Someone once said, “Marriages are made in heaven but so are thunder and lightning”. This statement speaks so much about the ups and downs you have to go through as a couple while being wedded. Most of the relations fall out over so many reasons like a difference of opinions, parenting, difficulty in co-existing but one of the most common reasons that become the basis of a misunderstanding and eventually separation is money. Fortunately, there are a lot of ways to settle these things with harmony.
All you need to do is break the ice and communicate with your spouse. Make a budget and then stick to it. Revise what your plans were- both long term and short term and things will fall into place. Here are a few steps to raise a budget with your better-half;
- Fix your goals
Your budget will be based on your long-term and short-term goals both as individuals and as a couple. Your savings may primarily be for a house or your child’s education but you need to be in sync with your spouse regarding this. If getting home is your priority before saving for child’s education, it might be otherwise for your spouse. The two of you need to sit and list all your priorities and goals. Once they are fixed, the remaining budget will be aligned accordingly.
- Define your income
The next step is to clearly discuss what you get in hand as a family. A lot of people plan their budget on their gross income which is not the right way. This budget then fails when it comes to realistic spending and saving. Gross income is the income you get before taxes are deducted. In order to plan a budget accurately, you need to take into consideration your net income. Net income is the final amount of money you get in-hand post taxes are deducted. If you have a stable income, then this budget holds good for a considerable period of time. If you are a freelancer or work on contract basis or due to any reason do not have a stable source of income, then you need to revisit the budget every month or bi-monthly or depending upon the frequency of your income.
- List your expenses
Listing the expenses needs to be done under two heads- fixed and variable. Fixed expenses cover things like debt payment, car loan, home loan, telephone bill, electricity or utility bill, etc. The variable head may include things like fuel expenses, eating out expense, shopping, etc. make sure you leave a room for another category called one-time expenses. One-time expenses are the ones which come unplanned like a pipeline leakage or car breakdown etc. Also, be open to accepting the variable expense list. Both of you may have different variable expenses varying in amounts. This exercise done now would help you when it is the really the time your spouse makes those spending, you won’t be taken by surprise!
- Deduct the fixed expenses
Yes, only the fixed expenses. Now that you have at hand your total family income and fixed expenses as well. Minus fixed expenses from the total income and you have your savings lot at hand. Of course, I do not mean you put the left amount totally into savings but you have that money to be used at your own discretion.
- Plan your savings
This is the step where you can plan your retirement or save for your car or your home or education or anything. Take into consideration the financial goals you had set in step 1. Save in different buckets- long-term, short-term, instant fund, investments like Mutual Funds etc.
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Now if you are still left with some money, go ahead with your variable expenses. The money left after savings is you free-will money. Go shopping, eat out, go for a vacation, a spa or whatever pleases you. Pamper yourself for doing a good job and wait for the next rewards the coming month.
- Re-iterate the process
Planning, budgeting, savings these things are fun to do one time but difficult to be maintained. Make sure you sit with your spouse every month and revise the process. Take into consideration if any changes happened over the month. Maybe you received a variable pay or extra taxes were deducted or an unplanned party is coming up, remember those one-time expenses slot you reserved? Do not forget to refill that bucket and increase its value over time. Adopt a sustainable approach towards your money planning, Sustainability is the key to an efficient budget.
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Budgeting is not a difficult process; it just requires discipline and determination. There is nothing to be awkward about sharing and discussing finances with your spouse, transparency, patience, and consistency are the keys to a sustainable budget and successful marriage.