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Budgeting with Your Spouse
Are you frustrated trying to figure out how to budget better with your spouse? If so, I’m going to give you 7 strategies to help you budget better with your spouse.
Creating a financial roadmap for your own life is, by all means, no simple task. It takes discipline and sometimes lots of sacrifices. When you combine that with learning to budget with your spouse, it can seem like a burden.
It’s very rare for two different people to walk into a relationship and be 100% on the same page with each other as it relates to managing finances. We are all unique and bring our own individual perspectives to the table. Many times, this can make budgeting seem like a daunting task.
On the other hand, when the right tools and strategies are used, budgeting can help couples achieve amazing financial goals. If you and your spouse are looking for ways to improve the way your finances are managed, then I’ve provided 7 strategies to help you do just that.
7 Strategies to Help You Budget Better with Your Spouse
1. Discuss Family Upbringing
2. Determine Roles and Responsibilities
3. Find Common Goals
4. List All Sources of Income and Expenses
5. Track Spending
6. Create a Realistic Financial Roadmap
7. Schedule Monthly Budget Meetings
Let’s take a deep dive into the 7strategies mentioned above.
1. Discuss Family Upbringing
Before you start looking at the numbers, you and your spouse must understand each other’s money mindset. The conversation must begin by discussing each of your experiences with money from childhood to adulthood. You both want to get clear on the type of experiences each of you had with money.
Think about a time in which you watched your parents or guardians do well with money. Also, think about a time in which they did not do so well with money. Have an open conversation about this. The goal is to understand how those particular experiences helped to shape your individual thoughts and views on managing money.
2. Determine Roles and Responsibilities
After going through the exercises in Step 1, you and your spouse should have gained a better understanding of each other’s money mindset. The next step is to determine who will take on the leading role in managing the finances. Please understand that this doesn’t mean that the spouse in the leading role is 100 % responsible for managing the finances. This simply means that because a budget requires calculating numbers, then the spouse typically categorized as a nerd would take on more of the leading role.
When comparing a nerd to a free spirit, the nerd would handle more of the intricate details associated with creating the budget such as setting up the spreadsheets and automatic bill pay, etc. On the other hand, the free spirit might offer tremendous support and a realistic perspective. Regardless of who decides to take on which roles, both partners should be actively engaged in all aspects of the finances.
3. Find Common Goals
I believe that it is very important to have your own individual goals, even in a marriage. However; it is very crucial that you and your spouse also have shared goals. You are a team and very few goals will get accomplished if you are both working as separate individuals. Discuss your dreams and the vision you both want for your marriage and your finances. Then create a plan which details how these goals will be reached. A good method to follow would be the S.M.A.R.T Goals technique. You can find more information about this in one of my most recent posts Married Couples Should Follow These Simple Steps to Catapult Their Financial Goals.
4. List All Sources of Income and Expenses
Now that there has been ample discussion surrounding each other’s mindset, we can finally begin digging into the numbers. I’ve included a budgeting spreadsheet to help you with the next several steps which you can find here: Budgeting Spreadsheet.
After you have saved a copy of the budgeting spreadsheet mentioned above, the first thing you want to do is gather relevant documents in order to create a list of all income within the household.
- Main Income Categories usually include – Salary/Wage, Bonuses, Hobbies, Side-Hustles, Alimony, Child Support, Rental Income, Refunds, etc.
Next, create a list of all of your household expenses. Anything that you need to buy, give, or save for should be included in this list. Also, try to include any one-off, quarterly or yearly items in this list. Think about everything you’ve had to spend money on and add it to the list.
- Main Expense Categories usually include – Giving/Tithing, Saving, Food, Mortgage/Rent, Transportation, Utilities, Daycare, Education, Personal Care, Medical, Cell Phone, Insurance, Home Maintenance, Auto Maintenance, Taxes, Debt Repayment, Fun, and Entertainment, Dining Out, Misc. etc.
Of course, each household will have varying types of income and expenses. Your budget will need to be tailored to meet your and your spouse’s specific needs. Remember that the goal is to have more money coming in than what is currently going out. If this is not the case in your budget, then the next step will help you identify ways to get there.
5. Track Spending
One of the best ways to find holes in your budget is to track your spending habits. Determine where most of the money is being spent and where you can cut back. Is dining out and unused subscriptions draining your budget? Make the necessary changes so that you can utilize the benefit of having more money to apply towards other expenses. To begin the process of tracking your spending, you can choose one of two methods:
- Automatically download bank and credit card transactions by linking your accounts to an app of your choosing. Software or Apps such as Mint and Every Dollar will analyze the data for you.
- Manually download bank and credit card transactions from the specific financial institution and analyze the data yourself for the last 30-60 days.
After you and your spouse have chosen a method to follow, then the next step will be to determine which areas you can cut back on. I mentioned dining out and unused subscriptions above because those items are two of the biggest money drainers. We often underestimate how much we are spending in these areas. Each category will require some evaluation. However; it might be best to start with these two.
6. Create a Realistic Financial Roadmap
The reason I decided to include this step after you and your spouse have tracked your spending is so that you can use your previous spending figures as a starting guide to creating the actual budget. Reviewing previous spending habits first removes much of the guesswork out of determining what a more realistic budget should look like. In order to create a budget, the following must be done:
- Discuss what type of budget will work best for your household
- Zero-Based – every dollar is assigned a name
- 50/30/20 – allocate 50 % – Needs, 30% – Wants and 20% – Savings Goals
- Create your own
- Determine pay dates and create the budget BEFORE the paycheck arrives
- Decide how much you will need to allocate toward each item
- Include fun money and a misc. buffer for emergencies
- Factor in quarterly or yearly items
I believe the hardest part will be figuring out the type of budget you want to use and how much to allocate toward each item. In my household, we use the zero-based budgeting method in which I assign every dollar a name. Then I created the actual budget in apps such as Mint and Every Dollar. You and your spouse have to decide what’s best for you.
7. Schedule Monthly Budget Meetings
Each month, couples should schedule a time to review the next month’s budget. These budget meetings should not be long and drawn out. Once a rhythm is established, it should take no more than 30 minutes to an hour to discuss upcoming financial details. If there are one-off items that occur throughout the month, then impromptu 10-minute meetings are appropriate.
Final Thoughts
Creating a budget is the key to seeing what your possibilities are. The best strategies to help you turn this key are to 1. Discuss Family Upbringing 2. Determine Roles and Responsibilities 3. Find Common Goals 4. List All Sources of Income and Expenses 5. Track Spending 6. Create a Realistic Financial Roadmap and 7. Schedule Monthly Budget Meetings. Remember, that we are all in control of our own financial destiny. If we make a plan and stay the course, we are pretty much guaranteed to reach our goals.
