A man and woman sitting at a table with papers.

How to cut your budget while keeping your marriage (Part I)

Making and sticking to a monthly budget is hard. Choices can be very difficult to make, especially when there are two people involved whose preferences are not the same. This series of articles will lay out a process for working through those choices together, while bringing your relationship closer in the process.

Remember the Why

Before you jump into a budget conversation, take some time to talk to your partner about why you want to get a handle on your budget. Would you feel less stress if you had money left at the end of the month? Are there other long-term goals you are working toward (like freedom from debt, early retirement, paying for college) that will be more reachable if you control your spending? Think about why you are willing to potentially make sacrifices in your spending. This will help you get on the same page and start the conversation with a positive outlook. Budgeting sounds like a chore—even the word makes many people cringe. Try to think of it instead as a tool—something that can make it possible for you to achieve your goals, and that can clarify your options so that you can make informed choices.

Income Minus Outgo

There are two ways to improve cash flow and leave more for savings at the end of the month. You can increase your income or reduce your outgo. This series of articles will focus on ways to find consensus on spending, but it is important to keep in mind that this is only part of the picture. There may be other things to consider in the long-term. Would a job change yield a higher income? Is there a spouse who is not currently employed, but who could return to work? Are there teenage children who could earn a little spending money for themselves in a part-time job? That is something to keep in mind as you go through the budgeting process. In some cases, it may be easier to increase income than to reduce expenses.

Get Real: Track Expenses

Step one in making a budget is to get a handle on how much you are spending now, and what you are spending it on. Download transactions from your bank account and credit cards for a period of several months, and label and sort them. There are many online programs that can help with this, or you can download them into a spreadsheet program like excel and do your own sorting. If you would like to choose a software program, check out this article on The Balance, which reviews 10 popular ones. It will help if you also keep receipts so that you can be specific about what the expense was. For example, it is not very helpful to have a category called “Amazon” or “Target,” but it is more helpful to be able to divide those expenses into “Groceries,” “Books,” “Clothing,” etc. Try to account for every dollar, but don’t drive yourself crazy. Just see that your monthly total expenses are roughly equal to your monthly total income. So, account for taxes, debt payments, and savings goals too. The more months you can include, the more accurate your budget will be. Don’t forget about bills and expenses that you pay annually or quarterly, like property taxes, insurance payments, birthday parties, and vacations. Once you have your expenses downloaded, labeled, and sorted, you are ready to move on to Part II.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax or legal advice. Please note that individual situations may vary. Therefore, this information should be relied upon when coordinated with individual professional advice.