3 Things you Must Discuss to Reach your Budget Goals Together

Dave and I sat down together for a few minutes this week to discuss our budget. We have often talked briefly about our spending limits each month and called it a “budget meeting”. This time though, we went more in depth and really talked through each part of our budget – the income and expenses, cash envelope amounts, sinking funds and current debts – for the month and our overall plan for the year. Going into the new year we hope to really crack down on our budget.

For a long time, we were just trying to make it from paycheck to paycheck without relying on credit to carry us through. After selling our house, we were able to get a month ahead on our bills – meaning we save up all of our income from the month and use it to pay for the next month’s expenses.

The biggest benefit of the month ahead budget is that we know exactly how much money we have to allocate at the beginning of the month. Having a clear plan for every dollar should help us knock out our debt and save for the future. Which is why these meetings will become more important for us to have.

Prior to getting a month ahead we used a calendar budget to track our bills.

Dave and I share a joint bank account, but these tips apply whether you have shared or separate finances. The focus here is less on sharing the bills and more on sharing a vision for your financial future.

Whether you are saving for a wedding, saving for a home, trying to payoff debts or just trying to make extra room in your tight budget, these discussions will be helpful to keep you both on track.

Going forward, our budget meetings will be a lot more detailed and focused. I’ll share more about what our regular meetings will entail after I share the three most important things to cover in your first budget meeting:

1. Both partners must see and understand the budget

It is so important that there is not just one partner who looks over the budget. I write the budget on my own and then go over it in detail with Dave. We go line by line and page by page.

I use Numbers (the Mac version of Excel) to keep our monthly budget with our income and expenses listed out. You could also use a budget planner like this one if you prefer to keep yours on paper.

I also have a page in the workbook with our cash envelopes listed with their monthly amounts, a page with our debts listed out with balance, minimum payment and interest rate, and a page with a list of our sinking funds, which are essentially saving accounts for larger upcoming expenses.

Some of the things we discuss during this step include:

• The average income we have to work with each month
• Our typical spending – which is tracked by our bank online
• The total of our monthly bills
• The amount we have left after bills
• Our non-bill expenses (e.g. grocery, eating out, gas, activities, etc.), how much money we spent last month on those and how much we would like to budget
• Any big expenses we have coming up (e.g. vacation, registrations, holidays) and how much we can set aside to prepare for them using our sinking funds

2. Both of you must have a shared goal for your budget

Are you saving for something? Are you trying to pay off debts? If you are not both on the same page with your financial goals it will be impossible to focus and make them happen.

Take time to talk about your future and where you hope to be 3 years down the road. I know a 5 year plan is typical, but if you are anything like us, so many things can change in one year, let alone 5. It may even be more tangible to discuss where you would like to be one year from now. However far into the future you prefer to plan for, just make sure your plans for your money line up with your partner’s. If one of you would like to save for a house and the other would like to pay off student loans you will find yourself treading water and getting nowhere.

This should also be the point in the discussion where you realize what you are both willing to sacrifice in order to achieve your goals. It may be something as simple as packing a lunch for work everyday or something more drastic like trading in a car for something without a payment. 

3. You must keep each other accountable to reach your goals

I believe this may be the most important of the three and is a result of ensuring the first two steps are covered. A family budget cannot be successful if only one person is keeping the other in check. 

At least this is true in our situation. In the past, I have reminded Dave of our goals when he would overspend. Without the prior two discussions though, Dave would often be out of touch with our budget overall and when I would claim to “borrow money” from another category it didn’t seem like much of a big deal in his mind.

After working through our budget and seeing how each dollar is planned and accounted for Dave was able to see how borrowing from ourselves has hurt our budget in the past and how avoiding the habit could help us budget better. Now he will be able to keep me accountable for staying on track with our budget as well.

Always use your future plans as a reminder of why you must check in with each other regarding spending. It is not about receiving permission to spend, but rather getting a reminder of why you are making the sacrifices now.

What else should be covered during your regular budget meeting

Your budget meetings can happen as often as you need them – weekly, biweekly, monthly. This is a time to sit together and only discuss topics related to your budget and financial goals.

• Walk through the budget, note any bills coming up that are different than usual – e.g. annual registrations, bills higher or lower than usual.
• Walk through cash envelopes to see how much is left. Determine if the amounts budgeted are adequate or do they need to be changed – e.g too much allocated or not enough.
• Walk through your debts, including balance, interest rate and minimum payment and see how they’re adding up.
• Walk through your sinking funds or savings to see your progress and make adjustments if necessary.

Living on a budget together can often be the source of stress for a couple. Be each others cheerleader when necessary. Be each others supervisor when you need to be. But always remember, you are in it together and you will feel so good knowing you worked as a team to achieve your goals in the end.