Budgeting for Couples: Everything You Need in 10 Steps
When you said 'I do,' you probably weren't thinking about budgeting for couples, but it's one of the most important factors of a happy marriage. Money and marriage go hand-in-hand.
When finances are good, the marriage feels lighter, and when they are bad, there can be a lot of arguments.
Why Is Budgeting for Couples Important?
Budgeting isn't at the top of anyone's 'fun things to do' list, but it's one of the most important ways to stay on the same page with your spouse and reach your financial goals.
When you budget as a couple, you agree on how you'll spend your income, split bills, and take steps to reach your financial goals.
Couples that don't budget end up arguing and often in financial despair. While money can be a touchy subject between couples, it's one of the most important topics to discuss in your marriage.
How To Start Budgeting as a Couple for the First Time
It can feel overwhelming to start budgeting as a couple, especially if you each have different ideas for managing money.
You may both have different money stories, or one partner may make more money than the other, making it uncomfortable to discuss money or make financial decisions. The key is to know the steps to create your budget as a couple.
A budget is a map for the money you bring in and helps you understand where you must focus your money and where to cut back to reach your financial goals.
1. Calculate Your Combined Monthly Income
Your budgeting approach doesn't matter, but you must start by determining your combined monthly income. Be sure to include all sources of income from jobs, side gigs, child support, and any other income that you receive monthly.
2. List Your Expenses
After getting clear about your income, it's time to be realistic about your expenses and spending. This can be a tough step, but it's the most important. List your monthly and periodic expenses.
For example, you pay the mortgage and car payments every month but don't forget about holiday gifts, taxes that are only due twice a year, or car maintenance that only happens a couple of times a year.
The more honest and realistic you are about current and upcoming expenses, the easier it is to create a budget that works.
3. Prioritize Debt Repayment
Debt can diminish any savings goals or profits you make. When you prioritize debt payments, it's like investing in yourself.
Since most credit card debt and other personal debts have interest rates that far exceed what you could earn on any investment, it makes the most sense to prioritize your debt payments first and then focus on other savings goals, such as investing.
4. Set Savings Goals Together
It's still a good idea to have savings goals separately and together. They give you something to work towards and celebrate when you reach those goals. Like I said earlier, if you have debts, focus on those payments first and then move toward savings.
It might feel strange to tell your spouse your goals when you are married, especially if you have joint accounts, but you can make room for individual and shared goals.
Compare your list of goals with one another. You may find you have common and separate goals. From there, you can work together to prioritize the goals and create plans to achieve them.
5. Use a Budgeting App
When you've established your income and expenses and know what you want to prioritize as a couple, it's time to track your progress.
Just stating your goals or even creating a budget isn't enough. You must track every penny you spend. A budgeting app for couples, like Goodbudget or EveryDollar, can help you track your spending categories, manage your income, and ensure your money goes where you intended.
Budgeting apps for couples ensure you follow your budget and help keep you and your partner on the same page. A budgeting app can also help you see where you make mistakes (don't worry, it's common) so you know what to change moving forward.
6. Consider Opening Joint Financial Accounts
Sharing a bank account can feel like a big step, but it's a great way to keep each other accountable and reach joint financial goals. Joint finances help you manage shared expenses and set boundaries on discretionary spending.
When you have separate accounts, it's much harder to determine if one partner is spending too much or even if the bills are paid on time.
It's okay to keep a separate account for spending you don't want to share, such as gifts or personal matters, but putting your money together for joint expenses can make things a little easier.
7. Find Ways To Cut Back
As you create your budget, you may find you overspend in specific categories. That's why budgeting for couples is so important. It gives you a bird's eye view of where your money goes and lets you see how small changes could help you reach your financial goals.
Together, brainstorm ways you can cut back, such as:
Using coupons
Not making impulse purchases
Reducing the number of times you eat out or buy coffee drinks
Limit the number of grooming appointments, such as hair and nails
Meal plan with your spouse to make eating at home more fun
8. Jointly Define Needs vs. Wants
You may find some spending excessive as you get further into your budget categories. Remember, though, just because you feel that way doesn't mean your spouse does too.
Rather than assuming you are on the same page, decide which expenses you have are needs and wants. This can make it a lot easier to cut back on unnecessary expenses.
9. Plan for Regular Financial Check-ins
No matter if you use budgeting apps for couples, have a strict budget, and are on the same page, it's easy to fall off the plan without regularly checking in. I like to suggest that my couples have regular 'money dates,' or date nights specifically designed to talk about money.
On these date nights, you can discuss everything you both did right that month and what you think might need some work. It's okay if there is a month or two when everything seems to fall apart.
The key is to learn from the mistakes, discuss them, and determine how to move forward. Budgets are meant to be flexible, so don't think you can't make changes.
If you and your spouse need financial counseling to get on the same page, a financial coach can assist you.
10. Celebrate Small Financial Wins
The most important part of budgeting for couples is to celebrate the wins! It doesn't matter if it's something incredibly small or it's a huge win.
Celebrating keeps you motivated to keep going. For example, if you set a goal to start saving $100 a month, and you did it for two months in a row - that's a reason to celebrate!
FAQs
Should We Have Joint or Separate Bank Accounts for Budgeting?
There isn't a right or wrong way to handle your bank accounts. Some couples prefer to have all their finances together. This way, they can both be accountable, and there is less stress about how they are doing on their financial goals.
Other couples prefer to keep separate bank accounts and instead split the bills down the middle. One way isn't better than the other; it depends on what works for you.
What Is the Best Way to Budget as a Couple?
The best way to budget as a couple is the way that works for you. Some prefer a budgeting app that both partners can view for full transparency.
Others prefer old-school pen-and-paper budgeting or complicated spreadsheets. The right budget for you is the one you will use most consistently to keep both partners accountable.
What's a Good Budgeting Type for Couples?
There are many good budgeting types for couples, but the most common are zero-based budgeting and the 50/30/20 budget. Zero-based budgeting means you give every dollar a 'job.'
At the end of the month, all your income should be accounted for, and doing something, whether it's saving, paying off debt, or covering a major bill, such as the mortgage or car payment.
The 50/30/20 budget is a little less work and only requires that you budget your income as 50% for fixed expenses (necessary expenses), 30% for fun spending, and 20% for debt payoff and savings.
How Do You Split Finances as a Couple?
Some couples split financial responsibilities 50/50, and others split them based on the percentage of the household income each partner earns. There isn't a right or wrong way to split finances as a couple. It depends on what you are both comfortable doing.
How Do I Budget When One Spouse Makes More?
It can feel challenging when one partner makes more than the other, but it doesn't have to be.
You can split the budget according to the percentage of the income each partner makes or split the bills according to what fits within each person's income. The key is to ensure both partners are comfortable with the method and happy with how you're splitting the responsibilities.
It’s Time To Get On The Same Page With Your Partner
Prioritizing budgeting for couples is the key to a happy marriage. When you are on the same page and striving to reach joint financial goals, it's much easier to feel like you're on the same team versus each man for himself.
If you don't consider budgeting the fun part of marriage, consider talking to a financial professional.
They can help you and your partner understand the importance of choosing the right budgeting approach so you can easily track your spending and reach your financial goals, and both you and your spouse can feel relaxed about your financial future.
Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!
Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.
Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.
Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.
