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Managing Money and Love: Creating and Sticking to a Joint Budget

June 1, 2015

Here’s a great idea

The word “budget” can stir a negative response. It’s sort of like the word “diet”. It can be associated with depriving yourself of things you enjoy.  If the word “budget” makes you cringe, use the term “spending plan”.  You and your partner are planning the most effective way to use money to reach your goals. –Dr. Laura Connerly, Assistant Professor, Family and Consumer Economics

In other words

Trying to operate financially without a spending plan is like trying to build a house without blueprints.  As you go through life, there may be several milestones for which you will need to be prepared financially such as home ownership, raising children, and investing for retirement.  The earlier you begin looking toward these milestones, the better prepared you’ll be when they arrive.

How this applies to you

Follow these tips for creating a joint spending plan that you and your partner can stick with:

  • Complete income and expense statements. Come up with realistic estimates of income and expenses.  These two lists will form the basis for your written spending plan.  Expenses should include fixed, flexible, and periodic.
  • Make a written plan. It’s easier to control spending and work toward your financial goals if your plan is in writing.
  • Be sure to include “pocket money” for each partner. Everyone needs a little “pocket money” – money they do not have to account for to anyone else before they spend it. If “pocket money” is built in from the beginning, such personal allowances offer some financial freedom and responsibility simultaneously.  You can use the Expense Record book, available from the Cooperative Extension Service, to track your pocket money expenses.
  • Review and adjust. Review your spending plan annually or as needed if your circumstances change. Set aside some time to discuss what worked well, what did not work well and what needs to be changed.

To find out more

Whether a newlyweds or a long-established couple, the Financial Smart Start for Newlyweds fact sheet series can help you find ways to eliminate money stress.  The fact sheets are available at: http://www.uaex.edu/health-living/personal-finance/life-stages-events/couples.aspx.

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