5 Steps to Better Finances as a Couple

Money matters are at the heart of many disagreements among couples. Keeping a handle on your money might seem like an easy task – but it’s not. Some people are hardwired to handle it better than others. Once a relationship transitions into the point where they start to talk about shared finances both individuals have to consciously make an effort to make decisions for the both of you, instead of just what you want. Don’t let financial stress cause tension in your love life. Here are five steps to better finances as a couple.

1. Know What You Can Live Without

What types of expenses from your single life are unnecessary? Cable? Dining out? Poker nights? Sit down with your partner and make a list of the different things you both spend money on each month. What things are not important and can be eliminated. The mistake many couples make is thinking that their financial worries are over because they now have two incomes. But that only decreases the cost of things like housing and utilities. All your loans, credit cards, and bad spending habits are still running amuck.

Every couple has to sacrifice something. You might discover that some things can simply be enjoyed differently. For example, instead of dropping $60 per month on a manicure and pedicure, a girl can spend $60 to buy the items necessary to do the whole job at home ten-times over.

2. Budget for Everything

Financial security starts by making a budget and sticking to it. Make a list of everything you could potentially spend money on each month – right down to gas, groceries, and eating out. This is where the first step comes into play again. If you realize that you are spending $80 per month on gas, but that could be cut in half by condensing trips or not coming home between gym/work/lunch/ect, then you realize that excess driving is something you do without. When you think about groceries, be sure to include pet supplies, toiletries, and the occasional must-buy item. One of the easiest ways to track your spending and make sure you are within in budget is through MINT. A mobile application and website that tracks your spending, categorizes purchases to help you budget, and offers free tips for better financial handling.

3. Save From Every Paycheck

The most difficult part of living today is saving money. Unless you are simply making more money than you can handle that is. For the rest of us, saving every paycheck is an essential part of going beyond “just getting by”. As a couple, you want to make sure you save what can (roughly $25 a week is a good start) for future emergencies or expenditures. Think: car repairs, a necessary home purchase, or future downpayment.

4. Have a Retirement Plan

As someone who has primarily worked from home, it has been difficult for me to maintain any type of retirement plan. As a couple, planning for the future – no matter how young you are – is essential. In fact, the earlier you start, the better. Retirement funds are largely about the amount of time which they can accrue interest. Couples who start saving early are able to earn more interest in the long run while putting less money in. Many of us believe we will work until we die or until we are of age to retire, but that often isn’t the case. Planning for this future is always a smart move. For short term goals, plan how you will handle buying a house, new car, career changes, or even a big move.

5. Keep Each Other Accountable

Financial planning only works when you work together. A big part of this is keeping each other accountable. Remind each other of the budgets you’ve established. Lead by example to help your partner stay on track. Check your spending daily to make sure that you are both coloring within the lines. Lastly, offer an incentive such as, if you stick to your budget for 3 months then you will take some of your surplus money and go on a nice date doing something you wouldn’t normally do. Incentivizing works for children just as much as it does for adults! Plus it makes the boring aspects of being financially secure more enticing.