by Maurie Backman | Oct. 2, 2019
Set aside some time with your spouse to tackle this important task.
Budgeting is one of the most effective money management tools out there. Without a budget, you risk consistently spending too much. This can land you in debt and delay your most important financial goals, whether they involve building savings, buying a home, or something else.
But a new study by The Ascent reveals something surprising on the budgeting front: Married couples wait 15 months, on average, to first sit down and map out a budget together. That's a long time to put off such an important move, and although part of that may boil down to sheer procrastination, there may also be an element of intimidation in play.
If you've been putting off budgeting with your spouse because you find the process overwhelming or don't know how to start, here's some good news: It's actually a pretty simple thing to do. And the sooner you check it off your must-tackle list, the more financially secure you'll be as a couple.
You don't need to be a financial whiz to succeed at budgeting, nor do you need fancy or complicated tools. At its core, budgeting means knowing how much your various bills cost you and comparing your spending to your earnings to ensure that you're not going overboard.
To this end, open up a spreadsheet and list your recurring monthly expenses. Then, comb through your bank and credit card statements from the past year to see how much they cost you, on average. Guessing at those numbers won't do you any good -- you'll need a solid grasp to make your budget effective.
Once you've nailed down your recurring expenses, think about those bills that only pop up once a year. Maybe you pay your $900 life insurance premium once annually; or maybe your professional license comes due once a year and costs $300 when it does. These expenses can throw your finances off course, so don't let that happen.
Instead, account for them on a monthly basis, even if you're not actually paying for them each month. In this example, you'd set aside $75 a month in your budget for your life insurance policy, and another $25 a month for your license renewal. You'd then put that money into a savings account earmarked for these expenses, and dip into it when they actually come due.
After you've figured out what you spend money on, you'll need to see how that total compares to the income you bring home. Ideally, you should have enough money left over each month to sock away at least 15% of your earnings for retirement (assuming you have a fully loaded emergency fund already; if not, that needs to be your first priority). If you don't have enough wiggle room in your budget to set aside that 15% or more, you'll need to consider making some lifestyle changes.
Those changes can be small ones, such as downgrading your cable plan or dining out less frequently. Or, you can consider larger changes, such as downsizing to a smaller home. Once you have your budget laid out, you can examine your different expense categories and see which ones will be easiest for you to reduce.
The sooner you and your spouse are on a budget, the less likely you'll be to accidentally wind up in debt or struggle to meet the goals you set for yourselves. Remember, you might think you have a solid handle on your bills, but once you combine finances, you may find that you're spending differently than expected.
Rather than remain in the dark, carve out some time to set up a budget. Heck, you can even spring for a nice bottle of wine and make a night of it. Just don't delay this important financial milestone for longer than necessary, because if you do, you'll likely regret it.
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