Whether you're newly married or celebrating your 10th wedding anniversary, it's never too early or too late to start revitalizing your finances within a partnership. In fact, better communication and navigating your way through topics that are difficult to discuss may make your union stronger. Schedule some time out of your day where you can both sit down and go over your goals, spending habits, and desires. Use these four tips to guide you to a system that works.
Make a List
Before going over your expenses, make a list of your income sources and amounts and combine them all together. Then prioritize reoccurring payments like utilities, groceries, and any debts or bills that are owed. Looking at your monthly bank statements will help when factoring in these costs as some tend to slip by us, such as renter's insurance. Transportation, personal care, and entertainment should also be factored into your list of expenses. It might be helpful to average out what you spend each month on items that are reoccurring. Add all of your expenses and subtract them from your combined income-- does it leave you with enough to save?
Track Your Expenses
Tracking what you spend each day is essential to managing your budget. This will create a mindfulness about your spending habits. You can do this with your partner by creating shared Excel spreadsheets. There are also helpful apps such as Honeyfi which cater to couples who want to simplify their budgeting process. Honeyfi works by having you set up all of your financial accounts and merging them together, even allowing you to mark certain ones as private if you choose not to share. It also works in real-time, so if your partner purchases groceries, you'll get notified immediately. Along with simplified tracking, Honeyfi lets you allocate certain expenses to various budgets.
We all know that financial stress is a leading factor in why marriages end up failing. Most of it could be avoided if couples kept a consistent and honest line of communication going. Schedule monthly meetings about your finances and don't hesitate to bring up any concerns. Tough conversations are sometimes necessary to resolve issues. Lastly, don't leave the conversation until you are both on the same page about spending and, most importantly, saving.
Why Budgeting is Necessary
- You won't accrue debt. While we may owe on student and car loans, accruing credit card debt can be risky. If you track what you are spending and set aside an emergency fund, you won't be forced to charge something on your credit card unexpectedly.
- A good retirement plan. Investing in your company's 401(K) plan is always a smart move. However, also having a savings set aside for retirement will pay off and allow for an even more comfortable retirement. Budgeting will also help minimize any debt, which isn't ideal to have once it's time to retire.
- Happier life. Knowing you have your finances in check will not only stabilize your relationship but will allow you to sleep peacefully at night rather than stressing about money.
Budgeting for a relationship isn't a one-size-fits-all solution. Some couples are married, some not; some may be expecting a baby; and some may have one partner who has a salaried job, and one who doesn't. Find what works for you and remember, communication is key.