) is that I do it myself, thereby saving us money but taking away some of my limited-and-valuable free time because, well, you try rebuilding a toilet with a 14-month-old running around. We budget a certain amount for household repairs each month. If I do, say, a $500 repair job for $20 in parts and a couple of hours of time, we’ll save part of that $500 in investments or savings and then I get part of it to spend as I want, because I’ve “earned” it. DH is welcome to do the same, but he’s not as handy with those sorts of things, and he’d usually rather pay someone to do it than deal with it. (Not knocking him, you understand–it’s a question of different talents/abilities. He is AMAZING with finances and such, much better than I am, while I have a rather mechanical mind and am good at looking at something and seeing how it works.)

 

[Xantippe]

It depends.

This month is shaping up to be $20-$30 extra on the snowball, which is very little (I plan out extra on utility bills, so usually get some wiggle room there.) If every month is like this month, we’re not done until 2020.

**That’s actually not terrible. I was expecting to hear 10 or 20 years from now. You never know these days. **

I will probably resume babysitting next year, and that by itself will help a lot. DH is looking for a new job. At some point I’ll stop having to put $$ towards a new furnace or roof, so the home repair fund will be smaller. I WANT to be done by the end of 2017, but a lot of that is out of my control at the moment.

It sounds like there is light at the end of the tunnel.

Have you done the usual stuff with fiddling with insurance and mortgage rates? (I realize you’ve probably done it, but I have to ask.)

 

[pensmama87]

I’m a SAHM, and don’t have a side job. DH and I have the same amount of spending money each month, and the only “found” money we really have is birthday present money, which of course we each spend however we want to.

However, one thing I can do to “earn” a bit of extra money is this. With household repairs, we often have two options, because I’m handy enough to do a lot of them myself. Option a) is that we hire someone to do the repair. Option a) is acceptable to both of us because while yes, I often could do whatever it is myself, I would have to do it while DD is napping or asleep, thereby cutting into my (very limited) free time. Option b) is that I do it myself, thereby saving us money but taking away some of my limited-and-valuable free time because, well, you try rebuilding a toilet with a 14-month-old running around. We budget a certain amount for household repairs each month. If I do, say, a $500 repair job for $20 in parts and a couple of hours of time, we’ll save part of that $500 in investments or savings and then I get part of it to spend as I want, because I’ve “earned” it. DH is welcome to do the same, but he’s not as handy with those sorts of things, and he’d usually rather pay someone to do it than deal with it. (Not knocking him, you understand–it’s a question of different talents/abilities. He is AMAZING with finances and such, much better than I am, while I have a rather mechanical mind and am good at looking at something and seeing how it works.)

I’m not knocking this approach, but I will say I don’t get it. Why not just keep the remaining $480 in the home repair fund the next time something breaks (because it will)? Otherwise you’re starting at zero every time.

We’re not at a place where we can save or invest, either. We have a modest emergency fund and sink funds for expenses that aren’t consistent month to month, but right now there is no “extra.” I am content with my $20 in fun money and don’t even spend it every month.

I just want this debt paid off.

 

[pensmama87]

It sounds like there is light at the end of the tunnel.

Have you done the usual stuff with fiddling with insurance and mortgage rates? (I realize you’ve probably done it, but I have to ask.)

We are as low as we can get, yeah.

 

[Allegra]

My husband makes extra money teaching piano lessons and he generally spends it on his coin hobby, though when money is tight he puts it in the checking account.

 

[alphawoman]

You might not like this answer.

By the sounds of it, you’re home owners who are house poor. I would sit down and evaluate expected mortgage costs, real estate transaction costs, and relocation costs associated with either downsizing into an owned home or a less expensive rental. If $20 per month is what keeps you out of the red, you are living beyond your means, and that needs to be fixed.

Based on what you’ve written, you have limited capacity to weather any significant shocks-- how would you handle a few months of unemployment or disability? There’s no need to answer this publicly, but are you saving adequately for retirement and your children’s educations?

There is no shame in living modestly. Do a quick mental inventory and ask yourself what proportion of your home you use intensively every day. Most people live in a few hundred square feet, usually the kitchen, bedroom, bathroom, and family room. Yards are overrated-- parks and public green space can give you almost everything you need at none of the cost and with none of the maintenance.

