Budgeting for Couples: Step by Step Guide and Free Worksheet

This comprehensive guide on budgeting for couples will help you learn step by step. You’ll find great tips plus a free worksheet to get you started!

Many of us have heard some variation of the statistic: financial problems contribute to 37% of divorces. Indeed, finances are at the root of many disagreements among couples.

And it’s no surprise. Money is often considered a taboo topic and money management is rarely taught in school. So how do we communicate with our partners about something as high stakes as money when we have very few tools to do so?

Luckily, I’ve found that building a budget as a couple is one of the best ways of developing clear and healthy communications around finances. I know it doesn’t sound sexy, but with the right framework and tools, creating a budget with your partner can actually be an exciting and intimate process. It will not only save you money, but get you closer to your shared goals.

Like many couples (including 23% of married couples), my partner and I currently keep our finances separate. We use Venmo to transfer money for rent, groceries, utilities, and car payments.

However, we collaboratively developed our budget and regularly check in on our finances. Even though our finances are separate, our financial vision is shared. Regardless of whether you combine finances, keep them separate, or have a mix, budgeting can help you develop that shared vision. 

What is a good budget for a couple?

A good budget for a couple is one that allows for flexibility, while still enabling you to work towards your goals.

Most of us have experienced an oil change that turns into a major car repair, holiday present budgets that creep higher than we expected, or injuries that come with sky-high medical bills. A good budget allows for some wiggle room for these expenses so that they don’t eat into your savings and derail your important goals. 

Additionally, a good budget has 4 main categories or buckets:

• Investing
• Saving
• Necessary spending
• Non-necessary/luxery spending

I go over each of these categories in more detail below.

Investing

Most couples hope to retire one day (ideally sooner rather than later!). Investing is key to reaching that goal because your savings cannot keep up with inflation.

The only thing that has reliably beat inflation over the past 50 years has been the stock market. It’s therefore pivotal that your budget include room for investments in a 401K, Traditional IRA, Roth IRA, or other retirement or investment account.

If you’d like more information on getting started with investing for retirement, check out this guide from Department of Adulting.

Saving

Your savings bucket is also extremely important. While the savings category may not sound fun, it’s actually the most fun one of all. As a couple, this is where you get to dream about your goals together.

Do you dream about buying a house one day? Having kids? Getting a dog? Going on a trip to Australia? Your savings will let you reach those goals.

The key is to discuss these goals as a couple and then integrate them into your budget.

I describe how to do this in the sections below.

Necessary spending

Necessary spending includes your housing, utilities, food, car expenses, everything that is absolutely essential for your day-to-day living.

Non-necessary spenging

Finally, non-necessary spending includes all those things you don’t really need, even if it sometimes feels like you do. That includes eating out, drinks with friends, presents, non-necessary clothes, and all those subscriptions you have *maybe* lost track of.

What is the 50 30 20 rule?

The 50/30/20 rule is an easy-to-remember guideline that allocates the categories above into spending targets. Specifically, many financial advisors recommend that you spend 50% of your take-home pay on necessary expenses, 30% on non-necessary expenses, and 20% on savings, including investing.

That 20% also includes debt-payoffs for any outstanding debt you currently have. If you are interested in strategies for paying off debt, check out this guide. 

As mentioned above, it is vital that you regularly invest and save money. Generally, financial advisors recommend investing 10-15% of your income for retirement and saving 10% of your income. While that may seem like a high target, if you have an employer match for your retirement fund, you can include that in your target 10-15%.

The 50/30/20 rule is a great rule of thumb. However, it isn’t realistic for all couples. For example, if you live in a high cost of living area, you will likely spend closer to 60% of your income on necessary expenses. In that case, you should aim to spend closer to 20% of your income on non-necessary expenses. 

It also doesn’t account for whether you have an emergency fund. Couples (especially couples with kids!) should aim to have 2 months of basic living expenses saved in case of an emergency. If that seems out of reach, aim to save $500 in an emergency savings fund and work from there.

The quickest way to derail a budget is to have an emergency like a job loss, car repair, or injury and have to rely on credit cards to get by. Consequently, if you don’t have an emergency fund, you should aim to reduce your necessary and non-necessary expenses as much as possible and save as much as you can until you build your emergency fund.

How do you calculate a couple budget?

The first step in calculating a couple budget is to assess how much money you both earn each month. If your income is variable, choose a conservative number that you reliably hit.

