Working with Your Spouse to Develop a Budget
- March 5, 2019
- by Emily
Conversations about money can be pretty dry. We don’t tend to think of accountants having touchy-feely jobs or a sense of humor. But when you’re working with your spouse on a household budget, or having any one of the many conversations about money necessary to keep your marriage healthy, the thing to remember is that finances can be a very emotional topic. For some people money talk stirs up feelings of shame, others feel fear. Here are some tips to keep in mind as you work with your spouse to develop a budget.
Start with Priorities
A budget is really nothing more than a document that helps you align your spending with your priorities. But the pro tip here is that your priorities are not necessarily the same as your spouse’s. So instead of starting your budget conversation with numbers, start with priorities. The key at this stage is that you’re not assigning a figure to any particular category, but just saying “I think X is more important than Y.”
For a real-life example, I personally wear only clothes that I get free from friends who are cleaning out their closets, but will gladly pay top dollar for grass-fed beef, fresh salmon and wild mushrooms. My late husband and I once had an argument about the price of a grapefruit. He did not prioritize spending on fancy food. He liked to buy brand-new clothes, though, which I still can’t understand.
Recognizing where each person’s priorities are before you start putting numbers in your budget is a good way to make sure you’re creating a budget that will work for both of you (and not make anyone feel resentful).
Create “Spending Money” Line Items
Each partner should have some fun money. There are different ways to manage your fun money and to decide how much each person gets. It depends on how integrated your finances are, among other things. Here are some things to remember:
- Personal spending money does not get used for any joint expenses. It’s not for toilet paper, kids’ summer camp or family vacations.
- As long as it’s not being spent on anything illegal, you shouldn’t criticize or care at all how your spouse spends his or her fun money, no matter how stupid you think video games are (or new clothes).
It’s also important to evaluate, individually and jointly, what you think is “fair.” Do you or your spouse have an expensive hobby, or support a family member financially? Is there an imbalance in the amount of student loans you each have?
After you get that sorted out it may help to physically separate the money into different savings accounts. Your credit union or bank will gladly open multiple savings accounts. From there you can schedule automatic contributions into each pot. You might have one for each of you, a vacation savings account, another for a down payment on a house, and one for rainy days. For bonus points while you are at it automate your retirement contributions.
Let’s Talk Numbers
At some point, you’re going to need to start plugging numbers into your budget. Here’s how to put a dollar amount on the priorities you’ve established.
- Track your expenses, both individually and as a household, for at least two months
- Figure out your monthly income, both individually and as a household
- With the priorities you’ve already established in mind and with a category dedicated to each spouse’s fun money start plugging in numbers based on what you’ve been spending.
- As you’re working, it should be fairly obvious where you could reduce spending. But make sure you’re working together. If your spouse loves to eat out (but you don’t), slashing your restaurant budget down to $0 isn’t going to work.
Budgets are living documents. Once you’ve created your budget continue tracking your expenses to see how close your actual spending and saving is to your budgeted amounts. Creating a budget is something you can do in a spreadsheet, on paper, or using one of the many budget apps available though we think ours is the best because we don’t sell your data to advertisers like everyone else.
Working with your spouse to create a budget can be difficult if you don’t acknowledge the money-related emotions you both bring to the table. But if you’re married, and especially if you have combined finances and/or children you’re raising together, creating an individual budget doesn’t make sense.
If you’re wondering where the money is going, Wealth Meta’s Budget Tracker can help.