Exchanging vows is an ethereal experience. Far less romantic is discovering that the "two shall become one" business also means a merging of joint incomes and expenses. If the mere thought of keeping tabs on spending makes you shudder, the purpose of a personal budget for two can seem restrictive – even oppressive – connoting penny-pinching and even abject frugality. There are, however, many reasons why it's vital to make a budget and stick to it. One of the most important is so you and your better half have financial security in your future.
Follow the Money
The most obvious purpose of a personal budget is to let you and your partner see where the money goes. The conventional way of preparing a budget is to tally up both your fixed and variable expenses and seeing how these line items match up against your joint income. Fixed expenses are largely those beyond your control, such as rent, student loans, car insurance, utility bills, money you put into savings and other expenses that you can predict within a fair degree of accuracy. Variable expenses include those that have a lot of wiggle room, such as the money spent on groceries, cosmetics, clothing, credit card debt and nonessentials such as gym membership fees, expanded cable television service and all forms of entertainment. Tallying up your fixed and variable expenses and calculating how much you spend to maintain your lifestyle tells you if you're living within your means. To live within a perfect budget, spend no more than 30 percent of your gross income on housing and other debt. Spend 4 percent on insurance, tuck 15 percent into savings and earmark 25 percent for taxes. Tag the remaining 26 percent for general household expenses.
The couple that plays together pays together – this is lesson hard-learned when you take a look at a budget that veritably burgeons with unpaid credit card debt. Another purpose of a personal budget is to shed light on just how much you're spending paying back unsecured debt. Assuming your credit card balance is $5,000 at an interest rate of 18 percent, this debt can ultimately cost you $8,000 if you only made minimum payments. Making a budget also forces you to examine the debt-to-limit ratio on your credit card bills. Too many maxed-out credit cards can level a walloping blow to your credit score, making it difficult, if not impossible, to grab the brass ring so many couples reach for – a home loan.
Keeping the Peace
Budgeting now prevents marital strife later down the line, curtailing needless quibbling about who spent the money – and why. The budgeting process is also an ideal time to discuss your respective spending habits – is one of you a saver and the other a spender? – troubleshoot potential pitfalls in cases when one spouse brings debt to the marriage, and come to an agreement on how you plan to save for a rainy day. A healthy budget allows you to save up enough money to cover three to six months of living expenses should you or your spouse become unemployed or unable to work.
A Safe Future
Although milestone events such as purchasing a home, starting a family or retiring from your job may seem light years away, a budget is an absolute requisite to help you accomplish long-term financial security. Don't think of a budget as a play-by-play rulebook you both need to follow till death do you part. Your joint personal budget is a flexible tool that changes throughout married life, taking into consideration times when money is abundant or scarce; it also accommodates new financial goals after old ones are met. A strong budget that gets the final nod from both you and your partner lets "his" and "hers" become "ours."
Lisa Sefcik has been writing professionally since 1987. Her subject matter includes pet care, travel, consumer reviews, classical music and entertainment. She's worked as a policy analyst, news reporter and freelance writer/columnist for Cox Publications and numerous national print publications. Sefcik holds a paralegal certification as well as degrees in journalism and piano performance from the University of Texas at Austin.