Couple’s Money – How to Budget Together
Money 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, so it’s best to lay out everything you earn all together (even on the table if you have to) and determine how much you can save up from that every month.
Step Two: Determining Minimum Expenses
The best way to think about this is by separating your needs from your wants. Your basic level of living should be the first thing you need to address after you’ve figured out your exact monthly earnings.
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. This can be just your small little treats each month that you can afford to spend, or it can ever be put aside late to save up for that one thing you want a few months down the line.
This is up to you and how much you’re willing to save up for a certain thing, or if you just fancy a monthly little pick-me-up.
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.
Not only is this relationship-building, but it’s also seeing how much you can progress and save money together.
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 onto 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.
Budgeting together can therefore bring you closer together, with all the benefits to saving money each month towards paying off debts, treating yourself, or even saving for something much more important and worthwhile.
Read more about the impact of debt within relationships, and how it can be combated without the headache.