Did you know that about 45% of couples argue about money? If you’ve ever found yourself in this boat, just know you’re not alone. Money management can be a touchy subject, especially when it comes to merging finances with your significant other. But with the right approach, joining finances can actually strengthen your relationship while setting you both up for financial success.
Open communication is key
Navigating finances together requires open communication and transparency. Here’s how to lay the groundwork for a successful joint budget:
- Schedule regular money dates: This can give you the opportunity to discuss your personal and shared financial goals, concerns, and priorities.
- Honesty is best: Be honest about your individual spending habits and financial obligations. Just because you have different approaches doesn’t mean it won’t work. Discover the art of financial compromise to navigate your differences here.
- Plan your shared future: Decide on a shared vision for your financial future, including short-term and long-term goals. Just as in your personal life, working towards a shared vision is a powerful factor to keep you aligned with your partner moving forward.
Building a joint budget starts with open communication and a shared vision for your financial future. This is best established during your money date when you set aside dedicated time for all things relationship finances.
Assigning responsibilities
Managing a joint budget doesn’t mean splitting everything down the middle. Instead, play to each other’s strengths and divide responsibilities accordingly:
- Decide how to split: Sometimes 50/50 works, other times it just breeds resentment. Deciding how to split expenses is something best done on an individual basis. Consider allocating specific financial responsibilities based on proportionate earnings.
- Play to each other’s strengths: If one of you is naturally more analytical and loves to get into the weeds on numbers, then let them shine by putting their superpower to good use. Just ensure that you both fully understand what’s happening so no one is left in the dark or bearing the full financial responsibility.
- Money dates: Maintain regular money dates and support each other where you can. According to Fidelity’s 2024 Love & Money survey, “1-in-5 primary decision makers admit to feeling resentful about handling financial matters alone.” By setting aside dedicated time each month to discuss finances and personal concerns, you can avoid joining this statistic.
Dividing financial responsibilities based on strengths can make budgeting more practical and effective for both you and your partner.
Creating your budget
Now it’s time to crunch those numbers and create a budget that reflects your shared financial goals and priorities. Don’t worry if numbers are not your thing; you can keep this super simple.
- Get Clarity: Start by listing all sources of income, including salaries, bonuses, and any additional earnings. Know clearly what you jointly have to begin with.
- Know your Expenses: Look at the last month’s expenses, categorizing them into essential expenses (e.g., housing, utilities) and discretionary spending (e.g., entertainment, dining out). Continue to do this moving forward each month, making adjustments to bring it in line with your shared goals.
- Set your Financial Goals: Decide to allocate a portion of your income to building up your personal and joint savings, to reduce any debt repayments, and set up emergency funds. For more on the priority list of financial action steps, check out ‘mastering financial planning’ here.
- Use Online Tools: Use budgeting tools and apps like Mint or You Need a Budget (YNAB) to help track your spending and stay on target.
Creating a joint budget helps you to track your joint income, expenses, and savings goals to ensure you’re both moving towards your financial goals together.
Finding balance: Compromising and adjusting
If there are any discrepancies when building this joint budget, you may need to compromise and adjust. In any relationship, compromise is key. Here’s how to find balance:
- Financial Flexibility: Be understanding of one another and willing to make trade-offs and adjustments to accommodate each other’s personal and financial priorities.
- Budget Check In: Schedule your monthly money dates and regularly review your budget together to identify areas for improvement or potential overspending, and ensure you’re both on the same financial page.
- Change is Inevitable: Your personal circumstances and relationship will inevitably change overtime, so remember to be flexible and willing to adjust your budget and goals to coincide with those changes too.
Finding balance in your joint budget requires compromise, flexibility, and regular review.
Planning for the unexpected
We all know too well that life is full of surprises, both good and bad. While money won’t always make them disappear, being financially prepared can certainly ease some of the pressure of navigating the stormy waters. Here’s how to prepare for the unexpected and protect your joint finances:
- Expect the Unexpected: Build your personal and joint emergency savings funds to cover unexpected expenses, such as medical bills or car repairs. Keep this in a high yield savings account (HYSA) where it is earning interest to at least match inflation and ensure there’s no restrictions on your withdrawals.
- Plan for the Best, Insure for the Worst: Consider purchasing insurance policies, such as health insurance, life insurance, and disability insurance, to protect against unforeseen events.
- Don’t be Blind Sided: Discuss and create a plan for handling financial emergencies, such as job loss or major unexpected expenses. Having the conversation about your worst-case scenarios won’t make it any less difficult, but at least you’ll both be on the same page, which will make navigating it together that much easier.
Planning for the unexpected is essential for maintaining financial stability and peace of mind, which is especially important when moving through financial storms in life.
Reward your progress
Don’t forget to celebrate your financial milestones and successes along the way! It’s easy for our minds to stay hyper-focused on what’s wrong or what could go wrong, so remember to recognize the wins too! Here’s how to reward yourselves for reaching your goals:
- Celebrate the Small Wins: Set small milestones and rewards along the way to your bigger goals to stay motivated and celebrate your progress. Maybe your goal is to become debt-free, but you celebrate yourselves for clearing the first debt!
- Stay Financially Savvy-ish!: Yes, it’s important to stay financially thrifty, especially when working towards your goals, but allow yourselves a treat too, whether it’s a special dinner or weekend getaway that won’t set you back..
- Affirm and Support Each Other: There’s a little kid in all of us who likes to hear they’re doing a good job! Use positive reinforcement to encourage each other and reinforce the good financial habits you’re putting in place.
Celebrating financial milestones while on the journey to your ultimate goals will help keep you motivated and on track with sticking to your joint budget.
Final thoughts on creating a joint budget
Building a joint budget may seem daunting at first, but with open communication on your money date, supportive teamwork, and a little bit of encouragement, you can create a solid financial foundation for your future together. Remember, it’s not just about the numbers—it’s about building a life that you both love, one budget at a time. And the best part? You don’t have to have it all figured out right away. Your budget can evolve just like your relationship does—flexible, growing, and unique to you and your partner. The secret sauce is showing up for each other with honesty, curiosity, and a willingness to find solutions together. Because when you treat money as a team effort, you’re not just planning your finances—you’re strengthening your partnership in the process.
Laura Tynan is the founder of The Witch of Wall Street, a personal finance and investing community, where women are shown how to manage, multiply and manifest money, using simple strategies. Laura holds a BSc Hons in Finance, is a Chartered Accountant, and is certified in EFT Tapping, Breathwork, and RRT. She has been recognized by the Financial Times as a Top 20 Future Female Leader and by Yahoo! Finance as a Global Champion of Women in Business. She is a multi-award-winning speaker who has spoken at, and been featured in, Forbes. Laura hosts The Witch of Wall Street podcast and is the author of the personal finance and investing book for women, by the same name, which is available now on Amazon.
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