Tips to Budgeting as a Couple
by CashTime Loan Centers
Most marital fights revolve around money and start because the two of you are not on the same page. Perhaps you have your own budget and your spouse has his, or maybe you have totally different attitudes toward money. You might not have a budget at all, and you aren’t the only ones. Statistics show that only 40% of Americans have a household budget that closely tracks their spending. If this is you and you would like some help getting started, here are some tips to successfully budgeting as a couple:
1. Don’t be afraid. A budget is not bondage, and it doesn’t have to be complicated to work well. Budgets are simply your best guess concerning the amount of income you and your spouse will be making over a set period of time (usually monthly), and how you both agree to spend that income. When it comes to money, talk early and talk often, so you can make sure you’re working together instead of against each another. This is one simple way to avoid misunderstandings that can lead to fights and hurt feelings. Combining incomes and creating a shared budget is a great way to ensure you’re both working toward the same goals.
2. Talk about those hopes and dreams! Communication is crucial to a happy union and communicating about money is vitally important. Before you sit down to talk budgeting, take some time to share your hopes and dreams for the future. That way, when you get to the part of your budget that deals with savings, you’ll both be on the same page as to your goals, which will help fuel the discussion on how to get there – in other words, how to manage your money today so that you reach those future goals.
3. Be honest but be flexible. The success of a relationship is closely intertwined with the way you handle finances, so it’s extremely important to be upfront and honest about your financial picture and how you spend and save. If you’re a spender and he’s a saver, you’ll need to talk through how to make that work for you both so that you’re not always at odds with one another. Yes, spenders and savers can share a budget, but communication and compromise are the key to making it work.
4. Track your spending. Once you’ve done the budget basics of listing your combined incomes, the static expenses like savings, rent or mortgage, loan payments, car payments, insurance payments, cell phone costs, and subscriptions, and the variable expenses like groceries, utility bills, gasoline or transportation costs, and entertainment, the next step is to diligently track your spending for at least three months. This 90 day period will give you a pretty good idea if you stayed within your allotted amounts for each category, overspent, or (hallelujah!) underspent in a category. Budgets are meant to be tweaked, and it will take a few months to get a clear picture of where you need to adjust your limits. A budget will do you no good if you don’t track your spending. You need to know where your money goes.
5. Make a date. Meet each week in the beginning, and after a few months you’ll be able to move to a monthly get together if you prefer. Set a time to go over your budget and see how it’s working. Order dinner in or make your favorite meal and make your money meeting fun! Set a challenge such as seeing who can think of (and implement) the most creative ways to have fun for free, who was able to save the most without sacrifice, or challenge each other to see how many zero spending days you can pull off in a month. Use your imagination and have fun with it. Winner gets to pick their favorite dessert or choose the meal for the next budget meeting.
6. Get real. If you add up your expenses column and it’s more than your income column, it’s time to make some serious adjustments. The bottom line of any budget is to teach you how to live best within your means. If your expenses exceed your income, you’re not living within your means and a budget won’t work. Take a serious look at your expenses and start cutting until you at least break even. Budget every time you get paid and don’t budget for more expenses than your income can cover. Think there’s no place you can cut back? Most of us do, until we get honest about those things we can live without, like a weekly massage, regular visits to the nail salon, a night out with the boys, those $6 morning cups of special coffees, or those subscriptions you’re paying for but not using.
7. Be patient with yourselves. Budgets are meant to be reviewed, tweaked, and revised as needed. No one is perfect, so don’t beat yourself up if it takes a while to get the hang of the whole budgeting thing. Just remember budgets are simply plans, and plans change. You may discover you don’t spend as much as you thought in one category, or you didn’t budget enough for another one – don’t sweat it. Make adjustments as you go until you have a framework that works for you. Don’t compare your budget with anyone else’s; your budget is just for you and it should meet your needs.
To recap, talk things over between yourselves to determine the hopes and dreams you want your budget to help you accomplish – pay off your house faster, take a vacation and pay for it with cash, fund a large purchase without using credit, make an investment, retire early, or start a college fund – and realize that your budget is the means by which you will accomplish your mutual goals. Be flexible, track your spending diligently, make it fun, and be patient with yourself and your spouse. You CAN do this!