Budgeting as a couple requires dedication to sticking to set goals, spending within budget, contributing your agreed quota of income earned and being accountable to each other.
Budgeting as a couple might not feel sexy, but in a way it is actually a little bit romantic – pursuing your dreams together is the stuff love is made of.
Here is how to budget, spend and save together
1. Decide on your financial goals, both individually and as a couple
The first step in building a budget together is to determine your financial goals. You’re more likely to achieve those goals if you keep your plan realistic.
Setting up a life together comes with lots of big, exciting things. Prioritizing your savings will have you both feeling financially and emotionally invested in the success of your relationship.
Here are some of the goals that might give shape to your joint budget:
- Paying off an existing debt/loan: Paying off your debts — especially credit card debt, student loans, or lines of credit — should be a priority for any couple.
- Traveling together: Financial experts often suggest 5% of your income, but it’s totally a personal preference.
- Buying property: It is important to think about more than just the cost of closing in on your dream home–insurance, legal fees, moving costs, and furniture. You can use a mortgage calculator to help estimate these costs.
- Children: Budgeting for a life with children is easier if you start saving up before they actually arrive.
2. Identify your sources of income
Your available income forms a bedrock for your budget. You’ll need to identify all sources of income: wages and salary, bonuses, rental income, government grants and subsidies, gifts, tax credits etc. This will allow you to start tinkering with your plans for achieving all the goals you’ve laid out so far.
3. Get all of your personal and joint expenses down
It’s time to think of basically anything and everything you spend money on individually and as a couple. Some expenses are recurring, while some are one-off expenditures.
You can start with your individual expenses, such as your personal transportation costs, money for personal meals and shopping. Get each expense and the amount in it’s own line.
Next move on to the shared expenses. Most couples have individual and joint financial obligations (mortgage, savings for a future child’s education), assets (house, car, savings) and expenses (groceries, date-nights, car insurance, utilities, even credit card interest), and irregular expenses (car maintenance, gifts, home renos).
Reflect back on your budget goals and make sure that each of them will be addressed in the budget you’re about to build.
4. Decide how you will split your expenses
It might make for a tough conversation, but if you’re both already on the same page about your goals and are both open and honest about where your money is coming from, then it doesn’t have to feel toxic. You’re having this conversation because you want to support each other in living the life you both want!
You’ll need to decide what proportion of every expense each of you wants to pay. It likely will vary by expense.
Read also: A Couple That Sweats Together, Stays Fit Together: Simple Workout Ideas For You And Your Partner
5. Set spending limits and savings expectations
Setting limits is an important way to eliminate wasteful spending. Knowing where your money is going can really show you how easy it is to overspend.
Keep things realistic by looking at your spending habits and changing one or two little things at a time.
6. Fund the budget
One of the easiest ways to budget as a couple is having a joint account that serves as a common budget account.
Each party can transfer their own portion of money (manually or automatically) into the joint account.
7. Manage the budget
To maintain and manage your budget, both parties need to be hands-on. This mostly includes recording expenses regularly, either through a mutually accessible spreadsheet or through an automated report drawn from your joint account.
Sometimes you’ll have to put a plan in place when your spending is about to reach the limits you’ve set – and having both parties aware of what’s going on makes it much simpler to get on the same page about what’s not quite working.
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