Some folks earn enough money that they can make financial mistakes or spend differently than planned without significant fallout for their family finances. These incidents can still lead to frustration or disagreements, though. Working with your spouse or partner on a budget is a great way to get ahead of those issues. For families living paycheck to paycheck, who might already be feeling more stress, it’s even more important.
And couples who budget together are happier together. According to research, “behaviors that financial practitioners would label ‘sound financial management’ are positively associated with marital quality and stability.”
Budgeting means planning for every penny — and the spending of every penny should be an intentional financial decision that’s the result of how you want to live your lives together. Here are four steps to get you started with this process.
1. Schedule a ‘money date’
Budgeting begins with a conversation with your partner. Experts recommend scheduling a “money date”: This is a dedicated time when you are both free of distractions. The environment should be relaxed, and no one should feel rushed. Anticipate that the conversation could become emotional, and be willing to step away to collect yourself. Above all, listen. Ask questions that help you understand your partner’s perspective about, and relationship with, money.
Money dates have less to do with money per se and more to do with happiness, values and goals. Begin the conversation by discussing what makes your relationship happy and secure. Define the shared values that will guide your tough decisions. And set short-term and long-term shared financial goals that will strengthen your partnership over time. Only then can you establish a budget together that quantifies your priorities about where your money should go.
Each of you should play an equal part in controlling your family’s money and in determining what to spend it on, although your specific roles may be different. When it comes to managing money — paying bills, monitoring credit cards, etc. — some couples decide to do it together, while others entrust one spouse to take charge of these tasks. The only right way is the way that works best for both of you.
2. Gather what you need
You’ll need to call on your inner detective for this step in the process. Collect as much information as possible about your past spending habits, ideally using a budget-management system that can do the work for you. The further back you go, the more accurate a reflection of your habits you’ll have.
If you don’t use a budget-management system, you can pull together the information you’ll need from these sources:
- Credit-card statements
- Checking-account statements
- Savings -account statements
- Third-party mobile-wallet transactions
- Brokerage-account statements
- Cash on hand
3. Create a system
People are not numbers on a spreadsheet. People have emotions, desires, values and goals — and all of those influence how we make decisions. We are surrounded by temptations, especially from online platforms and social media.
People who are good at self-control structure their lives to avoid temptation. In other words, self-control is not necessarily the result of superhero-level willpower, but rather a lifestyle that reduces or eliminates our exposure to things that are hard for us to resist.
So make bad habits harder to do and good habits easier. Do you want to spend less money online? Remove retailers’ apps from your phone and delete all preloaded contact and credit-card information from your accounts. Make online shopping an inconvenience.
Couples often think of multiple accounts at the same financial institution as one big checking account. Do you and your partner want to save more together? Open a joint savings account at a different credit union or bank than the one you normally use, and automate your savings by sending a portion of your paychecks into the new account. Your savings will be out of sight and out of mind.
4. Choose the right budgeting tools
Managing money is an ongoing process that requires realistic and appropriate responses to the financial turbulence everyone experiences at times.
Spreadsheets aren’t enough. You’ll need to put systems in place that make the most sense for what you face as a couple. For example, in recent years, four in 10 Americans experienced more than a 30% month-to-month fluctuation in income. Such violent income swings make budgets that are built to manage steady paychecks and expenses useless.
So plan for the unplanned — and don’t get frustrated when that is still not enough. Stick with each other and with the process you’ve worked out together. Give yourselves grace when mistakes are made, and don’t lose sight of the bigger picture.
Brian Page is co-host of the Modern Husbands Podcast and founder of Modern Husbands, which helps couples manage their money and their home.
More: Why a prenup could be the right prescription to keep a blended family healthy
This story originally appeared on Marketwatch
