The fundamentals of budgeting are the same but how you budget may look different throughout your life. Whether you are single, engaged or married, this is how you should handle your budget in each stage of life.
Singles
Singles have the most flexibility when it comes to their budget because they are responsible for all their money decisions. Having that flexibility can be great but it also comes with its downside. If you are the sole person making the decisions then there isn’t anyone to keep you in check. That’s why it is best to get an accountability partner.
So how do you choose a great accountability partner?
Your accountability partner shouldn’t be just anyone. It should be someone you can trust and can be honest with you. That can be a family member, friend or mentor.
Your accountability partner can help you set up your first budget and you can check in with them on a monthly basis. Be sure to share your financial goals with your accountability partner and your reason behind those goals. That way they can help remind you of your goals if you become sidetracked. You don’t have to run every purchase by them but you should feel comfortable discussing larger purchases with them so they can help you make a wise buying decision.
Engaged
Engagement is an exciting time and although you may want to start combining things in your life you should still keep your finances separate. That includes checking accounts, savings and debts.
Engagement is a great time to discuss finances and goals. Money fights are the leading cause of divorce. Discussing money now can get you started on a good path for marriage.
We took Financial Peace University a couple months before we got married and it was the best thing we could have done to get us started right financially in our marriage.
Creating a mock budget together on what it will look like after you’re married is great practice. It will give you clarity on what your expenses are and where you can save money. When you start living together you can cut out some of the duplicate expenses such as internet, cable and rent. But prepared for some expenses to go up a little, like food and utilities.
Married
The day you said “I do” is the day you “became one.” That also goes for your finances as well. It is no longer “his money” or “her money”. It is now “our money.” Combining finances helps you be on the same page as your spouse. Budgeting is a lot easier when everything is out of one account.
Having the same accounts also encourages open communication and eliminates any chance of secret spending. It’s sad but I have heard of stories where one spouse gambled their money away and the other spouse didn’t find out until months later.
A lot of married couples don’t combine their finances because they feel that they will lose the freedom to spend on certain things that they like. That’s why it is important for each person to still have their own personal spending money within the budget. It can be $100 to $200 (or whatever your budget reasonably allows). This lets both of you have a guilt free shopping trip at Target or Home Depot as long as it is within budget.
Along with both of you having personal spending money, you should also set a limit for large purchases. Anything that is above that limit should be discussed. For example, anything over $300 should be discussed. Not only is this a good money tip, this is a good marriage tip. Nobody wants to come home to the surprise of, “look honey I just bought a…[car, couch, tractor, insert any extravagant purchase here]!” I promise you, they will not be thrilled!
Each month you should do a written budget together. Typically one person prefers numbers and details over the other so that person can do the initial number crunching. When the budget is written out, take some uninterrupted time together to look over the budget. The other person must have a say in the budget and should feel comfortable to suggest changes. Discuss your financial goals together and see if the budget aligns with those goals.
Budgeting with your spouse doesn’t always have to be about crunching numbers and looking closely at your bills. It can be fun too! You made a commitment to grow old together, so what does that look like? What do you want your retirement to look like? Take some time to have a “dream date” with your spouse as Chris Hogan likes to call it. Get a clear picture of what you would like to do in retirement. Do you want to travel? Do you want to move to a warmer area? Dare to dream big without letting the “how to” hold you back. Dream first then make a plan on how to get there.
Retirement
Whether you are single or married in retirement you still need to budget. You have worked hard for several decades and now it’s time to live off your savings. Budgeting is just as important so you don’t run out of money.
A Budget for All
Whatever stage of life you are in, having a written plan for your money will help you take the stress out of finances. What stage of life are you in and who is your accountability partner? Comment below!