Income Sharing makes sense in a society based on cooperation and or living in small groups.

Income Sharing is “weird” in a society based on individualism and competition. The individualism and competition block the development of the social skills needed for sharing to work.

This is what I imagine based on watching a group of people do income and asset sharing.

Sections:

- Fears and Hopes
- Critical parts
- Membership
- Exit

*** Fears and Hopes

Fears:

Will I need “permission” to do things ?

Will I loose my freedom ?

Will I be judged negatively for my spending habits ?

What is we don’t agree on how each person should spend money and can’t work it out ?

I talked with a friend, who has experience with income sharing. He recommends people talk with each other about their fears around sharing income.

Hopes:

Security - If I loose my job, the others income can support me for a while. Maybe, I can take lower paying job that I like because I don’t need to earn as much money.

Social Connection - We really get to know each other

Probably best for people to talk about their hopes around income sharing. Just like my friend recommends for fears of income sharing

***** Critical Parts

from watching a group of people share income and assets plus talking with a friend who has shared income

These things are critical:

--- Trust,
--- Flexibility
--- Tracking cash flow, individually and as a group
--- Spending Habits

--- Trust

I heard that seeking fairness, equal share is not effective for income/asset sharing. This can result in suspicion. Is anyone taking more than their fair share ?

--- Flexibility

Even though I often like there to be a clear plan, outline. This may not work for income sharing,

People’s lives are constantly changing. So, there has to be flexibility to adjust, sometimes quickly.

--- Tracking cash flow ideas

People need to be aware of how money is being spent to make effective financial decisions. This includes knowing how each person is spending. So, there needs to be a way to track money flows.

I believe the intention for tracking expenses is key. Is the group tracking to stop people from cheating or spending wrongly ? Is the group tracking so the group can make informed decisions on money ?

Ideas for tracking cash flows:

- X dollars. each person is given X dollars to spend, so little things, like snacks do not need to be individually tracked

- Each person records, each person keeps a record of how he/she spends money and shares that with the group. The challenge is remembering to write down every time I spend.

- Budgets. A member presents a budget and give that much money to follow the budget. If the person does not follow the budget, no problem. That means, the budget didn’t work. It is time to make a new budget.

- Credit/Debit cards. Each person is given a credit/debit card that only he/she/they uses. Likely the monthly statement can be downloaded into a book keeping program.

--- Spending Habits
Everyone has different ideas of how to spend money. For sharing to work, there needs to be some similarity around this question. If the difference is too great, no one will be happy.

**** Membership:

I see a range of possibilities from just do it to a formal application process. Each group will have to decide what is best for it. Even though I like processes, there is no process that can guarantee things will work out.

If I was joining a group, I imagine this is what I would want to do:

Discovering if sharing food and housing works for everyone by living together for a period of time. There is no spending or income sharing during this time. Sometimes people can best support each other and the shared interest/cause by living in separate houses/apartments.

Explore money spending and view points for a period time. I report my expenditures and income as if I was a member. The group shares its spending habits with me as if I was a member. Then, we meet have regular discussions about what every sees. Are we compatible or not ?

Are assets, like vehicles, houses, money, inheritance shared ?

If yes, does I give up ownership and any hope of return of item if I leave ?

If yes, what is minimum maintenance and what condition do I expect the item to be in if I leave ?

If no, do I put the assets in safe keeping and agree not to use them ?

***** Exit:

It is unlikely the member will spend his/her/they entire life in the income sharing group. It is unlikely the group will exist for the entire time a person is alive.

I see a potential problem when all money is put into building the group, leaving nothing for individual members when they leave.

If people stay a few years, then move on. Long term thinking, retirement for individual after he/she/they leave the group is not needed.

Have an exit fund savings to be used to pay out person when he/she/they leave. The downside this leads to a growing financial liability, the longer the person stays.

Have an exit fund paid to the person while the person is in the group. Each month members get x dollars per month for an exit fund that they do what they want with it. He/she/they can put it into a retirement or savings account or spend it. There is no financial liability/debt owned to someone, when he/she/they leaves.

I do recommend that groups have a legally binding exit plan that provides a minimum amount of money based on number of months person was a members. This does not limit either side. If both sides agree to change the exit agreement, it can be changed. This is to prevent an expensive and long drawn out lawsuit.

One idea I have is to half for now and half for future. At the end of the financial period, the money remaining after paying expenses is divided in half. One half goes to maintaining and or growing the community assets. The other half goes into an exit fund for members.