Budgeting For Newlyweds: How to Create a Budget That Works

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Budgeting Guide For Newlyweds - Doing That Married Life
Bugeting For Newlyweds - Doing That Married Life

How to Start a Budget For Newlyweds - Doing That Married Life

Money and budgeting can be a scary thing for newlyweds. Some of you might have even tried to ignore it altogether in hopes that it would just work itself out. But, if you really want your marriage to succeed, you’re going to have to deal with it head-on. In fact, talking about money is one of our rules for a happy marriage.

While it’s possible you may have disagreements and trouble when you first sit down to create a budget together, you’ll eventually be able to work through the shit and come out better on the other side.

Why You Need a Budget

The main reason you need to create a budget with your spouse is so that you can reach your financial goals together; whatever that may look like for you.

Most of you are likely working on paying off debt, buying a home, potentially raising children, and eventually retirement. Starting your budgeting conversation early is the best way to reach those goals together. You’ve committed to spending your life with this person so it’s important that you’re on the same page on how to get there.

Financial Benefits of Creating a Monthly Budget

This should go without saying, but as a reminder – creating a budget will allow you to properly allocate your income and save for your future goals. Being intentional with your money, and more aware of what you are spending it on will make it easier to actually save.

Once you get the hang of budgeting and get excited about your progress, you’ll be more excited to make dinner at home vs. going out, you’ll think twice about buying that new pair of shoes, and may actually reach your goals sooner than you thought.

It will also make you more responsible overall. When you decide to share your life with someone, every decision you make also affects your spouse. This is even truer when you have children.

When Mike and I got serious about our budget, it opened up additional conversations around things like insurance and retirement.

What happens if Mike gets hurt and can’t work, or if one of us gets sick? Now that we know how much we actually need to live, we’re able to make smart decisions about everything else.

We’re covered if there’s an emergency and we won’t have to worry about how we’re going to pay our rent or put food on the table.

Relationship Benefits of Creating a Monthly Budget

Beyond the financial benefits of creating a budget, the benefits to your relationship are even better.

Having open and honest conversations about money is one of the best things you can do with your spouse.

Not only will it make communication better in general, but it reminds you that you’re on the same team and working toward the same goals.

Facing financial burdens and celebrating financial wins together will bring you closer as a couple. It’s just one more piece of the life puzzle and you’re figuring it out together.

Ultimately, you’re growing as individuals. Learning from each other and becoming better, less selfish versions of yourselves. It’s really fucking magical.

Should You Combine Your Money?

Whether or not you should combine your money is completely up to you. Mike and I waited an entire year before we did because it felt right for us.

At a minimum, you should consider having a joint account for all of your shared bills like your rent or mortgage, utilities, groceries etc.

Most experts will say you should combine your money because it makes you accountable to each other and removes the secrecy around your spending, which can lead to trust issues.

We will say that once we did combine our money, it was so much easier to manage.

Instead of spending time figuring out who owes who what, we’re making decisions on what we want to spend our money on. Plus, because we are being much more intentional about spending our money, we have more of it!

It also gives us the opportunity to check each other and make sure we’re really sticking to our goals.

Step-By-Step Guide To Creating a Monthly Budget

Step 1: Record All of Your Income

This is an easy first step. Record your monthly take-home income, including your job, any side hustles, interest or dividends, etc.

If your monthly income varies, start with your lowest expected income to be safe.

Step 2: Record All of Your Expenses

Write down all of your monthly expenses, in order of importance. I also keep mine in order of due date, so that I can allocate funds appropriately.

Don’t forget to include items you may only pay once a year, such as car insurance, registration and holiday gifts. It’s likely easier to put a small amount away each month toward these, instead of all at once when they’re due.

Managing your expenses is where you’ll want to put the majority of your energy. This is where you have the most control.

This includes non-essential categories like entertainment, date night, gifts etc.

You don’t have to be overly strict when you’re first starting out, but you do want to decide on a specific dollar amount for each category.

You’ll end up refining these amounts as you go. Once you see your progress, you’ll be less inclined to spend on frivolous things.

Agreeing on How Much to Spend

Agreeing on how much to spend on non-essential expenses will take patience and understanding. This was especially true for us when we were deciding how much to spend on Christmas gifts.

Mike has a big family, and he’s a very generous guy. Ultimately we had to balance what we wanted to do for the family and what our future goals are.

We did eventually come to a budget that we were both comfortable with, but it took us a long time and there was a lot of tension surrounding the conversations.

If you find yourself in a similar situation be as patient and calm as possible. Remind each other of your long term goals and work on a compromise.

Step 3: Tally Up Your Total Debts

Knowing your total debt is the first step to getting out from under it. We won’t get too deep into this right now. When you’re starting out focus on covering your minimum debt payments.

Continue to track what’s left as you move forward, and when you have some extra funds throw it at your debt to pay it down faster.

Step 4: Decide on Your Savings Goals

What short or long-term goals do you have that you need to save money for? This can be buying a house, sending your kids to college, or even taking a vacation. You should also focus on saving up an emergency fund, and an additional 3 months of living expenses.

If your goal has a deadline, figure out what is the minimum amount you need to save each month to reach that goal. Some of your larger goals may not have a hard deadline on them, but you should create one anyway. This will keep you accountable to putting as much money away as possible toward them, and help you reach them faster.

Step 5: Come Up With a Personal Spending Budget

Think of your personal spending budget as fun money. This is the amount of money that each of you has to spend on whatever you want. You should keep this separate from your main account if possible. The cash envelope system works well here.

Essentially, this is the amount of money you’re willing to flush down the toilet. Aside from just deciding how much money you’re willing to spend, figure out what will be included in this. Because I love to shop for clothes and shoes, anything that isn’t a necessity comes from my fun money.

