How To Budget as a Couple (2024)

Budgeting as a couple can be a difficult process. It's hard to move from the mindset of caring only for your own financial needs to balancing the needs and wants of your partner.

Without taking the time to talk about money, though, couples can find themselves stressed about finances down the road. Long-term success requires a commitment to budgeting as a couple. Here's what you can do to start things off on the right foot.

Key Takeaways

If your spouse refuses to combine finances, set up a household budget to handle the household expenses. You may want to seek counseling to address the underlying issues behind choosing not to combine finances.
If you are not married yet, you should set up a household budget and wait to combine all of your finances. It will protect you financially in the event of a breakup.
Your budget should always include long-term financial goals. You should also be regularly saving money. Remember to work up to saving a year's worth of expenses in your emergency fund.
Be sure to plan time together, too. Cheap dates ideas can help you build your relationship and stay on budget.

Start with the Basics

Before you sit down to plan out your budget with your partner, spend time together talking about your financial habits, goals, and desires. Understanding each other and how you both approach money can help provide a basis for moving forward.

Understand that different styles aren't "good" or "bad." This phase is really about getting to know the other person and being honest. When you get it all out there, it's easier to know how to proceed.

If your partner is hesitant, you may need to change your financial approach. See whether you can make it a more positive experience and frame the situation as working together as a team to get the best financial start together.

Determine Your Household Needs

There is wiggle room on how much you spend on these items. You can save money by buying a less expensive car, cutting back on groceries or downsizing. Remember, these obligations need to be met before you spend on your luxury or extra items.

Note

When you first start budgeting together, you might need to adjust expectations so that you are both on the same page. One person may want to save more and live cheaply, while the other may be more of a spender.

As a couple, prioritize your needs over your wants as you budget together. Be clear about what should come first, and why. Additionally, if one (or both) of you have debt, you need to figure out how to handle it. You need a plan to tackle it in a way that allows both of you to feel comfortable.

Create Long-Term Goals

It's important to set goals to work on as a couple. These long-term goals should be part of your financial plan. The plan can help you determine how soon you can buy a house or when to start a family. It can also help you plan for retirement or your dream vacation.

When you have specific goals you're working toward each month, it can make sticking to a budget easier. If you are just limiting spending and saving without a goal in mind, it is easier to justify overspending on a regular basis.

Some good beginning goals are to get out of debt and to begin to save for a down payment for your home. You should also make saving for retirement an important part of your financial plan.

Address Individual Needs

Once you have determined your household needs, start talking about individual needs and wants. They can include items such as gym memberships, clothing costs, haircuts, and other items you may spend different amounts on.

You may be inclined to give your spouse a hard time about not cutting back on the amount they spend on video games, while you continue to spend what your partner might feel is an exorbitant amount on your hair.

Recognize that your needs and wants are different from each other's, and be ready to compromise. You may want to set up an allowance to spend on your wants without being accountable to the other person.

Note

Listen to your partner to understand what is important to them. You should each have money to spend on things that matter most to you as individuals.

As long as each partner is sticking to the budget, there is no reason to argue or fight about how that money is spent.

Should You Combine Your Finances?

A big question that comes up when budgeting as a couple is whether to combine finances. This is a matter of personal preference. However, there are three main approaches.

Combine All Finances

Pretty much everything from both of you goes into a big pot. All income and expenses are shared. Partners might have small accounts for their personal discretionary spending, but, for the most part, everything is shared.

Separate All Finances

With this approach, each person has their own accounts. Expenses are divided up and assigned to each partner. Bills might be divvied up based on a 50/50 approach, or it might be based on each person's income. In some cases, where one partner owns a house, the other might even pay rent.

Hybrid

Other couples find a hybrid approach makes more sense. Perhaps there's a joint account for household expenses and other shared goals (like vacations or saving up for a house). Each partner contributes to the joint account but keeps the rest of their accounts separate. Again, this can be a situation where each person contributes the same amount or each partner might contribute a percentage of their income, or there might be some other way to determine how much each person adds.

The important thing is to discuss how to manage finances before getting too far along in shared budgeting. Make sure both of you feel that the approach is equitable and that you're both adequately protected in the event of a breakup.

Set Up Budget Meetings to Track Your Spending

You both need to take part in tracking your spending. A weekly budget meeting usually works. During this meeting, discuss your progress toward shared and individual goals. Touch base about category spending and what's left.

In the beginning, you may need to go over this daily, but eventually you can do it once a week, or even sit down once a month. It can help to choose good financial software that you can sync on your phones. In fact, there are plenty of apps available that are designed for couples to coordinate their finances. As you get better at following your budget, these meetings can be shorter and just as effective.

Keep in mind that when discussing finances, it is important to remain calm. If one spouse makes a mistake, find a solution and move forward. It does not help to dwell on mistakes or get upset.

Bottom Line

Don't let budgeting cause undue stress in your partnership. When you start exploring the possibility of combining finances and living life together, it's best to establish good habits from the beginning, allowing you to avoid serious disagreements later.

Frequently Asked Questions (FAQs)

What are the best budgeting apps for couples?

The best budgeting apps for couples are those that can sync across multiple devices so each of you can access them from your own phone or computer. Good options to try include Mint, Mvelopes, and Goodbudget. You may need to try a few differnt apps to find the one that works best for you and your partner.

How do you create a budget?

