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For many couples, their wedding is one of the first times they explore joint budgeting on a larger scale—and budgeting for a wedding is a pretty big feat. Now that you’re married, though, it’s time to budget for life. That sounds scary—sorry! Fortunately, it doesn’t have to be. As long as your open, honest, and realistic with your spouse, joint budgeting can actually be a really surprising way to deepen your relationship. Read on to learn more about joint budgeting—and where to start.
You see the thing about finances is that you can’t avoid them. So, don’t avoid talking about them. It’s not an exciting conversation, we know, but it doesn’t have to be stressful either. Here are three tips to make it go as smoothly as possible:
Come prepared. It shouldn’t be the shortest conversation you ever have but it doesn’t need to take all day. Gather any documents or statements ahead of time. Ideally, each of you should bring:
Agree to disagree. Expect some tough moments, but be prepared to talk them out and move on. Hear your partner out and make sure you get the chance to articulate your points, too.
Talk values, not just numbers. Bring a human touch to an analytical conversation. The reasons we spend or save the way we do usually relate to our values. Be cognizant of these differences.
If you’re wondering what exactly you’re supposed to talk about during this money talk, the answer is, well, everything. The goal is to find out early on whether you and your spouse are on the same financial page. You need to know their financial history, hang-ups, and hopes. Here are some questions to get you started. Keep in mind you may know the answers to many of these, especially if you already live together, but it doesn’t hurt to circle back now that you’re married.
Now that everything’s out in the open—your hopes, your fears, your histories—you can start to prioritize and set financial goals as a couple. Financial goals and priorities are different for every person and couple—and they’ll determine how you create your newlywed budget.
NOTE: Saving for retirement, paying off debt, and building an emergency fund should be part of your budget planning no matter what.
When you create your goals, remember that they work better with set timelines and specific numbers. Each goal should be actionable, measurable, and, of course, reasonable. Some common goal examples are:
Creating a budget is different for every couple, but the basics still apply.
First, calculate your actual combined take-home income. If you have deductions for health insurance or retirement, add those back in. They’ll go into your actual budget, but for now, you need a big picture look at what you’re making together.
Second, decide your budgeting approach. This is the breakdown of how much (typically by percentage) of your income will go to the various priorities and goals you set up. A common approach is the 50/30/20 budget. This breaks down to 50% of your income for needs (this includes those insurance deductions), 30% to wants (saving for a new car or a new puppy), and 20% to savings and debt (here’s where that retirement deduction comes in).
Next, track everything. Use a spreadsheet, a financial app, a financial planner—whatever will keep you and your spouse set on your new budget. And, when we say everything, we mean it. If you don’t count or track small expenses here and there, they add up—and your budget will suffer.
Last, adjust regularly. Set up time every month or quarter to review how things are going. You’ll likely need to make changes every few months to adjust for the changes in your life. This is fine and normal. Just make sure you’re both always on the same page about any alterations.
Budgeting isn’t fun but it can mean fun later. Tackling the tough stuff upfront can help seal your fate for a financially happy future.
You Need A Budget (YNAB) is a software and education company that helps people gain total control of their money, and in doing so, their lives.Get Started