It can be difficult to manage finances in a relationship.
It’s easy to believe that everything is moving smoothly. Your budget and savings accounts may say otherwise.
Although it is not the most romantic way for you to spend your time together, discussing money and budgeting can make your relationship more meaningful.
It doesn’t matter if you use an Excel spreadsheet, a budgeting app, or pen and paper, it is important to talk with your partner about where the money is going.
Spend a few minutes at the end or beginning of each month to review your monthly budget together. This is your chance to review your monthly spending and savings, and then decide if you need to adjust for the next month.
These are some budgeting questions that will help you get started.
Four Conversations You Should Have with Your Partner when Budgeting
It’s important to know how to budget together before we start.
To get a better idea of where your money is going in the future, you will want to see what it has done.
You should be aware of:
Your income: What amount do you each bring in each month? Take a look at the total income you get from your businesses or jobs. Talk about the differences in income between your spouses. Every couple needs to find what works best for them.
Your fixed expenses: This is a list of all bills and obligations that must be paid each month. They should not change. These include rent, student loans, utilities, and life insurance. These are the monthly costs that you have already agreed to pay and likely come with a contract.
Variable expenses: These are items that don’t have a monthly repayment but which you still need to purchase: groceries, gasoline for your car, pet supplies and clothing, as well as household goods such shampoo and sandwich bags.
After you have all the numbers, it is time to ask some important questions.
These are the four budget questions you should ask your partner in order to strengthen your relationship and your wallet.
What do you think about your spending habits?
What do you think about your savings goals?
How can we manage our personal savings and spending?
Are we required to adjust our budget in order to achieve our goals?
1. What do you think about our spending?
This is the most obvious question that you and your partner need to ask each other as you reflect on the spending of the last month.
It is helpful to see how your actual spending compares with your budget. Take a look at all spending categories, including entertainment, food, and transportation.
Which places did you spend more than expected? What were the places you spent less than expected? Which place would you like to spend more?
Analyze the factors that led to you spending more than you expected. Talk to your partner about what you can do better next month.
If you are consistently spending more or less than your budget for a specific category, it is advisable to adjust your spending limits. It is better to be practical rather than stick to a number that doesn’t work for you.
Consider, for example, how much you can budget per month for groceries, but still manage to make $450 each month despite your efforts to reduce food costs. Adjust to a more realistic amount.
It is also true in reverse. What do you do with $75 extra? You can either reallocate the money or transfer it to pay for more expensive maintenance.
2. What do you think about our savings goals?
It’s great to pay your bills on time and have enough money to meet your daily needs. But, as a couple, don’t forget your big-picture goals.
Are you and your partner in agreement about where money should go if there is extra money at the end of the month?
You might want to save money for a down payment on a house, but your partner wants to use the extra money to pay for a summer trip to Europe. Maybe you have student loans that you want to pay off in five years.
It is possible that you don’t have enough money to save enough for many goals. This is why it is important to align your financial priorities as a couple.
As a couple, there may be smaller goals that you wish to save for. For example, buying furniture or home decor after moving into a new apartment.
A sinking fund can be created by setting aside a certain amount each week or month to put into separate accounts. You can create a sinking fund by contributing regularly to a pool of money that will help spread the cost of future expenses over time.
It can be easier to stick with a budget if you and your spouse have clear financial goals.
3. How should we manage our personal spending and savings goals?
Both of you will have your own personal items or savings goals. For example, you might spend $80 each month on your hair, but your partner may spend $80 on video gaming.
A “no-questions-asked” allowance can be a way to avoid conflicts.
No matter how much you have to save, invest, or spend, each person needs some money. Make sure that you agree to your personal allowance.
You can also choose to combine your finances if you aren’t comfortable doing so.
A joint account can be created for household expenses as well as other goals, such as vacations and weddings. Each partner contributes to the account, but the other accounts are kept separate.
4. Are there any budget adjustments that are necessary to reach our goals?
Once you have created a budget together, you can start to identify ways that you can save money each month or even make money.
This is particularly important if you are saving for a large goal but your budget makes it impossible to achieve that goal in the timeframe you desire.
Reduce unnecessary spending such as subscriptions that you don’t need anymore, and you’ll have more budget flexibility.
You shouldn’t limit your discretionary spending. Take a look at your most important expenses and find a way to cut costs.
You can ask your Internet provider for a lower rate or if they will match a quote from a competitor. You can also reduce your electricity and water usage to lower your utility bills.
It may be time for you to talk about ways to make extra money if you are already very frugal.
There are many ways to increase your income. You can ask for more work hours, overtime, or a raise at work.
A side hustle, or passive income stream, could be a way to supplement your regular job. Selling items around the house can increase your cash flow.
During these conversations, it’s important to not point fingers or stress income inequalities. It’s possible to live in a single-income household, where one spouse is taking time off from work to care for the children. That’s perfectly fine.
Even if you only have $200-500 per month, it is worth thinking of ways to make income.