This is an article “The Truths And Myths About Couples’ Budgeting” by Marc Primo
Does anyone remember what makes the world go round? Was it love, money, or love for money?
Keeping the flame alive is hard enough, but staying on track with a single budget can be a demanding test for any couple. Nobody said it's impossible, though. In fact, lots of couples have thrived by helping each other manage their finances.
Of course, the usual key factors such as trust, transparency, and mutual understanding in letting blunders pass should be present. Sometimes, however, it takes more than all the love (or money) in the world to make budgeting techniques work.
What can happen without couples’ budgeting
First, let's tackle the usual problems that couples encounter when they don't practice couple budgeting.
In the distant past, the husband would earn a salary and give some or all of it to his wife to budget household necessities. This practice could sometimes lead to frustration for the husband who would be unable to monitor the expenses.
On the other hand, the wife could also go on a spending spree trying to purchase all household needs based on whatever amount she gets.
In today's times, when both spouses are more empowered, things have pretty much changed. 39% of couples even resort to separate 'to each their own' methods when handling their respective finances. Each is assigned specific monthly expenses to settle by the end of the month.
However, this could lead to one partner having more spending power than the other due to differences in earning capacity.
And, where do these budgeting models often lead? To fights, added debt, and sometimes, even divorce.
Here are some examples to give you a clearer picture of what households experience when couples do not work out a budget:
One spouse carelessly disposes money, while the other is restrained from buying wants
Both spend extravagantly on things beyond their means then end up with low credit scores
Both disagree on the necessity of their respective purchases
One spouse is faithful to the budget, while the other doesn't understand how it works
The fact is that 'two heads are better than one' can only work in couples’ budgeting when both of you are on board and aligned with your objectives. Otherwise, many complicated dynamics can play out if one is dipping a hand in the cookie jar, while the other is pressing on the calculator.
To make your couples’ budgeting method work, let's review three simple tips:
Centralize your money monitor
Thanks to the digital age, managing money is easier than ever before, and so is sharing a centralized budget location with your significant other. Such practices allow both of you to see every activity and detail concerning your shared budget. In the long run, it's easier for both of you to stick to money matters if your goals are aligned, and both of you are always in the loop.
Online, many free apps allow couples' budgeting, such as Zeta, Honeydue, or Firstly. You can assign amount thresholds for each other and track each other's purchases and payments via smartphone, even while on the go.
How it works is simple. If one of you spends on a purchase, the app subtracts the amount from that spouse's allotted personal budget. Some apps let you have the option to get notifications for every budget activity, plus chat features so you can contact each other in case a pitstop at the grocery on the way home is needed.
However, one pro tip is to never use these couples' budgeting apps if you intend to surprise your spouse on special events like, say, a milestone wedding anniversary.
Nurture each other's commitment to the budget
Not many couples include their financial commitments on their wedding vows. But it's never too late to say 'I do' if you want to make your couples' budgeting goals successful.
Remember, a leading cause of fights between couples is typically money-related, so best to have a mutual agreement and solid commitment before starting a plan.
There is nothing wrong with assigning budgeting responsibilities, so long as you both remain transparent about your respective salaries and any leftovers after payments. Since you're in a marriage, you should combine your respective income to increase your purchasing power as a couple and keep a tab on where the money goes.
A couple of responsibilities you could share include:
Leaving ample amounts in the savings account for recurring expenses
Refilling cash envelope payments or managing e-payments
Monitoring the highs and lows of regular bills
Figuring out budget leaks or what to do with excess amounts
One common thing to avoid in this type of couples’ budgeting practice is letting your spouse be complacent on how you 'manage and report' your financials or vice-versa. It becomes the responsibility of one.
If you have kids, it’s also best to teach them about money matters early. This way, they’ll understand why you can’t always say ‘yes’ to treats and good times.
Being committed to the budget should always be a shared experience, just as how you should balance the money that goes in and out of your shared accounts together.
Turn it into a win-win love affair
They say 'all win in love,' so what better way to handle your couples' budget than by giving each other some wins while managing it. Save up simultaneously for equally priced rewards you can both enjoy together so that you both remain invested in achieving your budget goals.
If only one gains something from saving more from the family money, this may cause arguments between you. Sit it out and talk things over. Better yet, fill out worksheets that indicate both of your goals so that everything is clear from the onset of your couples' budgeting plan.
Of course, the first thing you have to include in your goals is to settle bills, debts, and loans. But it doesn't hurt to allocate a few dollars for what you both consider fun, and a little more for your respective personal budgets.
If you have separate debts, it's also better to combine them via debt payoff strategies to make things easier to manage. And this is regardless of whether one has a more considerable debt than the other. Come to think of it, making a few sacrifices for each other is always more ideal than telling your spouse, 'Til debt do us part.'
In the end, both love and money do make the world go round after all. Sharing both only makes it even happier.