Years ago when it was common for one spouse to stay at home and the other to make a living for the family, budgeting was more clear-cut. With one income, deciding where expense payments would come from raised no questions. But today, with many two-income heads of households, many options and choices exist for budgeting.
- acknowledge that no one system will fit every couple
- jump in a pool
- conduct regular financial meeting
- get fixated
- neglect a budget
- forget to change it up
- keep it all in
- stop having fun
Each person – and couple – has individual needs, values, skills, interests, attitudes and personalities.
“Equal share” and “proportional share” are two methods couples can consider. In “equal share,” each individual puts an equal amount of his/her income into a joint account. This account serves as a “utility account” to cover basic household expenses and savings. The partners then can save or spend the remainder as they wish. Since resentment in the higher earner can arise, some couples prefer the “proportional share” method. There, each person contributes a percentage of his/her income to the joint account, with the balance left for discretional individual spending.
The “pool method” has couples combine all of their income to use for household and other expenses, and savings. In this way, the person who earns less is not penalized in individual purchasing ability. Alternatively, keep your pools separate. Each partner keeps his or her own money, and is responsible for specified bills. The person earning more might pay a bill that is generally higher (such as the mortgage payment), while the one earning less might pay a bill that generally runs lower (such as a utility or phone bill).
Each partner can contribute to the relationship/family in different ways, acknowledging that it takes money, time and skills to run a household. Couples who share responsibilities create a situation in which both are equally vested.
Financial discussions help couples learn more about each other and remain focused on the goals they have set. Some couples do well with monthly meetings to review the budget; others prefer to do it weekly. Meetings don’t have to be lengthy. Having a set schedule, though, removes guesswork and helps encourage openness about all purchases or debt problems.
If you try a system and it doesn’t work, change it. Experiment, if you need, to find what works best for you. Make sure to discuss and choose together.
Learn to create and use a simple budget – around goals you set together. Your goals may range from saving on grocery bills to saving for retirement, and include provisions so you have time to train for the marathon you’ve always wanted to do. Budgeting software (much of it free and downloadable online) is available, but a spreadsheet or pencil and paper can work just as well.
Change financial responsibilities and tasks from time to time. If one person always writes the checks for the bills, the other person should take a turn now and then to know what’s going on and how to do it.
If one person feels guilt or resentment about making (or spending) more or less than the other, it is going to grate on the relationship. Open up communication in a kind, loving way, which can be easier said than done. Whether it’s figuring out how one person can earn more income or deciding on spending money for each, talk about it with an encouraging tone. Remember you are a couple, and got together to share your lives. That includes finances.
However you budget, remember that you are a committed couple first and foremost. In the bigger picture, the money you make belongs to you as a couple. So don’t forget to budget something – even if’s a very small amount, or simply making sure to budget time – to have fun together.
Whether couples choose the equal share, proportional share, pool, separate or other method (or a combination), the key is to talk it through and do it together. Making sure you are the same page when it comes to goals will go a long way in easing the budgeting process, and making it a successful one.