DH, DS, and I have chosen to live in a gorgeous 900sqft 2 bedroom loft in the heart of the downtown core of a city we love. We could probably have 2 children here without going nuts. Everything we need is within a 5 minute walk, otherwise we take transit, which is efficient. We don’t go on vacations or own a car, we have a full gym in our building, we prepare most of our food at home, use the library extensively, have memberships to museums within walking distance (which we have down to less than 50 cents per visit!), two excellent parishes within 3km, and try to ensure our entertainment is mostly free or steeply discounted.

It might sound like we have a poor quality of life, but it’s quite the opposite! We live in a beautiful area with lots of parks, universities, historical and cultural sites, we eat fresh and delicious food, have a small home that we love and use intensively, lots of friends nearby, parks to enjoy, good neighbours with a similar approach, public health care, nice clothes, and good internet and phone service. What we do is splurge on peak experiences that we enjoy and remember, like going to the circus or symphony, or interesting activities for DS.

We could buy a house, but this way we’re able to save 40% of our pre-tax income for retirement and education in liquid assets and, to be frank, we’ve earned far higher returns in our investments than we would even in an overheated housing market. I would enjoy a large house, but I don’t find myself longing for one and it keeps the materialism in check. Our biggest depreciable asset category is clothes, but that’s necessary to live and work as professional and, even then, we don’t allocate a lot to clothing.

My advice is to sit down as a couple and identify the few things that give you the most incremental quality of life. For me, that’s being in a good neighbourhood near lots of parks and cultural attractions, buying lots of meat and fresh produce, and having a good gym. For DH, it’s having a modern home with a less than 10 minute commute to work. Trust me, your happiness will largely be the same!

 

[pensmama87]

I understand that y’all don’t know my finances, but I’m tired of the implication that I’m some stupid frivolous spender. Frankly, it’s untrue. Do I agree that there are unnecessary expenditures in our life? You bet. But come try and tell DH that we should give up cable and see how far you get.

Can we focus on the point of the thread, please? Does supplemental income belong to the family or the person who earns it?

 

[schaeffer]

Our extra earnings went into the household budget, but gifts (birthday check from parents) were at the receivers discretion. Often part of that went into the budget and sometimes all of it depending on if we were extra tight.

Due to the timing, my November birthday check was earmarked for Christmas gifts for the kids, or a nicer Christmas dinner than otherwise planned. That was my choice.

There were some times that a bonus check or check from an unexpected job (like being asked to give a lecture and receiving a small stipend) was used as fun money for the person who earned it.

We had one checking account. He didn’t know it but I DID have a small stash of cash on hand for expected emergencies. This was usually from gifts I received from family, money from an odd job, and “change” from spending money he’d given me. All the change in our pockets went into a jar and I’d exchange them for cash and put them into my little cash stash as well. Having that little buffer gave me a little piece of mind, and when the kiddos needed 5 dollars to take on a field trip, I was able to give it to them. I kept the stash between $150 to $200, if there was excess, that became grocery money for the week, or school clothes etc.

 

[slh3016]

I understand that y’all don’t know my finances, but I’m tired of the implication that I’m some stupid frivolous spender. Frankly, it’s untrue. Do I agree that there are unnecessary expenditures in our life? You bet. But come try and tell DH that we should give up cable and see how far you get.

Can we focus on the point of the thread, please? Does supplemental income belong to the family or the person who earns it?

I don’t think that was what anyone was trying to imply, least of all me.

Honestly, to me, it sounds as if you are very strict, rigid, and structured about your finances, hence the disagreement over the extra few bucks each of you get doing odd jobs.

I was even about to reply and say that while Dave Ramsey’s plan is the IDEAL (and very smart for people with absolutely NO common sense about money), once you have ingrained those new habits, sometimes you can let up on certain things.

For instance, Dave preaches about absolutely no debt for anything. Early on in our marriage, we had to take out a significant loan (for us) for my husband to purchased the farm assets of his retiring aunt and uncle. We struggled and lived off my sole income for 2.5 years to quickly pay back that $90K loan. Now, I’m not saying that was bad, but at the time, we would have loved to have purchased more cattle with that farm income and have paid the debt off over a longer period of time but NO, we had to follow Dave…fast forward 15 years and now we see that if we had bought those cattle back then when the prices were cheap, our net worth would be well over $200,000 more now(probably even more than that!) and our income would be over $100K more a year at today’s market prices! Lesson learned: Dave’s advice really has to be tailored to each individual situation.

