A couple of weeks ago my husband and I returned from our honeymoon all relaxed, suntanned and ready to take on the world. With only a couple of days left on leave before returning to work, my idea of domestic bliss was turning up the local department store buying all the perfect fittings and furnishings for our little love nest.
My husband’s idea for filling in our last days off was something a little different. *Insert doomy music here* He wanted to do up the budget.
Honeymoon officially over.
Talking about money is never fun, is it? It sure wasn’t for us. I flitted between wanting to know every single detail of our financial goals and budget system to throwing my hands up in the air and saying “Just give me two envelopes every fortnight: One for groceries and one for my play money. You handle the rest!” My poor husband found it a little difficult to navigate the emotionally tense terrain that came with money talk. I was used to managing my money my way, albeit a little haphazardly, up until now and it became clear pretty fast that our ideas of how to go about managing our now dual income were quite different.
Domestic bliss is one thing. Financial marriage is another one completely and it is an area where there is plenty of room for conflict. Whether it is a talk that you are having with your spouse or a business partner, it is essentially combining two ways of managing money, two sets of financial goals and two ways of defining the word ‘priority.’ This is my second financial marriage. The first was, and still is, with my business partner. We used to joke around that although we were both single we were financially married. Boy! That took work. But eventually we stumbled our way through the minefield of small business and found a system that worked for us.
But we couldn’t cut and paste that financial relationship and apply it to my husband and I. That just wasn’t going to work. Setting up a budget is a bizarrely personal process and it works differently for every couple. So if you are in my boat and need to start planning a financial future with a significant other, here are my tips (formulated with assistance from some experts I know) on how to avoid disaster.
Be brave. Set up time to talk about it. It doesn’t work particularly well if this conversation happens incidentally. “Hey honey, do you like this new outfit (that was purchased because I like to look good for you)” to which the other partner responds nonchalantly “Yeah it’s nice. Hey we should talk about our budget.”
That conversation could deteriorate quickly. Setting up a time to talk about it allows each partner to think about the things they need to bring to the table. Things like goals, priorities and sensitive money issues all need to be talked about.
Sensitive money issues are called that because, well, they are sensitive. The point of this conversation is to get this all on the table. Be brave. Get it out in the open. You might discover that while your idea of investment is a property or stocks, your partners idea of investment is a designer jacket. Be ready to talk about it. No accusations. Just aim to understand where your partner is coming from and plan the way forward from there.
Set up a budget. A household budget is an essential management tool that every household or business needs. A good budget will anticipate costs and take them into consideration along with financial goals. If you hit up Google you will find a million different options in terms of budget setup tools. It doesn’t matter as long as you find one that works for you. Hell, it might even be a pen, paper and calculator. Whatever! We chose to work with an Excel spreadsheet because it can be set up to do calculations for you. What we had to decide on from there was the categories we were budgeting for, the amounts in each and the time scale. For example, the mortgage gets paid monthly and is X amount. The credit card payment is monthly and is X amount. The grocery money is in the area of X amount and is a running balance tracked over a fortnight. That is what works for us. Find what works for you.
Figure out a way to monitor it. A budget that isn’t monitored is difficult. But then again so it one that is painful to monitor. My husband is smart phone junkie. The easiest way for him to monitor it is with an app that does the work for us. He plugs the data in as he goes. The easiest way for me to monitor it is an envelope marked “groceries” or “play money” because I am not the one who does the reconciliation. This is what works for us. Again, it doesn’t matter how you monitor it, just as long as you find a way that works for you.
Give yourself a wage. I remember one hapless husband scratching his confused head as his wife cried “But honey I need pretty things.” They had talked about their financial goals and gotten it all down into a well monitored budget that didn’t take into account ‘pretty things.’ It caused a lot of stress until the budget was reworked. Easy fixed hey! But easier still if you put it into the budget to begin with. It is important to give yourself a little allowance. I spend mine on things like photography gear (which takes time to ‘save up’ for), clothing, business development books and coffees with friends. My hubby might spend it on things like meals out, DVD hire, junk food for when the boys come over to play ‘Risk.” Our financial demands on a day to day basis are a bit different but if we both have an ‘allowance’ it doesn’t become a point of contention. The amount of this allowance will need to be talked about and lined up with your other goals and priorities but as long as it is there, it will give you a bit of breathing space and a reward for all the hard work you do during the week.
Don’t forget that there are things you might forget. I forgot that coffee costs money. I also forget that pantyhose sometimes tear and it is a bad look to turn up to an important meeting with a ladder in your stockings. Other people have forgotten that the banks may charge you account fees or that it costs money to cure your 3:30itis at the vending machine. If your budget is airtight, you might find yourself resenting your partner because you can’t buy a chocolate bar. Some people view these spending leaks that need to be plugged but if you come in between me and my latte on a Monday morning, you will live to regret that decision. It isn’t a spending leak to me. It is a mortal need. Our best move was to factor it in.
It might help to track your spending for a week or so, allowing you to remember the things that you forgot. It also pays to be a bit flexible and ready to review the budget. A good budget is a work in progress. It is a living document if you like. Your financial demands change over time so it is a good thing to revisit the budget plan and talk about it every now and then – a little financial check up for your relationship if you like. Always remember that the point of a budget is to reduce stress and give you a clear picture of where you are financially. (CH)