6 basic steps to help you create a financial budget with your partner
Marriage is otherwise described as a partnership, union, or equal union. No matter how you describe yourself, communication is key to your happiness.
You and your spouse will need to talk about all the major issues including lifestyle choices, parenting, sex and of course, money.
In fact, money problems are one of the main reasons why marriages fail.
Money is not a controversial issue. Whether your marital status is “soon-to-be,” “newly married,” or “in a pinch for a while,” the key to handling money is to have a finances or a budget.
A budget is simply a best guess of how much income you two have and how you plan to use them.
Start by sketching together a basic budget plan. Then, once the budget is in place, sticking to the plan will just be a matter of checking in with each other on a regular basis.
Ideally, you would do this using free or inexpensive software to track your finances easily, accurately, and quickly.
Step 1: Set short, medium and long term goals
Always remember that these goals should all be closely aligned with your financial situation – and can change over life stages. These goals need to be specific, achievable, and time-bound.
Your short, medium and long term financial goals will have a huge impact on your overall budget. Short-term goals typically take a year or two to achieve and include things like creating an emergency fund of three to six months, paying off credit card debt, and saving for a special vacation.
Mid-term goals include saving to pay for a house upfront, cashing in on a new car, or paying off a bank loan. This process can take up to 10 years.
The most important long-term goal anyone can have is saving for retirement, and that requires you to save and invest for most of your working life, possibly up to 40 years — or even longer.
Step 2. Determine your net income
Once your financial goal is set, check your monthly income. Total income is the amount you have after deducting personal income tax (if any), insurance…
For budgeting purposes, use your monthly net income or take-home pay. This is the amount you get before you spend your household items.
If you and your partner have a steady salary, then setting a budget shouldn’t be too difficult. But if either of you has an occasional income like a seasonal job, self-employment, or sales commission, you’ll need to review the monthly income section.
Step 3. Add required expenses
Mandatory expenses include the costs you have to pay every month. Examples include housing, which can be in the form of mortgage or rent payments, car payments, gas, parking fees, utilities, loans, insurance, card payments credit and food.
Calculate your monthly required expenses.
For some people, food becomes “what’s left after all the bills are paid,” but the two of you should have a rough idea of the minimum you need to spend on groceries and treat it as a mandatory expense.
Step 4. Calculate what you need to save
Refer to Steps 1, 2 and subtract step 3 to work out your budget. Let’s say the total amount you need to save each month is 4 million. The amount left in your Step 3 is 11 million so you have 7 million for the next step.
Step 5: Divide spending arbitrarily
Discretionary spending means paying for things you do or enjoy together, such as eating out, going on vacations, watching TV shows, etc. It also includes money you spend personally such as clothes, gym, eating with friends…
List all potential discretionary expenditures and categorize them as “general” or “personal” spending. Discretionary spending is usually a small monthly budget created based on available discretionary funds.
In the example above, you have 7 million left to spend on discretion. That probably won’t happen monthly, which means the two of you will need to negotiate discretionary spending with each other on a monthly basis.
Step 6: Schedule a weekly check date
You should choose a software to easily manage both such as: You need a budget, Honeydue, Good Budget or an excel spreadsheet.
Schedule a check-in day once a week to check and re-evaluate your goals. Talking about your finances regularly will help you and your partner stay together and motivated to achieve your goals.
To avoid stress, you can discuss your budget while cooking dinner or spending the weekend at home.
Set a budget, track it, and meet once a week to see where you’re at to minimize money conflicts and help the two of you achieve your goals.
at Blogtuan.info – Source: Afamily.vn – Read the original article here
