Knowing how to budget as a couple starts with clear communication
Congratulations on taking your relationship to the next level. Figuring out finances for couples — whether you move in together, are engaged, or get married — can feel overwhelming. But by starting with a strong financial foundation, you can set yourself up for a beautiful future together.
Whether you’re saving for a bundle of joy or a home of your own, the right financial plan and platform can help keep you on track. These tips will help you learn how to budget as a couple and navigate those all-important money conversations so you can take charge of your finances as a duo.
1. Start Budgeting
Getting started can seem daunting, but once you get the ball rolling, you’ll be well on your way to the easy breathing that comes with financial success.
Be transparent. You probably know couples who’ve struggled to get past money troubles, dollar disagreements, or secret spending. For a healthy relationship, both partners must be transparent when it comes to money.
Start talking. Establishing trust and a strong financial foundation begins with having conversations about each other’s financial habits, goals, and experience with budgeting.
Discuss your dreams. Before you can learn how to budget as a couple, you’ll need to spend some time figuring out your joint money goals, while still leaving room to address individual financial obligations.
Be flexible. Budgeting can be challenging, depending on each partner’s priorities, values, and financial history. In fact, there really is no best way for couples to manage their money, since each relationship is unique. So give your partner some space and understanding.
Use a budgeting tool. The good news is that even if there are some disagreements, seeing all the numbers on paper (or in your budgeting software) can help inspire communication, encourage compromise, and have you working together as a team.
2. Set Joint Financial Goals
“I love our new home.” Having a clear picture of the end goal can help you get there faster.
Some examples of joint goals can include:
Travel you want to experience together
Paying for a wedding
Buying a home
Paying off shared debt
Building an emergency fund
At the same time, you need to leave room for each person’s individual goals like paying off pre-existing debts or spending on personal needs like a gym membership or a new outfit.
Ideally, try to focus on two to four primary goals at a time so neither of you gets overwhelmed. You can always revisit your goals as your priorities shift. In fact, you should make it a point to discuss big-picture money goals together every few months.
Once you figure out what’s important to each of you, then you’re ready for the next step.
3. Form an Accurate Picture of Your Finances
How much do you make together? How much do you spend? When you can see your income and expenses clearly, you’ll take the guesswork out of budgeting.
If you’ve never worked with a budget before, it can be eye opening to calculate how much money you’ve got coming in and going out. But you’ll need to do it to create a budget that lets you pay your bills and still have money to put toward short and long-term goals.
Add up Income
This part is easy. You just add up all the take-home pay for each partner. (That’s the amount of your paycheck that actually hits your checking account.) If one person doesn’t have a steady income — for instance if they do freelance work — then take an average of the last three months of income to get an approximate amount.
To your take-home pay, add up other expected income for the next 12 months:
Other expected windfalls
If your monthly income covers all your expenses, you can dedicate “other income” toward making progress on goals. If you need those windfalls to cover expenses, plot out when they’ll show up throughout the year, after taxes, to work them into your budget.
Tally up Expenses
For the next step, add up all your expenses, broken into three key groups.
A. Fixed Expenses
These expenses include anything that you can put on autopay and are generally the same amount every month. Include items like your mortgage or rent, insurance payments, car payments, subscriptions, memberships, and utilities.
For many couples, fixed expenses can be paid from a joint checking account that each partner contributes to.
Action step: If your fixed expenses aren’t already on autopay, set that up from your checking account or credit card.
B. Flex Expenses
Next up is the everyday spending you do on things like groceries, restaurants, dry cleaning, and transportation. If you aren’t sure what you’re spending on these items, look back into your debit and credit account statements, or just start tracking every dollar that goes out for a couple of weeks to come up with an estimate.
You can pay for flex expenses from either a joint checking account or from individual accounts — joint if you do most of your flex spending together, or individual if that works better for you.
Action step: Make a special effort to manage your flex budget. This is where you and your partner have the most influence over your budget on an everyday basis.
C. Non-monthly expenses
These are expenses that come up less frequently, but still need to be accounted for in your budget. They can be birthday and anniversary gifts, car maintenance, holidays, property taxes, and annual insurance premiums.
Action step: Once you’ve listed all your non-monthly expenses, add them up, divide by 12, and count that amount as part of your monthly budget. Then set up an account dedicated to non-monthly expenses. Add enough funding to cover six months if possible, and set up an automatic contribution to it every month, so it stays replenished. Then every time a non-monthly expense pops up, you’ll use that account to pay it.
How Do Most Couples Split Finances?
Knowing how other couples budget can help you form your own best spending plan. While there are different schools of thought, what works for many couples is taking a “yours, mine, and ours” approach. That’s where you maintain both joint and individual bank accounts.
