Couples Budget: An Equitable Approach

All you need is balance

Perhaps a happy money relationship isn’t about being equal, just equitable! 

My wife and I long ago decided to split our expenses 50/50, right down the middle for things like rent, food, electricity, etc.

We maintained our finances separately and any money left over to spend after the 50% split was discretionary.

We both tracked our income, expenses, savings using Quicken, so it was easy to keep track of finances.  We both had a knack for saving money, too, so we never had major fights or issues.

After we got married and bought our first home, we decided it was time to rethink how we approached our finances.  Keeping our accounts separate and splitting bills down the middle, didn’t really give us a complete, honest picture of our financial life, plus it made it hard to plan for the future and keep track of our progress. 

The 50/50 split didn’t make sense anymore, either. Since we both made different amounts of income, our budget (spending or savings) decisions were all skewed.  It didn’t make any sense that the person making the least income paid the same percentage in expense, and vise versa.

This forced us to think about a better way to cover expenses and manage our money. Honestly, I can’t even begin to tell you enough how that was the best thing we could have ever done for our personal finances. Here’s how we did it…

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How to Build a Better Budget in 3-steps

A budget is your financial compass!

How do you decide who to pay after you get paid? 

Some may say: “Well, I have a budget.”

Sure, a budget may be the obvious answer.

Before that, though, what was your thought process leading up to creating your budget?

If you don’t have a budget, the same question still applies: How do you decide who gets your hard earned income and why?

Whether you have a formal process or a simple flexible mental exercise (aka no process), the only right answer is the process that works for you.

Just the thought of doing a budget can seem tedious. The goal is try different methods until you find one that sticks, and eventually make your own.

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Cut the Slack, Pocket the Savings

Cut the Slack, Pocket the Savings!

So here’s how I put $3,380 back into my pocket this year and forever with minimal work.

Let’s talk about ‘bills’ for a second. I’m talking about those pesky periodic bills.  Yes, everyone has them. Some bills are necessary and to some degree inevitable and an unavoidable part of life (i.e. utility, taxes, insurance, etc.). On the other hand, we all have those often unnecessary bills that siphon away our hard earned cash like clock-work, often paid automatically and forgotten.

In the past, I didn’t mind paying for certain creature-features that I perceived to bring me comfort: like cable, cell phone, internet, car, dining, memberships to this or that, you name it. I worked hard so I wanted to enjoy it. Comfort, however, comes at a price in the form of a monthly bill.

Shortly after the time I nearly inflated my lifestyle, I took a good hard look at my monthly spending. I reviewed every bill I paid to see where I can reduce or eliminate.  I knew that if I want financial independence I had to shift my priorities. I had to reduce my level of consumption. It was simple math. Read more

Take Control of Your Personal Finances

Truly a powerful tool!
Truly a powerful tool!

The first desktop computer I bought myself was a Sony Vaio. It came in this really hideous color with a large CRT monitor and tower.

It ran Windows ’98.  Like all store bought computers, it had its fair share of bloatware—which is pre-installed software you don’t ask for.

One software in particular that I took the time to figure out, though, made my financial life so much easier: Quicken–a personal finance and budgeting software.

That was years ago and I still use Quicken to track my finances to this very day.  I use it to keep track of income, expenses, investments, payments, net-worth, and budgets. I also use it to reconcile my bank and credit card statements every month. Read more