Some people earn enough money that they can make financial mistakes or spend differently than planned without major repercussions on their family finances. However, these incidents can still lead to frustration or disagreements. Working with your spouse or partner on a budget is a great way to overcome these issues. For families living paycheck to paycheck, who may already be feeling more stressed, it's even more important.
Couples who excel together are happier together. According to the research, “Behaviors that financial practitioners call ‘sound financial management’ are positively associated with the quality and stability of marriage.”
Budgeting means planning for every penny — and spending every penny should be an intentional financial decision that is a result of how you want to live your life together. Here are four steps to get started in the process.
1. Set a “financial appointment”
Budgeting starts with a conversation with your partner. Experts recommend scheduling a “money date”: this is a dedicated time when you both are free of distractions. The environment should be comfortable, and no one should feel rushed. Expect the conversation to get emotional, and be willing to step away to collect yourself. Above all, listen. Ask questions that help you understand your partner's perspective on money and the relationship with it.
Financial dates have less to do with money itself and more to do with happiness, values, and goals. Start the conversation by discussing what makes your relationship happy and safe. Identify shared values that will guide your difficult decisions. And set common short- and long-term financial goals that will strengthen your partnership over time. Only then can you create a budget together that sets your priorities for where your money should go.
Each of you should play an equal role in controlling your family's money and in deciding what to spend it on, although your specific roles may be different. When it comes to money management — paying bills, monitoring credit cards, etc. — some couples decide to do it together, while others entrust one spouse to handle these tasks. The only right way is the way that works for both of you.
2. Gather what you need
You will need to contact your internal detective to perform this step in the process. Gather as much information as possible about your past spending habits, ideally using a budget management system that can do the work for you. The further back you go, the more accurate the reflection of your habits will be.
If you're not using a budget management system, you can gather the information you'll need from these sources:
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Credit card data
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Current account statements
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– Savings account statement
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Third-party mobile wallet transactions
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Brokerage account statements
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Cash in hand
3. Create the system
People are not numbers on a spreadsheet. People have feelings, desires, values, and goals, all of which influence how we make decisions. We are surrounded by temptations, especially from online platforms and social media.
People who are good at self-control organize their lives to avoid temptations. In other words, self-control is not necessarily the result of superhero-level willpower, but rather a lifestyle that reduces or eliminates our exposure to things that are difficult for us to resist.
So make bad habits harder, and good habits easier. Want to spend less money online? Remove retailers' apps from your phone and delete all previously loaded 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 big 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 the one you normally use, and automate your savings by sending a portion of your paycheck 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 appropriate responses to the financial turmoil that everyone experiences at times.
Spreadsheets are not enough. You will need to put systems in place that fit what you are experiencing as a couple. For example, in recent years, four in 10 Americans have experienced income fluctuations of more than 30% from month to month. Such violent fluctuations in income render useless budgets created to manage salaries and fixed expenses.
So, plan for the unplanned, and don't get discouraged when it still isn't enough. Commit to each other and to the process you have done together. Give yourself grace when you make mistakes, and don't lose sight of the bigger picture.
Brian Page is the host of the Modern Husbands Podcast and founder of Modern Husbands, which helps couples manage their money and homes.
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