How to budget as a couple
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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My wife doesn’t like to talk about money, but we do have the conversations. I am the one the handles the bills and I tell her how much we need for the month. She puts it in and then we are done with the conversation. She is really easy about it and that makes it so we have no money conflicts.
Why do you think she doesn’t like to talk about money? Does that bother you that she doesn’t?
We talk about money all the time. It goes like
me: you spent on WHAAAT (a second car, a boat, a maid, a new thing we don’t need…)
him: yolo
me: ok I buy my peace, whatever.
It would be a problem if we couldn’t afford it but so far so good.
Oh Pauline, you make me smile all the time!!!
I loved your post today, the hot fierce lion was getting ready to rumble. Your man doesn’t have to worry about you one bit, I don’t think. You both know your numbers, some people can’t even say that much.
I think budgeting as a couple is important, or at least knowing where money is going and what the limitations are. It’s more difficult than it sounds, but you’ve got some great points here.
I think it becomes as difficult as the couple makes it. We find it dead easy to do but for others depending on personalities, beliefs and other factors might not find it as simple, that’s true.
Great post… For my wife and I.. It all starts with honesty. If we want to buy something, we just tell each other, and it isn’t a big deal. If you start keeping secrets, then you will likely run into trouble.
That’s true, secrets only lead to fights.
WOW, Mr. CBB. Great post. Our finances were a mess for the first 16 years of our marriage. We had never learned how to manage money together – Rick had a fear of spending, I had a fear of not being able to spend. What a mess that created. Choosing to budget as a couple has been one of the best moves we have made for our marriage, and for our family.
Thanks for sharing that Laurie as I’m sure many who read the post would love to get feedback from other couples.
We write our monthly budget together and rarely have any disagreements. It helps that our expenses are so low and that we share all of the same goals. Plus, we’re both “savers” so there is rarely anything to disagree about.
Money is not something Brian and I fight about, thankfully! We follow a pretty strict budget that gives us both our own separate spending/savings but requires us to each put in a certain amount towards joint expenses. So far, so good!
That’s great that it works out for you that way. If it works don’t break it. That would not work for us because we just want all our expenses together. We never fight about money either, likely because we understand where we want to go like you and Brian as well.
Some good points in the article. Those times that hubby has tried using a budget it lasts until he sees something he wants that isn’t in the budget….. Most of the bills are automatic, the only ones we have to ‘pay’ ourselves would be Rogers and M/C. Rogers will be paid this week sometime and M/C is sitting at a lovely zero balance. Oh..as is Sears. I charged a whole $12.00 on it at Christmas!! Terrible I know…The one thing I can try to control is groceries and you know how that one goes.
I’m pretty sure I can find what I need if something happens to him. He will tell me every once in a while that if I ever need such and such it’s in this place……usually right before he decided to re-organize things. I have a rough idea of where things are as he has a number of plastic file holders on shelves in the computer room so it would be a matter of the kids and I looking in those first. One of these times when he’s outside or otherwise out of my hair I’ll go looking to make sure. As things are not great here I do intend to make sure I know where things are just in case.
The one part in this post where I talk about couples who can’t work together and one might try to control the groceries was because of you. I remembered you telling me that and it’s true though, many people are like that. They try to control the parts that they can and the others they can’t they hope it works out for the best.
I seriously think smart phones and having mint on them all the time makes budgeting with a SO a no brainer. It’s so easy to be on the same page when all the hard work and tracking is being done through software and you’re both updated continuously. It definitely eases disagreements. =)
Nice post Mr. CBB! We tackled it head on before we got married and haven’t looked back. I find that communication is key, as well as both the spouses owning the budget – otherwise it’s likely to fail. I say handle things head on and you’ll be happy that you did. 🙂
My wife and I don’t necessarily have “conflicts” with this, but there are certainly many times when we struggle with it. I’m the numbers guy and our family’s CFO. I know how much money we have coming in, what expenses we have, and how much money is available. My wife is more the spender. Our budget doesn’t change very much, so we’ll sit down about once a quarter and go over things.
You’re lucky our budget changes often but it’s no big deal since we input every expense each week so we have all the information right in front of us. We are numbers fans so we like to know where it all goes but we are also not sticklers about our money. If we need more we will make sure there is enough in the categories.
Excellent post! One of the first things I noted about my wife was that we understood each other financially and have similar practices. I have heard so many horror stories about couples having big fights over money and potentially breaking up over it. My wife and I are getting ready to very aggressively tackle her med school loans and we had a very productive and open conversation about how we would proceed with little to no disagreements.
I think it’s so important to be on the same level from the beginning. Since you and your wife have been on the same page those med-school loans will be gone in no time at all.
I agree Mr. CBB you need to talk about these things while dating and definitely before getting married. Its amazing that my wifey and I made it work the other way around but we sure caused ourselves a lot of headache in the early stages. Find something that works and make sure you get the information such as credit, bills, and goals for future. Nice post Mr. CBB.
Thanks Thomas, it may not work for every couple but I think as long as the basics are there and a mutual agreement that works for the couple it could work but both have to be involved in some form.
YES!!! When we stopped hiding from debt and attacked it like wild,screaming banshees, it was not only fun, but took a ton of stress out of our lives. We do all things money as a team and have regular, monthly and often times weekly meetings. Thanks for a fun and valuable post, CBB. And have a ribble rabble Monday!!!
Why do I get the distinct feeling that your monthly meetings are more like a party with drinks and umbrella straws… you make it seem fun and that’s what it should be. Cheers mate
I probably wouldn’t have a one budget thing if I was in a relationship, but if I was married then yes. I believe in one account for shared goals and expenses, but I also do believe in having your own account for your own spending that isn’t questioned (however that amount is known in the mutual budget), if you get what I mean. I would consider it a very important topic to talk about once the relationship is serious enough, but you can definitely gauge one’s spending style pretty early on.
It is what it is Tonya lol… whether in a separate account or not the money is realized. If I need to spend I do. that’s what misc is all about. We work together but we don’t trip out when one of us spend.
J doesn’t budget, which makes the cause of budgeting difficult for me. I try to budget and show him where our money should be going and he nods along but takes a completely different direction. So we keep our money separate so I won’t have to deal with it!
Do you think that this is the way it will be for the rest of your lives together?