Using individual checking accounts for flex expenses can be a great option to give you and your partner freedom to manage your daily spending according to what matters most to you — a latte here, a T-shirt there — without having to align on every single purchase.
If you decide to use individual accounts, consider naming one another as a beneficiary (called a POD or payable-on-death designation). That way if either of you pass away, the account will automatically pass to your partner.
You can use a joint account to pay for your fixed expenses, non-monthly expenses, and even your flex expenses if that works best for you. You can even set up different joint accounts to help you contribute to future goals like saving for a home or having a baby.
Agree with your partner on what portion of your income will go into each account. Using a percentage can be helpful if one partner makes significantly more than the other.
There’s No One Size Fits All
Some couples decide to combine all finances when they get married, while others keep everything separate until death do they part. Whichever route you take, what’s most important is that you both agree that it’s the right method for you, and you don’t keep any money secrets from each other. Financial infidelity will almost always end up causing relationship headaches down the road.
No matter whether you decide to keep all accounts separate, joint, or some combination of both, Monarch Money gives you a snapshot of your finances as a couple, so you and your partner can budget and plan as a team — regardless of how you structure your accounts.
4. List Your Savings Goals
“Yes, we can afford a second vacation this year.” When you’re learning how to budget as a couple, saving is an important part of the plan. After expenses, it’s a good idea to allocate some money toward specific goals. This can include contributing to an emergency fund, saving for a vacation together or a wedding, and investing in your individual retirement accounts.
A. Start Your Emergency Fund
How much you save depends on how much wiggle room you have in your budget after expenses. If you’re just starting out, aim to build an emergency fund equal to one month’s household take-home pay. Once you hit that milestone, you can incorporate additional goals, but continue to build your emergency fund to three to six months (or more) of take-home pay.
Then if layoffs loom or you have an unexpected medical bill, house repair, or car breakdown, you’ll be ready. You won’t have to give up dinners out or take on a side gig.
B. Save for Goals
Once you have a good start on your emergency fund, you can introduce other goals, like paying off debt and investing for the future. You’ve already built the saving habit. Now you can use it to pay for your dream home or fund your retirement.
5. Divide Financial Duties and Expenses
Who’ll monitor spending? Who’s in charge of saving? Set key duties early, and you’ll avoid money problems later.
It’s often true that one member in a couple is more organized or financially savvy and agrees to take on the budget. But if it’s a task that neither person enjoys or is good at, then you’ll want to have a conversation around who is responsible for what. The main point is to avoid a situation where a bill doesn’t get paid on time because of confusion over who was supposed to take care of it.
Among the duties involved in maintaining a couple’s budget are:
Preparing your tax return
You might decide that one person handles the monthly items while the other works on the big picture planning. Or you could alternate months. However you work it out is up to both of you. The key is communicating and dividing the labor in a way that’s acceptable to both.
6. Keep Your Budget Organized
A budget is like a lawn — it needs regular tending. Your financial needs and abilities can change from month to month as new expenses emerge, goals change, and income fluctuates. Here are some strategies to help you and your partner stay on track:
Schedule Regular Checkups
Schedule regular budget meetings (weekly or monthly). Though that might sound like a drag, call it a money date instead and do something fun together after it’s over as a reward. During your meeting, discuss any new expenses coming up, review what went right (or wrong) in the last month, and look over statements together. Then celebrate any progress you’ve made.
Refine Your Budget Over Time
Update budgeting spreadsheets or software regularly. Make any necessary tweaks to reflect new income sources or changes in expenses.
Make sure both parties are comfortable with their financial roles and responsibilities. Whatever you decided in your first money conversation doesn’t have to be set in stone forever. Maybe the person doing the bills needs a break, or perhaps someone’s income has changed and they can’t contribute as much. Check in with each other to make sure everyone understands their role.
Consider setting spending rules. No one will enjoy having to be accountable for every latte they drink or each T-shirt they buy. But bigger money decisions should at least warrant a discussion. Come up with a rule that makes sense for your specific budget. It could mean running purchases over $100 by your partner first, or having a “no questions asked” policy for money spent from an individual account.
Cut each other some slack. Just as with other parts of your relationship, there may be a learning curve. Plus, your values may not be perfectly aligned. One of you may be more of a saver while the other is a spender. The key is to keep the focus on making progress together, not expecting perfection.
7. Choose the Right Budgeting Tools
You’ve got this.
Once you’ve ironed out all the big picture money issues and had the important cash conversations, choosing the right tools can teach you how to budget as a couple and help you avoid money fights. Those may include:
An app to manage bills
A weekly budget tracker app
An intuitive money management platform like Monarch Money does it all. It keeps track of all of your financial activities and allows both parties to see the budget in real time so there are no miscommunications.