Talking about money with your spouse or significant other can be difficult, especially if you two have different money philosophies. However, in order to see real growth and change in your financial situation, you have to start by getting on the same page. We’re going to take the next 3 Thursdays to talk about Love and Money and how to communicate as a couple about all things financial. Your first step is all about how to create a budget you can both live with.
Make Budget Night Date Night
Your budget is always where you should begin. Creating a budget allows you to see where your money is going and with that knowledge you can decide to make changes and improvements based off of your goals. If you don’t know where your money is going, you won’t know how to fix anything. Start by setting aside time each pay period to work on your budget together.
For a lot of couples looking head on at their finances can be very scary and I totally get that. Maybe you’re afraid of seeing how out of control your spending has gotten. Maybe your debt overwhelms you. Or maybe you’re afraid to find out that your take home pay isn’t enough to cover the bills. Whatever it is, it won’t get better by ignoring it.
Although talking about money is hard you can make the conversation a bit easier by establishing that you’re on the same side and you’re doing this to make a better and less stressful future for your family. And while money is a heavy topic, budget night doesn’t have to be a funeral dirge.
Recently I was hired as a budget coach for a couple who’s saving for a house. Each weekend, they go out for coffee and look over their budget. They focus on what they’ve done well over the past week, where they over or underspent, and what they need to focus on for the coming week.
Bottom line is, plan time during the week to go out together, make a date of it, and start talking about your budget
If you want a budget that works for both of you, you have to be honest with how you’re spending your money. This budget session is a no judgement zone. Whether you’re $300 a month on hair and nails or he’s spending $400 on Knick’s tickets…now is the time to talk about it.
Make sure you’re accounting for all of your expenses both big and small. Lay them all out and write them all down so you can then move on to #3…
Make Short And Long Term Financial Goals
For this, you’ll start by each of you taking a couple minutes individually to write down your Top 3 Financial Priorities. After you’ve brainstormed on them separately, come back together and see how your lists correlate. Does one of you want to pay down debt first while the other one wants to save $10,000? That’s important to know because it’s really difficult to be successful at competing priorities.
Writing down your lists separately will give you insight into understanding each other’s money values. For example, I’m big into aggressively paying down debt while Scott values the safety of having a bit more savings in the bank. Differences like that are pretty easy to navigate through. For us, we’re just building a slightly larger emergency savings cushion than the $1000 that Dave Ramsey suggestions as Baby Step #1. By doing this, it makes Scott feel better about the state of our finances but really isn’t taking that much extra time away from us beginning to start rolling our debt snowball.
If your lists and goals are VERY different, talk through it. Take turns explaining why each think your top 3 are important. Understanding where the other one is coming from will bring new insight into your money values.
The last step in this part of the exercise is creating and finalizing a combined Top 3 Financial Priorities list. This is the list you will focus your budget and efforts around.
Create A Budget That Supports Your Financial Priorities
Now that you’ve written down all of your joint and separate expenses and created a Top 3 Financial Goals list, it’s time to create a budget that supports those goals. Work together in being ruthless about what is a need vs what is a want. And that’s not to say that all of your “wants” get eliminated from the budget; I think it’s important to keep in some of what makes life interesting and fun. But it’s also very difficult to make a real dent in your goals, be it paying down debt or saving for a house, if you’re not making some financial sacrifices somewhere else.
I was forced to do this the other day. I looked at my budget and realized that I was spending $170 per month on my hair and nails. #Yikes! While those things are important to me and make me feel pretty, I have a pretty aggressive debt payoff plan for the year and that hair and nail money would go a long way! So, I decided to spend just half that each month on my beauty grooming and roll the other half into my debt snowball which makes for an extra $1020 in debt paid off by the end of the year!
So make sure you’re creating a budget that you both can live with while still supporting the goals you’ve laid out for yourselves.
Plan your next budget date
A budget isn’t something that you can just write and walk away from. It’s important to check in with each other often to make sure the budget is working for both of you. If the budget is too constricting, it may be hard to live with and maintain. Or maybe you’re finding that you don’t really need as much in gas money each week as you have planned for. Revising your budget to make tweeks and changes is fine as long as you’re both on the same page.
Even though starting a conversation about your budget can be hard, it’ll feel so much better once you’ve got it going. Whether you use an online budget app or pen and paper, make sure it’s easily accessible for the two of you so that you can refer to it on a regular basis. If you’re looking for a Budget Planner for the year, check out the one I’ve designed. Scott and I personally use it and I created it after not really being able to find exactly what I needed. So, maybe it’ll help you too!
If you liked this post, check out: Financial Fitness: 8 Steps To Take Right Now To Get Your Finances In Order