The Ultimate Guide to Creating Budget Plans for Couples

create a budget

If you’ve been reading articles on how to create a budget as a couple, there’s a good chance you’ve seen a lot of straightforward, black and white advice. Some of these articles make it seem as simple as checking items off a to-do list.

But it’s never that simple. Nothing in relationships is ever that simple.

I’ve been married for three-and-a-half years and my husband and I are just starting to see eye-to-eye on this topic for the first time. And it’s not for lack of trying. We’ve had countless talks (ahem, arguments) on the topic and I’ve even written a few articles about it before. The plain truth is this: creating a budget is a process.

Are you and your partner ready for this process? Buckle up. It’s not always perfect, but you can get on the same page as long as you work at it. Here are some tips to help you get started.

Phase one: things are starting to look serious

The way you talk about money together will change as your relationship does. If you and your partner believe what you have is special, then it’s a great time to start broaching the topic of money.

1. Start slow

Feel each other out; to create a budget takes more than a couple of conversations. Treat this as a getting-to-know-each-other process, one that could even be enjoyable if you let it.

Not ready to talk about specific numbers? Figure out what your relationship with money is like. If you’re not sure, a great way to find out would be talking to your partner. Try word association or talk about what your family’s financial situation was like when you were growing up.

Getting to know this about yourself and each other can pave the way to productive teamwork when you create a budget later. You’ll be able to work with more than just numbers – you’ll understand why you have the habits, feelings, and thoughts you have about money.

2. Get the difficult money confessions out of the way

The longer you go without expressing the money confessions you’re scared of, the harder it will be. Now that you’re warming up to money conversations together, get those hard discussions out of the way.

It’s not easy to admit having student loan or credit card debt, or not having a savings account. But these things don’t make up the fabric of who you are. They are circumstances in your life. And, if you work hard at them, they won’t be in your future for too long.

If you really can’t bear the thought of divulging the money skeletons in your closet, this could be a catalyst for change. Part of the fear could be because you don’t have a plan for this money issue yet. If you sit down and strategize a plan, then you can make the money confession and confidently say, “I’m doing something about it!”

On the flip side, opening this up for conversation provides an opportunity for you to collaborate together on a plan. Two heads are better than one!

3. Keep an open mind

Just like you wouldn’t want your partner to judge you for your money confessions, you shouldn’t judge your partner for theirs. Be as open and receptive to your partner as you want them to be in return.

And also remember: you’re not married yet. If your partner doesn’t have a plan, be there for emotional and strategic support. There’s no need to freak out about their money situation because it’s not yet yours. By the time you get really serious and create a budget together, the entire scenario might look different.

Phase two: cohabitation might be imminent

Are things starting to heat up in your relationship? Have there been talks of engagement or cohabitation? If so, then it’s time to get down to numbers. Even if you don’t get married, moving in with someone creates legal responsibilities that you should be ready for.

1. Discuss how you’ll split rent and bills

If you’re apartment shopping, then it’s time to create a budget for the apartment – decide on the highest and lowest you’re willing to pay for rent. How much are both of you comfortable paying? How do you want to split it up?

I remember doing this with my now-husband and finding out that our comfort levels were very different. I wanted to spend 20 percent less on rent than his number – but he wanted certain accommodations that couldn’t fit into mine. While I was pretty stubborn at first, we ultimately decided the right compromise was to go to with his number but split the rent 75/25.

This was very hard for me. As an independent woman who’d been making her own way for 28 years, I wasn’t happy about paying less. I believed that costs should be 50/50 until we made a permanent commitment and a decision to pool our money together. And I’m not alone here.

Kara Perez, founder of financial literacy site for women, Bravely, talks about how she and her boyfriend worked through a similar situation. He earns more than she does, especially since she recently started her own business.

“My boyfriend making so much more than me does chafe at me. I’ve always been independent and I work my butt off as a freelancer. We talked a lot about shared goals and balancing both financial and household responsibilities. Ultimately, we decided to split rent evenly and have him pay 70 percent of utilities and internet.”

Whatever you do, create a budget for the apartment before you actively search for one. Because once you see a place and fall in love with it, this can be a lot harder to do.

2. Before you sign a lease, discuss all the finances

Remember the money confessions section above? Well, if you didn’t do it early on, do it now. Do not enter into a legal document with financial repercussions until you know what the other person signing the document can or can’t do.

Ask your partner directly if they have debt – and be willing to answer the same question. Ask about charged off accounts, collections, credit scores, and savings. You wouldn’t want to apply for an apartment together only to realize that your partner’s credit score is too low to pass. And you certainly wouldn’t want to enter into a lease only to find out that your partner can’t pay.

That could spell the end of your relationship and your finances.

Before you sign the lease, talk about all the financial things. And be willing to confess to your own. The truth will eventually come out, so make sure it comes out in a way that’s productive, not after the fact.

3. Pay your bills together

Once you move in together, pay your rent and utilities together. This is great practice for beginning the regular money dates you should have if you ever combine your finances.

Pour yourselves some wine or take yourselves out on a date. Do whatever you can to make this an enjoyable experience. As you pay your rent and utilities together, use that as a time to talk about your financial fears, goals, and immediate issues.

