7 Tips for How to Budget as a Couple

Financial woes are one of the leading causes of conflict among couples in North America. But you can beat the statistics and ensure that money is a constructive part of your relationship by learning how to budget as a couple. Talking about financial matters early and often is an investment in your future. Your partnership can result in a strong economic unit. Here are seven important guidelines to get you working toward that.

Here’s how to budget as a couple.


1. Consolidate. If you decide on joint responsibility for debt, then it makes sense to seek out a joint, low-interest consolidation loan or line of credit to pay off higher-interest credit or consumer debt.

2. Get Rid of Bad Debt. Many young people are in debt to the Bank of Mom and Dad or to other family members. Clear off that ugly debt as soon as possible. You’ll gain parental respect and self-respect, improve relations among family members and start developing the kind of financial independence that is a cornerstone of strong relationships.

3. Decide Who Pays. Partners rarely earn equal salaries, so when deciding how to budget as a couple¬†you need to determine if you intend to share expenses fifty-fifty or get a bit Marxian about it — each according to his or her ability to pay. Nail this one down because it has enormous potential for disagreement as careers develop.

4. Decide How You’ll Pay. Credit can be a relationship killer. Talk about how you are going to pay for major expenses, such as furniture and cars. The big-store come-ons, offering no interest and no payments, often end up as debt at 26 percent interest or more if you can’t produce the full purchase price when the payment/interest freeze is over. It’s far better to develop your own savings plan. That bedroom set will take longer to acquire, but you’ll avoid paying hundreds of extra dollars in interest.

5. Keep It Simple, Smarty. Reduce the potential for discord by adding up your shared bills. Then open a joint account and set up a monthly automatic withdrawal from each partner’s personal account for the agreed share. Simple and automatic wins every time. Each of you can then carry a debit card for that account for purchases like food. Follow the same approach with savings for major purchases.

6. Broach The B Word. All of the above discussion about how to budget as a couple will be for naught if you don’t actually create and follow a budget. It is the single most powerful tool in developing a strong financial relationship. Budgets don’t happen overnight. You have to spend time tracking your expenditures by going through your bank accounts and debit and credit card statements, then slotting them into a budget format. This exercise is an eye-opener and usually leads couples to some cost-cutting when they realize how much they are actually spending on non-essentials. There are lots of free online budgeting tools you can try.

7. Dream On. What are your dreams and priorities? A couple’s goals might not be the same or cost the same, so communication and compromise are vital. He wants golf clubs, she wants a trip around the world. She wants to return to school one day, he wants a six-month sabbatical. When figuring out how to budget as a couple, make sure dreams and goals are part of your plan together. A wish list creates purpose in a financial plan for the present.

Image(s): Goldmund Photography

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