My Finances, Uncategorized

Budgeting as a Couple

Budgeting as a couple

I think I’ve mentioned in passing that my husband and I do a budget meeting together every Sunday night.  This meeting has been pivotal in our marriage and our finances, so I thought I’d write a little bit about how we structure that meeting and why it works for us.  Finances can be such a struggle in marriage and we feel grateful that we’ve found a solution for our family!

A note about us

My husband and I are pretty young.  We got married while still undergrad students.  We have a joint bank account that we have used together from day three of our marriage.  I have a separate bank account, but I never use it and usually there’s only a few hundred dollars sitting in it.

Everything we have, we have built together.  I’m a stay-at-home mom right now, so that leaves my husband as the primary breadwinner.  Even though our primary income is his, we count it as ours and share all aspects of our finances.  Additionally, the massive student loans are his from law school, but I feel equally responsible for them and have no issue putting any income I bring to the table towards paying off those debts.  We are in this together.

This isn’t the ideal situation for every couple, but budgeting as a couple has brought us closer together and helped us to be more united.  We share similar financial and life goals, and working together on our budget helps us progress as a couple.  It didn’t come easy, the first few years we hard.  Getting in the habit of budgeting weekly was challenging.  We didn’t always share the same view on money.  We still disagree occasionally, but we’ve learned how to express our views and have a discussion without becoming overly emotional about it.  Like all good things, harmonious budgeting takes practice and time, but it’s totally worth it.

That said, here are the most important elements that have helped us to keep our budgeting mostly tension-free!

Schedule a time

We budget at the same time every week.  For a long time, we budgeted on a two-week schedule, but when we finished law school and had to start living on savings, we found that weekly budgeting was better for keeping our spending low.

Budgeting once a month was too overwhelming for us – it was too much at once!  I suggest budgeting at least every two weeks, or twice a month, to keep the task manageable and regular.

Besides keeping our spending in check, budgeting as a couple every week has blossomed into a “couples inventory” of sorts where we do far more than budget.  We talk about our weeks, set goals, coordinate our calendars, and we take time to discuss our relationship.  Now that the kids are older, we talk about what is going on in their lives and how we can be better parents.  We’ve been doing this for about two years now, and it has helped us in so many aspects of our marriage that I doubt we will ever go back to meeting every other week.  We still call it our budget meeting, but it’s more like a couple’s council.

All this started from having a regularly scheduled time just for budgeting!  Having on the calendar keeps you obligated, and doing it regularly helps make it into a habit.

Keep it low-key

Talking about finances can get very tense very fast.  We start our meeting after the kids are in bed, after we’ve eaten, and after we have had a few minutes to unwind.

Budgeting as a couple requires cooperation and conversation, and when we rush into it while we are still stressed, we tend to fight more.  When a new year starts and I need to update the spreadsheet, I do that outside of our regular budget time because it makes me a little stressed out.  We put away our phones and only use our computers for the task at hand.

We’ve learned to avoid confrontational tones about one another’s spending, and instead have agreed on a set of questions to help us reflect on our choices.  For example, “Was that a necessary expense?”  “Are you sure you need to buy those this week?”  Obviously, the tone of the question makes all the difference, so practicing a respectful attitude during our sessions is important.

Set an agenda

Once we are both in a good mental place to get started, we sit down together and I pull up our budget on the computer.  We have an excel sheet that I created and manage.  We love our excel method, and it’s got everything we need to get an idea of where we are financially at a glance.  If you want to try budgeting in excel, you can read my excel budget tutorial or get download my more advanced spreadsheet (it’s free!).

We have a routine for how our budget meetings go, and it started with a set agenda that I wrote down when we first started doing budget meetings.  Here are the main points of our budget meeting:

1. Review Expenses

The first thing we do is go through our bank statement and credit card statements online.  As we do that, we log each expense in the budget.  Doing this helps keep us in touch with our spending.  Tracking our spending also helps us get a grasp of how we need to plan for future expenses.

2. Review current balances

Each week, we review the balances in our different accounts.  Investment accounts we only check the first week of each month, but our credit card and checking account balances we log weekly.

3. Make credit card payments

After we’ve logged all the items on our credit cards and noted the balances, we pay them all off.  Occasionally, if we have a big expense that has our balance unusually high, we may not pay it all off in one week but we rarely carry a balance and we never pay interest.

One example of a big expense might be an insurance premium.  We amortize those expenses, so we have money set aside in our savings account for them.  Sometimes we may delay payment a week while we transfer the money.  This last year we were surprised by getting handed my husband’s bar fees a few months earlier than we expected.  Even with the best of planning, we do have things like that crop up!  We paid that off slowly over about three weeks, since it was an extra burden on our weekly budget.

Note that we don’t wait for statements or bills to pay our card.  We pay the posted balance each week, or at least the majority of it.  We love our credit cards because of the cash back and points rewards they give us.  I wrote about our credit card usage if you’re interested in more details.

4. Make savings payments

We have a strategy for managing our savings account.  When we make payments to our savings accounts each week, I log those in the budget so I can make sure the balances are correct.  We have a small emergency fund attached to our checking account, so our first step is making sure that is fully funded.  We only keep $1,000 in there, so most of our payments go into our high-interest account for other purposes, like long-term savings or upcoming travel.

Before we had an employer with 401k matching, we also made weekly payments to our Roth IRA.  We plan to get back to funding our IRA in addition to our 401K eventually, but right now we have other financial goals (pay off student loans!) so that’s on the back burner.

5. Make student loan payments

Yup, we make weekly student loan payments.  Sometimes they are small but trying to put in that extra every week pays off over time!  Also, checking in on our balance on a regular basis also keeps us grounded.  If we ever start getting to spendy, a quick stop by the student loan account usually brings us back to earth.

6. Review upcoming spending

We talk about big expenses coming up and what we expect to spend that week.  While we often have things come up that aren’t mentioned, like going out to lunch with coworkers, we try to anticipate everything from groceries to gas. I usually do a meal plan in the evening before or just after our budget meeting, so we can have an idea of what our grocery budget for the following week will be.

Planning our spending helps keep us on the same page with our money.  We are really serious about our goals of funding retirement and paying off student loans, and it takes serious spending discipline to keep enough of our paycheck available for those things.  Going over our planned spending keeps us accountable to each other so that we can be more successful in working towards those goals.

We also look at any large expenses coming due, like insurance premiums or routine car maintenance.  Since we amortize these expenses, these discussions usually involve moving money from our high interest account to whichever credit card we are putting the bill on.  Amortizing has been a huge budget saver for us and I wrote all about how and why we do it here.

7. Set or review goals

Our goals generally follow these five steps for financial wellness.  We have specific goals for five, ten, and fifteen years that we occasionally update.  We don’t always go into depth on our progress each week, but we do try to touch on them.  About once a month this leads to a deeper conversation about how we are doing and what we can do better.

If our savings has gone over our cap (we try to keep three months expenses handy), we might plan or execute a move of a chunk of it into our investment account.  If we want to take a trip, we’ll discuss a budget and set monetary goals for saving up for it.

Goals are different for everyone, but I suggest wrapping up your budget meeting by making a goal for the following week or month that will challenge you.  As an example, you could try to increase your retirement contribution, or up your savings rate.  Whatever you choose, goals help you push yourself and increase your financial health.

Final thoughts

Overall, budgeting as a couple has brought us closer together.  Finances can be really challenging, but it is so worth the struggle!  Having our regularly scheduled meeting, coming in with a good attitude, and following a routine agenda for the meeting have helped us to have more peace in our marriage as we navigate finances together.

Budgeting as a couple

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