Young couples bring more than love and dreams to a relationship. Each person has his or her way of thinking about issues, including finances. Creating a budget for two is a great way to build your teamwork skills and to get an idea of where each of you stand on financial priorities.
1. List your individual financial situations. Include how much each of you has in income, assets and debts. Review your spending over the past few months.
2. Design an expense budget for your monthly needs. Determine how much money to allot in categories such as groceries, entertainment and dining. It’s common for the person who makes more money to pay a greater proportion of expenses, but that’s not the only option.
3. Make room in the budget for contributions to an emergency fund, if you lack one. Save at least three months of living expenses. The fund means not having to use credit cards and their associated high-interest charges in emergencies.
4. Share your goals, both for the short-term and the long-term. Short-term goals might include largely individual endeavors such as contributing to retirement plans and paying down student loan debt. As for longer-term goals, a possible goal is that your partner might wish to go to college (or go back to school for a higher degree).
Decide on approximate time frames for these goals and how you might meet them.
5. Use caution if combining all of your money into a joint bank account. Many couples prefer some level of individual independence. A good starting point is to open a joint account to cover basic budgetary needs such as food, mortgage payments and utilities. You can also open joint savings accounts for the emergency fund (it needs to be its own account) and for longer-term goals. Also, clarify expectations for joint accounts. For instance, some people prefer that their partners consult them before spending more than $100.