When you hear the word budget, how do you feel?
Is it something you look forward to reviewing or is it that thing that seems to keep telling you what you can’t spend money on?
Do you even keep a budget? (Be honest!)
For many couples, the answer is no.
Another challenge couples face is that one spouse is on board, but their partner is dragging their feet, or worse, ignoring it.
That is a recipe for disaster, one of the top reasons why couples split up is over money.
I want to show you how you can create a budget together that will;
1) pay the essentials
2) allow you to build your wealth
3) have some fun now.
Yep, it’s possible!
Why Your Budget Doesn’t Work
Let’s start with the basics. What’s the goal of a budget?
it's obvious, right?
Funny thing, though, this is a big hang up for many.
Do you think a budget is to keep your spending in check?
If so, you’re wrong.
A budget is simply directing your money towards your priorities and goals.
Keeping your spending in check is a wonderful benefit of a budget.
There are myriads of different ways to budget, but a reasonable and sustainable budget needs to cover three key areas:
- Essential bills – Housing, food, transportation
- Building Financial Stability/Wealth – paying off debt, saving for emergencies and specific goals, and investing for your future
- Fun – Quality of Life and discretionary expenses
That’s pretty much it.
And within these categories, you’re going to set priorities.
Are your credit cards and car loans a big source of stress in your marriage? Then you may decide to throw money at knocking out those debts.
As you can see a budget can be a real stress reliever when done right.
How to Create a Budget Together
Now that you see how a budget works, you too can now get to the fun part – creating a budget you BOTH love.
Yes, you can love your budget.
The key is how you set things up.
One big mistake people make with their budget is that they jump into the numbers first.
Look, there’s a time for that, but it’s not your starting point. Instead, I want you to go on a date.
A money date. Why?
Remember the goal of your budget is to direct your money towards your goals and priorities.
That means you two need to define what those actually are.
I go into more details about how to do money dates in my book Jumpstart Your Marriage and Your Money, but here are some conversation starters to help you figure out what you’d like to do.
- If we didn’t have to worry about our bills, what would things look like?
- What would we like to knock out together this year?
- Ten years from today how would we like finances and lives to be?
And don’t stress over giving the answers you should give. If buying a house doesn’t really matter to you because you two would rather travel more, that’s okay.
The important thing is that you figure out what kind of life you want to build together.
Now that you know where you’re going, it’s time to get yours thereby setting up a budget.
Simple Budget for Couples Getting Started
If the two of you are looking for an easy budget to set up and follow or you’re trying to help your spouse keep spending in check, you may want to look at the 50/20/30 budget.
Those three categories we mentioned earlier – essential bills, building financial stability, and fun – us the main buckets. The 50/20/30 part comes from the suggested percentage you allocate for those goals.
You would try to keep your essential expenses no more than 50% of your budget, 20% goes towards saving, investing, and paying down debts, and finally, you have about 30% that you two can use on discretionary expenses like eating out or those fun purchases.
It’s not perfect and it doesn’t cover every possible scenario, but that’s okay.
You’re hitting the main point – giving your hard-earned dollars a purpose that will move you closer to your personal dreams and financial goals.
Thoughts on Building Wealth as a Couple
I hope these tips and resources help you build a budget that reflects your personalities and values.
If you have any additional tips or want to share your story, please let me know!
Elle Martinez is the creator and host of Couple Money, a community focused on helping spouses get on the same page, dump their debt faster, and get on the path to financial freedom!
Thank you, Elle, for this great info on how couples can budget together.