Budgeting for income and expenses is a sure way to manage your income. It is even more important if you are a couple. You need to budget for your income to ensure that you manage your money wisely, and achieve your financial goals as a couple. There comes a point where a couple must form a budget to ensure that one partner is not carrying the financial burden alone. Conflict may arise over what to prioritize, and where to reduce. Here are some things to consider when budgeting as a couple:
Determine Your Shared Monthly Expenses
The first step will be to determine shared expenses like rent, food, electricity, heating, and transport. These shared expenses should set a baseline of the compulsory contributions that each of you to make. All shared expenses should be listed and shared proportionately according to the income of each couple.
Identify Your Individual Expenses
Individual expenses include hairdressing expense, clothes, shopping, gym memberships, club memberships, and other personal indulgences. Your partner’s indulgences may seem outrageous, but it is important to accommodate each other’s needs. Once you identify the amount these expenses need, you have to include the expenses in your budget.
Creating Financial Investment Goals
Once the compulsory expenses have been identified, it is time to set aside some of the remaining income for financial investments. Investing is an important factor in budgeting. You need to identify an investment that you both agree on like buying land, shares, getting a fixed deposit, buying a house or any other form of valuable asset.
Track Your Income and Expenses
To ensure that your budget is in full effect, you have to create a tracking system. The tracking system is meant to ensure a couple does not deviate from it. It ensures that a couple stays on the right track.
These four guidelines are a good start for couples who are willing to budget their income and expenses. There are other things that should be considered, like giving to charity and tithing. Each couple’s budget won’t look the same, but the guidelines should keep a couple on the right path. It won’t be easy at first, hence it is quite important for a couple to be patient and disciplined for their budget to work.
Tom serves as the Financial Consultant for Heritage Bank. In partnership with LPL Financial Services, he assists individuals, families and business owners with all aspects of financial planning including retirement.
LPL Financial Consultant • 678-284-3302 • [email protected]