Some people earn enough money that they make financial mistakes or spend differently than planned without a significant fall in their family’s finances. These incidents can still lead to frustration or misunderstandings, however. Working with your spouse or partner on a budget is a great way to get ahead of issues. For families living paycheck to paycheck, who may already be feeling more stressed, it’s even more important.
And couples who budget together are happier together. According to research, “behaviors labeled by financial professionals as ‘good financial management’ are positively associated with marital quality and stability.”
Budgeting means planning for every penny – and spending every penny should be a deliberate financial decision that results in how you want to live together. Here are four steps to get you started in this process.
1. Schedule a ‘money date’
Budgeting starts with a conversation with your partner. Experts recommend scheduling a “money date”: This is a dedicated time when you both have no distractions. The environment should be relaxed, and no one should feel rushed. Expect the conversation to be emotional, and be ready to leave to collect yourself. Above all, listen. Ask questions that will help you understand your partner’s perspective about, and relationship with, money.
Money dates have less to do with money per se and more to do with happiness, values and goals. Start the conversation by talking about what makes your relationship happy and secure. Define shared values that will guide your difficult decisions. And set short- and long-term shared financial goals that will strengthen your partnership over time. Only then can you build a budget together that accounts for your priorities and where your money should go.
Each of you should have an equal share in controlling your family’s money and deciding what to spend it on, although your specific roles may be different. When it comes to managing money – paying bills, monitoring credit cards, etc. – some couples decide to do it together, while others rely on one spouse to handle these tasks. . The only right way is the way that works best for both of you.
2. Gather what you need
You need to call on your inner detective for this step in the process. Collect as much information as possible about your past spending habits, best to use a budget management system that can do the work for you. The further you go, the more accurate a reflection of your habits you will have.
If you don’t use a budget-management system, you can get the information you need from these sources:
- Credit card statements
- Account checking statements
- Savings – account statements
- Third-party mobile-wallet transactions
- Brokerage-account statements
- Cash in hand
3. Create a system
People are not numbers on a spreadsheet. Humans have emotions, desires, values and goals – and all of that influences how we make decisions. We are surrounded by temptations, especially from online platforms and social media.
People who are good at self-control structure their lives to avoid temptation. In other words, self-control is not necessarily the result of superhero-level determination, but rather a lifestyle that reduces or eliminates our exposure to things we find hard to resist.
So make bad habits harder and good habits easier. Do you want to spend a little money online? Remove retailer apps from your phone and delete all preloaded contact and credit card information from your accounts. Make online shopping a hassle.
Couples often think of multiple accounts at the same financial institution as one large checking account. Do you and your partner want to save more together? Open a joint savings account at a different credit union or bank than you normally use, and automate your savings by sending a portion of your paychecks to the new account. Your savings will be out of sight and out of mind.
4. Choose the right budgeting tools
Money management is an ongoing process that requires realistic and accurate responses to the financial turmoil that everyone experiences at times.
Spreadsheets are not enough. You need to put in place the systems that are most important for what you are dealing with as a couple. For example, in recent years, four out of 10 Americans have experienced more than 30% fluctuations in income from month to month. Such violent fluctuations in income make budgets built to manage constant salaries and expenses useless.
So plan for the unplanned – and don’t be disappointed if that’s not enough. Stick to each other and the process you’ve done together. Give yourself grace when mistakes are made, and don’t lose sight of the bigger picture.
Brian Page is co-host of the Modern Husbands Podcast and founder of Modern Husbands, which helps couples manage their money and their home.
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