This is the time to admit if it was hard for you to come up with your portion of rent or groceries. Or it could be a great time to talk about saving or paying off debt. Just keep practicing getting these topics out in the open as often as possible. It will make it a lot easier to work as a team the longer you do this.

Phase three: committed for life

Are you married, engaged, or officially unofficially committed to each other for life? If so, it’s time to start talking and acting as one unit in your finances just like you do in life.

1. Decide how you want to handle your money together

This is one of the most debated topics on couple money: how to combine your accounts (or not). There are a few ways to approach it.

  • All joint accounts.
  • All separate accounts.
  • Joint accounts and separate accounts.

The first two should be fairly obvious. Couples who want no financial secrets or mystery go all joint accounts and couples who want total autonomy choose all separate accounts. Why would anyone do a hybrid approach? Usually, it’s to keep a joint for paying major bills or saving together, while keeping a separate account for daily expenditures you don’t want to be held accountable for all the time.

There’s no right or wrong answer to which you choose. Just remember that you still need to be on the same page in your finances, even if your finances aren’t all on the same bank statement. Dylan Ross, CFP®, AFC®, of Garrett Planning Network explains the idea of a “household” spending plan: “Just because you keep separate finances and each have your own account, that doesn’t mean you can’t create a ‘household’ spending plan based on the combined amounts.”

According to Ross, this joint plan can be done with or without joint accounts:

Combining total amounts for the purpose of developing a household-level spending plan helps make sure nothing gets overlooked. And because spending plans need to be flexible and may change often, having a single plan for the household should be easier to maintain than separate budgets, even if you’ll continue to maintain separate accounts.

2. Outline your common goals

Once you’ve decided on the logistics of your financial accounts, it’s time to talk about your common goals. Here are a few to decide on together:

  • Emergency fund.
  • Debt payoff.
  • Retirement savings.
  • Wishlist items such as a home, car, annual vacations.

Then you’ll want to create a budget itself. After you pay all your monthly bills, how much is left over? If you have annual or quarterly bills, it might help to divide them into their monthly cost and budget for them that way. Then decide how to allocate the leftover money.

This is where you’ll have to make some compromises. Your first priorities aren’t always going to be the same, so if you can’t decide on the same priorities, split the difference. Apply partial amounts to each of your top priorities so both of you is heard and working towards something that’s important to you.

3. Find a system to keep you on the same page

Have your spending plan under control? Great! Now you just need an easy way to stay on top of it together. Finance writer Carrie Smith talks about the journey she and her husband took to get on the same page. “One area of budgeting that the hubs and I found challenging was being able to manage two people using debit cards from the same bank account. I would always have to ask him what a certain expense was for or if he got the receipt. This made it frustrating and annoying on a daily basis.”

So how did they find a way to relieve their frustration?

“To streamline things, we decided to use the same credit card and have a budget meeting every Monday. We now go over the expenses together, categorize them correctly and make a payment for that week’s credit card balance.”

This worked so well for Smith and her husband that when she was unable to do much after having Lasik surgery, her husband could manage for the both of them. “During the month where I had eye surgery, Ryan was able to take over the budget duties and everything continued moving along smoothly. We have one designated credit card for all our household expenses and no longer have big issues over daily transactions.”

4. Try a budget app for couples

I loved Smith’s idea for staying on the same page with her husband in their budget, but I wondered, does tech help them at all in this? Turns out, it does!

“Yes,” Smith said. “We both use Mint and have it downloaded on each of our phones so we can both see the budget categories. This helps us stay on the same page every week!”

If you and your partner are already glued to your phones, why not use that to your advantage? Budget apps for couples can be a great tool to help. But what are the best budget apps for couples out there?

The truth is, if you use a budget app and add all of your credit cards and bank accounts, then you can track your expenses together on any app. But if you’re looking for a budgeting app for couples to really dig deep on together, Mint and YNAB (You Need a Budget) are two of the most popular out there.

Always remember this: life happens in seasons

So with all this advice, why did it take my husband and I more than three years to get on the same page and learn how to create a budget plan together? Because it took that long for us to realize that life happens in seasons, and so do finances.

You see, we met when we were in our late 20s, an age in which we’d been used to handling our finances ourselves with no one else to answer to or compromise with. This proved to be an unexpected challenge. I was rigid in my money practices and he was in his.

But as we grew together, the natural changes of life helped us see with a more flexible lens. I stopped worrying so much about the fact that I make less than him because when he started his own business I was able to help out. And when he realized I was meeting him in the middle on simple things like budgeting tactics, he met me in kind.

As you and your partner grow together, remember that the situation you’re in today may not be the situation you’re in ten years from now. So if you feel insecure about earning less, understand that the situation could change. And if your partner wants to be supportive, don’t feel guilty because you might have an opportunity to be supportive later.

And if you have different money goals or ideas of how to create a budget plan, keep talking about it. It will get easier to compromise the longer you’re together if you have open, honest, and frequent conversations about it. Sometimes it just takes time to come around to new ideas. But keep communicating and working as a team, and you will find your budgeting sweet spot.

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