BUDGETING FOR COUPLES
In good times and in bad, for richer or for poorer: You promised to love your spouse no matter what. But what happens when that "what" turns out to be your spouse's chronic mismanagement of money? On a military salary, financial missteps can add up to big problems down the road. So why has budgeting gotten such a bad rap?
Couples say that the thing they argue about most in marriage is money. Many don’t even have a method for budgeting household expenses. Perhaps it’s the notion that budget means you have to “do without” something. In truth, it just means making a plan for how you spend and how you save — not painstakingly tracking every penny you earn.
So how do you forge a more budget-friendly union? Start by following these two major, but basic steps.
CONTRIBUTE TO THE BUDGET
A healthy, couple-friendly budget is one where both parties contribute earnings to a fund to pay expenses. But how you do it can vary. In Caroline Bird's book, "The Two-Paycheck Marriage," she outlines three models that describe the most popular methods, and the advantages and disadvantages of each. Each way is effective; the trick is to find the method that feels fair and equitable to you both.
Couples put an equal amount of their respective salaries into joint checking or savings accounts to pay for joint living expenses. The money each spouse has left over is spent at his or her discretion.
- Advantage: Each spouse contributes to daily expenses and each has money to call his or her own
- Disadvantage: If one spouse earns much more than the other, the other spouse may feel resentment for having to provide equal funds
Each spouse contributes a percentage of their salary for joint living expenses. The remainder is spent at his or her discretion.
- Advantage: Both contribute and both retain their own funds
- Disadvantage: Difference in amount contributed could cause resentment
Spouses combine all of their income and use it for joint and personal expenses. Money is held in either joint or separate accounts.
- Advantage: One’s work is valued equally, regardless of the salary earned
- Disadvantage: The spouse with the lesser income may feel like they don’t have as much say in how the joint income is spent, or either spouse may feel obligated to discuss every purchase
STICK TO THE plan
Once you’ve decided how to contribute to the budget, it’s time to figure out how to stick to a specific budget system.
In "Money Flow Systems for One- and Two-Earner Families" by Wanda S. Mowry, she outlines five different kinds of budgeting systems. Every one has its individual merits: The trick is to find the one that works for you and your spouse. It may take time to find the way that works best for the two of you, so don't get discouraged if you have to try more than one approach.
Cash Box System
Cash is kept in a jar, moneybox, or in envelopes. Amounts are designated for various bills and are paid in cash; what is left at the end of the month is put into savings.
Each earner contributes to a joint fund, but maintains his or her own money for personal spending. The joint fund is used for joint living expenses.
One spouse handles all the income and pays all the bills, while the other receives money that can be used for personal spending.
Both incomes are pooled and bills are paid in an informal partnership.
Each spouse has their money and is responsible for paying certain bills.
If you are the primary bill payer, make sure your spouse is aware of bills that must be paid monthly. Consider rotating who pays the bills from month to month, or on a six-month basis. It's important that both spouses understand what bills need to be paid — and when — in case of an emergency. You may also want to include older children into your bill paying conversation. By educating them on what products and services cost now, children will gain a better understanding of how to budget their own money later.