My wife and I agree on most things, but when it comes to putting together a monthly budget, it can be a challenge. Our financial styles are different, one being more of a spender, the other more of a saver. It’s important to recognize that neither is right or wrong. It is a matter of establishing your financial goals as a family and finding a path where both feel their needs are being met. Luckily, we have been able to compromise and incorporate some give and take in coming up with a budget that we both feel good about.
Budgeting is something that few people enjoy but going through the process with your spouse is imperative to a strong relationship and a bright financial future. Following are things to consider in putting together a budget where both of you will feel equally satisfied.
- Spend time discussing your long-term financial goals and priorities. Is it buying a house? Paying off debt? Saving for kid’s college, retirement? Write them down.
- Review your current expenses. Separate them into essential expenses (rent, auto, groceries, utilities, childcare) and “nice-to have” expenses (dinner out, new clothes, vacation).
- Have each person review the non-essential expenses and prioritize them. Be ready to negotiate. Each spouse will want different things included in a budget. Hear each other out but be willing to compromise. Find common ground. Do you both enjoy dining out? Going on vacation? Is there a way to lower a different line item on the budget to allow for another “nice to have”?
- Feel strongly about some items that didn’t make the budget yet? Each person should have an agreed upon discretionary amount of which neither spouse needs to account for. This could be a weekly latte, a monthly massage, an expensive haircut, a regular golf outing.
In the end, your final budget will be broken into 4 categories:
- Funds for your financial future
- Essential expenses
- Family discretionary expenses
- Individual discretionary expenses
As you and your spouse work through this important process, remember emotions may run high but don’t go away mad and don’t take things personally. There are going to be wants that will not make it into your budget or the individual discretionary funds may not be equally balanced or proportional to your household contribution. The goal is to build a budget that you both can live with and that will make a positive impact on building your family’s future
Mario Hernandez has been a Certified Financial Planner (CFP) for over 30 years and brings a vast amount of experience in the financial planning and investment management business. Through Longevity Wealth Management, Mario provides holistic planning services that help clients find solutions to live their best life. Mario’s email address is mario@longevitywealthmanagement.com. Securities offered through Osaic Wealth, Inc. member FINRA/SIPC. Investment advisory services offered through Longevity Wealth Management. Osaic Wealth, Inc. is separately owned and other entities and/or marketing names, products or services referenced here are independent of Oasic. Certain insurance products are offered by Mario Hernandez as a licensed agent independent of Osaic Wealth, Inc.. Mario Hernandez is not affiliated with Osaic Wealth, Inc. or registered as a broker-dealer or investment advisor.
