Financial challenges in relationships can feel like you're carrying the weight of the world on your shoulders.
Whether you come to a relationship with a solid financial background or you carry a lot of debt and don't have good credit, it's important to know how to budget with your partner to ensure you're on the same page and can reach your financial goals for couples.
There are many financial ups and downs of being in a relationship.
For example: it’s easier to share expenses and reduce your spending, but it’s just as easy to spend more money on dates, vacations, and large purchases that you and your partner desire.
How Much Does a Relationship Cost?
When looking at the cost of relationships, it's important to consider savings and expenditures, here are some examples:
Housing
According to the Bureau of Labor Statistics, single people spent about $17,899 on housing in 2021, whereas couples spent $24,811, which equals $12,405.50 per person, a savings of $5,493.50.
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Food spending
According to the BLS, a single person spends an average of $5,945 annually, whereas married couples spend $8,860 or $4,430 per person.
Overall spending
If you look at overall spending, the average single person spent $48,108 annually, and the average couple spent $76,046, or $38,023 per person, a savings of just about $10,000. Plus, being a couple has tax and other fiscal benefits.
How to Create a Budget-Friendly Relationship
Even though couples save money in relationships, it’s important to know how to create a budget-friendly relationship so both partners are on the same page, allowing you to reach your financial goals.
It's common for partners to come together with different ideas about how to handle finances and different amounts of debt or savings, making it important to learn how to meet in the middle to achieve financial harmony.
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How do I start budgeting with my partner?
Here are some quick steps to follow to budget with your partner:
- Determine how to split expenses: Consider splitting expenses 50/50 or split bills based on the proportion of the household income each partner makes
- Designate financial responsibilities: Consider what role each partner plays in managing the household funds and paying bills
- Set boundaries: Together decide how much money each person can spend without asking, and when you should discuss purchases to ensure they fit within the budget.
Some independence is important, but so is staying on the same page. - Have accountability: Couples need to have some accountability. This doesn't mean they are 'checking up on you.' It's just a way to ensure the bills are paid, and the household funds are handled how you both determined they should be.
What can couples do to save money?
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When creating a budget with your partner, it’s important to determine how you can cut costs.
Even though couples’ costs are somewhat lower than a single person’s, there are still ways to keep costs down
These are some ideas to cut costs, but once you start to adapt new ways to save money, you’ll come with some of your own:
- Meal plan to avoid eating out
- Shop around for cheaper insurance and household services
- Shop sales and use coupons
- Set a spending limit for non-essential spending
- Don’t buy more house than you can afford on one income
- Stay out of credit card debt
Achieving Financial Goals as a Couple: Easier or Harder?
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It might seem easier to achieve goals yourself. You don’t have another person to worry about, and can do what you want with your money, but having two people with like-minded goals, it is easier to achieve them.
Not only do you have two incomes to help put money toward your goals, but you also have two sets of eyes on your budget and spending to ensure you use the money how you intended.
If one partner has a better sense of financial well-being, they may help you have better financial habits and reach your goals faster.
Of course, this can go the other way, too. If both parties don't have good spending habits, you could overspend and not reach your goals.
It's important to have at least one person who is accountable for your finances and can make sound financial decisions.
If both partners are bad decision-makers or don't handle money properly, you should consider enlisting the help of a financial planner who can help you budget better.
Tips for Couple Budgeting
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Budgeting for couples can seem overwhelming at first. Here are some tips to keep you on track:
- Set up financial dates: Financial dates are times you and your partner set aside to talk only about money and your budget. It’s also a time to regroup and set different goals if things aren’t going as planned.
- Avoid common financial mistakes: Avoid financial mistakes like not saving an emergency fund, not staying on the same page with your partner, or lying about your finances to your partner.
- Determine how to split expenses: Agree on how you’ll split expenses and hold each other accountable to ensure you meet your responsibilities and goals.
- Cut back on expenses: Always be on the lookout for areas you can cut back on expenses and allocate the extra funds toward financial goals and emergency savings.
- Save an emergency fund: Save three to six months of expenses to cover yourself in any emergency. If you must use part or all of your emergency fund, save for it again.
Final Thoughts
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Relationship finances can seem complicated, but having multiple incomes has many benefits.
You can meet your goals faster and have two sets of eyes on your budget and finances to ensure you reach your financial goals.
It takes time to get used to having two people involved in the budget, but when you get into a groove, having someone else accountable for the finances can feel great so all the pressure isn't only on you.
