How To Budget With Your Significant Other

In May of 2015, my financial future changed forever: I tied the knot with my now-husband. I figured budgeting as a couple would be easy, but a few budget talks quickly showed me how hard it is to get on the same page about money with your partner!

I was blissfully unaware of our financial situation. But after looking over our budget spreadsheet, my husband and I realized we were up to our eyeballs in debt—there was no way we could afford to buy a home any time soon.

And you know what? I wouldn’t be debt-free and self-employed today if we never had that conversation. That’s why every committed couple needs to talk about money.

When you’re combining households with a significant other, the finances can feel a little messy. But when you agree to tackle life as a unit, you need to manage your money together.

Budgeting is stressful for anyone, and trying to do it as a couple is really stressful at first. You both have to be willing to listen, learn, and change to get across the financial finish line together.

Fortunately, once you get into the rhythm of budgeting as one, you’ll achieve your financial goals more quickly and with less fuss.

Let’s dig into why couples need to tackle money together, how to budget as a couple, and 5 ways you can save money together.

Why Should Couples Talk About Money?

First of all, why should you chat about money with your significant other? Isn’t it just going to lead to a fight?

While I’m guilty of avoiding conflict, every couple needs to talk about money. Getting on the same page financially will help you:

• Stay together: Seriously. Money issues are the second most popular reason that couples split (the most common reason is infidelity). If you get on the same page about money early on, there’s a good chance you’ll stay together.
• Set expectations: Budgeting together sets expectations and norms. You can minimize any potential miscommunications or arguments when you’re on the same page.
• Achieve your goals: You can’t achieve your money goals if you refuse to talk about money. Talking about your money goals often with your partner increases the odds you’ll actually achieve those goals.

Committing to someone means your financial future is intertwined with theirs, so even if you’ve never spoken about finances with your significant other, now’s the time to start.

How to Budget As a Couple

Sure, you should talk about things like career goals and having children with your significant other, but you also need to get on the same page with your finances.

Whether you’re cohabitating with your boyfriend or are about to get married, budgeting as a couple requires a different approach. Follow these 7 steps to create a new budget from scratch with your sweetheart.

1. Where Are You Right Now?

How much does your fiance earn in a month? How much does your boyfriend spend on sneakers every year?

It’s important to sit down with both of your bank accounts and go over everything. This should include:

• Your income
• Your recurring bills (car, rent, utilities, etc.)
• Your discretionary expenses (groceries, Netflix, Amazon splurges, etc.)
• Investments or retirement contributions

You should ask your beau about their money habits. Are they super frugal? Do they love buying the latest fashions?

How are your money styles different? This isn’t about forcing anyone to change their habits, but to find a way you can both manage your money in harmony.

And this should go without saying, but you love this person! Money is a messy business, but you need to have your first budget summit without judgment or hard feelings. You can’t undo your girlfriend’s $5,000 credit card debt; you just need to know it’s there so you can make a plan for tackling it together.

Once you have a baseline, you can start creating your budget! Pull out an Excel sheet or a piece of paper to start crunching the numbers.

2. Calculate Your Income

First, calculate how much you and your honey bring home every month. Focus just on take-home pay, not pre-tax income. If you have a stable, salaried job, this is a lot easier. If you have an irregular income, try to work off of averages. 

3. Add Up Your Mandatory Expenses

Once you know what you both earn every month, calculate your consistent monthly expenses. These are your set bills like rent, car payments, student loans, wifi, and (to some degree) groceries.

I recommend starting here so you know the minimum you must spend to survive. This is your baseline, must-have number without any frills.

Be sure to label each expense in your Excel sheet or paper. If you’re moving in together and consolidating expenses like rent, make those adjustments right now in your budget.

4. Don’t Forget Discretionary Expenses

You probably spend money on clothes, a gym membership, a trip to the coffee shop, books, and more. This is where you can get into trouble! These discretionary expenses can add up quickly, especially when there are two of you. Create budget line items for online shopping, takeout, gas, Netflix, and whatever else matters to you. You might find that you each have a Netflix account and could save money but consolidating the account into just one.

In addition to your discretionary expenses, set aside a “fun money” limit per person. That might be as little as $50 per person to start. If my husband wants to buy a fancy coffee grinder with his $50, that’s fine. I can blow mine on video games! We’ve had great success with “fun money” because it gives each person judgment-free spending cash to do whatever they want.

5. Set Joint Financial Goals

After reviewing your income and expenses, you might see areas for improvement already. For example, if you’re spending more than both of your salaries, your budget is in desperate need of trimming.

