Couple’s Money – How to Budget Together

183197077Money in relationships can be an issue of contention.  A commonly known fact is that money problems are the number one reason for divorce.  Money problems directly affect many shared life activities associated with relationship satisfaction, such as buying a house, enjoying holidays, caring for children and what you can do on the weekend. When you’re already under financial pressure, the day-to-day management of money can become explosive. Planning a budget is the best way to take the financial stress out of your relationship.

Budgeting as a couple can be difficult. It can be hard to stop looking after yourself and start managing money as a couple. Many people feel like they’ll lose their freedom, and they’ll open themselves up to criticism about their spending. But a good ‘couple’s budget’ will give each party freedom, protect each of you from criticism and enable you both to plan for the things that you share together, such as fun outings together and possibly even vacations

You Will Need:

• A single savings account (of which you both have debit card access).

• Two individual savings accounts (one for each partner).

Step One: Determining Income

Determine your income as a couple. Add all of your wages and other sources of income together. The grand total may be more than you think.

Step Two: Determining Minimum Expenses

List all of your household needs (rent or mortgage, electricity, groceries, phone bills, minimum debt repayments, etc.). These are the expenses that you have to pay; holidays, handbags and golf clubs don’t belong here. Add up your needs budget and subtract this from your income; if there is money left over, then go on to step three.

Step Three: Guilt Free Money

Transfer $20 into each of your accounts. You can spend this on whatever you want without judgement. Gamble it, spend it on lollies, etc.

Step Four: Mutual Goals

List all of your mutually agreed upon wants. This includes all the things you want to do as a couple (e.g. holidays, one a night out per month, saving for a house and paying off debt faster). You’ll need to decide on what to include based on what’s important to you as a couple. You may want a wine subscription, or Foxtel, or to donate to charity; it’s up to you. If there is money left over, then go on to step four.

Step Five: Divide the Spoils

If there is still money left over at this point, then you should put some more of it into your separate accounts. Place the remaining bulk of leftover money into savings or onto any debts that you may have.

Sheryl: Debt Free and Stress Free

J&A_DCSgroup_Sheryl_001Can you tell me about your background? How did you get into debt?

I walked away from a marriage with 3 kids. I was determined that they wouldn’t have less in life, so I used credit cards. Every year, just before Christmas, the banks would offer to increase my credit card limits. I thought I’d pay it back, but I never did. If you ask my kids, they never went without. I never told them that I used credit cards to do it.

Was there a point when you decided that you were going to get out of debt?

Yes; I had six grandkids within six years. A friend had gone through Debt Mediators, so I thought, “Why not me too?”

When did you get debt free and how did you stay motivated?

I finished in September 2013. How did I stay motivated? I was really determined to get rid of those debts once and for all.

What is the most important thing you’ve learnt along the way?

Never increase your credit card limit. Never have more than one open debt at a time. I only buy things with cash now.

What goals are you going to achieve now that you’re debt free?

I’m just enjoying being stress free. I don’t have to worry if the car needs new tires or if it blows up. I have savings!

Do you have any final words or wisdom?

Automate your bills. I BPay my bills every week automatically, so they are paid in advance. This way I’ve paid it all off before I even get any money. The best thing about BPay is that I can always count on having enough money set aside for all of my needs, because my bills are paid on time and up to date.

The 10 Cheapest Places to Live in Australia

The 10 Cheapest Places to live in Australia Bendigo1

Housing is the number one financial stressor for Australians. The median house price in Sydney hit $660,000 in February with the national capital city’s median not that far behind at $533,750. We’ve been asking, “Why do it to yourself; why eke out an existence in Sydney when you could have a great life in another regional centre?”

We’ve compiled a list of the most affordable places to live outside of the capital cities. Inclusion in this list included the following criteria: a population greater than 30,000, low unemployment, and access to high-quality education and health care. We’ve ranked them based on the how much extra money you would have in your wallet if you moved from the average capital city costs.

(Property Data http://www.domain.com.au/public/apm/suburbprofile/default.aspx?mode=buy)

Hidden Debts and Relationships

Almost every day, I will have a potential client say something like, “you can’t tell my wife” or “don’t tell my husband”. Of course I always respect the wishes of my clients, but I encourage clients to openly discuss their financial problems with their spouse. I even have clients who want me to tell their spouse about their financial problem, thinking it will make things easier. These conversations generally don’t go very well. The spouse is usually upset and feels deceived, and the client feels an even deeper sense of shame and guilt.

Getting out of debt isn’t easy and you need all the support that you can get. By keeping financial problems a secret, we do not have the support of our number one backer, our spouse. Secret debts can damage relationships, but with ‘the big secret’ out of the way, spouses can share the burden and both work towards a common goal together.

Full disclosure is the key to a clean conscience. A continuing conversation about money will help bring a spouse on board and show commitment towards the relationship. Having two people openly involved in running financial aspects of their life together improves accountability, equalises the marriage in a positive way, and helps each partner to stay on track.

Interview With a Recent Client: Kayla

J&A_DCSgroup_Kayla_003

Can you tell me about your background, and how did you accumulate your debt?

I accumulated my debt through being young and naïve about the interest on hire purchase items. During the financial crisis, I was made redundant at my regular job, and then I was unable to keep up with all the repayments I had accumulated. Even though I had temp work, I wasn’t earning enough. I was okay for a while, but it just got to the point where bills were piling up and creditors were calling nonstop. It was all really overwhelming.

Was there a “light bulb” moment when you decided that you were going to be debt free? 

I was watching TV one night and saw an ad for Debt Mediators, and it felt like they were talking directly to me. So I made my brave decision to call the next day, asked multiple questions, gathered all the information I needed to decide on a debt agreement that was the best option for me.

How long did it take you to get debt free? How did you stay motivated?

It only took me two years, even though my debt agreement was for three years. When I first started the agreement, I was still doing temp work, but once I got permanent work, I increased my payments and ended up paying it all off 12 months in advance.

It was easy to stay motivated because with the help of Debt Mediators, I was able to consolidate my paments into one monthly payment. It was the only creditor bill I had and I just wanted to get it over and done with; once I had reached half way, I could see the finish line so I just smashed out the rest of my payments.

What advice would you give to people with large amounts of debt who don’t see a way of becoming debt free?

I would say definitely ring Debt Mediators and have a free and easy conversation with a consultant. Ask them what they do and how they can help you. And if you feel that going into a debt agreement would be the best thing for you and your situation, then by all means go ahead with it. I, for one, have never had any regrets.

What was the most important thing you’ve learnt along the way?

The most important thing I’ve learnt is that it’s okay to make mistakes with money, and you’re not alone. That’s why there are companies like Debt Mediators who can assist you in helping to make it through that debt, and that you don’t have to let the stress take over your life. Anyone can become debt free, if you stay committed and on track with your agreement.

What goals or aspirations are you going to achieve now that you’re debt free?

A couple of weeks after becoming debt free, I applied for a mortgage and became a joint home owner with my mother and sister. So even though I’m in debt again, this time it’s good debt and I’m on the way to becoming a home owner.

Do you have any final words of wisdom for our readers?

I’m still not that great at saving, but I now know the dangers of hire purchases. I’m a lot wiser and I make all my purchases with savings so I don’t fall into the same trap again.