Sooooo, while I don’t know the particulars of your financial situation (income amount vs debt amount), I WILL say that you really need to analyze the nature of the debt, your interest rates, etc. and see how much wiggle room you have. I, personally, think that maybe you can let up in some areas (but again, that depends on the nature of the debt, terms, etc.) so that you and your DH can actually enjoy life a little more in the moment and not be so stressed out over where your pin money is going

To be clear, I’m NOT saying give up your debt reduction plan, but I’m saying that maybe there are some amounts that are not as critical that they be paid off right away if the interest rate is not that burdensome.

 

[pensmama87]

I don’t think that was what anyone was trying to imply, least of all me.

Honestly, to me, it sounds as if you are very strict, rigid, and structured about your finances, hence the disagreement over the extra few bucks each of you get doing odd jobs.

I was even about to reply and say that while Dave Ramsey’s plan is the IDEAL (and very smart for people with absolutely NO common sense about money), once you have ingrained those new habits, sometimes you can let up on certain things.

For instance, Dave preaches about absolutely no debt for anything. Early on in our marriage, we had to take out a significant loan (for us) for my husband to purchased the farm assets of his retiring aunt and uncle. We struggled and lived off my sole income for 2.5 years to quickly pay back that $90K loan. Now, I’m not saying that was bad, but at the time, we would have loved to have purchased more cattle with that farm income and have paid the debt off over a longer period of time but NO, we had to follow Dave…fast forward 15 years and now we see that if we had bought those cattle back then when the prices were cheap, our net worth would be well over $200,000 more now(probably even more than that!) and our income would be over $100K more a year at today’s market prices! Lesson learned: Dave’s advice really has to be tailored to each individual situation.

Sooooo, while I don’t know the particulars of your financial situation (income amount vs debt amount), I WILL say that you really need to analyze the nature of the debt, your interest rates, etc. and see how much wiggle room you have. I, personally, think that maybe you can let up in some areas (but again, that depends on the nature of the debt, terms, etc.) so that you and your DH can actually enjoy life a little more in the moment and not be so stressed out over where your pin money is going

To be clear, I’m NOT saying give up your debt reduction plan, but I’m saying that maybe there are some amounts that are not as critical that they be paid off right away if the interest rate is not that burdensome.

I don’t follow Dave strictly. I’m not paying off our debt from smallest to largest like he recommends. Our smallest loans have really low interest rates (under 2%), but our biggest ones have higher ones (6.8%), so we are paying those off first to avoid paying so much interest. The entirety of our debt is student loans (plus a mortgage, which around here is less than rent, so no, I’m not selling my house). So it’s not like we’re investing in a small business or anything like that.

The primary issue now is that my husband’s income alone is barely - barely - sufficient for us to get by with minimum payments on those loans (along with setting aside money for things I know we will need to pay for eventually - I’ve mentioned a new furnace and roof on the thread already, plus there’s car repairs, our end of the medical expenses when we have a baby, etc). We were actually breathing pretty easily when I was babysitting, so it didn’t bother me as much that he wanted cable or larger pocket money amounts for beer every now and then, or that he kept this extra income. But now that I am done with that for another year or so, we need to adjust. He is actually underpaid in his field, but his current employer cannot afford to pay him more. A person with his level of experience and qualifications could easily be making $10-20K more than he is right now. He is looking but nothing has really popped up yet.

So, on months we come up a bit “short,” I just put less money aside. But that does make me nervous for a car breakdown or something unexpected. We still have some, but will it be enough?

 

[slh3016]

I don’t follow Dave strictly. I’m not paying off our debt from smallest to largest like he recommends. Our smallest loans have really low interest rates (under 2%), but our biggest ones have higher ones (6.8%), so we are paying those off first to avoid paying so much interest. The entirety of our debt is student loans (plus a mortgage, which around here is less than rent, so no, I’m not selling my house). So it’s not like we’re investing in a small business or anything like that.

The primary issue now is that my husband’s income alone is barely - barely - sufficient for us to get by with minimum payments on those loans (along with setting aside money for things I know we will need to pay for eventually - I’ve mentioned a new furnace and roof on the thread already, plus there’s car repairs, our end of the medical expenses when we have a baby, etc). We were actually breathing pretty easily when I was babysitting, so it didn’t bother me as much that he wanted cable or larger pocket money amounts for beer every now and then, or that he kept this extra income. But now that I am done with that for another year or so, we need to adjust. He is actually underpaid in his field, but his current employer cannot afford to pay him more. A person with his level of experience and qualifications could easily be making $10-20K more than he is right now. He is looking but nothing has really popped up yet.

So, on months we come up a bit “short,” I just put less money aside. But that does make me nervous for a car breakdown or something unexpected. We still have some, but will it be enough?

