When it comes to things that can destroy a healthy relationship, money's near the top of the list. Household budgeting may seem like a difficult way to structure your financial life, but it could not only save your relationship but make everyone in your family happier as a result.
The "B" word
Even single people have a hard time sticking with a budget. For many, budgeting conjures up images of keeping every last receipt for money you spend, sitting at a desk with a calculator and a pad of paper at the end of each week tallying up your expenses, and guiltily splurging on things that you want only to find out later that you'll have to eat ramen noodles for the rest of the week to make it to your next payday.
When you get two or more people together in the same household, the challenges only get bigger. Some couples choose to keep all their checking and savings accounts separate, while others put all their joint income into a single pot and spend from there. But regardless of whether you choose one of those solutions or end up somewhere in between, you're still left with a basic question: In a world where credit cards and other readily available sources of cash make it easy to live beyond your means -- at least temporarily -- how do you keep from spending more than you earn?
Building a budget
The simple answer to the question of how to find bliss under financial pressure is communication. Given that money is a taboo subject in many families, you may not have much experience in even thinking about potential money issues, let alone talking about them. But without communication, you, your partner, and the other members of your household are all flying blind.
The first step is to get issues on the table. Each person needs to have a chance to explain their financial priorities as well as their initial ideas of how to achieve their goals. Once everyone knows what's important to everyone else, then you can start to have a rational conversation about how to manage money in the best way possible.
Typically, the next step is gathering financial information. Figuring out your take-home pay after taxes is crucial to determine exactly where you stand. Similarly, a basic understanding of where your money goes will open the door to potential money-saving moves down the road, and it will also give everyone a better idea of whether current spending patterns are fair to everyone involved.
Be sure to use the many tools that are available. Intuit (NASDAQ:INTU) has offered its Quicken software for quite a while, but it bought Mint.com three years ago as a way of looking for a kinder, gentler way to get people to think about budgeting. You can typically get information from your credit card company as well, with American Express (NYSE:AXP), JPMorgan Chase (NYSE:JPM), and Citigroup (NYSE:C) offering various forms of year-end summaries that break out expenses into categories.
Once you know how much you've spent in the past, you'll be ready to start thinking about the future. Simple Internet searches will give you several perspectives on how much the typical household spends on various things, allowing you to compare your own spending levels. Obviously, you may have particular priorities that you want to emphasize, so don't take any deviation from the norm as an inherently bad thing. Often, though, you'll find that you're spending more on things you don't value; then it's time to take action.
Finally, don't be afraid to experiment. Some families budget a substantial amount of free spending money for each person, while others prefer more consultation and negotiation to make everyone secure. As long as it works for you, it doesn't matter exactly how you set things up.
As hard as it is to get started, household budgeting has saved many relationships from financial disaster. Whether you're already having disagreements with your family or just want to avoid any future trouble while things are still smooth, taking steps to get your money under control will go a long way toward making everyone happier.