Now’s the time to identify your problem areas and make a plan to solve them. This means creating both short-term and long-term goals with your partner.

Good short-term goals are:

• Saving $500 for emergencies.
• Paying off the credit card.
• Saving for a wedding.

Long-term goals include things like:

• Buying a house and paying it off.
• Saving 15% of our income for retirement.
• Creating a college fund for children.

You get the idea. Just be sure to create goals that follow the SMART framework. This will significantly improve your chances of achieving your goals and enjoying a healthier financial future.

6. Plug Your Budget Into An App

You know your income, expenses, and financial goals. Now you need to plug everything into some kind of tracker. This is a critical step because a tangible budget helps you see your money in one place. Without a budgeting app or at least an Excel spreadsheet, you have no idea what your money is doing for you.

I recommend using budgeting apps for this. You can also see if your bank offers a free budgeting tool. Try out a few with your significant other and see which one you guys like the best. Make sure that the app gives you both equal access to the budget, too.

7. Check Your Budget Weekly

Your budget will only work if you check it frequently. Otherwise, it will become a jumble of numbers that you and your sweetheart sweep under the rug.

Choose a time once a week to review the budget. Set aside 15 – 30 minutes to look over the budget together and see where you need to make changes. We also check up on our short-term and long-term goals, ensuring we’re always making progress on them.

We’ve started holding our budget summits on Sunday afternoons. We look over the numbers to see if we need to adjust our habits going forward. For example, one week I noticed we spent way too much on takeout, so we made sure to eat at home more.

5 Tips For Saving Money As A Couple

Budgeting is one thing, but saving money, paying off debt, and investing is another beast entirely. Most couples are looking for more breathing room in their budget, which usually means finding more ways to save money. After more than 5 years of marriage, here’s how my husband and I have learned to save more money as a couple.

1. To Combine Or Not Combine?

Finances are really personal. For me, combining finances was a no-brainer once I got married. But several of my friends are married and choose to keep their finances separate. You get to make the rules in your relationship and finances; as long as it works, do it!

If you’re going to combine finances, keep in mind that it’s safer to wait to do so until you’re married. You have more legal protections this way. Although we cohabitated while we were engaged, my husband and I didn’t have access to each other’s accounts until the ink dried on our marriage certificate.

I do think combining accounts will help you cut down on transfer fees and banking costs, but at the end of the day, do what works for you.

2. Cohabitate

I waited until I was engaged to cohabitate, but I’m a little old-fashioned! If you and your significant other are ready to live together without an engagement ring, go for it. In fact, cohabitation can save you both money. Depending on where you live, you can save $200 – $400/mo by sharing a dwelling with your partner.

You’re splitting costs like rent, utilities, streaming subscriptions, and groceries. While some of your expenses will increase to cover two people, living together is still overall more affordable.

3. Buy In Bulk

If you and your partner are trying to save money, pool your resources to shop in bulk. When my husband got a Costco membership, I was in frugal heaven. We were able to buy cereal, bacon, toilet paper, and other household items at a lower cost per unit than at the grocery store.

This does depend on what you buy in bulk, so always calculate the unit price to see if you’re actually getting a deal.

4. Check In Before Big Purchases

Nothing is more frustrating than trying to get on track with your money, only to realize your partner bought something that busted the budget. Fortunately, communication is the antidote to busting your discretionary budget.

My husband and I created “The $50 Rule.” If we’re buying something that costs more than $50, we send the other person a quick text letting them know a) we’re buying something expensive and that b) making sure they’re cool with it.

This really cuts down on impulse shopping, so if Amazon is your Kryptonite, set up a similar agreement with your partner.

5. Date Each Other (but on the cheap)

Budgets really put a damper on the romance, guys. Since champagne and roses aren’t in the budget anymore, you might feel deprived. But the real fun of being with a special someone is that you can try tons of different frugal date ideas!

For example, my husband and I used to treat each other to a “fancy” meal at Costco’s cafeteria (they have a $3 special for hot dogs and soda). Treat your budget constraints as a creative challenge instead of seeing it as a bummer.

The Bottom Line

Pairing up sounds romantic, but the realities of life are often anxiety-inducing. Instead of shying away from “the talk” about your finances, set your relationship up for success by budgeting with your bae.

Use these 7 tips to set up a budget and empower yourself to make great decisions. If you need a little wiggle room in your budget, don’t be afraid to look for more ways to save money as a couple.

Remember, you two operate as a unit now. That means sharing everything from your favorite dishes to your current funds.

It’s okay to have hard conversations as long as you’re meeting in the middle with respect. There might be an initial learning curve, but with time, the two of you will get across the finish line—together.

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