Best Ways to Budget as a couple

Gross income is the amount you have before taxes and deductions. This amount is not helpful for creating your monthly budget. Use your take-home pay or net monthly income to create a budget. This is the amount you receive before spending begins. After determining your net income, you can create a budget for the month and spend monthly expenses accordingly. 

When creating a budget as a couple, don’t forget to add your mandatory expenses. These expenses include housing, mortgage payment or rent, utilities, car payments, gasoline, student or other loan payments, credit card payments, and food. Some people think that food comes after all the bills are paid. But it is better to determine beforehand how much you want to spend on food as well. Food and grocery should be a part of the budget as well. 

Have a money date once a week. It does not have to be serious, you can just chat about your weekly expenses and discuss the financial terms over a glass of wine. When you do it weekly, it will not take long and you both are updated with each other’s spending.

Your budget is highly dependent on your short-term, medium-term, and long-term goals. S.M.A.R.T. acronym is a good way of setting your financial goals. It is explained as under.

- Specific - State your goal in a few well-chosen words. “We want to own a condo in the Bahamas.”

- Measurable - How will you figure out that you have achieved your goal? “How much will the condo cost?”

- Achievable - The goal should be something that you can achieve financially. “Can we save that much given our current and predicted future income?”

- Realistic - Even if it is achievable, does it really make sense in your situation? “What will we have to adjust and give up and are we comfortable with that?”

- Time-based - Your timeline will tell you whether it's a short-term, medium-term, or long-term goal. “How long will this take?”

Discretionary spending means spending on items that you want but does not need. List all potential discretionary spending and categorize it as “joint” or “individual” spending. Discretionary spending typically is its own mini-budget, created monthly based on available discretionary funds. Keep a separate fund for that as well so that it does not create a conflict in the future.

Honeydue is a budgeting app that is specifically designed for couples. It includes features that let you and your spouse decide how much you want to share with each other. You can track your shared expenses, keep a note of your individual expenses, and it is available for both Android and iPhone. 

You and your partner can set monthly limits for each spending category, chat within the app, react to transactions, and ask each other about questionable spending (from a shared account). More than 10,000 U.S. banks support the app, and best of all, Honeydue is free.