How to budget as a couple

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Your World Becomes One With Budgeting

Budgeting as a couple doesn’t have to be a difficult process to begin, as long as you want to budget in the first place. I think one of the most asked questions I get is how to budget as a couple because it seems to be one of the biggest barriers that stop couples from taking control of their finances. This might be a long post but if you are serious about budgeting you’ll hear me out.

Not all couples want to budget and feel they have success with separate bank accounts even after marriage, that was not us at all. We became 1 money jar. Some people think budgeting basics is difficult but it’s got to be the easiest math you will ever do and benefits the both of you. Thinking about how to budget money and actually doing it are 2 different things. In order to get ahead you must take the first steps, together.

When we are young we have the entire world in our hands. We can do what we want, when we want but when we get married or are in a committed relationship changes have to happen. Now you share that space with someone you are in love with and 2 jars become 1 money jar. Those couples that can’t work on a budget together end up where I often see one person struggling to balance just the grocery budget, since that is a big chunk of most people’s finances.

Dating and money talks

We all bring certain ideals and beliefs to a relationship and it’s probably why I’m a big advocate about talking money when dating. You can fall in love with someone and they could be the best lover in the world, but if your money pot beliefs don’t jive then look out, there might be trouble.

I’m not saying that all women want is money or all men want is money, what I’m saying is that if you are not on the same page you may have to pay for this in some form down the road. It might not be what you expected either. Growing up all we had to do was go to work and take care of ourselves, at least that’s what it was like for me.

When we get married or are in a serious relationship that all changes and  putting the money into one pot can be terrifying. The thing is when you are in a relationship for the long haul you need to know numbers, you need to know everything about anything related to your money, including passwords, account numbers etc.

Budgeting for couples

You don’t need to be married either to be committed. Why wouldn’t you care about this stuff? If your spouse/partner happens to pass away, gets ill, is seriously injured or leaves you, do you have any idea where you will begin? If the answer is no then you should high-tail your butt to your computer and start figuring out a plan as a couple so you aren’t left in the dark should something happen.

I remember when Jen first emailed me asking me for help putting a budget together. The first thing I had asked her was whether her husband Ken was on board. Unfortunately at the time he was not so I tried to motivate Jen to invite her husband to get familiar with the new budget we had set up for them so he felt like part of the process.

Compromise is a huge part of any relationship so if you can’t work together to compromise with your finances where does that leave you with other aspects of your commitment. If you are disciplined enough to get rid of debt and stay on track you will find that the path to financial independence seems a bit more enduring.

In a matter of months after starting the budget Jen and Ken were back on track and although she is still running the numbers he knows what the numbers are. That’s an improvement over not really wanting to budget because he may have felt restricted having categories and only a certain amount to spend.

Budgeting for marriage

Here’s what Jen had to say when I asked her how introducing a budget to her husband affected their marriage.

Before Ken and I met he spent money when and however he wanted. When we moved in together I had him stop using the coffee truck at work so he started bringing a lunch and his own coffee. Ken asked me to take over his finances and we discovered he was $50,000 in debt.

He got a consolidation loan and worked on paying that off. Once Ken started contributing to the mortgage after we got married the loan was too hard to pay so we incorporated it into the mortgage.

Ken still liked to spend without thinking about it. He would buy beer, smokes, play online poker and join every pool they ran at work for every sport. We continued to go into debt until we had our son. Ken quit smoking (more for the health of our son than the financial aspect of it) and I found Canadian Budget Binder through a couponing page.

When I decided to start using Mr CBB’s budget as a beta tester to begin the budgeting process again. Ken thought it would never last, that we would give up as quickly as we had on the Til Debt Do Us Part budget that we had tried while I was pregnant.

I had asked Mr. CBB to help me make a budget to help me save money and pay down our debts. When I had actually followed through with the budget Ken sometimes felt depressed. He felt that we had no money and he couldn’t do anything like golf as much as he wanted, play online poker, go on vacations or buy as much beer as he’d like.

Sometimes it got directed towards me as anger and that caused us to fight about money. It put a lot of stress on me. I do have to commend Ken for always working overtime to help earn extra money though. When budgeting started working well for us we decided to put our car loans and line of credit into a home line of credit to lower our payments but also pay way less interest; as Ken saw that loan decrease and our savings increase he started to get on board with budgeting.

Now Ken asks me about purchases, he has an allowance that he has to budget, he tries to be frugal by borrowing things from friends or getting me to post on freecycle, etc.

He occasionally gets frustrated that we can’t afford certain things like vacations but we don’t stress about money like we used to. We now have the same goal to work towards debt freedom by living within our means and teaching our son about money from a young age so that he does not have the same financial problems as us when he grows up. We are still a work in progress but are doing FAR better than we were just over a year ago.

Stop hiding from debt 

It’s not something we can run away from although many try to put a band-aid over top by spending more than they earn. The cash they need to pay what they overspend goes on credit cards or lines of credit, thus the cycle begins. That’s not a fun way to wake up every morning. We need to stop comparing financial numbers of everyone else and focus on the hands who put food on the table and a roof over our heads, ourselves.

When the wife and I designed our budget it was something we had never done before, and trust me we are still learning. I don’t think there hasn’t been a month that goes by where we are making changes to our budget. It wasn’t until we got to Step 6 who does what and when that we realized that this has to be a team effort.

