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Having a joint budget can have a huge impact not on your finances, but your marriage.
For some, it can be a struggle to set set things up and agree on the numbers.
Others may have created a budget years, but it doesn't work for them now.
We've been marriage over eight years so we know first hand that a successful joint budget has to adjust to changing circumstances.
I want to show you how we create ours and how we changed it.
Our First Joint Budget: Newlywed Phase
When we were first married, my husband was working less than a year at his post graduate job and I had a part-time internship.
Our immediate goals were simple:
- pay off my car loan
- build up savings
Knowing what our goals were, we came up with a few rules:
- Keep essential bills under one income (his)
- Use my income to pay down debt and save
My internship was scheduled semester by semester so we didn't want to rely on it for regular expenses.
This small detail turned out to be an advantageous habit.
When we started out we did proportional contributions where we both put in a set percentage of our income and the rest we had for personal spending.
Since neither one of us enjoyed writing out a ton of checks, we set up online bill pay for most of our expenses.
Every paycheck we'd sit down and reviewed things. (We eventually switched banks because our first one didn't give us the service we needed and wanted.)
Our Joint Budget with a Self-Employed Spouse
Fast forward a bit – I became self-employed and my income took a hit for the first year.
Our goals for the budget shift just a bit.
- pay down debt
- grow my business
- buy a house
I needed to get my business situated so that extra debt payments were from my husband's income while I reinvested most of what I earned into the business.
Once my income was fairly stable, we then focused on our house down payment.
Our Joint Budget as Parents
The next milestone with our budget came when we were expecting our first kid.
Understandably, our goals were pretty much:
- have a baby fund (covering hospital bills and first year expenses)
- build a car fund (both cars were showing their age)
- pay down debt
Automated savings took care of the baby and car funds. We also scheduled extra student loan payments.
We had a good run with the student loans – throwing tax refunds and bonuses at it.
Then events popped up that sideline our debt snowballs. Eventually we increased our payments again, but then another big change came.
Joint Budget as a Family of Four
Fast forward a few years and we're expecting again. You think having another kid would be a small change in our budget, just add one more.
Didn't work that way.
This time around my pregnancy was rough the ENTIRE time. Just know that I was starving and nauseous until the day I gave birth.
Working through the pregnancy was difficult and I had to drastically cut back on my hours.
Taking care of two kids keeps my schedule full. I've decided to take on less outside projects and focus more on work I have more control over. Because of those changes my income has fluctuated more.
The good news is that I do have that flexibility in schedule. The not so good news is that some of these projects aren't earning as much now.
On top of those changes we're also selling our current place and buying a house that is better suited for our lifestyle now.
It has taken about a year to get things squared away, but I think we have stuff in place for a more productive, less stressful budget.
The goals are:
- finish paying off the last mortgage debt,
- have a 20% down payment for the house, and
- have a house fund
Ironically, our current budget is looking like our newlywed in that my net income is going towards paying down debt (getting rid of the last student loan).
We keep tabs on our net worth and accounts with Personal Capital.
Thoughts on Joint Budgets
Just because you two start a budget doesn't mean you can just set it and forget it.
Every so often talk it over and see if your goals and situations make changing your budget a must do.
While our joint budgets may not be perfect, that have helped us more closer to our dreams.
I'd love to get your thoughts on joint budget – what does yours look it? How has it changed over the years?