Your budget is your blueprint for keeping cash flow positive, and for sticking to your saving goals. Even if you and your partner will be paying for expenses separately, it's essential to have one overall household budget. That big picture is indispensable for having a good sense, based on actual numbers, of where the two of you stand financially, and how you plan to stay on track throughout the year. Remember a budget is there to help you, and its not written in stone. Create a spreadsheet, or use an app, to list all your anticipated monthly expenses. It can be helpful to divide them by how frequently they occur.
For the fixed expenses, such as rent or phone, it's easy to fill in the exact amount you know you'll have to spend. On the other hand, with the variable expenses, like groceries, there is no single exact amount. But based on what you know you spend, you should be able to estimate a fairly accurate number for most weeks. The next step is to compare your income to your expenses. In order to achieve (and maintain) a positive cash flow, you may have to adjust some of the variable expenses—which probably means cutting back or cutting some of them out altogether. You can go back to the answers you and your partner gave when you had the conversation about what kinds of expenses would be the easiest, and the most difficult to forego. You should revisit your budget on a regular basis. Remember, it's there to help you both, and it's not written in stone. Adjusting it if your overall household income changes is important. Check out this budget coach to walk you through the budgeting experience.
- Create a budget that fits your lifestyle.
- Discover the importance of giving every dollar a job.
- See how to reduce spending for specific expenses.