If a couple wants to budget together then all of their financial numbers need to be put out on the table for couple viewing. It’s up to the both of you to decide who will take care of the budget or if you will both work on it together, which I suggest. If one of you is in a huff about it then it won’t work. If you think you can partially budget behind the scenes it may work but the numbers will likely be skewed, especially if one spouse/partner is spending money and not telling you about it or forgetting to.

There is no room for being lazy, you need to get organized and get your stuff together if you want this to work. We can all dream of having lots of money, early retirement and winning the lottery , but if you don’t have a plan nothing is going to work the way you want it to. Then again, if you get lucky and win or receive money that you never expected it becomes a bonus.

So, how should go about budgeting as a couple? Here are a few steps that we took in order to get our budget off the ground and in motion. It’s been a couple of years now and the budget is still going strong. Our net worth is up over $500,000, higher than we ever expected and we were able to save enough to pay almost $265,000 worth of debt (our mortgage) off in less than 5 years.

Yes, a mortgage is a debt, if you owe money it’s a debt. That wouldn’t have been possible if we weren’t using a budget, at least not at the speed that it happened for us. I can’t see us not ever using a budget again, it’s our life-line to understanding us as a couple, our wants, needs and where we plan to go into the future.

Tell the truth

I talked about it earlier saying how I would discuss money while dating but what some people do is tend to fudge the numbers either to make themselves look better or feel better. When you are in a committed relationship it is what it is, you can’t tell lies about money and not expect anything to happen.

It will all catch up with you at some point or another. So forget about your money status and get real about money. No one wants a liar for a partner and I’m sure things won’t end nicely once your debts are exposed. If you are sitting on $100,000 debt don’t wait to tell him/her after you put the ring on the finger.

Stop making excuses

I always hear excuses from people for one reason or another and although It’s not my problem those that are making excuses need to recognize them. I don’t know how many times I said I wanted to quit smoking. There was always a reason why I couldn’t though. I didn’t have time to quit, too much was going on, I can’ t do it and so on.

It’s a load of crap, so just step into it or don’t step in at all. The minute we make excuses for why we don’t do something in our life is the minute we stop taking pieces from the mountain to build our own. Everything takes time, so suck it up and live life the way you want to.  No one else is going to care if you go into debt, go bankrupt, lose everything or kill yourself smoking. It’s your life. Take control or give it away, it’s your choice.

Know what you need and want

If you are now living together as a couple whether you rent or buy you need to know what your needs and wants are. What do you need in order to live a happy life together and as individuals. Does a case of beer a month make you happy like it does me, well than you might want to have that as part of your budget allowance.

This is the part where you want to set some goals together. Know what you want from your finances and where you both see yourselves headed in the future. If you want to buy a house, then talk about it. You need to find out all the costs involved with purchasing a home so you can budget that money in. If you need to pay off your OSAP loans or car loans talk about how you want to accomplish this and by when.

Run the numbers

The tough part is trying to fit in the needs into the budget especially if there is debt coupled with not earning enough money to pay the bills. This is where you will both have to decide whether you want to keep something in the budget, adjust it or get rid of it.

I know many people who don’t have cable as part of their budget because they simply can’t afford it, don’t want to pay for it or don’t watch it enough to justify it. So, ask yourselves if your budget doesn’t balance what can you cut in order to make both of you happy and stay under budget to achieve your goals. Once you run your numbers it’s time to follow the steps I outline to prepare the budget. It doesn’t have to be fancy. All you need is to make sure it’s telling you what you need to know.

Working together

The budget won’t work if you don’t do it together, like Jen and Ken quickly learned. If one of you wants to take over all the computer or pen and paper work of the budget that’s fine. There has to be that give-and-take I talked about earlier so don’t jump down each others throats about expenses, own them and sort out what works for the both of you and what doesn’t.

You could meet up once a week to go over the expenses, any bills you need to pay and pay them. Another great part about doing it together is that it brings you both closer in terms of money matters. Relationships fail because of money, that’s a fact for many divorces these days. I’m sure an hour a week is worth keeping the money love alive. When couples are on the same page and working towards paying off debts it brings forth a feeling of togetherness, or teamwork. If you care about each other, then care about where your money is going.

Chill out

Don’t get so flustered about having your money accounted for with a budget. We all make mistakes and we are supposed to learn from them. If you want to treat yourselves to a night out on the town or a vacation all you need to do is save the money up in your projected expenses account and enjoy the times you spend together. If you spend more than anticipated, it’s not the end of the world because as a couple who budgets you will have that emergency savings set aside just in case it’s needed for an emergency.

Whether you decide to put your money together into one account each month so you can pay all your bills and debts that’s up to you. As a married couple that is what we do but if we were just dating (not engaged) we likely would have kept separate bank accounts and paid half of all the bills owing and our own debts.

When some couples get married it’s hard for them to let go of that control that they have over their money empire but in the end it was the best decision we made. We married each other because we are in love, we have nothing to hide, we work as a team and we want to retire and leave this earth knowing that nothing got in the way of our dreams. Our way to budget as a couple worked for us and may or may not work for you, but if you want it bad enough together you will jump in with both feet, no regrets.

How do you budget as a couple? 


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