“Hey, I’ve got an exciting idea—let’s go work on our budget!”
…Said absolutely no one ever.
Setting up a budget isn’t exactly fun. It can feel more like a punishment—something you and your partner have to do because winging it every month isn’t working.
Just hearing the word budget can conjure thoughts of complicated math, unwanted restrictions, and facing up to some bad past behaviors. (Like those $300 shoes in the closet that have never come out of the box.)
For couples who are combining their finances into one budget, and compromising their spending styles, it also might seem like a potential path to an argument.
And yet, budgeting is key for couples who really want to get a handle on their money and reach their financial goals.
This can potentially lead to some tough conversations. But it also may help avoid some tougher talks down the road . Here’s why budgeting is important.
You Can Gain Better Control of Your Spending as a Team
One of the basics of budgeting is to prioritize your spending. Once you as a couple have decided where your money must go every month – toward groceries, utility bills, car payments, rent, etc.—you’ll have a better idea of how much will be left for discretionary expenses.
And instead of being restrictive, your budget could give you some spending flexibility. You’ll know if you need to cut back and when you can loosen up a little—and you’ll be accountable to each other. You can also determine who is the tougher of the two of you and put that person in charge of managing the bills. Just remember to keep a balance.
Leave room for some splurges, or the spender in the family probably won’t be too happy. And be proactive about big purchases: Identify a threshold for how much each of you can spend so there are no surprises.
You Can Come Clean About Your Money Problems
Your spouse might not know about those pricey shoes in the closet, but it’s likely each of you has some idea about the other’s money issues .
If not, this is the time to talk about any hidden debts, bad habits that cost money, or if you can’t trust yourself not to overspend when there’s a credit card in your wallet.
Then you can you start tackling those problems, by setting spending limits, cutting up some of those credit cards, perhaps getting counseling, and, of course, incorporating those looming debt payments into your budget.
You Can Be Better Prepared for Emergencies
Many people recommend coming up with a fund that will cover three months’ worth of living expenses in case you lose your job or get hurt and can’t work. That fund also can be used for unexpected costs, such as home or car repairs or a medical procedure.
Not only will budgeting help you determine how much you can set aside each month to build that emergency fund, it can guide you as you choose which expenses you can put off or do without if you don’t have enough in your fund when a crisis strikes.
Maybe you could reduce the number of date nights you had planned. Or perhaps you can put your tax refund toward that nasty bill instead of flying to Cancun in the spring. Having a budget can help you replace panic with a plan. For additional budgeting help, sign up for SoFi Relay. You can keep tabs on your cash flow and spending habits.
You Can Come Up with Short and Long-Term Goals
If there’s a “fun” part of working together on a budget this is it: deciding your priorities for the future.
Whether it’s saving for a home, having children, taking a cruise, starting your own business, or all of the above and more, your budget will help you focus on the things that are most meaningful to you as a couple.
Your strategy can help you set aside the money to reach those goals – turning the dreaming into doing. And you’re more likely to stay on the track if you’re checking in on your spending each month.
You Can Work out How Much (or How Little) You Want to Combine Your Financial Lives
You may decide to completely merge your bills and bank accounts, or you might want to keep your own accounts and divvy up the bills. There are pros and cons to each approach.
Combining accounts can simplify your finances and build trust. But if you feel strongly about financial independence—or you’ve been burned in the past—you may feel more secure if you have your own money.
Either way, if you’ve been winging it up until now—acting more like roommates than a couple—having a plan can help keep resentment at bay . Try to negotiate an agreement that’s comfortable for both parties.
Ready to combine your cash?
It’s easy to create a joint
cash management account with SoFi Money.
It Can Lead to Less Stress
Sure, knowing exactly how much money you have (or don’t have) and where it’s going (or not going) each month can be a little nervous-making. Especially if things aren’t going well. But it’s better than not knowing .
Once you get the numbers down on paper, instead of just swirling around in your head, you may find things aren’t as bad as you thought. And if the situation is shaky, you can take steps to do something about it. It’s pretty tough to know what to do next without some way to measure your progress .
It Will Give You Something to Talk about Besides Work
OK, those are all important topics, too. But once you create your budget, you’re going to want to revisit it on a regular basis. You can discuss how your various budget categories are holding up and if you need to make adjustments.
You should go over any upcoming expenses that aren’t in the budget or only come up occasionally. And you can talk about how you’re doing with your bigger goals.
Introducing SoFi Money
The good news, especially for those who dig technology, is that there are plenty of online tools and apps that can help you put together a budget. And whether you decide to go with a joint cash management account or keep things separate, with SoFi Money®, you can track your spending to be sure you’re both sticking to your plan. (You also might find it’s necessary to make some tweaks based on the information the SoFi app provides.)
Save, spend, and earn, all in one product. And, because you’re trying to save money, you’ll be happy to know there are no account fees (subject to change).
With the SoFi app, you can make mobile transfers, deposit photo checks and access customer service anytime, anywhere.
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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC . Neither SoFi nor its affiliates is a bank.