Married couples have tons of questions about how to manage their money. “Should we have separate or joint bank accounts?”, “How much should my spouse and I spend every month?”, and more. Though, the most commonly overlooked part of financial wellness is actively tracking where your money goes.
Growing up, my dad used to sit at the kitchen table every weekend and balance his checkbook. It was like his own personal ritual. I would come down Saturday mornings as a groggy-eyed tween and watch him as he recorded numbers in that leatherbound booklet. I always grew up thinking I would have a leatherbound checkbook, too.
After all, that’s what all adults do on Saturday mornings, right?
Of course, that’s not the case. A young boy’s interpretation of the world is usually pretty skewed anyways! Though, watching Dad balance those numbers in his little checkbook made me realize something about personal finance:
It can be a lot of hard work.
Luckily, the world has matured and grown from when I was a kid. Now, all that’s needed to build a proper budget and track your finances is a simple phone app. It is so much easier to keep track of your finances today than ever before, especially with your spouse. Of course, there are some things that you’ll need to get started.
As I’ve previously mentioned, it’s incredibly important to talk about money with your fiance, spouse, or partner. Having an honest conversation allows you to open up about your debts, personal spending, goals, and more.
Iron out what’s important to the both of you so that you have a direction when building your budget. If one of you wants to drive a nicer car, you may have to make a few concessions in other areas to afford that car payment (though, I would recommend not having a car payment if possible!).
Identify what your spending “must-haves” are when it comes to your money and decide who will have to cave on what. Make those expectations clear and you’ll avoid plenty of arguments!
Are you a spreadsheet kind of gal? Prefer an app on your phone that you can just swipe through? Here are some of the most popular and easy to use budgeting options out there.
Mint — The budget tracking and financial planning app from Intuit.
You Need a Budget — Easy money management made personal.
EveryDollar — Financial peace perpetuator Dave Ramsey’s premiere budgeting app.
Tiller — A bit more complex, but if spreadsheets are more your speed, Tiller makes automatically importing transactions easy.
Assuming that both you and your partner work and aren’t fabulously independently wealthy, having a good idea of how much you rake in per month is an excellent way to make sure you don’t fall behind.
Take a look at what you and your partner make per month and add it all up. If your paycheck changes every month, just take a look at an average of the past three months!
Then, identify your fixed living expenses; these are things like rent, utilities, water, loan payments, food, etc. Total those monthly costs up as well.
Finally, subtract the total amount that is required to leave your bank account from the total amount that you earn per month. If you’re able to cover those basic expenses and still have some money left over, your next step is an easy one.
Part of today’s unfortunate reality is that 69% of Americans don’t have $1,000 saved. Saving can be an incredibly difficult thing to accomplish. When you’re living paycheck to paycheck, it’s almost impossible to make your dollar stretch any further.
If you have money left over after covering your fixed expenses, it’s a wise move to set aside some of that incoming cheddar every month. Some financial advisors suggest setting up a savings rule with your bank so that you can automatically direct 10-20% of each paycheck into a savings account.
Once you build up your $1,000 rainy day fund, set your sights on 3 months worth of your fixed expenses. That way, if something unexpected happens, you’ll have a safety net to fall back on.
After you’ve covered your expenses and paid yourself, decide what you’ll do with the remaining money. Making it a priority to pay off your student loans? Want to buy a house, or make a big investment? It’s up to you to decide how you want to split up your leftover cash.
It’s a great idea to set a fixed amount for each goal, but it’s also important to choose how much money you and your partner are going to spend personally each month. Set a small amount aside for personal expenses so that you don’t feel overwhelmed with just covering your basic needs!
Finally, let your budget be fluid. Finance can be a lot of work, and it’s important to watch your spending habits as they change over time. Adjust your budget when things change, and make sure to keep the lines of communication open with your spouse.
Make it a priority to find your path to financial wellness together.
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