Using our budgeting tips for couples, you’ll find that your household finances become manageable, your relationship strengthens, and stress is reduced. These are just three positives that come from learning how to budget together.
Every couple faces this challenge when they first cohabitate. You debate whether to combine income into one account or find a way to manage money with separate accounts, but it always turns into an argument.
Couples who struggle with budgeting will only add more stress to their relationship. I wanted to share some useful tips to help you remove the stress of budgeting so you can focus on other areas of your relationship.
If you’re struggling in this area, then please continue reading to learn more about how you can budget as a couple without arguing.
1. Set a Date
Don’t spring this idea on your partner last minute! Tell your partner that you’d like to sit down to create a budget for the household. Ask when they’ll be available for a few hours during the week or weekend to discuss your financial situation.
Plan the date and time together. Add it into each of your calendars so that you’ll both be committed to this budget meeting. Make sure that you have enough time to talk through your budget without being interrupted. Even though it may not be the most fun topic now, planning for your financial future will open new doors for you later in life.
2. List All Income Sources and Amounts
Knowing how much money is coming into your house is the first step in starting a budget. Each of you needs to write down a list of income sources and amounts. This includes side hustle income, employment income, freelance income, bonuses, dividend income, and so forth.
While your employment income may be a stable number, side hustles, dividends, and freelance income will likely fluctuate. Do your best to create a three-month average of each fluctuating income source. Compile these lists into one main list of income sources with amounts.
Now that you know how much you’re bringing into the home, you’ll need to evaluate expenses.
3. List All Joint Household Expenses
These lists will be your regular household expenses such as the mortgage or rent, insurance, and car payments. You’ll need to include other expenses that may fluctuate such as food, utilities, household supplies, and debt repayment.
This list of joint household expenses can be written together as you review your bank statements to see where you’re spending money each month. This process may take longer than establishing your household income but don’t give up.
Be sure to take a five-minute break if you’re starting to feel overwhelmed. This process is supposed to strengthen your relationship, not cause an argument.
4. Develop a One-Month Plan
I should forewarn you that budgeting won’t be a one-time thing. You will have to sit down with your partner each month to evaluate your income and expenses.
As you noticed, some of your expenses like food and household supplies will fluctuate week to week and month to month. This is why you must set a date every month to meet with your partner and develop a one-month plan.
Take all of your expenses and subtract this number from your combined income. If the answer is negative then you’re spending more than the household brings in. This is a significant problem that’s common for most couples who are starting their first budget.
5. Evaluating Expenses
If you now realize that you’re spending more than your income can support, it’s time to evaluate your expenses list. Working with your partner, circle any expenses that are considered “extra” or something you can reduce in price. These may include food, utilities, that extra coffee at the coffee shop, etc.
Make a list of expenses that you can alter in some way to reduce your spending. Your partner may not agree with you during this process, try to keep an open mind and come to an agreement with which expense you can remove or reduce.
Remember you’re working as a team to develop a monthly budget for a common goal of financial freedom. Your ultimate goal is to save more money so that you can invest it into assets that will grow your net worth.
6. Finalize the Budget
Now that you’ve agreed on what expenses to eliminate or reduce, and you know how much income you both bring into the house, it’s time to finalize your monthly budget. You can use a budgeting app or a spreadsheet to finalize your budget. The key is to use a tool that both people will have access to, and feel comfortable using.
Agree with what amount of spending money will be allowed for each person. Designate all income to specific expenses and meet in 30 days to evaluate the finances again. Again, be sure both of you are in agreement and comfortable with the first month’s budget.
7. Make It Part of Your Life
As you move forward in everyday life try to make finances a normal topic with your partner. Discuss dreams and goals, how much income you’ve added to the “pot” or where you may have made a wise financial choice that day. This will help make money talk an easier discussion between you guys and help establish a sense of pride about working as a team.
Each month you should sit down and evaluate the budget until you’re finally able to assign some cash at the end of every month to your savings accounts or invest it into assets that give you a return with dividends or interest earnings.
If you fall off track here and there don’t give each other a hard time, just start over with the budgeting tips for couples above and continue to move forward.
Using these tips you’ll find that discussing money is no longer a taboo topic and that you will feel more united as a couple. Take advantage of this time together to discuss your life goals and dreams as a couple.
