Why IS Budgeting SO Important?
When your spouse mentions budgeting, what is your initial reaction? For most, it’s a negative one. It is common to associate a budget plan with severe restrictions. Our goal is to equip you with the budgeting tips and tricks to alter your response to the word “budget” from negative to positive. After all, the purpose of any successful budget should be to eliminate anxiety over money. Getting rid of financial stress is also a bonus for your marriage!
All marriages are different, but many marriages struggle with similar disagreements—parenting, sex, in-laws, etc. However, arguments about money are a significant predictor of divorce.
Interestingly enough, it doesn’t matter how much money you make; arguing about money is still a concerning factor at all income levels. So you don’t need more money; you need a better budget plan!
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Whether you have no idea how to be on a budget or have spreadsheets galore, the most important thing you can do is get on the same page with budgeting. Regardless of the interest in your finances, both of you must have a role in managing the money. A mutual understanding of your finances helps both of you know what you can and cannot afford. It also makes each partner accountable for achieving short-term and long-term goals. This can—and should—be a team effort.
A well-thought-out budget can get rid of stress over money and arguments! By the time we are done, your love of budgeting will be blossoming. So let’s dive into creating a couples-friendly budget plan and and how to stick to a budget.
Budgeting Tips for Couples
It’s time to do away with arguments over money. Instead, come together and develop a budget plan that both of you can actively follow.
1. Eliminate Negativity
If you are ready for a significant shift in handling your finances, you need to change how you talk about money! If finances have been a strain in your marriage, now is a great time to wipe the slate clean. Don’t mutter rude comments, talk down to, or constantly bring up past mistakes to your spouse. Avoiding criticism and negativity around finances is an absolute must.
Create a positive and trusting environment. Regardless of the financial missteps of the past, you are here and committed to getting on the same page. The best thing you can do is build camaraderie and a sense of teamwork. Working together can be a bonding experience.
The opposite of this is also true. Avoid saying things like, “You always … ” or “You never … “. Don’t try to beat your spouse down with negativity. Give them a chance to start fresh and work with you. Also, avoid the urge for one of you to be the leader in all financial situations. This leads to an unbalanced dynamic, with one person feeling less responsibility than the other. You need to be on the same page. Believe in each other and get excited about the stress-free financial future you are going to create … together!
2. Understand Your Habits
One crucial step that many people overlook when creating a budget is an evaluation of each partner’s spending habits. You each grew up in different homes. How finances were discussed, handled, and spent was different. Sit down and discuss how you both observed your parents deal with their finances.
How does each of you view money now? Dive into what patterns you notice in your life together. Use the following questions as a guide for your discussion:
- How often are you worried about money?
- How do you feel after spending a large sum of money?
- Does paying cash, card, in-person or online all feel the same?
- Can money buy happiness?
- What money habits could you improve?
- What would make you feel financially secure?
The goal of this conversation is to understand your background and your current notions about money. This in-depth understanding will guide your budgeting plans and help your partner understand you better moving forward.
3. Track Every Dollar
The first step in your budget plan should be to track every dollar. Don’t worry; budgeting this way will not last forever! Just monitor the inflow and outflow of every dollar for a month (or two). You may think you know where your money is going, and generally, you probably do. However, seeing an exact breakdown of where every dollar is going is a game-changer.
You may be thinking, well, this month isn’t good because I had unplanned medical bills or unusual expenses. But that is precisely the reason for this exercise. You need to plan for the ordinary expenses, as well as the unexpected costs that pop up.
Start by getting a tracking app and observe your spending for a month to see where you are at. This will allow you to see the typical expenses and even the not-so-typical expenditures that you may not have factored in. Below are some resources that will enable you to do just that:
- EveryDollar – This app can be used for free. It allows you to input your expected expenses and then track your monthly spending. This is a great free resource for getting a breakdown of your spending. It is time-consuming entering every transaction manually, but it is a great way to become more aware of your spending habits.
- PocketGuard – With this app, you can connect all of your accounts, and it will find all of your autopay expenses and recurring income. Using this information can give you a snapshot of your typical overall spending. You can even export the data if managing your own spreadsheets is your thing.
- Mint – Add your accounts, cards, and bills, and Mint will automatically track your inflow and outflow. Mint makes monitoring your finances so easy that you may want to keep it around for the foreseeable future. You can glean so many insights by using this app to track your spending. As a bonus, it is free!
- YNAB – If you are ready to really dive in and track your spending and make a plan for the future, but you don’t feel like you know how to be on a budget, this is a great solution. YNAB helps you organize a budget plan and walks you through how to break the paycheck-to-paycheck cycle. This app is not free but could be the detailed guidance you need to get on track, depending on your situation!
4. Get Clear on Your Goals
Now that you understand your spouse and your current spending situation, it’s time to get to the fun part. How to make your money go further, and how to get more out of your hard-earned money.
What are the short-term goals you would like to reach as a couple? Over the next year, you can change current habits or become more educated and make informed financial moves. What goals do you have for the next six months to a year? Consider these questions and decide which short-term goals you would like to achieve.
- Are you living paycheck-to-paycheck? Make a short-term goal to break the cycle. Then, tighten up your spending and increase the remaining balance in your accounts so that you are not completely drained when your next paycheck arrives.
- Do you have an emergency fund? If unexpected medical expenses, car repairs, or broken appliances arise, how will you pay for them? Putting aside money specifically for unforeseen, necessary expenses is a great short-term goal. It can also help you avoid needing an emergency loan.
- Are you ready to get rid of debt? Whether it’s student loans, car payments, credit card debt, or something else, you can take action to pay off this debt. Setting your focus on this goal can be an exciting first step.
- Do you want to have more fun with your money? What if all your hard work was going toward an incredible vacation? That would make showing up to work day after day SO different! Setting this goal can be the first step in changing your budgeting to accommodate more fun in the future.
Now think five years down the road. What financial goals do you have for yourselves at that point? What about at ten years?
5. Be Specific in Your Budgeting
Now is the time for the nitty-gritty details. You know how much you have coming in and going out; you are clear on what goals you want to achieve over the following months and years, so now it’s time to make them happen.
Write it out. If your short-term goal is to create an emergency fund, get specific on how that will happen. Where will the fund be set up, how much will you contribute each month, and when will it be deposited? Narrow down the details of your plan.
6. Check in Regularly
So now you have a clear idea of where you are and where you are going. You have goals set out and are excited to meet them. However, life is bound to come in and try to throw you off course. That’s okay! One of the best budgeting tips we can offer is to set regular budgeting meetings to address all of the issues that arise.
Just like a business keeps regular tabs on exactly where they are at, so should you and your spouse! Reconvene on the same day of each month to review unexpected hiccups and celebrate small victories.
There will be some growing pains, and there will also be unforeseen problems that arise with your current plans. That’s what the check-in meeting is for. You can reexamine and problem-solve the issues so you can swiftly get back on track.
Start Your Budget Plan
Arguing about money will lead to a lack of satisfaction in the relationship. Don’t let financial stress drag you down! Get on the same team as your partner, and use these helpful budgeting tips to learn and grow together!
Finances don’t have to drive a wedge between you and your spouse. Instead, make a budget plan together and use it as an opportunity to make changes and achieve your goals!