Step 6: Decide How You Will Manage Your Money

Figure out how you’re going to actually manage the day to day of your money. Will you only use a joint account, will your fun money be in separate accounts?

And, don’t forget about credit cards. We use credit cards for pretty much everything so we can earn cash back, but that’s because we’re adamant about paying them off in full every month and won’t create more debt.

Step 7: Choose a Tool to Manage Your Budget

Having a tool to record everything will be paramount to your success. We’ve listed a few at the end of this post for you to consider. Commit to using this tool on a weekly and monthly basis to properly record and manage your spending. You should both be involved when deciding where your money should go, but one of you can take the lead on the actual updating of the tool if you prefer.

Budgeting Tips

When you and your partner are getting ready to create your first budget, it’s important you discuss your overall attitudes about money and what your goals are.

Mike and I grew up in very different households and had different experiences that shaped our attitudes and expectations around money. He saw two happily married parents who worked together as a team and he always had the view that when you get married, the money becomes “ours.”

I, on the other hand, grew up with a single mother who often struggled to make ends meet. There were times when we had no heat or telephone and we never had cable. I grew up with a scarcity mindset, and that followed me well into adulthood. Frankly, I was always afraid of not having any. I had seen a lot of people get screwed out of money in my life as well, and it felt much safer for me to just pay my half of the bills and horde the rest of it.

Mike, being the amazing husband he is, was very patient with me (and still is) when I get uptight about what we’re spending and what we’re saving for, etc. I am also much more concerned about saving for retirement, (I started saving so late) and it’s important for me that we had a solid plan moving forward.

The main point here is to be patient and empathetic with your partner during this process. You may not agree 100% on everything they’re saying but try and put yourself in their shoes. And keep an open mind. It’s likely your partner will have ideas you hadn’t thought of before. It might even turn out that you actually agree with them!

Also, remember that your budget is likely to change over time. As you get more comfortable with the process, your priorities shift and you start reaching your goals, what you decided on day one won’t necessarily serve you later on. Each month, when you create your upcoming budget take into consideration what is best for you now instead of just repeating what you’ve done in previous months.

How to Stick to Your Budget

Sitting down and creating a budget is one thing, but sticking to it will take a little extra effort. The best advice we have is to make a weekly date where you review your budget together. Hold each other accountable to this date. Sunday night works well for us.

Make sure you update your budgeting tool, properly categorizing transactions etc. and making any necessary adjustments to your budgets based on your spending. Make sure you’re both aware of where you stand, and if you do need to make any adjustments decide on those together.

If you find that you’re regularly overspending in any categories, try using a cash envelope system. For each category, put the amount you budgeted for the month in an envelope. Only use the cash in that envelope to pay for that specific category. Once the money runs out, you can no longer spend on that category.

In addition to your weekly check-ins, make sure you sit down together and layout your monthly budgets together. Talk through what you might have to budget for that isn’t necessarily a recurring monthly fee, like holiday gifts, oil changes, doctor visits etc.

Lastly, make sure you’re celebrating your wins. When you hit that savings goal or pay off a debt make a big deal about it. Create as many positive experiences around budgeting as possible. Eventually, you’ll start looking forward to those budget dates so you can see how awesome you’re doing.

How to Talk About Your Partner’s Spending

If at any point you feel as if your partner isn’t doing their part or they’re spending too much money, make sure you talk about it right away. Don’t let it fester until you’re ready to explode.

Wait until your weekly budget meeting to discuss it so you’re both already in the mindset to discuss money. Let them know how you’re feeling without being accusatory. Remind them of the goals you have set. You can say something like, I know you love (insert here) but if you scaled back on that we can reach (goal) faster. What do you think?

Give your partner a chance to tell their side of the story. Hold space for them to express themselves, without interruption. See if you can come to a compromise on the situation, or slowly work toward lessening their spending in a certain area.

If their excessive spending is serious or habitual in nature, like an addiction to gambling or drugs, it’s about much more than the money and you should seek help from a professional.

Budgeting Tools

There are a number of free and paid budgeting apps for you to use and track your spending. Take some time to test them out and see which is best for you.

Note: Because you’re potentially connecting your financial information to these apps, it’s up to you to do your due diligence in researching them. We cannot be held responsible for any issues or losses you may have.

You Need a Budget (YNAB)

The budgeting app we use is called You Need a Budget (This is a referral link. You’ll get a month free if you sign up after the trial, and so will we).

It’s based on the zero-based budgeting technique which just means you give every dollar a job. They have both a desktop version for easy planning and an app for on the go budget management.

Our favorite functionality of YNAB is the ability to set savings goals. You can set the total amount you want to save and even put a deadline on it. The app will tell you how much you need to save each month to hit your goal and tracks it along the way. We use savings goals for our house downpayment, car insurance that’s only paid once a year, vacations, and even holiday gifts.

You Need a Budget Online Budgeting Tool

Other Great Apps

Every Dollar


Zero Based Budget Spreadsheets





Summing It Up

Budgeting is not a dirty word. Part of marriage is handling finances, and getting started with budgeting is the first step toward financial freedom and reaching your goals.

Don’t forget you’re in this together. Be kind to each other throughout this process and play on the same team. Hold each other accountable for sticking to the budget you create and don’t be afraid to switch it up as your income, goals, and life circumstances change.

What About You?

Have you tried budgeting yet? Do you have questions about budgeting? Share in the comments!

Doing That Married Life | Mike & Jessica Coster

An unlikely couple, we met in a hopeless place… the Internet. Good boy, meets bad girl; connects over their love of music, food, and aversion to the outdoors. On paper, we made little sense, but the timing was impeccable. We finally understood what was important and what we wanted in a relationship. No lists to review, or boxes to check - we just knew we worked.