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Tips for Budgeting as a Couple

How to Budget with Your Partner

Counting Dollar Bills

It’s easy to use your money irresponsibly as a single person and suffer no consequences. However, once you’re a couple, it requires financial responsibility to stay afloat. Most couples fight about finances and even break up. Your finances are woven together with the success of the relationship. Budgeting together can be challenging; it is hard from thinking about your finances to balancing money in a relationship. If you don’t talk and plan your finances, it can cause stress as your relationship progresses. Long-term success is built on financial discipline. These tips will guide you to plan and budget as a couple.

Tips for Easy Budgeting as a Couple

Budgeting alone is easy but living as a couple requires you to include your partner in your plans. Here are simple ways to budget effortlessly.

Set Achievable Goals

When thinking about budgeting tips, most people set goals, but they forget to make them achievable. Financial experts always talk about setting realistic goals; these are the best budgeting tips. Put your financial goals into short, medium, and long-term categories; this enables you to plan for the present and future.

These goals affect your general budget. When it comes to short-term goals, take a little while to achieve them. They include paying a short loan from Loan Solution, saving for a trip, settling your credit card debt, or creating a 6 months emergency account.

Good budgeting tips for medium-term goals can take the form of saving for a home or down payment, settling your student loan, or paying for your vehicle in cash. This takes more years than short-term goals. What are some budgeting tips for long-term goals?

The best budgeting tips or advice is to save for retirement; this requires investing or saving for most of your working life; it can take at least 40 years. It might sound like a cliché but following the SMART acronym while setting your goals can help a lot:

  • Specific – Outline your goals clearly; in a few words. For instance, we want to buy a new house in Hawaii.
  • Measurable – Is there a way to know whether you’ve reached your goals? Consider the cost.
  • Achievable – Set goals you can accomplish based on your financial capability. How much can you save with your current and future income?
  • Realistic – You might set achievable goals, but do they make sense to your situation? Consider things you have to give up and if you’re okay with that.
  • Time-based – How long will it take? Your timeline determines whether it’s a short, medium, or long-term goal.

Learn how to use budgeting tips and tricks like the SMART acronym to test and adjust your goal if necessary. If buying a house in Hawaii takes too long or is out of reach, consider a timeshare. You can also buy a more affordable house outside this state.

Calculator placed over stack of USA dollars

What is Your Net Income?

All relationships require communication; this is important, especially when planning your finances. The best budgeting tips and advice for couples is to be open about your income. The first budgeting tip for millennials is setting realistic goals and then determining your monthly income. Do you know what gross income is? It is your cumulative income before deductions and taxes.

Although this doesn’t help you on how to get better at budgeting, any amount that comes out for pension, retirement, or social security should be included in your budget. Incorporate simple budgeting tips by using your net monthly income; this is the cumulative amount you take home.

Budgeting tips for beginners enable you and your partner to budget effortlessly. If you both get hourly wages or salaries, you have a stable net income. If you have irregular incomes through self-employment, seasonal work, or sales commission, your net income might change each month. You need to get the best budgeting tips for self-employed couples.

Identify Each Other’s Spending Habits

You might have different spending habits with your partner; however, you need to agree on budgeting tips for families to manage your funds. It is necessary to be on the same page when it comes to your finances.

The way most people spend money has changed since the Coronavirus happened; you need to adjust your budgeting tips during COVID 19 to suit the times. You can save money in various ways, like having homemade meals instead of eating out, among other budgeting tips during pandemics.

If you’re a spendthrift, you can try controlling this habit by adjusting your mobile, internet, and utility plans. Cancel any subscriptions you don’t need and use your credit card only when necessary. These habits allow you to save money, have a reasonable budget, and live comfortably.

Calculate the Cost of Your Essentials

When writing down your budgeting tips for couples, you need to calculate your expenses. These are the things you pay for monthly, for instance, student and other loans, utilities, credit card, insurance, housing (rent or mortgage), parking, gasoline, and food. Some people use the ’leftover’ money to pay for food, but you need to estimate how much you need to spend on groceries and put it as a mandatory expense. Then, calculate your mandatory expense and deduct it from your net income.

Save Together

Saving enables you to achieve your financial goals

Saving money together is one of the most straightforward budgeting tips basics you need to learn. Even with combined salaries, you might find it difficult to enjoy some of the luxuries in life. However, you can accomplish your goals by saving.

Little habits like making instead of buying gifts will help you save; you don’t have to buy designer or expensive gifts; after all, gifts that come from the heart are priceless. Also, cook more instead of going out. Buy generic items; there is no difference between branded and generic items. Try this with non-perishable goods like light bulbs, dish sponges, liquid hand soap, paper towels, etc.

Entertain at home; it is challenging to maintain a social life on a budget. Entertain your guests at home instead of expensive restaurants. It is also important to track your funds; this is one of the most straightforward budgeting tips couples can follow. Track your every expenditure, even the little things like gas.

Calculate your monthly expenditure; this enables you to adjust your budget according to your needs. It also shows you what you need to cut off to save money. You can use online discount sites; these allow you to indulge in life’s pleasures while saving. For instance, dining at an exquisite restaurant or a couple’s massage. Although it is good to treat yourself, do so on a budget.

