Knowledge Center

Budgeting With Your Significant Other

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Few things upset life with your significant other more than disagreements about money. Whether you decide to combine bank accounts or keep your finances mostly separate, if you and your partner are living together, it’s a good idea to come up with a shared household budget to help head off conflicts before they arise.

Identify your priorities

The first thing you and your partner should do when planning your budget is figure out what’s important to each of you individually and what matters to both of you as a couple. Acknowledge your differences and focus on where you are the same.

For example, say your partner likes to live in a comfortable home with nice furniture and lots of decor but you prefer to get out of the house and travel. You may find one of you is more focused on possessions, while the other is all about experiences.

You can help keep the peace and navigate the opposing aspects of your budget by focusing on the priorities the two of you share. You will, of course, have regular bills to pay that aren’t really up for debate. You might also have other overlapping priorities as a couple, including donating to a charity of your choice, planning for retirement, caring for a child or pet, or going out to eat every now and then.

Before you fund your individual priorities, make sure these shared expenses have been taken care of so that the two of you know your overlapping needs are being met. Once you’re certain you’re covered as a couple, you can begin to budget for your individual wants. Some couples find it easier to agree on set allowances for each individual, which may allow you to spend at your own discretion without feeling like you have to get your purchases approved by your partner.

This same logic applies when determining how to allocate funds in an emergency situation, such as the Covid-19 pandemic. Determine what each of you needs, as well as your household cash flow, and create your emergency budget with those factors in mind.

Know your cash flow

Once you decide to make a budget as a couple, take a month to track your income and expenses. Then sit down and hammer out the logistics of your personal finances so that you know where your money comes from and where it is going. Your shared spending plan should be based on your collective cash flow, which means that you both might need to make adjustments to develop a budget separate from the one you followed when living alone.

Additionally, if you decide to keep some of your finances separate, you will need to figure out who is responsible for which bills. If you have “mine, yours and ours” accounts, you should work out a cash flow to ensure that the account for shared expenses is adequately funded in time to pay your bills.

Remember to respect one another’s differences

It’s tempting to discount your partner’s priorities if they differ significantly from your own, but remember that some of your own spending habits might seem equally unimportant to your partner. You have to remember to respect each other when you start putting your first shared budget together.

As you work out the basics of your finances, make sure you both keep calm. If either of you needs to take a break from the planning session, do so. The key to creating a shared budget is compromise, and remember that a well-planned budget can help you both use your resources to get what you want out of your relationship.

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