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Personal finance - Title : Budgeting for Couples

Tags: budgeting for married couples, tracking expenses,

Meta description: Budgeting, tracking, saving & spending for the married

Snippet: Budget is a statement of future income and expenses. A budget is a financial blueprint. It keeps track of how much money comes from where and how much goes to where. In a budget you identify all the sources of income. You make a list of all the expense items. A budget will give you a direction on where the money is going and the kind of surplus you are able to make. It is simple and easy. All it requires is a bit of discipline. Why is there a need for a budget? How will a budget help me? To achieve financial success you need to have a budget. Typically budgeting helps you save more money. It helps you to create wealth. It helps you to spend more in entertainment, food, lifestyle, education etc. Generally it helps you lead a stress free life. Budget will point out where your money is getting wasted. Budgeting is also a good learning exercise. There is no one in the world who can claim that he has been financially successful and he did not have a budget. So if you do not have a budget it means you are in trouble. First thing you need to do is prepare one. You can take the driver’s seat to direct your expenses to match your income and stay clear of debt. Budgeting is the heart of your personal financial life. Budgeting is easy and it’s necessary. Not convinced enough to take all the pain? Continue reading how budgets can help your financial life. Planning A budget helps you plan how your money is going to be spent. It is not intended to restrict your spending rather to guide your money to meet your financial objectives. You are more likely to reach your destination when you have a road-map in hand. Budgets serve the same purpose for your financial life. Control When you have a plan in hand you can know when you deviate from it. Budgets bring you back on track by helping make necessary corrections. Most people will be amazed to find how much they spend on certain categories when they start budgeting. Budgets tell you immediately when you have money lying idle so that you can invest it or purchase that laptop you had seen on advertisements.

Frees Up Time That’s the last thing you want to do - waste precious time fumbling with your finances. Budgets update you with information at your fingertips. At the year-end you can easily figure out how much is to be shelled out as taxes. Did you know that most people can cut 10% of their spending in 10 minutes by budgeting?! Tracking Expenses Identify how you're spending money now. List out details of your income from all sources. Make a list of all your monthly expenses. You can use an excel sheet for a budget sheet. In the budget sheet list the planned spending amount and actual amount under various heads. Initially you may find a great difference between the two but you will gradually learn to decrease the difference. You could be in for a shock to learn the actual amount you spend on groceries, eating out and on other entertainment is twice or thrice more than what you’d expected. Many young couples tend to spend beyond their means and admit that eating out and mobile phone bills are some of the culprits that put a severe strain on their budget. Evaluate your current spending and set goals that take into account your long-term financial objectives. Your spending habits and life style must not come in the way of achieving your future financial goals. You probably want to buy a new vehicle in two years or purchase a home in four years. Today is the time to begin saving for your aspirations. Spending It is important to distinguish between needs and wants. It a useful habit you need to cultivate to have a balanced financial life in the long term. Needs are the basic necessities you can’t do without. When you have identified your needs like rent, telephone, utilities you will know how much you have left to spend on wants. Wants are basically desires you’d like to spend on. If you want to succeed in living happily within your means don’t dress up your wants as needs. It is not wrong to satisfy your wants but just remember not to do it at the cost of your needs or the consequence is obvious – you will fall in debt. Here are additional tips that can help you deal with family finances better

• Set priorities together Your preferences can be different from that of your spouse’s. You may prefer to use funds to go on a family holiday while the spouse may think it important to save to purchase a vehicle. Try to find ways to amicably settle on preferences. At times you may have to compromise on wants but peace has to be paid for. Make huge financial decisions together after discussions.

• Be honest about money Be frank about each other’s spending and don’t lie about your saving and spending habits. If you have huge debts don’t hide this fact from your spouse. As a couple, talk about household finance matters. Very few Indian households discuss money matters in the family. Learn to hold ‘money discussions’ with your spouse and older children.

• Try to avoid loans Many couples don’t want to wait to purchase the new refrigerator, washing machine, LCD TV or a vehicle. Learn to budget your needs and wants. The disadvantage of buying on EMIs is that you end up paying much more than you would have to pay at one go, which is a waste. So if you intend to purchase something, save for it and then buy it.

• Set a Cap Every month set a cap for your personal spending or wants, which should include any money not dedicated to necessities like bills, rent, saving, insurance, etc. Don’t forget that in a certain month you may incur additional expenses like on bike/car trouble, doctor’s appointments. Setting a cap allows you to place limits on spending.

• Put Away the Cards When out on shopping spree use cash instead of carrying your credit card along. When going on an outing leave the card at home if you don’t trust that you can limit your spending. If you do trust yourself, keep the card and only use it for emergencies.

Breadcrum Married life stage

Budgeting for Couples  
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