Finances in a home can be a huge burden or point of contention for many couples. Read any newspaper that outlines divorce statistics and you will see finances being the #1 reason for marriage breakup. Money can be an extremely overwhelming subject, which is why there are so many financial professionals out there to assist on the subject.
Personally, I love budgeting. It is extremely comforting for me to “work out the numbers” for our home. Oddly, my husband is in the financial business, but he gives me the drivers seat to come up with a budget for us to review as a couple (He knows how much happiness spreadsheets and calculators bring me!). I think having a financial plan is extremely important, especially if one partner has different spending habits than the other. The budget should be reviewed and agreed to by both of you, since it is a team effort to bring in the money it should be a team effort to spend it appropriately.
Thankfully, my husband and I are on the same page for the majority of our financial decisions. I am a little more reserved and he is more of a risk taker, but we somehow manage to meet in the middle. Many of you have seen the television shows or have read Gail Vaz-Oxlande books on money management. I enjoy learning from her and find her general approach to finances very helpful.
I have been asked countless times how my husband and I budget, specifically the breakdown of where we spend our money.
The following breakdown works well for us, but your situation could be different. I recommend seeking the guidance of a financial professional to ensure you are covering all aspects for your own personal circumstances.
Our Household Budget based on Net Income:
30% – Housing (Mortgage, taxes, house insurance, utilities & hydro)
20% – Transportation (car payments, gas, repairs & vehicle insurance) *My husband travels a lot for his job
20% – Life (Groceries, eating out, entertainment, clothing, gifts, gym memberships, etc)
10%- Long term savings (retirement)
10%- Savings (Accomplish goals like house renovations, buying a second property, etc)
5%- Emergency Fund (For everything unexpected!)
5%- Treats! (Vacations, events, spa, etc)
Sit down with your partner and create goals that can be worked on together!