Money can be a big challenge for relationships, especially for couples on a budget with limited income or a lot of debt. Overwhelming debt, lack of communication and financial secrets can lead to arguments, guilt, finger-pointing and resentment. Here are steps to help.

Understanding what a budget is, what it can do, and how to build one together can help couples address problems in a healthy, positive way as they work toward mutual financial goals.

A budget is simply a roadmap for dividing household income into expenses (including mortgage, groceries and discretionary spending). Building a budget together means agreeing on the roadmap and helping each other stick to it.

Schedule a meeting with your partner, and take the following steps to prepare for challenging but important conversations.

Step 1: Lay it all out.

Before you can decide how to spend your money, you need to know what you’re working with.

Income and fixed expenses are easy to figure out. Fixed expenses are simply your household expenses that cost you the same, or about the same, each month, such as your mortgage, car payments and debt payments. Even though they can vary somewhat, utilities fall into this category as well — just calculate an average. 

Couples should begin this budget step with honest conversations about debt. If you or your partner are hiding any debt because of fear or shame, now is the time to face it.

It’s important that both parties know that the discussion will be free from judgment and blame. Now is the time for problem-solving — not accusations! 

Step Two: Get on the same page with goals.

What are your goals as a couple? Perhaps you want to buy a house, go on a vacation, or invest for retirement. Align your goals and come up with a plan to achieve them together.

Working step by step toward goals can improve a couple’s relationship and help motivate you to stick to your budget. If you are having a hard time coming up with goals, talk with a third party, such as a financial planner, to get some ideas.

Set goals based on a specific time frame. What do you want to achieve in the next month, year, or ten years? The key is to make your goals specific, reasonable and achievable. Create a shared Google Doc so you can both add and edit as needed.

When you reach a goal, acknowledge it together, celebrate your success, and move on to the next one!

Step Three: Decide on limits for variable expenses.

Once you deduct known expenses from your income, the next budget step for a couple is seeing how much you have left for food, savings, entertainment and discretionary spending.

These are your variable expenses because they often change month to month. These are also the expenses a couple has the most control over.

Decide together how much money sounds reasonable to budget for each category, and then come up with a system to stick to it.

The envelope system suggests placing cash inside labeled envelopes (such as “Eating Out,” “Entertainment,” “Clothes” and so on). If you’re looking for something a little more high-tech, Mint is a free budgeting tool that can help couples manage and plan finances online. Your bank may even offer software that will help you track spending.

Whatever system you choose, just make sure that both you and your partner can access it.

Step Four: Set aside funds for individual spending.

For couples who combine funds, having some household income devoted to you both as individuals is very important. Neither partner wants to feel like they have to ask permission for every purchase they make.

Talk about what is important to both of you as individuals, and budget funds fairly to meet those needs. 

Sometimes having a set allowance works. Each party gets a certain amount of money to spend each week on whatever they wish. As long as you and your partner don’t spend more than the allowed amount, you can both enjoy some freedom without having to be secretive.

Step Five: Track your finances together and meet frequently.

Often the job of managing the household finances falls on one person. This is a mistake! Both you and your partner should manage funds and build a budget as a couple. 

Meet frequently, even if it’s just over dinner, to talk about progress and challenges. Be open to changing the budget if it doesn’t seem to be working. Listen and communicate openly and honestly with your partner, and try not to be harsh or judgmental about struggles and setbacks. Remember — you are in this together!

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