Finding balance in a relationship can be difficult especially when it comes to money. But with good communication, clear goals and a proper plan, budgeting as a couple can be rewarding for you both. Set up your partnership for financial success with these tips from leading finance experts, Yes Finance.
Communication is key.
The first thing you should do is sit down with your partner and have an open and honest discussion about both of your financial history, habits and goals. “Having a good understanding of how you both approach money can help provide a strong foundation for moving forward,” says Yes Finance owner and director, Peter Steel. To find out more about your own approach to money, try Sorted’s money personality quiz.
Decide on needs and find common ground.
In order to have a good understanding of each other’s current financial situation and where you want to go with your money goals you should next determine what the needs of the household are. These needs can include expenses such as rent, mortgage, utility bills, groceries, car payments, and debt payments.
“When you budget together, make sure you prioritize needs over wants. Also, you might need to adjust your expectations, one person may want to live more frugally and save while the other may like to spend more. Finding common ground is key,” adds Peter.
When you have clear goals, you’re working toward each month, it can make keeping to a budget a whole lot easier. Divide your financial goals into short, medium and long-term sections to make sure you are planning for both your present and your future. It’s not just about financial goals, ask yourself ‘what do I want life to look like?’. Those goals will drive your choices on how to spend your money together. Try using the S.M.A.R.T system for goal setting.
Adjust when needed.
Once you have this new budget stick with it for it at least two weeks and discuss with your partner what’s working and what’s not. You may have underestimated whet you needed for bills. Readjust by moving some money from a category where you haven’t spent as much. “Make it fun and schedule a “Money Date” once a week to go over and re-evaluate your goals,” advises Peter. According to a TD Bank Love & Money Study couples that regularly talk about their finances are happier in their relationships than those who discuss finances less often.
A joint account can help you stay organized and track your spending. If one half of the couple is better with money than the other a joint account can help with accountability and will help build trust in the financial relationship. Sorted recommends setting up a joint account to cover bills and other expenses, or a savings account for shared goals like holidays.
It’s going to take a few months to find a budget that works best for you as a couple but be patient. Remember that budgeting is just about making financial decisions that help achieve your life goals as a couple.