Money and Marriage: A Simple 9-Step Guide to Budgeting as a Young Couple
When you’re starting out in marriage, one of the most important skills you’ll need to master is budgeting. Managing money together is a key part of building a strong, long-lasting partnership. However, for many young couples, budgeting might be a completely new practice. It can be overwhelming, especially when you’re figuring out how to merge two lives, two incomes, and possibly two different spending habits.
But don’t worry – budgeting doesn’t have to be complicated or stressful. With a little planning, communication, and patience, you can manage your finances as a couple and build a strong foundation for your future together.
Here are some practical steps to help you and your spouse budget like pros – even if you’ve never budgeted before!
Step 1: Start with a Conversation
Before diving into numbers, it’s important to have a discussion with your partner about money. This step is often overlooked but is one of the most crucial parts of building a solid financial foundation as a couple.
You’ll want to talk about your financial goals, individual money habits, and any past experiences with budgeting. Some questions to ask yourselves might include:
- What are our long-term goals (e.g., buying a house, saving for retirement, paying off debt)?
- Do we have any debts (student loans, credit card debt, etc.)?
- How do we feel about money – do we have different attitudes toward spending and saving?
- Are we comfortable with joint or separate bank accounts?
Understanding each other’s attitudes toward money and setting shared goals will help guide your budgeting decisions moving forward.
Step 2: Track Your Income and Expenses
Once you’re on the same page; the next step is to get a clear picture of your financial situation. This means tracking your income and expenses for at least a month. Write down everything you earn, including salaries, bonuses, or any other source of income.
Next, track your expenses. This might feel tedious, but it’s essential. You’ll need to know where your money is going before you can make a plan to budget it. Start by categorizing your expenses into fixed and variable costs:
- Fixed expenses are things that stay the same each month, like rent or mortgage payments, car payments, and insurance premiums.
- Variable expenses can change month to month, like groceries, entertainment, and gas.
There are many apps and tools available, such as Mint or YNAB (You Need a Budget), that can help you categorize and track your spending. You can also do it manually by writing everything down in a notebook or using a spreadsheet.
Step 3: Set Financial Goals Together
Now that you have a better idea of your income and expenses, it’s time to set some financial goals. Setting goals will give you both something to work toward and will help you stay motivated to stick to your budget.
Start with your short-term goals. These might include things like saving for a vacation, building an emergency fund, or paying off credit card debt. Then, think about your long-term goals, like buying a house, saving for retirement, or paying off student loans.
Once you’ve set your goals, break them down into smaller, more manageable chunks. For example, if you want to save $5,000 for a down payment on a house, figure out how much you’ll need to save each month to reach that goal.
Step 4: Create a Monthly Budget
Now comes the fun part – actually creating your budget! There are several different budgeting methods you can try, but the most popular ones are the 50/30/20 rule and the zero-based budget.
- 50/30/20 Rule: This is a simple method where you divide your income into three categories:
- 50% for needs (rent, utilities, food, insurance)
- 30% for wants (entertainment, dining out, shopping)
- 20% for savings and debt repayment (emergency fund, retirement savings, student loans)
- Zero-Based Budget: In this method, you allocate every single dollar of your income to specific categories, including savings and debt repayment, until you reach zero. This method is more detailed but can give you greater control over your finances.
Whichever method you choose, make sure you stick to your budget as closely as possible. This may require some trial and error, but over time, you’ll get better at estimating your expenses and making adjustments.
Step 5: Save for an Emergency Fund
One of the most important parts of budgeting is building an emergency fund. Life is unpredictable, and having a cushion to fall back on will give you peace of mind. Ideally, you want to save at least three to six months’ worth of living expenses in an easily accessible savings account.
At first, start small; if you can only afford to save $50 or $100 a month, that’s okay. The goal is to build the habit of saving regularly. Over time, you can increase the amount you save each month as you get more comfortable with budgeting.
Step 6: Review and Adjust Your Budget Regularly
A budget isn’t something you create once and forget about. Life changes, and so will your expenses and income. To keep your budget accurate, you should review it every month. Look at your spending and see if you’re sticking to your goals or if you need to make adjustments.
If you’re spending more than you planned on certain categories (like dining out or shopping), you may need to cut back or find ways to reduce those expenses. On the flip side, if you have extra money left over at the end of the month, you can put that into savings or use it to pay down debt faster.
Step 7: Be Flexible and Communicate
Budgeting isn’t always easy, especially if you and your partner have different money habits. It’s important to remain flexible and communicate openly about your finances. If something isn’t working, talk about it and figure out a new plan together. Being willing to compromise is key.
For example, if one partner wants to save more aggressively and the other wants to spend on fun activities, try to find a balance. Maybe you can agree on a set amount of money to spend each month on fun activities while still prioritizing savings.
Remember that budgeting is a team effort, and working together will help you achieve your goals faster. Celebrate your wins, whether it’s paying off a credit card or saving for your dream vacation. The more you communicate and work together, the stronger your financial foundation will be.
Step 8: Avoid Debt as Much as Possible
Debt is one of the biggest financial challenges many couples face. While some debt, like student loans or a mortgage, can be manageable, credit card debt and high-interest loans can quickly spiral out of control. Try to avoid using credit cards for everyday expenses unless you’re able to pay off the balance each month.
If you do have debt, make it a priority to pay it off. Use the debt snowball method (paying off the smallest debt first) or the debt avalanche method (paying off the highest-interest debt first) to pay down your debt faster.
Step 9: Stay Accountable and Keep Growing
Finally, the key to successful budgeting as a young couple is staying accountable and committed. It’s easy to fall off track, especially when life gets busy. But keep each other motivated by regularly checking in on your progress and celebrating your successes.
As you grow together, your financial situation will likely change, and your budget may need to change with it. Stay flexible and adjust your plan as needed.
Budgeting might seem challenging at first, but with these practical steps, you can take control of your finances and set yourselves up for a successful future together. The important thing is to start now, communicate, and be patient as you learn and grow together. Happy budgeting!
Related Resources
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Justin Fague reviewed this article. To reach out, please email healthyrelationships@usu.edu.