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
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,
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.
(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
) , and
) 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
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.
Budgeting is an important part of getting your finances in
order, but the most financially comfortable families also make
great investments. The best investing approach is to choose great
companies and stick with them for the long term. In our free
3 Stocks That Will Help You Retire Rich
," we name stocks that could help you build long-term wealth and
retire well, along with some winning wealth-building strategies
that every investor should be aware of.
Click here now
to keep reading.
owns warrants on JPMorgan Chase.You can follow him on Twitter
@DanCaplinger. The Motley Fool owns shares of Citigroup and
JPMorgan Chase and has options positions on American Express.
Motley Fool newsletter services recommend American Express. Try
any of our Foolish newsletter services free for 30 days. We Fools
may not all hold the same opinions, but we all believe that
considering a diverse range of insights makes us better
investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a