So, you’ve successfully held a couples money and budgeting meeting together, as outlined in Part 1 and Part 2 of this series. Now what? Guest Poster Timothy Ng fills us in on how to ensure smooth ongoing handling of finances.
Successfully Managing the Budget as a Couple
With an understanding of your partner’s attitude to money, their financial goals and the tricky questions of joint and individual expenses clarified, you can implement what you have learned into a successful budget.
Now that you know how much your joint expenses are, you need to work out how you will pay for them. Each person will need to contribute from their wages, but how much? If you and your partner earn around the same amount, you can easily split the expenses 50-50 and deduct half of the costs from your wages and half from your partner’s.
Unfortunately things aren’t always that simple as couples tend to have differing salaries and if this is the case you’ll need to do some calculations.
If for example your combined expenses are $2,000 a month, your monthly income was $2,000 a month and your partner’s monthly income was $3,000 a month, take the lowest monthly income and multiply it by your monthly expenses.
Take the result – $4,000 – and divide it by your combined incomes and you get $800 so your contribution is $800. Then subtract your contribution from the combined monthly expenses and you have $1,200 which is your partner’s contribution.
Then set up a joint checking account and an automatic debit of this amount from each of your individual accounts. You will then both have online, phone and branch access to the account and the money, as well as an ATM and EFTPOS card each. You can pay the bills together or nominate one person to be responsible for that.
Separating a Couple’s Finances
Even though you are part of a couple you don’t want to lose your individuality, or your individual financial security. Therefore, think about keeping some of your finances separate, for example:
While one person may be responsible for the bill paying, both people should understand the household finances as this ensures an equal and honest relationship where money is concerned, and where it’s not.
Was this series helpful? We’d love your feedback below. Leave a comment!
Timothy Ng is a personal finance writer, and has a real passion for encouraging people to compare credit cards to ensure they get the best deal. Check out his comprehensive guide to best credit cards where he provides an in-depth overview and analysis, to help you find a better deal.