You know what they say: a couple that budgets together stays together. Okay, maybe that’s not exactly true. But if you’re looking for a way to ensure a loving, harmonious relationship, you need a solution that makes budgeting for couples simple and seamless.
Why should you budget together?
You’ve likely heard this before, but money is a leading cause of divorce, coming in second only behind infidelity. So while balancing the ledgers might not make for a cute date, it’s necessary for staying in your partner’s good graces—that’s what the statistics show, anyway.
In this guide, we’ll look at some strategies cohabiting couples can use to create a budget, plan for the future, and stay fiscally disciplined.
Agreeing on a financial strategy when building a life with someone is critical. Of course, budgeting for couples is crucial if you share joint accounts with your partner, but it’s a good idea even if you’re sharing the roof over your head.
Still not convinced? Here are a few more reasons to start budgeting as a couple.
Synchronize your spending
Everyone has a different approach to money management. Some people are penny pinchers, while others are more impulsive with their spending habits. So when you begin sharing a life with someone, your financial differences can easily cause a rift if you don’t account for those differences.
Gain peace of mind
You and your partner will better understand your finances with a shared budget. Knowing that you’re both on the same page will give you confidence that you’re moving in the right direction together.
Prepare for the future
When you budget as a couple, you’re not just planning your finances’ daily and monthly ebbs and flows. You’re also planning for your future together. Identifying clear financial goals is a significant psychological component of saving, and budgeting for couples is also helpful for learning to work together towards a shared goal.
Save for emergencies
Life happens. Whether medical expenses or home repairs, you will hit some bumps in the road. With a shared budget, you can work towards building a rainy day fund. An emergency fund mitigates the likelihood that money will come between you and your partner when the going gets tough.
How to budget as a couple in 7 simple steps
Sitting down and hammering out a budget with your partner can be intimidating, especially when experiencing financial difficulties. With the numbers staring up at you, you might feel embarrassed or guilty about the state of your bank account.
But establishing a dialogue about money and implementing a budget is one of the most important things you and your partner can do together. So here’s the lowdown on budgeting for couples.
1. Calculate your monthly expenses
The first step is to take stock of your expenses for a typical month. Rent or mortgage, bills, groceries – add up the total cost of the necessities. Be honest with yourselves about your discretionary expenses, as well. It’s crucial to have a clear picture of where your money goes.
2. Tally up your income
Next, add up your income. If you’re an hourly employee or your income is unpredictable, average your monthly income based on the last six months.
3. Set financial goals with each other
After you’ve calculated inflows and outflows of cash, it’s time to set some intentions for growing your wealth together.
Most importantly, you must agree on how much to put away in an emergency fund. Then, identify a few things you’re saving up for, such as a new car or home. When you have a clear picture of why you’re saving up, you’re more likely to stay dedicated to saving.
Pro-tip: Consider opening tax-free investment accounts for your long-term goals, such as retirement or education.
If your current income isn’t cutting it, set some earning goals for yourselves. Of course, switching jobs is the best way to secure a bigger paycheck. But picking up a side hustle is also a great way to earn extra income.
4. Find places for each of you to cut expenses
While it takes a lot of work to earn more money, cutting expenses is a relatively easy way to achieve budgetary bliss. Here are some common ways to trim down your monthly expenses:
- Cancel subscriptions: How many streaming services do you need?
- Scrutinize your buying habits: This could be as simple as buying generic over brand-name or making coffee at home instead of stopping at the coffee shop on your way to work.
- Find cheap things to do: Spending money on a big night out or a birthday is easy. Get crafty with your weekend plans to have fun on the cheap.
5. Avoid unnecessary purchases
Humans are wired to enjoy spending money. When you buy something, your brain releases dopamine in response. But those dopamine hits can take a toll on your checking account.
Here are a few ways to regain some self-control at checkout.
- Leave your online purchase in the cart for 24 hours. If you still want it, discuss it with your partner before buying. (Quick savings tip: many online retailers will send you a discount code if you leave an item in your cart for just a few hours.)
- Keep a log of all the things you almost bought but didn’t. Note how much money you saved by not purchasing each item.
- Don’t save your payment information in your browser. Turn off one-click ordering, too. The harder it is to buy things, the less likely you will do it.
6. Stay in communication
Keep the lines of communication open when it comes to money. For example, don’t be afraid to admit to your partner if you slipped up and went out with your coworkers for lunch.
Communication is vital for large purchases—always discuss big-ticket items with your partner before buying.
No matter how tight or robust your budget is, always review your finances with your partner weekly or monthly to ensure you’re on the same page.
7. Track your expenses closely
One of the most important aspects of personal finance is tracking your spending habits. The more closely you pay attention to where your money goes; the easier it is to curb bad habits so that you can save and invest more.
Rather than spending hours poring over your account statements, look for an app that allows you to track your spending in real-time.
It’s never too late to start budgeting with your partner. Speak openly and realistically about your financial situation and take action to course-correct together when money stress creeps into your relationship. Then, you and your partner can tackle financial wellness as a team, and your relationship will be stronger.
Julep is not a financial institution, financial advisor, or credit repair company, and does not provide credit repair services of any kind. The information provided is for general educational and reference purposes only. The information is not intended to provide legal, tax, or financial advice. We do not propose any guarantee that the information provided will repair or improve your financial profile. Consult the services of a competent licensed professional when You need financial assistance.