The days where your biggest decision as a couple was what movie you were going to watch are over. Now, you are taking a new step as partners – perhaps you have recently moved in together, or are considering starting a family. This is where your expenses as people start to necessarily merge together. The line clearly defining ‘whose money is whose’ is starting to blur.
Managing your own finances can be hard enough on its own, but what do you do when your partner is involved? Your landlord doesn’t hand you a guidebook along with your copy of the lease explaining how he thinks you should earn the money to pay him (although that would be nice…). No, he just expects his money on a certain date and it’s up to you to figure out how you’re going to get it to him. Luckily for you, you stumbled upon this article. It is my hope that reading and following these guidelines will make the burden of sharing finances much easier.
Share the Burden: Because two people’s finances are involved, two people should be making the decisions. Don’t fall into the habit of having only one person decide. If one of you thinks you should invest in something new, there will always be the other to offer the objective opinion of, “Honey, I don’t think we can afford that yet.” With two people choosing, you have a better chance of making the most mature, informed decision.
Unfortunately, we no longer live in a time where only one person needs to work for two people to survive. All too often, both partners must pick up jobs in order to survive. But that leaves the questions of… Who takes care of the house? Who cleans? Who cooks? Ideally, these tasks would be shared, but if it is too stressful for two people to work full-time jobs, perhaps one should only take a part-time job instead. Then someone can take care of the housework that needs to be done without strain.
Write it Down: It’s hard to keep track of your expenses if you don’t have a plan. Make one together. Budget yourselves every month – figure out how much money is coming in and how much is going out. How much is rent going to cost? Are utilities included? How much will transportation cost? How much are we going to spend on food? Whenever possible, limit your spending. Decide, “I’m going to only spend x-amount of dollars on food each month.” Do your best to stick with your plan and not exceed your mark. Encourage each other to stick with the agreed numbers.
Expect the Unexpected: Never live paycheck-to-paycheck if you can avoid it. Always have some money in reserve to account for unexpected occurrences. What do you do if the car needs repairs, or one of you gets sick or injured? You need to have money to pay for these things. Never, ever rely on credit. In fact, avoid it whenever possible. The debt you build up as a result will only come back to haunt you in the end. Ideally, you would be making a surplus of money each month to save away for future investments.
Cut Down on Current Expenses: There are plenty of things you can do to reduce the amount of money you spend per month. For instance, if you are shopping, buy store-brand products instead of name-brand. Most of the time, the only thing you are paying extra money for is the popular name – many products are almost identical in ingredient and taste otherwise. Also take a look at the ‘price per unit’ label next to the overall price label. This will show you how much money you are paying per ounce, for instance, so you can make informed choices about the products you buy.
Whenever possible, avoid buying small (and incredibly overpriced!) products. Buying that $1.50 soda bottle or candy here and there can add up to hundreds of dollars over the course of a year, especially when you make a habit out of it. Instead, buy larger quantities at the supermarket if you really must. Cut down on food you don’t need – buy less snacks and candy. Many supermarkets will have displays of these close to the cash register specifically to tempt you. Avoid it! This will help your body and your wallet at the same time.
Sarah Danielson writes for Financialized, an investing and finance blog that offers an unbiased perspective on personal finance topics.