Succesfully creating a joint budget... and sticking to it

There is a Chinese proverb that says “if you want to go fast, go alone, but if you want to go far, go together”.

This proverb (which isn’t even Chinese) is absolutely right, but let’s be honest… many times “going together” tends to be complicated because we are all different, and each one thinks differently.

The relationship with your roomies, your business partners and even your couple could be a disaster if you don’t put together a budget. The idea is that both parties benefit.

Basic rules to build a budget with your roomies

1. Set a day and time to pay rent

If you don't want the owner of the apartment to show up charging the rent, set a fixed day to make the rent deposit.

Example: Every Monday of the first week of the month, you must deposit the rent money to an account. Without fail.

Choose someone responsible for rent and services payments; track calculation and control of pending accounts.

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2. Before moving in with your roomies…

Make sure they are responsible. Set rules and discuss what you wouldn't tolerate.

Example: It’s forbidden to eat each other’s food, if you drink your roomie’s coffee you will have to replace it, take care of the furniture, parties, or visits are not allowed, etc.

3. Divide expenses

Toilet paper, cereal, coffee, and cooking oil are among the items that are most shared between tenants.

Stick a calendar on the fridge and establish what each person has to buy.

Example:

Week 1: (Roomie #1) has to buy cooking oil

Week 2: (Roomie #2) must buy three boxes of cereal for everyone

Week 3: (Roomie #3) it’s time to buy coffee

The rule is that those shared items are never missing in the house.

Envato / DragonImages

4. Sign your contract as a roomie

Keep things straight from the beginning. Make sure that the contract says: how much you must pay for rent, the deposit amount, what services are included in your rent, percentage of rent each one must pay, when your contract expires as a roomie, if your room includes furniture and the dimensions from your room.

5. Golden rule: if you are going to leave, give previous notice

The rent is divided among those who live in the apartment. If one leaves, it disrupts the entire budget. If you’re going to leave, give at least a month's notice so those who stay have time to get another roomie.

“Six out of ten young people share or have shared an apartment at some point in their lives”, Dada Room.

You and your sweetie must have a budget (Yes or yes)

1. A joint emergency fund 

Each one must allocate a certain percentage of their income for your emergency fund. 

Dear Money recommends the following emergency funds:

• Conservative: Consists of saving the amount necessary to cover your expenses for 6 months. If an unforeseen event happens, you'll have enough time to recover and act calmly. 
• Traditional: Save the amount needed to cover your total expenses for 3 months. 

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You choose which emergency fund is right for you (based on your income). 

After you complete your emergency fund, decide if you are going to create a pool for all the money or if each of you will save in the fund independently. 

To be fair, if one earns more than the other, the amount to save will be greater than the one who earns less.

2. Don’t forget the couples goals

Where are you going to travel next year? Think of something realistic that both of you can reach and that won’t “bankrupt” either one.

What concerts/festivals are unmissable for you? Taking into account the 50-30-20 rule, allocate part of your 20% for those “treats”.

You can divide the cost of gifts for weddings, birthdays or any other celebration so that everyone contributes the same amount

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3. Learn to say “no”

If it’s too expensive or if you’ve already spent a lot, choose not to go out and stay home. Watch Netflix and make some homemade popcorn. 

Prioritize your expenses so that after a while you’re not snapping at each other.

Remember that money problems are more common when you're in a relationship.

4. Before you buy something that is not contemplated, first GIVE NOTICE.

It’s disrespectful when you think you’re teaming up with your couple, and suddenly you realize that the money went on some unnecessary treat.

If you and your partner are raising money, avoid compulsive spending such as:

• Tickets to see your favorite sports teams

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• Manicure and pedicure with gelish
• Rabbit-shaped slippers because December is coming, and your feet are going to get cold
• Annual registration in the coolest gym in your neighborhood, just to go take photos
• A many other examples

Budget between freelancers/partners/entrepreneurs

If you are an entrepreneur, and you teamed up with others like you, you’ll have to:

• Check how much money your business earned and how much was spent last year.
• What are the minimum profits for the business to go on?

(Check how much money you should earn monthly so that everything goes smoothly)

• Get organized. In case of renting a WeWork-type office, get a quote to know how much you’ll spend on general services and rent.

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• Define how much money you’ll allocate to the payroll of employees (if you have them).
• Divide the budget equally. If your incomes are different, establish what percentage of money each one will have to contribute.
• Always be honest, if it’s too much, if it’s out of your budget, if it’s not convenient for you, DON’T join.
• The money destined to pay your debts, your fixed expenses and your treats is just for that, don’t go around using that money for the expenses you have with your freelance partners/friends.

“If you want to go fast, go alone, but if you want to go far, go together”, a Chinese proverb.

Now that I have mentioned the three basic pillars to achieve financial stability, you’ll have to give it a try and strike a balance between living with your roomies, the financial relationship you have with your couple and the projects you have at the door with your business partners.

Commit to being disciplined and committed, only then will you be a superstar with the budgets as a whole.