A few of years ago, my husband and I were in limbo. We were trying to sell a house that wouldn’t sell and paying off student loans on an education that promised a higher-paying job but didn’t deliver. Our savings weren’t growing, even though we both had full-time jobs. We felt like we were hurtling along in life, but never getting anywhere.
A friend was leading a class on budgeting, so we signed up — more as a favor than anything else. I mean, we weren’t frivolous with our money! We weren’t smothered under debt! We weren’t like other couples fighting about money.
But we weren’t talking about money, either. And since finances influence every other area of life, we weren’t talking about our jobs or our goals. They were kind of there, kind of fuzzy and not at all the driving force behind our decisions.
That budgeting class changed how we thought about money — and ultimately how we related to one another. Being forced to sit down and talk about our financial situations brought life into better focus. Often, our conversation spilled outward from money into how things were going at work, what struggles we were facing, revealing our insecurities and helping us listen to each other person more deeply.
How to Avoid Fighting About Money
It’s not news that most fights in a relationship have something to do with money. But happier couples figure out a way to talk about their issues with clear solutions in mind, according to a 2019 study published in Family Process.
Most of these fights start because the people in the relationship aren’t on the same page. Maybe you’re working off different budgets (or no budget), or you have different attitudes toward money.
Talking about money early and often in a relationship can help you make sure you’re working together, rather than against one another, and prevent future fights. And creating a shared budget can help ensure you’re working toward the same goals and bring you closer as a couple.
Here’s how to talk to your significant other about money, and how to create a budget that works for both of you.
Make Sure You’re Not Tired, Hungry or Rushed
It may sound silly, but it’s not. If you try to sit down and sort out money problems when you are any in of these three states, you are doomed to fail.
It’s important to give yourselves the time you need, especially the first few months you sit down to talk. Don’t start the discussion when one of you is going to have to run off to work or right before bed.
Plan time for your discussion when you know you will both be at your peak of attention: You’ve had a good night’s sleep and a recent snack, and you have at least an hour of uninterrupted time where you can both be fully present (turn off those cell phones!) to discuss your situation.
My husband and I often spend some time on Sunday afternoons chatting through our budget. We have nowhere to be and have usually eaten lunch together, so we make a pot of coffee and start talking.
Whether you realize it or not, you have each been raised with certain attitudes toward money. The way your parents organized their finances probably had an impact on you. One of you may be more of a spender, and the other might like to keep almost everything “for a rainy day.”
My husband and I grew up with vastly different influences regarding money. His mom has an accounting background and balances her checkbook to the penny.
You would think this would have made him a stellar budgeter, but when he left home, he wanted nothing more to do with line items and category balances. While he is not a spender, he doesn’t feel the need to pre-plan where his money goes — he just doesn’t overspend.
A 2019 Penny Hoarder survey of more than 1,500 adults found that 40% of respondents who did not receive early financial education had no savings at all.
If my parents budgeted, I never knew it. They weren’t savers and didn’t have a retirement plan. I don’t think I ever heard the word “budget” before meeting my in-laws.
Oddly enough, as an adult I became extremely careful with my money — I saw the issues my parents went through, and I never wanted to be an over-spender. By nature, I am also a rule-follower, so having a budget just makes sense to me: I like to have established, external guidelines for how I use my money.
To balance my desire to have guidelines and his desire to keep things as simple as possible, we have a bit of a hybrid system: We budget for the things we have to pay for (rent, insurance, etc.) and then decide on an amount for all the fun stuff each month (eating out, vacations, etc.). Then we take out the money we can spend on those things, spend it however we want that month, and when the money’s gone, it’s gone — if we run out of “fun money” on the 12th, it’s leftovers and Netflix for the rest of the month.
As is the case in most relationships, we don’t always see eye-to-eye. But sitting down to talk through our budget each month creates a dialogue where we can be honest about what we want to do with our money.
The more honest you are with each other about your spending habits, the easier it will be to avoid hurt feelings — now and in the future — and the more realistically you will be able to craft your budget so it works for you and not against you.
Discuss Your Goals
And not just financial goals: What is most important to you in life? Ask yourselves the question: “What do I want life to look like?” Dream big, and then try to discern the underlying values beneath those dreams.
If you wish you could spend every day at the beach, soaking up the sun, maybe your priority should be to plan vacations each year that let you do that — or better yet, create a life that you don’t want to escape from as often. Make plans to buy a house with a killer in-ground pool or start working toward a job that allows you to relocate somewhere near the coast.