To create a budget, start by assessing all of your sources of income. Once you know your monthly income, subtract your mandatory expenses, such as rent, insurance, and utilities. Then subtract your debt payments, such as those for credit cards or student loans. The amount you have left is what you can apply toward savings goals and discretionary expenses.

Insights, advice, suggestions, feedback and comments from experts

Budgeting as a Couple

Budgeting as a couple can be a challenging process, as it requires moving from an individual mindset to balancing the financial needs and wants of both partners. However, taking the time to talk about money and creating a budget together is crucial for long-term financial success and avoiding stress about finances in the future.

Starting Off on the Right Foot

To start budgeting as a couple on the right foot, there are a few key steps you can take:

Set up a household budget: If your spouse refuses to combine finances, it's important to set up a household budget to handle the household expenses. This can help ensure that both partners contribute to the financial responsibilities of the household. Seeking counseling may also be beneficial to address any underlying issues behind the decision not to combine finances [[1]].
Wait to combine finances if not married: If you are not married yet, it is advisable to set up a household budget and wait to combine all of your finances. This can help protect you financially in the event of a breakup [[1]].
Include long-term financial goals: Your budget should always include long-term financial goals. It's important to regularly save money and work towards saving a year's worth of expenses in your emergency fund. This can provide financial security and stability in case of unexpected events [[1]].
Plan time together: It's important to plan and prioritize time together as a couple. Cheap date ideas can help you build your relationship and stay on budget. Remember, nurturing your relationship is just as important as managing your finances [[1]].

Starting with the Basics

Before sitting down to plan out your budget with your partner, it's important to spend time together talking about your financial habits, goals, and desires. Understanding each other's approach to money can provide a basis for moving forward. It's important to be honest and open about your financial styles and preferences. Different styles aren't inherently "good" or "bad," but understanding them can help you know how to proceed [[1]].

If your partner is hesitant about budgeting, try to make it a more positive experience by framing it as working together as a team to achieve the best financial start together. This can help create a sense of unity and cooperation in managing your finances [[1]].

Determining Household Needs

Once you have a feel for each other's financial styles, it's time to determine the household needs. This includes expenses such as rent or mortgage payments, utility bills, groceries, car payments, and debt payments. It's important to prioritize these obligations before spending on luxury or extra items [[1]].

When starting to budget together, you may need to adjust expectations so that you are both on the same page. One person may want to save more and live frugally, while the other may be more inclined to spend. It's important to prioritize needs over wants and have a plan to tackle any existing debt in a way that allows both partners to feel comfortable [[1]].

Creating Long-Term Goals

Setting long-term goals as a couple is an important part of budgeting. These goals should be part of your financial plan and can include buying a house, starting a family, planning for retirement, or saving for a dream vacation. Having specific goals in mind can make sticking to a budget easier and help justify saving and limiting spending on a regular basis [[1]].

To create a plan for achieving your goals, consider the following steps:

Pay off debt: Create a plan to pay off your debts, listing them from highest interest rate to lowest, and start paying them off one at a time [[1]].
Set clear savings goals: Determine when you want to hit each financial milestone as a couple, such as saving for a down payment on a home [[1]].
Consider retirement savings: Figure out which tax-advantaged retirement accounts to start contributing to as part of your long-term financial plan [[1]].

Addressing Individual Needs

After determining your household needs, it's important to discuss individual needs and wants. These can include items such as gym memberships, clothing costs, haircuts, and other personal expenses. It's important to recognize that each partner's needs and wants may differ and be ready to compromise. Setting up an allowance for personal discretionary spending can help ensure that both partners have money to spend on things that matter most to them as individuals [[1]].

As long as each partner is sticking to the budget, there is no reason to argue or fight about how that money is spent. It's important to listen to your partner and understand what is important to them [[1]].

Combining Finances

Deciding whether to combine finances is a personal preference for couples. There are three main approaches:

Combine all finances: In this approach, everything from both partners goes into a shared account, and all income and expenses are shared. Partners may have small accounts for personal discretionary spending, but for the most part, everything is shared [[1]].
Separate all finances: With this approach, each person has their own accounts, and expenses are divided up and assigned to each partner. Bills may be divided based on a 50/50 approach or each person's income. In some cases, where one partner owns a house, the other might even pay rent [[1]].
Hybrid approach: Some couples find a hybrid approach more suitable. This may involve having a joint account for household expenses and shared goals, while keeping the rest of their accounts separate. Contributions to the joint account can be based on an equal amount or a percentage of each partner's income [[1]].

It's important to discuss and agree on how to manage finances before getting too far along in shared budgeting. Both partners should feel that the approach is equitable and provides adequate protection in the event of a breakup [[1]].

Tracking Your Spending

Both partners should actively participate in tracking their spending. It's recommended to have regular budget meetings to discuss progress towards shared and individual goals, category spending, and what's left in the budget. Initially, daily meetings may be necessary, but as you become more comfortable with the budget, weekly or monthly meetings can suffice. Using financial software or apps designed for couples can help coordinate and sync your finances [[1]].

When discussing finances, it's important to remain calm and find solutions together if mistakes are made. Dwelling on mistakes or getting upset does not help the situation [[1]].

Conclusion

Budgeting as a couple can be a challenging process, but establishing good habits from the beginning can help avoid serious disagreements later on. By setting up a household budget, discussing financial habits and goals, prioritizing needs over wants, and tracking spending together, couples can work towards long-term financial success and reduce stress about finances in their relationship [[1]].