How Not to Break the Bank on Couple’s Budgeting

Merging Financial Philosophies

Planning a couple’s budget doesn’t have to be a struggle.

Making the transition from single to married life can be a difficult process for those with independent personalities. On top of combining the furniture and deciding whose lamp is better, couples should take a minute to discuss merging finances.

Unorganized budgeting leads to overspending and unnecessary debt that can reduce your ability to save and maintain a good credit score. While it may not be the most fun part of moving in and getting married, successfully merging financial styles is the key to a secure future.

Be Realistic

Don’t expect anyone to change their spending habits overnight. This can be difficult if you are very strict with your money and your significant other is loose (or vice versa). The key to a successful budget isn’t having everyone spend the same way; it’s understanding how much you take in collectively and what you can spend it on.

Household v. Individual

The reason people budget is to purchase all the necessities of life and save for the future with a finite amount of money. For this reason, when planning out how much you can spend on certain items, decide how much money you should realistically spend on necessities.

The main difference when evaluating necessities as a couple is determining the difference between a household necessity and an individual want. As a general rule, household needs should be above the individual.

Hierarchy

Because things like car payments and insurance are fairly constant, start the budget with them and then move toward the less necessary pieces. The more difficult part will be finding the perfect amount to set aside for things like eating out and entertainment. To avoid setting your budget unreasonably tight, check out your bank statements from the last few months to find an average amount you spend. Then cut back slightly from that.

Expenditures in this example hierarchy take into account necessity and household status. Things that must be paid each month are toward the top while less important and individual items are placed near the bottom.

  1. Car payment
  2. Insurance
  3. Bills
  4. Groceries
  5. Clothing
  6. Eating out
  7. Gym membership
  8. Entertainment
Couple's Budgeting

Budgets help plan spending so you aren’t left with nothing in your pockets at the end of the day.

Goals & Saving

Planning a budget is just as much about savings as it is spending. Consider what your short and long-term goals are with your savings as a couple to determine how much each of you needs to trim or cut out in certain areas.

Is a new car, baby or home in the near or distant future? Consider these big questions when planning how much you will save each month, and always remember to contribute to a rainy day fund for unexpected expenditures.

Expect Changes

As with any plan, expect to overlook certain things on the first try. That said, hiccups shouldn’t mean you stop trying to budget all together. When your budget seriously can’t work for you, switch things up until you find the perfect way to buy your necessities, save for bigger purchases and still have fun.

Photos courtesy of nanny snowflake & stuartpilbrow