3 ways couples can set a household budget that works

#SmartKobo: How couples can set a household budget that works

Household budgeting enables couples to not overspend on basic needs

Setting a budget as a couple can be a very difficult process. It is really hard to move from a mindset of taking care of your need to balancing your need with your partner/kids. But the good thing about budgeting as a couple is that it will enable you both to reach your financial goals and have a beautiful future.

Money is one thing asides infidelity that causes divorce. However, in other to avert such, it is always advised to have a conversation about money and map out ways to manage your finances. Your budget will not only allow you to plan and track how you spend your money, but it will enable you to plan your future and also enable you both to gain financial freedom.

Managing household expenses is an essential, though sometimes difficult, task. Whether your household has two incomes or one, it is important to know how you are spending your money and where financial improvements can be made.

Budgeting may seem daunting because it implies cutting back on some of your more fun expenditures and involves putting together a worksheet or a spreadsheet. But it doesn’t have to be as hard as it sounds.

You will first need to organise your household budget and determine how much income you and your partner earn. Then, you will have to calculate your monthly expenses.

Two people creating a budget is not always that easy, but if you both are determined to reach your goals, it is achievable. All it entails is a budget and self-discipline. This Budget sheet sample below can work very well if the two parties have a source of income

DETERMINE YOUR HOUSEHOLD NEEDS

First, you need to determine the household needs. This would include things such as rent or mortgage, utility payments, groceries and child care. 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, renting a smaller place. These obligations need to be met before you begin to budget on luxury items.

When you are first married, 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 want a better apartment and cut in other areas. Be sure to prioritise your needs over your wants as you budget together.

If one spouse comes in with a lot of debt, make a plan to tackle it together

It is important to set goals that you can 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 that you are 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.

Also, read #SmartKobo: 7 money mistakes every newly married couple should avoid

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.

Make clear savings goals and determine when you want to hit each of the financial milestones as a couple. A clear plan will help you be ready to buy a home or move onto the next step. Be sure to include retirement as part of this planning process.

ADDRESS YOUR INDIVIDUAL NEEDS

Once you have determined your household needs, you can begin to talk about individual needs and wants. These can include items such as gym memberships, clothing costs, haircuts, and other items you may spend different amounts on. It is important to recognise that your needs and wants are different from each other. It is important to compromise. You may want to set up an allowance to spend on your wants without being accountable to the other person.

Listen to your partner to understand what is important to him or her. Make sure that each of you have money to spend on the things that are most important to you.

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

SET A PERIODIC BUDGET MEETING TO TRACK EXPENSES

You both need to take part in tracking your spending. A weekly budget meeting usually works for this. During this meeting, you can discuss where you are in working toward your goals.

Additionally, you can talk about how much you have left in each category and any planned expenses you may have. You can adjust your categories as needed. In the beginning, you may need to go over this every night, but eventually, you can do it just once a week. The weekly budget meeting is key to getting your budget to work.