Financing is hard enough when you only need to look after yourself. When budgeting as a couple, complications abound.
Differences in salary can create awkward conversations about contributions. Different financial philosophies will clash, and different spending and saving habits can drive your better half crazy.
You’re not alone. But I’m sorry to say there’s no right or wrong way to budget for couples. Different financial planners will offer different advice on the best way to handle finances as a couple. Some will work for you, others will not.
Mine, yours, ours
Personally, I’m a big fan of the three account principal: mine, yours, and ours.
Your paycheck goes into your account, their paycheck goes into their account. And you both sit down and have an important conversation about how much you will each contribute to the joint (“our”) account each month, how it will be used, and any goals for the savings you accumulate together.
The personal accounts ensure you can both continue your individual spending habits guilt-free and fund any personal savings goals. Meanwhile, you are both working together to meet shared expenses and goals with the joint account.
A joint account is primarily used to budget for couples living together, married or unmarried. Many use the joint account to pay for shared household expenses, like the rent or mortgage and utility bills.
If you are budgeting for two incomes, some experts advise splitting these basic expenses 50/50, while others suggest splitting the expenses relative to your incomes (if your partner earns more, they pay a relatively greater share).
If possible, discuss with your partner the idea of depositing more than the expected bills into the joint account each month. The reason is that unexpected joint expenses come up all the time, and it’s helpful to be prepared. And if there is any money left over that month, leave it there as a buffer for future expenses and a source of joint savings.
Track your joint spending
The best way to budget as a couple is with some kind of oversight of joint spending. Fortunately, there are many easy ways to track spending and savings as a couple. Here are my favourites:
Money Dashboard is a useful budgeting for couples app. Once you link up your accounts, including joint accounts, all of your spending is automatically categorised (for example, “home”, “bills” and “savings”). The dashboard shows all of your spending across categories in one place. You can also set budgets by category and track your spending against your budget limits.
You can also separate view by account, giving you a quick reference for what you personally spend and what’s happening in your joint account. If you are handling finances as a couple, this makes it easy to track your joint activity.
A good old fashioned spreadsheet
Another favourite low tech solution is a spreadsheet from Excel or Google Sheets. It doesn’t have to be fancy. I find this a good complement to apps, particularly to track unusual expenses one person covered with a personal account but agree should be split a costs. For example, an unexpected home repair or vet bill. At the end of the month, total it up and use the joint to reimburse.
This has the benefit of transparency, accountability, and it sparks regular discussion about spending habits and goals.
Communicate, communicate and communicate
No matter what tool you use, the best tip for how to handle finances as a couple is open honest communication.
Budgeting as couples can be a source of stress and cause arguments, and these conversations can be awkward or intense no matter how long you have been in a relationship. But it’s worth it. You won’t regret coming up with a solid plan to address your budget.
So don’t be afraid to regularly check in with each other to discuss your financial needs, goals and realities. And remember that you are ultimately working as a team to align priorities. That includes agreement on household expenses, kids, debt, buying big items like house and cars, and retirement goals.
Finally, don’t be afraid to seek professional help from a financial advisor to help guide the conversation. It’s hard to argue with an unbiased third party, and they can help set you on the right course to meet near-term and long-term goals.