This is a topic that many married couples dread: tackling the household budget. But it's important to recognize that sitting down ahead of time to determine the budget not only gives a couple a sense of teamwork, but also allows for more freedom about money, not to mention less anxiety. Having a budget will lessen disagreements about money, because you shift the focus from money to thinking about how to meet your household needs.
In addition to the two emotional items we discussed, savings and personal spending, a standard budget will include the following:
- Shelter (includes utilities)
- Health care
Before you start tackling this part of the budget, do the following calculation:
- $ __________ Write down your monthly income.
- $ __________ Subtract your planned monthly savings.
- $ __________ Subtract your planned monthly personal spending.
- $ __________ The money left for your monthly budget.
The amount of money you have left is what you should use to calculate the rest of your budget. The numbers might fall into place. But if you find yourselves arguing over the budget, ask yourselves the following questions regarding how you can save money in each category:
Even if your income and situation does not change, the two of you should re-evaluate your budget every year. You might be surprised. There might be some new issues that need to be addressed.
Food. Do you shop in bulk? Could you eat less meat and substitute grains and beans for some meals? Could you cut down on expensive snacks like potato chips and soda?
Shelter. Could you reduce your heating or cooling bills? Would it be worthwhile to insulate your home? Could you move to a smaller dwelling or a less expensive neighborhood?
Entertainment. Could you see fewer movies in the theater and instead wait for them to come out on video? Could you go to less expensive restaurants or cut out dessert and coffee when you eat dinner out? Could you scale down your vacations by eating fewer meals out and staying in less expensive hotels? If you buy season tickets (cultural or sporting events), could you attend half the events and sell the rest of the tickets?
Insurance. Are you fully aware of insurance through your employer? Sometimes insurance plans through work are much less expensive than those for individuals. Could you extend your waiting period on disability insurance?
Transportation. If you have two cars, could you function with only one? Could you save on gas by carpooling to work together or with other people? Could you sell one of your vehicles and buy a less expensive or older model to lower your car payments (and probably your automobile insurance)?
Health care. Do you have the most reasonable plan for your needs? If you have few medical expenses, it might pay to have a less expensive policy with a larger deductible. If you are on long-term medication, are you buying your medicine in bulk? Sometimes plans charge a lot less when you buy several months' worth of medicine through a mail service.
Clothing. Could you buy fewer clothes or shop at a more economical store than you do now? Could you put part of the clothing budget under discretionary money?
After you go through these questions, try calculating your budget again. Things might fall into place. If they don't, you'll need to make more drastic cuts than you would like or somehow bring in more income.