When I asked my husband that question, he said he would love to buy a farm and work full-time on the land. The capital investment to buy a farm is too high for us, but what we could do was purchase a few acres of land in the country where we could build a house and he could spend weekends puttering around on an old tractor, turning logs into lumber and getting out of the city where we work all week. It was the perfect compromise.
Another budget discussion we had led me to becoming an entrepreneur. Life-changing? I’d say.
Decide what’s important to you: paying off a debt, taking that vacation or going to every rock concert within driving distance. Those goals will drive your decisions of how to spend your money — together.
How to Budget as a Couple
Getting the discussion above started is the first step, but how does it really work on a day-to-day basis? How do you figure it all out together? Here are some practical strategies to help you start a budget with your significant other:
Take Stock of the Numbers
Gather your past few months of statements, bills, pay stubs and other financial documents. You’ll want to see where your money has been going to get an idea of where it needs to go in the future. Make sure to account for:
- Your income: How much do you bring in each month? Note the combined total of your income from your jobs or businesses. If one person makes significantly more than the other, talk honestly about how to handle it. My husband has always made more money than me, and we have always found it easiest to pool all of our resources and spend them together, equally. Each couple should figure out what works for them.
- Your obligations: List out things like rent, car payments, student loans, utilities, life insurance, phone bill, retirement contributions, even saving for a down payment. These are the costs you have already committed to paying each month, and they likely come with a contract, either formal (like rent) or informal (a monthly promise to pay for the water you use).
- Your living expenses: This is anything that doesn’t have a monthly payment, but that you need to buy anyway: groceries, gas for the car and things like pet supplies, gifts and household goods like shampoo and sandwich bags.
Bills like rent and utilities are easy to manage, since they only come up once per month. Divide longer-term bills like car insurance into one-month chunks so you make sure you are putting away enough money each month to be ready when the bill comes due.
Expenses like gas or groceries are a little more difficult because you purchase these several times each month, and not always in the same amount each time. Figure out what you typically spend on these purchases and use that number as a starting point for your first month of budgeting.
Allocate What’s Left After Your Necessary Expenses
What magic number is left of your income after all of your expenses above? That’s what you get to spend on the fun stuff, from eating out and going to concerts to saving for a vacation. You need to both be on the same page about how you’re going to save and spend this money.
It’s important to decide on a “no-questions-asked” allowance for each of you. Whether you can afford $10 each per month or $300 each per month, everyone needs a little money to spend on themselves — if not, you’ll likely end up with a “my-budget’s-too-strict” craving and splurge on something you shouldn’t. And then you’ll feel guilty because you “failed,” and it’s a downhill spiral from there. It’s good to build in some fun money for each person to spend or save as they please.
Coming up short on your budget? Consider looking for a side gig that the two of you can do together, like dog walking. You can make it a mini date night that pays!
This first month of budgeting, make sure to allocate every single dollar of your paychecks: Money has a way of spending itself if you don’t have a plan for it.
Try Your Plan and Reevaluate
Try out this new budget for two weeks, then discuss what’s working and what’s not. Maybe you underestimated how much gas you would need that month and you’ve already overspent.
Readjust by pulling some money from a category where you haven’t spent as much, like groceries.
Give it another two weeks and reevaluate. This is your chance to go over the first month’s plan and see where it worked well and where it fell short. Then, plan out the next month’s budget with your new knowledge about your spending habits.
To make sure you remember to do reevaluate and plan out your next month’s budget, put it on the calendar! It’ll feel like a date. I promise.
Be Patient and Keep Trying
It’s going to take a few months to find a process that works best for the two of you. If this is your first time budgeting from scratch, you will probably forget something in your initial budget (for us, it was haircuts!) and will need to add it in later and re-allocate some funds accordingly.
You will also need to shift money around sometimes, like when you overspend on gifts because Mother’s Day, your best friend’s birthday, a baby shower and a wedding all land in the same month. That’s OK! You can borrow $20 from the grocery fund and plan to eat more leftovers this month. Then start budgeting an extra $5 each month so that next year you’ve got a little extra padding in your gift fund this time of year.
Budgeting is about making your financial decisions reinforce your life goals. If at any point the two feel disconnected, take a step back and ask yourselves that question: “What do I want life to look like?” The answer will tell you how to better spend your money now.
How Starting a Budget Changed Our Relationship
Our budget meeting each month has turned into an informal monthly check-in of where we are in life and how we’re feeling. It gives us a chance to course correct quickly when something is off, and it helps remind us that we’re doing OK when things are going well.
Having a monthly budget we agree on and that reflects our goals changed our relationship. I have a feeling it will do the same for you.
Abbigail Kriebs is a contributor to The Penny Hoarder.