How To Make A Couple Budget That Sticks!
Money is a top stressor in relationships. It is also a top cause of divorce in the US, where divorce rates are ~46%.
It’s common to face some challenges around money. If this is you and your relationship, just know…
You’re not alone.
It’s essential to create a shared vision and a couple budget that will make it happen. But it’s not always easy to get on the same page.
Getting both parties on board can be an art form. And if you and your spouse or partner don’t sort it out, then you might end up in trouble.
But with the right approach, working together towards a couple budget and shared financial plan can improve both your finances and your relationship!
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By the way, rather than a couple budget, I invite you to consider calling it a “spending plan.''
When you say “budget” or “couple budget,” most people tense up. They feel restricted and fear hearing “no” or having to stop themselves from getting things they want.
“Spending plan” is a simple reframe that helps people appreciate that (1) they have money and (2) they get to decide how to spend it!
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So, why create a shared financial vision and a couple budget/spending plan?
Alignment: It’s rough not to be on the same page with your partner — after all, they’re your closest friend. It’s especially hard when the misalignment is around money, since it affects our lives in so many ways. Conversely, it’s a ton of fun to be working on a shared vision and plan!
Intentionality: Most of us make financial decisions based on what we want or what we feel…but there’s so much more at your disposal! Following this simple process will help you get there:
Figure out your current finances;
Decide your top priorities; and
Then make a plan and a couple budget/spending plan to achieve them!
This process pushes you to be intentional with your money. For example, if you’re going to take $100/month away from your dream home down payment fund, it had better be worth it!
Or, let’s say you have $5,000 a month to spend. If I’m intentional, I can make sure that I maximize it by using it in ways that lower my stress and boost my joy!
Progress: Humans are dynamic beings. To thrive, our relationships need to be dynamic, too. If you’re marching in place, things can get stale. Or you can start to drift apart.
But if you are working on a financial plan together, then you’ll feel connected and inspired. Paying off that debt is something to celebrate...together! Saving up to buy that car in cash is an empowering joint venture!
See that? It’s you two growing together, and that will improve your finances, relationship, and lives!
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This all sounds great, right? Maybe you’re all like “sign me up!”
Well I’d be happy to, but you can’t just invent a Financial Prosperity Plan, with an accompanying couple budget/spending plan, out of thin air. (By the way, from now on I’ll refer to the aforementioned “financial plan” or “shared financial vision” as a “Financial Prosperity Plan.”)
There are stages and steps to making a strong plan that will stick. And now, I’ll reveal them to you!
3 Steps to Financial Clarity, Teamwork, and Peace of Mind
Step 1. Talkin’ Bout Money
To make a plan that you both are inspired by, you’re going to have to talk about it, of course. But talking about money doesn’t come naturally to most of us. After all, money is still a taboo topic in many circles. Add that to worry of your partner judging or trying to restrict you, and we’ve got a lot of roadblocks in the way.
How do you overcome this?
Start by sharing about your inner relationship with money.
If you go straight to the numbers without a sense of safety or a bigger vision, you’re just asking for a fight. But you can get things off the ground by sharing your points of view, experiences, dreams and fears about money. This is powerful because it helps you learn about yourself and your partner while minimizing the chance for argument, since you’re not actually making a financial decision.
For some of you, getting through a conversation about money without fighting will be a huge victory, or it will at least get the juices flowing and set the stage for further dialogue and discussion.
Here are some prompts to help build understanding, which in turn will start cultivating trust and safety around money talks:
What comes to mind when you think of money?
How did your parents handle money when you were growing up?
What money-related stereotypes are associated with your identities?
What have been your experiences with credit cards, bank accounts, and other financial products and institutions?
Once the trust and safety are starting to develop, you can move on to Step 2. Remember, though: there’s no harm in revisiting Step 1, and it’s common and even healthy for the steps to overlap at different times!
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Step 2. Digging the Data
To make a financial prosperity plan and a couple budget, you’ll need to know where you’re at and where you want to go. Otherwise, you’re just guessing and probably restricting yourself without making sure it’s worth it! So, do these things:
Figure out your EXPENSES, i.e. money you’re spending. I recommend writing/typing out by hand your last 2-3 months so that you really get where your money is going.
Insider Tip: Don’t stress about 100% perfection. The point is to get in touch with how you’ve been doing things so that you can be thoughtful as you move toward a proactive approach to your couple budget, allocating your money in advance so that you can make the most of it!
Tally up your INCOME (money coming in); DEBTS (money you owe); and ASSETS (items of value). List them all somewhere, scaling your income to a monthly amount or average, and add in your credit scores, too.
Brainstorm and decide on your top Individual and Joint Priorities. I recommend 3 & 3: choose 3 joint priorities that you want to achieve within the next 3 years. And feel free to add 1-2 individual priorities, as well, i.e. ones that are not really for your spouse but are mainly for you. In my case, an example would be a craft beer collection and fridge!
Now it’s time to identify your Budget Priorities. Hopefully you’ve been growing more comfortable talking about money and looking at your numbers. Now, it’s time to decide how you rank the importance of various types of regular spending. This mainly covers monthly expenses but may also include, for example, putting money towards those two out-of-state vacations you want to take each year. I recommend putting each expense into one of four categories:
Necessary (i.e. rent; food; minimum monthly debt payments; etc.)
Totally Worth the Money
Nice to Have
No Idea Why We Spend This
As decisions get made, whether they entail decreasing or even increasing spending, those four categories will be your guide.
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Step 3. Make It Happen
Now it’s all about the execution.
First, take all this data and information, and work the connection between your goals and your income & expenses. In particular: the more income you have left over after expenses, the more money you’ll be able to put toward your goals, which means you’ll achieve them more quickly.
Here’s a screenshot of an example plan I created:
Once you’ve finalized your couple budget and financial prosperity plan, then you must decide how to put it into action. For example:
Consider your budgeting and tracking approach, i.e. the envelope method; manual data entry; or apps built for couples such as Zeta and Honeydue.
Allocate the various financial roles and tasks, ideally playing to each person’s strengths and preferences.
Insider Tip: I recommend that each person gets experience with each role and task. This way, if there’s ever a need -- whether emergency or otherwise -- each of you feels capable and doesn’t have any additional stress around figuring out how to actually pay the electric bill in order to keep the lights on (so to speak).
Create a structure for regular meetings and check-ins. To start, I recommend weekly check-ins to make sure nothing is out of whack and monthly deep dives. Over time, you can adjust as appropriate.
Practice accountability, humility, and forgiveness with each other, as mistakes and miscalculations will happen. This really goes for all areas of our lives and relationships, and money is no exception.
Continue growing and learning around the intersection of relationships and money. Keep exploring and sharing with each other about your relationships to money, including fears & worries and hopes & dreams. Subscribe to a podcast, read a book, or get individualized support.
If you follow these steps, you will get a massive boost to both your relationship and also your financial situation!
Imagine what it would be like to have:
Clarity around where you’re at and where you want to get to;
Teamwork around working on your financial goals together; and,
Peace of Mind that can only come with having open dialogue and a solid, achievable plan along which you are progressing.
This is all available to you.
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.