You can also save by travelling locally instead of buying expensive plane tickets. Did you know that buying in bulk helps you save money? Items you will use all year round like tampons, toilet paper, toothpaste, laundry detergent, shower gel, paper towels, and other goods can be bought in bulk.

Use a Budgeting Software

One of the best budgeting tips for beginners is to use planning and budgeting software. Although it might seem like you don’t need budgeting software, it has many benefits like streamlining and simplifying your budgeting process.

A budgeting software makes it easy to control and manage your budgeting process; it is flexible and accurate. Some software can track budget iterations; this eliminates version control issues. You can create budgets by item or cost.

You can also track your daily expenses, especially if you find it challenging to record everything. Some software products have an inbuilt credit card debt management feature to manage your credit card debt effortlessly. You need to enter correct information; this feature works accurately, so you don’t have to worry about any mistakes.

It doesn’t matter if you’re not a tech-whizz; these software tools have a friendly interface and are easy to use. Some also come with trial versions so you can check whether they are convenient for you, and others have free versions, so you don’t have to pay for their services.

Tax Documents on the Table

Try the 50/20/30 Plan

When looking for budgeting tips bonuses, you should consider simple plans like the 50/20/30 plan. Use 50% of your net income for necessities, 20% for your long-term savings, and 30% for your lifestyle activities. These are good budgeting tips for beginners, especially those who have no idea where to start.

Use the Zero-based Budget

There are various ways of budgeting as a couple; one of them is the zero-based budget.                   It helps you account for every dollar you spend. The idea behind this plan is to give every dollar a purpose/job. This plan prevents you from wasting money, especially when your finances are tight.

Once you decide where to use each dollar, you should have zero money left over that month. It simply means that what you have is equal to what is going out. You know where all your money is going each month, so there’s no room for guessing whether you have enough or how much will be leftover. It helps you avoid unnecessary wastage of your funds. Although this plan sounds complicated, it is simple and beginner-friendly.

Each month, you and your partner make a budget based on your net income and spending, assigning this to each category. Assign the money to various categories like spending or saving. You can even break these down further; for instance, you can include personal expenses like housing, mortgage or rent, and utilities. You can also include food in its own category and allocate funds to takeout or groceries.

The easiest way to avoid overspending with this plan is to use cash for discretionary spending. You know how much money you need for various things, withdraw this amount from the bank and put it in different envelopes. When you spend all the funds in a particular envelope, you cannot spend any more money in that area. If you prefer the cashless method, use a tracking app.

Zero-based budgeting is useful if you don’t have a steady income because you start afresh every month. The zero-based budget is easy to make with just 3 steps. First, add your income, add your savings, expenses, and debt repayment, and then give each dollar a purpose. Make your zero-based budgeting process effortless by tracking your expenses, including irregular expenses, and be flexible.

Try Weekly Allowance Budgeting

What should you do when a traditional budget does not work for you? Even if you’re a careful planner, your spending can get out of hand. You can overcome overspending by setting aside weekly funds instead of monthly; this can help you understand your cash flow and overall financial standing.

Weekly allowance budgeting is where you and your partner set aside a specific amount to spend during the week. Use weekly allowances for discretionary expenses like shopping or dining out.

Fixed expenses or mandatory expenses are important when determining your weekly allowance, although they are not included. Create your weekly allowance budget by starting with your monthly budget.

Categorize mandatory expenses like insurance, car payment, rent, utility bills, student loan payment, and groceries. Also, include your savings and then use the remaining funds to cater to variable expenses.

You can easily determine your weekly allowance by dividing your discretionary spending into 4 parts. Discretionary expenses include entertainment, shopping, etc. Discretionary expenses might also include things you don’t need every month, like streaming services.

Set Up Separate Accounts

Different bank accounts will help you manage your finances. For instance, you can have a personal checking account that pays for your essentials and lifestyle but don’t spend more than you have assigned to it. You can also include any bonus that you make in this account. Every month after transferring funds to your financial priorities, the rest should be put in your emergency funds.

You should have at least 6 months’ worth of income in this account; this helps in case one partner loses his job, you have medical emergencies, emergency home expenses, etc. It’s also reasonable to prioritize savings; use this account to cover annual or semi-annual payments, for instance, home insurance, property taxes, income taxes, and important goals like college savings for your child or paying student loans.

Conclusion

Budgeting alone is easy, but budgeting with a partner can be challenging; that is why you need to work together and be open about your finances. Communication and open-mindedness are crucial to building a budget together. Even if you have a system that works for you as an individual, you have to talk with your partner and come up with what works for you as a couple.

Any budgeting couples tips for us? How do you budget with your partner? What are your budgeting tips that have worked well for you? Please share with us.

Author’s bio: 

Daniel Miller is an inexperienced specialist in the business and financial area. Daniel has also worked as a financial advisor at a bank and provided consulting and advice about budgets, savings, insurance, stocks, retirement funds, tax advice, etc. He is currently doing specific research on the topic.

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