Budgeting for Couples: How to Manage Money as a Couple

Have you ever heard a dubious anecdote from adults about how husbands find ways to hide their money from wives, and the latter masterly find the places where the husband's stash is hidden?

This is how the “traditional” model of family budgeting looks like, which assumes that the husband always earns money, and the wife always spends it in her own way.

For modern independent people, marriage is not about solving money problems. But at the same time, the financial difficulties of living together not only do not disappear, but even multiply. Differences in income levels, different approaches to saving, uncertainty about the future, or feelings for each other raise questions of financial coexistence to a new level. Is all that is mine now yours? And is yours now mine?

Many problems can be avoided by agreeing on all these topics at the very beginning of the relationship, but only a few think about this in advance. And although it intuitively seems that living together helps to save on some household expenses, conceptual difficulties can arise when you least expect it. For example, if the income level of partners differs greatly, the one with the higher income is not always mentally prepared for the fact that his/her new standard of living, shared with the partner, will be lower than usual.

Thus, if we consider a typical working couple with a normal level of trust, positive attitude towards each other, respect for the partner's needs and habits, shared interests, and the ability to discuss problems, then for a comfortable coexistence of a couple, they need to answer a few questions in terms of "we":

• What are our financial priorities? What do you care about? What do I care about? Who is ready to sacrifice what if necessary?
• Considering our priorities, how much money do we need per month to cover our basic needs? This includes food, paying bills, medicine, personal care, sports, hobbies, etc.
• How will we deal with unforeseen circumstances? Will we solve our problems on our own? Or will we do this together? Will we create an emergency fund and keep it untouched?
• Will we save money together? If yes, how will we do that? Will we open a savings account, a retirement account? Will we invest in shared real estate property?
• Do we have common dreams we want to save up for?
• Do we expect large expenses in the long term? For instance, paying for the higher education of a child we are planning?
• Do we plan to get a loan or mortgage?
• How do we pay for vacations and entertainment?