How many hours a week does your husband work? Not trying to be nosy and family time is important, BUT, I think it might be worth him looking at picking up an extra job (even if it’s not in his field of expertise) to earn a few more bucks. Maybe he could cut the grass of some neighbors?

We have two business and my husband works 80-90 hours a week this time of year (his busy season) but he’s off 4 months in the winter (except for farm jobs that he puts off until then). Some days I dream of a life of only 40 hour weeks, though

Praying your husband is able to find another job with more income soon. That definitely would ease a lot of your burden. Of course, you know this already

 

[MomaMary8]

Can we focus on the point of the thread, please? Does supplemental income belong to the family or the person who earns it?

This seems to be a question that can only be answered for you by you and your husband. Present your thoughts in a gentle and straight forward manner, and then try and discuss. If your husband does not agree, nothing this board says will change that fact. It sounds as if you believe supplemental income belongs to the family budget and your husband disagrees. Is this a correct way of stating things? If this is true, let your husband spend his money. Carry on with the budget you have. You cannot force your husband to behave in the way you wish. Is it frustrating? You bet! But is $1000 of pin money a year worth the cost of anger and frustration? Your marriage and family is worth more than $1000. Honestly, from this post and some past posts, I believe this is just a small symptom of greater problems between you and your husband.

If you have a budget that is working, trust in the budget and try to let your anxiety go. I’m assuming this $1000/year would not pull you out of debt in a year.

 

[Xantippe]

One nuance I forgot is that at our house, if my husband has extra programming income, it might well be (at least partly) plowed back into buying electronics. For instance, we recently bought an inexpensive electronic tablet ($100ish) that will allow my husband to see how well his apps function on that type of device (there’s a lot of different behavior on different devices).

But, that’s kind of a business income. I suspect that many hobby businesses might involve similar issues. So, if a spouse is a musician, it would not be unreasonable to use part of that income for music expenses (tuning the piano, saving for a new piano, whatever).

 

[EmilyRenee]

PensMama,
We are in the same boat as you. We’ve been married 26 months and have a 17 month old daughter. My husband just graduated in December and I graduated in 2012. We weren’t smart enough to realize that private universities were a bad idea until we were in the midst of them. Now, we are significantly in debt and I am not earning a full-time income, as someone needs to be in charge of childcare (I nanny on the side). My husband’s loans come into repayment in July…and we are going to be able to SQUEAK by on bills, as long as my employer doesn’t take time off. We were supposed to replace his car this summer, but my car got totaled in the fall, so we had to replace it. Now, his car died and so I no longer have one It’s just not in the budget. We both have our spending cash (not a lot, but it’s not realistic to not have any) and pay as much towards loans and my car (that he now drives) as we can. We didn’t even get a fancy car…a small 2007 with 100K but it wasn’t really in the budget. College loans are tough. We are paying more for rent than we should be, but bedbugs are prevalent in our city and so I’m afraid to move to a cheap(er) place. Hugs. I feel your pain.

FWIW, if I earn “extra” income by babysitting for a family I don’t usually, I usually spend it on myself or the baby. But, that doesn’t happen often… And, I don’t think my husband has any extra income ever. We both used to work 2-3 jobs before the little one was born…and that all went towards our savings, etc.

 

[Xantippe]

I understand that y’all don’t know my finances, but I’m tired of the implication that I’m some stupid frivolous spender. Frankly, it’s untrue. Do I agree that there are unnecessary expenditures in our life? You bet. But come try and tell DH that we should give up cable and see how far you get.

Can we focus on the point of the thread, please? Does supplemental income belong to the family or the person who earns it?

Here’s another thought.

While it’s true that there is a tradition of “butter and egg money” (where mama got to use extra earnings for extras without having to justify it), it’s also true that there are lots of more entrepreneurial families where practically 100% of family income is “side income.” It’s ALL side income. My parents are like that–probably 85-90% of income is entrepreneurial, from a variety of sources. There is no main income coming from an employer.

 

[Xantippe]

I don’t think that was what anyone was trying to imply, least of all me.

Honestly, to me, it sounds as if you are very strict, rigid, and structured about your finances, hence the disagreement over the extra few bucks each of you get doing odd jobs.

I was even about to reply and say that while Dave Ramsey’s plan is the IDEAL (and very smart for people with absolutely NO common sense about money), once you have ingrained those new habits, sometimes you can let up on certain things.

