If you recently tied the knot or are getting married soon, it’s time to start talking to your significant other about money and budgeting. Couples often have different spending and savings habits that can result in disagreements. In fact, numerous studies have shown that arguing about money is a top predictor of divorce.
Develop a strong marital foundation by creating a plan to manage your finances jointly. The sooner you set financial expectations and goals, the better. Once you’ve developed a budget, then it’s important to check-in with each other regularly to stay on track and make adjustments as necessary.
Follow these seven budgeting tips to help build a lifetime of healthy financial habits.
1. Put It All on the Table
Be transparent about current financial situations including sources of income, debt and recurring monthly bills. Some non-negotiable monthly expenses such as utilities and grocery bills may vary a little each month, so look back at old bills and bank statements to come up with realistic projections for these expenses. This is also a good time to discuss your individual views on money and how you expect to handle finances.
2. Decide Whether to Merge Bank Accounts
Establishing a joint account is a personal decision that depends on your situation and what you are comfortable with. Combining accounts can simplify your finances in terms of understanding your cash flow, expenses and savings status. Some couples prefer to open a joint account for collective expenses, while maintaining individual accounts for discretionary spending. There is no right or wrong way to approach this topic.
3. Develop Short-Term and Long-Term Goals
After you have determined your current joint financial status, discuss short-term and long-term financial goals. This should include whether you want to buy a home, take a yearly vacation, plan for children and how you want to spend your retirement years. Consider consulting a financial planner
to discuss a strategy to achieve long-term goals.
4. Seek Opportunities to Trim Expenses
Work as a team to explore ways to cut monthly costs. Look into a family cell phone plan versus an individual plan and cut the cable cord in favor of internet TV. You can save on groceries by planning meals based on what’s on sale, using coupons, and joining a wholesale shopping club.
5. Set Discretionary Spending Levels
This category of expenses includes anything you can live without such as dining out, cable TV, lattes and gym memberships. Review how much you’ve spent on discretionary expenses over the last few months and then establish monthly dollar limits for this category.
6. Create an Emergency Fund
You need to plan for the unexpected. Establish an emergency fund that you can tap into if you require a costly car repair, medical care, or one of you loses your job. We recommend saving six months of your post tax income to set aside for an emergency fund.
7. Plan Monthly Check-Ins
Goals, expenses and income change over time. That’s why it’s important to set aside time every month to review your budget, spending habits, and make any required adjustments. Having regular discussions about budgeting and finances is also a great way to maintain strong communication with your spouse.
We’re here to help. You can find more information about budgeting in our Simply Speaking blog. We also offer information on personal banking and financial planning on our website. Our Customer Service Team can be reached at 866-224-1379.