We’ve discussed previously how Canadians are swimming in debt, with household debt at an all-time high of an astonishing $2.23 trillion as of August 2019. But Money can be a touchy subject when it comes to couples. And especially when you’re moving in with your partner for the first time or even if you’re newly wedded. Sometimes, money problems can cause arguments between you and your loved one and cause heated tension when you both are struggling to stay on top of your debt. When making a commitment to your spouse by moving in together or getting married, it’s important to be open, transparent and honest about your budget to avoid unnecessary strife.
An easy way to combat this is to put time aside to create a foolproof budget. Creating a budget in a couple allows you to plan for your future, whether it’s for vacations or making a huge purchase together. Not only this, but it encourages you to set financial goals together too. Creating a budget with your spouse is one of the best financial decisions that you can make in your marriage.
Why you need a monthly budget as a couple
By doing a monthly budget with your spouse, it will help you work together as a team. It also allows you to work together to meet your financial goals whether it’s buying your first car together or taking the plunge and buying a house. It also allows you and your partner to put money aside if you decide to start a family in the future too.
Benefits of creating a monthly budget as a couple
There are plenty of benefits of creating a budget as a couple, on top of your own personal budget. A budget will help you to direct where your money goes, and how you spend it, and how much you save, before it disappears. It adds an “equality” element to your relationship and ensures that each person in the relationship feels they are both equally contributing to your expenses. Being united with your finances will help you build a strong foundation for your marriage and help you grow together, sharing the good financial times and the bad as a team!
A example of monthly expenses for a newlywed’s budget will include:
- Accommodation: Rent or mortgage payments.
- Food: Groceries, lunches, and eating out.
- Bills: Electric, heat, water, telephone, etc.
- Health: Health insurance, prescriptions, supplements etc.
- Leisure / Fun: sports, yoga, gym membership
- Investments, savings, retirement accounts, credit score health.
- Entertainment: Netflix, Hulu, Amazon Prime, date nights etc.
- Debt: Student loans, credit cards, car payments, etc.
- Miscellaneous: random expenses such as gifts, birthdays or unexpected events (stay prepared).
- Transportation: gas, car insurance, oil change, tire rotations, general car maintenance, inspections, etc.
So, when it comes to budgeting, it’s difficult to figure out a starting point. So, let’s discuss five steps to create a successful budget and integrate it perfectly into your newlywed life.
Step 1: List all your combined income sources and amounts
Your income should be the first thing listed on any budget. In order to successfully plan how you spend your money, you must be open with how much you earn. It’s vital to know exactly how much money you both must contribute towards bills, so you can also make the most out of your spare money too.
To begin, simply list out all of your expected income in a one-month period. For example, you may work two jobs and get paid semi-monthly for one, and bi-weekly for the other. Write down the dates you receive your paycheck and the amount each paycheck is expected to have. After you’ve written down this list, combine each person’s income together to figure out the exact amount of money you both have for your monthly budget. Note this number at the top of your budget and remember that your expenses should NOT exceed it.
Step 2: List out all your joint household expenses
This one is quite simple. Make a list of all your household bills whether it’s your hydro or gas bills, debt, rent/mortgage, utilities, transport, groceries and of course, entertainment. These bills won’t necessarily change month-to-month and are easy to budget for. If you create a category in your budget for each of these, it allows you to see where most of your money is being spent.
Step 3: Estimate how much you will spend on each item
Your budget may vary slightly each month. Therefore, it’s important to review your expenses each time you create a new budget. When setting a budget, estimating your expenses will help you visualize where your money is going, and help you check out what expenses could be reduced. In some cases, you’ll know the exact amount from a billing statement, while in other cases you’ll just need to decide on what your limit will be
Step 4: Track expenses
This is probably the most important step. In order to ensure you’re staying within your desired budget; you need to track your expenses. We recommend either using a spreadsheet or a budgeting app to track your expenses. You can log your expenses as they occur or have a set time each day to do so. Either way, you’ll need to be consistent about tracking your spending if it’s not being done automatically by an app.
Step 5: Schedule a standing budget meeting
For a budget to work successfully for any couple, your budget must be discussed, tweaked, and revisited often. Make the meeting fun and relaxing (cook a nice dinner!) and plan out your bills and expenses that you know are coming up. This is an easy way to play for your upcoming month and ensure that your finances will stay in order and under control.
About Marble Financial Inc. (CSE: MRBL; OTCQB: MRBLF). We are a group of forward-thinking financial technology experts that fully understand the benefits and drawbacks of credit in Canada. Marble helps Canadians rebuild their credit to gain access to prime lending. Through our industry-leading proprietary technology solutions: Fast- Track, Score-Up, and Credit-Meds. Since 2016, Marble is proud to have empowered thousands of Canadians to a positive financial future. We continue to establish ourselves as leaders in financial wellness.