Imagine the scenario: You are single. Today you are able to create a Budget habit and control your finances. Then, you decide to move in with your partner. What should you do? How to maintain your finances under control now that you have different variables on the table?
The key to succeeding in a common or a couple’s budget is to work together.
You need to understand the new picture, plan and work together to stay on target, avoid debt and maintain control of your finances.
How to Do it
- First, have an honest conversation to understand each other’s budgeting methods, desires and the reality of both financial situations. Then, list all the new variables: Income, Savings, expenses and debt. With all the information, create a budget based on your reality together.
- Any extra help or advice from your bank is valid.
- Plan to spend less than you make.
- Create a real usable Emergency Fund. This alone can save calamities, such as not being able to afford monthly expenses or ruining your savings plans. With this in place, you should be able to weather financial emergencies rather than creating emergencies.
- Create a realistic savings plan. You both can decide if the Savings goal will be specific or just for the purpose of saving. And remember not to spend any of those savings. They are there for a reason, and they usually create happiness.
- Always pay bills on a timely basis; don’t let them build up or forget them. Doing this will help keep you out of debt.
- Learn about debt and make sure not to create it. Debt is not your friend. In fact, it wastes money (interest and penalties). In some cases, it even wastes lots and lots of money. And it creates chaos, uncertainty and anger. If a credit card can’t be properly managed, destroy it and go to a debit card.
- If a reasonable expense is needed, then discuss it and align the best way to proceed to avoid debt in the future.
Transparency plays a major part in Budgeting
Couples should start by truly outlining their own plans and desires. Being truthful really helps. After all, you are building a life together. You wouldn’t want your financial problems to come back to haunt the relationship. It is even more important if marriage is in the works. Finances are right at the top of family tension and arguments, which need to be addressed properly.
It is reasonable to keep some funds in joint accounts to pay for such things as utility bills or rent. It is also reasonable to keep joint funds in savings accounts when the savings are for a joint item like a trip together. It is, in fact, reasonable to put a lot of funds in a joint account, but not all funds. It is also reasonable to keep finances totally separate so long as both people totally agree on how expenses and savings will be used. It simply depends on how each person has used their funds in the past.
The point is to Work Together to have a bright future ahead of you.