Money … I am not ashamed to admit that it is one of my favourite words. Whether we like it or not, it’s one of the things that make the world go around. If you are in a relationship, it is even more imperative that you are on the same page when it comes to money matters because (most of the time) your relationship will depend on it.
The tips I have put together here are not random. These are tips and suggestions that I have incorporated into my own life and trust me, they work! These simple suggestions helped myself and my husband be consumer debt free! Take these tips to heart and make it work for you. It is never too late to start!
Make a list of all your fixed expenses:
It may seem like a no-brainer but it is surprising how many people have no idea how much their fixed expenses are every month. As a couple, sit down and list out every single fixed expense you are responsible for (mortgage/rent, utilities, cellphone, gym etc). Make sure to also include the dollar amount and when they are due.
Make a list of your variable expenses:
These are expenses that you have control over (groceries, entertainment, travel, hobbies). Be realistic. You can’t expect to spend $200 a month on groceries if you are family of 6. This will give you an idea as to how much money you actually need to live on.
Don’t keep secrets:
Sure, it’s easy to stash your recent purchase in the laundry hamper than to justify why you spent that $200 but communication is KEY in a relationship. Be open about income and expenditure. One thing that has worked in my household is the allowance method. Every pay day, we make sure all our bills are covered, put aside a little for emergencies and for variables like groceries etc. Next, we each have a set dollar amount we take out in cash. This money has to last us until next payday and can be used for things that are not in our budget (movies, eating out, buying shoes etc) The only catch is once the money is gone, the spending stops!
Have a budget:
This can be a relationship-saver when one of you is a spender and the other is a saver. By having a plan, you can address both your needs. Knowing where you stand financially means you can make informed decisions. It is as easy as writing down all your fixed and variable costs while making sure you are in the black at the end of each month. If you spend more than you make, then you may need to look into making more money or cutting costs!
Share the responsibility:
It’s not unusual for one person to assume the responsibility of daily finances. It often falls to one partner to pay the bills, check the insurance coverage, allocate for upcoming expenses etc … the list is virtually endless. In my home, I am responsible for this. However, at any given time, my husband has access to everything. Take turns paying bills and have regular conversations so that both of you are clear about what’s going on financially.
Track your dollars:
I have been tracking my variable expenses (and I mean, every single thing I spend on) since 2007! And let me tell you, it is so much easier than many people make it out to be. I am not a money guru nor do I have any fancy apps. All I have is a binder with ruled paper! Every time I spend something, I write it in my binder when I get home. At the end of the month, I group them into categories (groceries, transport, cash, gifts etc) so I have a snapshot. This helps with the ‘where did the money go’ conversation we have at least once a month.
Plan for emergencies:
While no one likes to think about bad things happening, the fact is that bad things do happen to good people. If you don’t have a large chunk of cash at the ready to deal with whatever life throws at you, you won’t have the means to cope. But that doesn’t happen magically. And often couples over-estimate their partner’s ability to take over the entire financial burden should one partner lose a job, someone become ill or suffer some other disaster. It takes a plan. Putting aside a little money for emergencies should be a priority. This is why it is important to work with a budget and have money conversations regularly.
How does your family deal with money management? Feel free to share any tips and suggestions that has worked for you!