Creating a budget with your spouse or another significant half is critical in managing your household finances. When both of you decide to get married or live together, it’s time to talk and share about the joint budget plan. Your budget not only allows you to plan and track where the money will be spent, but it enables you to direct the course of your finances together.
For couples, budgeting can be a touchy and sensitive topic, but you can be successful at it and have fun while you are at it, too. So what are the secrets for couples to deal with that? Let’s get started right now!
- Start a joint budget
The easiest setup is besides having each individual account where both partners maintain their own budget but then having a joint account that both fund to pay shared expenses. In some countries, one of people either a husband or a wife, will be in charge of managing joint expenses. On the other hand, couples will share a shared expense where they will contribute their respective amount and spend for both needs.
A joint account requires transparency, mutual trust and shows a shared commitment toward a common goal. It’s yours together now, both the pleasure and the responsibility.
- How about if one makes more
It is certainly true that you and your partner cannot earn the same salaries, and those amounts might vary broadly. So is it fair in that case to split the mortgage 50-50? No. “Fair doesn’t necessarily mean equal,” And because you are partners, you are spouses, you are couples, you cannot calculate every single coin of each other, right?
So, how do you guys deal with the situation where both do not earn the same salary? Make a list of all your combined expenses: housing, taxes, insurance, utilities. If you are independent and you accept the fact that you guys will contribute based on the respective percentage. Let’s say If you make $70,000 and your partner makes $30,000, then you should pay 70 percent of that total shared expenses and your partner 30 percent. I thought it’s acceptable.
Things may change day by day and you guys can have a discussion to make all things balanced. Be ready to adapt to changes and keep some money in reserve in your personal accounts to cover any unexpected overages.
- Who pays for what
When you guys do not decide what percentage each of you can contribute, choosing who pays for what is also another good way. This can be applied in the situation when each of you has your own debt. She has her student loan while he has his business debt. If your partner has a lot of debt, maybe you offer to help her out with the payments so she can set herself free sooner, thus creating your shared goal. Or maybe you take on a larger percentage of the household expenses, thus freeing her to tackle her debt payments.
- Saving for your both future
You are spouses, there is no doubt that you guys need to have your joint savings plan. Your savings plan should be the result of a joint decision based on your long-term and short-term goals. Make sure your partner not only knows about these plans, but is on board with them and ready to make it happen. When you’re both saving toward the same goal, you will get there faster with better quality.
Just imagine that you plan to have a vacation next year which can be considered a short time goal. However, your partner wants to focus on working and saving and the vacation should be made in the next 2-3 years. How do you deal with that? It is important to have the same goal and you both are on the same page. Otherwise, one of you should sacrifice and prioritize for others needs first.
- How to invest in both yourselves?
How about if you are the type of person who wants to take risk and invest in the business, but your partner tends to keep his money in a low-risk, low-interest-bearing savings account. It is time to find an investment or finance advisor or you guys need to put the Pros & Cons between both plans and consider the potential outcome, risks and losses.
Whether you find outside help or not, you should both be aware of where your money is invested, how well those investments have done and have a shared plan for retirement. You have a dream of retiring at 40 but your spouse has been planning his retirement strategy on working long beyond that or it’s just simply that he loves working instead of retiring and travelling around the world?