For instance, Dave preaches about absolutely no debt for anything. Early on in our marriage, we had to take out a significant loan (for us) for my husband to purchased the farm assets of his retiring aunt and uncle. We struggled and lived off my sole income for 2.5 years to quickly pay back that $90K loan. Now, I’m not saying that was bad, but at the time, we would have loved to have purchased more cattle with that farm income and have paid the debt off over a longer period of time but NO, we had to follow Dave…fast forward 15 years and now we see that if we had bought those cattle back then when the prices were cheap, our net worth would be well over $200,000 more now(probably even more than that!) and our income would be over $100K more a year at today’s market prices! Lesson learned: Dave’s advice really has to be tailored to each individual situation.

**Do you have any idea how many farmers go bankrupt and have gone bankrupt over the last 30+ years? Borrowing pretty much ANYTHING for a farm is pretty much the definition of risky.

livinghistoryfarm.org/farminginthe70s/money_05.html**

The 1980s were absolutely catastrophic for farmers carrying a lot of debt.

Remember Farm Aid?

en.wikipedia.org/wiki/Farm_Aid

Sooooo, while I don’t know the particulars of your financial situation (income amount vs debt amount), I WILL say that you really need to analyze the nature of the debt, your interest rates, etc. and see how much wiggle room you have. I, personally, think that maybe you can let up in some areas (but again, that depends on the nature of the debt, terms, etc.) so that you and your DH can actually enjoy life a little more in the moment and not be so stressed out over where your pin money is going

**There is also the issue that as the OP’s family gets bigger and if they continue to have more children, their costs will inevitably rise. So, this may be as good as it gets as a time for debt-repayment. **

To be clear, I’m NOT saying give up your debt reduction plan, but I’m saying that maybe there are some amounts that are not as critical that they be paid off right away if the interest rate is not that burdensome.

 

[marymary1975]

Both my husband and I get some kind of supplemental income. His family runs a business so he sometimes gets some income out of his family’s business and I do get extra money from SS due to my deceased first husband. Neither one of us pocket the money for our own selves. we both have considerable high student loan debt so we use the extra money to reduce the student loan debt and for emergency fund for the kids. If there is something personal that him or me want to buy out of that we would talk about it and see if the want is OK and if we can fit it into our regular budget. Personally I don’t like the idea of I earn it is mine to spend as I want specially if you have kids. In my opinion you should look at the general situation of the family, budget, debts, needs etc and make consensual decisions based on your family situation. If you have money to blow, then well maybe each can use it as spending money. But if you have debts to be paid, kid’s needs, family needs, I think extra money should go to cover those needs.

 

[Xantippe]

This seems to be a question that can only be answered for you by you and your husband. Present your thoughts in a gentle and straight forward manner, and then try and discuss. If your husband does not agree, nothing this board says will change that fact. It sounds as if you believe supplemental income belongs to the family budget and your husband disagrees. Is this a correct way of stating things? If this is true, let your husband spend his money. Carry on with the budget you have. You cannot force your husband to behave in the way you wish. Is it frustrating? You bet! But is $1000 of pin money a year worth the cost of anger and frustration? Your marriage and family is worth more than $1000. Honestly, from this post and some past posts, I believe this is just a small symptom of greater problems between you and your husband.

If you have a budget that is working, trust in the budget and try to let your anxiety go. I’m assuming this $1000/year would not pull you out of debt in a year.

Pensmama87 has explained that the budget is just barely working and in the case of emergencies, it’s not going to be enough.

Pensmama, maybe that’s the angle you ought to take. Ask, “If our furnace has to be replaced, how are we going to pay for it?” I suspect the answer is going to be, “We can borrow for it!” Then my next question would be, “If we can barely manage on our current budget with your salary and a little bit from me, how can we possibly afford our current expenses plus payments to cover a new furnace?” That’s just math–if you can’t afford to save for a new furnace, you can’t afford payments for a new furnace. (Ditto new roof or major car repairs.)

 

[nodito]

pensmama,

I agree with you that supplemental income, with very few exceptions, should belong to the family and go into the general fund. I’m a stay at home mom and don’t make any money right now, but I keep the house running and watch the kids and cook the meals. Since we’re a team, the money that either of us (mostly him) earns goes towards whatever’s best for the family.

But what to do about it? What does your husband say when you tell him how frustrated you are with the current arrangement? Does he understand that this is a really big deal for you? If he won’t contribute part or most of that to the general fund, can you ask him to stop earning it and spend more time at home with you and the children?