Next, review your monthly expenses over the past 2-3 months, looking at credit card and bank statements. You may want to use a budgeting template (included below), to help map out these expenses into categories.

Calculate how much you generally spend on debt payments, necessary expenses, and non-necessary expenses each month. Take the time to list out non-necessary expenses you consistently pay for as well. 

While this will likely take a decent amount of time, it helps ensure that you get a representative picture of your monthly expenses. You don’t want to just look at a high spend month like December or a generally low spend month like February and end up developing a skewed budget.

First, assess your savings and investments. Do you reliably save 10% of your household income (or pay down debt and save with 10% of your income)? And do you invest 10% of your household income each month? If not, these should become your top priorities and you should build the remainder of your spending around them to the best of your ability.

Now evaluate, do your necessary expenses comprise 50-60% of your total income? If so, that’s awesome! If not, start assessing where you can cut expenses. This may mean moving to a lower cost area or housing situation, meal planning, or using 1 car instead of 2.

Most couples’ biggest expenses are (in order):

• Housing
• Transportation
• Food

You’ll get the most bang for your buck by reducing these expenses.

Next, determine whether your non-necessary expenses make up 20-30% of your total income. If not, use the list of non-necessary expenses you created. Star the items that truly make you happy and ruthlessly cut those that don’t. You might also consider substituting some of those non-necessary expenses, like going on walks with friends instead of going out to eat.

While evaluating your necessary and non-necessary expenses, check whether each partner is contributing a similar percentage of their income to shared necessary and non-necessary expenses.

For example, it might not be fair if one partner is paying for all of the holiday presents while the other partner is using their fun money for drinks out with their friends. Strive for a fair solution in how you each contribute to these expenses.

The best way to budget as a couple

To sum up where we are so far, you should:

• Prioritize having a 2-month emergency fund
• Save 10% of your income
• Invest 10% of your income

The remainder should go towards your monthly expenses, with ideally 50-60% going towards necessary expenses and 20-30% going towards non-necessary expenses. With your partner, you’ll review 2-3 months worth of expenses to assess whether you’re hitting these targets, and strategize how to meet them if you aren’t.

Once you have this baseline, the best way to continue budgeting as a couple is to check in regularly. You can check in once a month. If you’re facing a lot of financial difficulties, check in once every week or two.

At these meetings, discuss:

• Your budgeting targets
• Whether you’ve been hitting your targets since the last meeting
• (If you haven’t met them) Why you haven’t met your targets
• Any major expenses coming up (Is your kid invited to 6 birthday parties this month?!)
• Any steps you might need to take to meet your goals

If you have a budgeting app or spreadsheet (which I discuss below), this can help facilitate your discussion.

Finally, use these meetings to dream together. What are your goals for the next year? 5 years? 10+ years? And are you saving enough to meet those goals?

This is where you can actually get excited about that savings bucket. After all, it’s a lot easier to leave your savings alone if you know you’re saving for something exciting!

Enjoying this post? Then you’ll love Husbands Who Travel for Work: How to Connect with Your Wives

Budgeting for couples with kids

If you have kids, the recommendations above still apply. You’ll want to invest 10% of your income, save 10%, spend 50-60% on necessary expenses, and spend 20-30% on non-necessary expenses.

However, the reality is that kids throw a lot of cost and unpredictability into a budget. It’s likely that you’ll spend a higher percentage of your income on necessary expenses, and that’s totally okay! It’s also likely that you’ll have more unexpected injuries, illnesses, and other fun little emergencies than couples without kids. So it’s especially important if you have kids to not neglect your emergency fund.

Finally, you might consider using some of your savings/investments on saving for college. You should never save for kids’ college at the expense of your retirement account. Kids have their whole lives to earn money (and decide whether they even want to go to college!).

However, you have much less time to save for retirement. That being said, if you have the funds to do so, investing in a 529 plan can be a great way of using the power of compounding to cut college costs later on.

Budgeting couple tips

Budgets can feel punitive, but they don’t have to be. It’s important to let your values, dreams, and collaboration as a couple lead the way in the budgeting process. Here are some tips to keep those values at the forefront of your process:

Tip #1

Try to avoid accusations if one person spent money on something the other person doesn’t value or if one person spent more money than the other person expected.

Remember that few of us grew up with good money lessons and skills. If you notice unexpectedly large expenses, try to treat those expenses with humor and humility. Like: “Whoops, guess I took out my stress last month on my Starbucks habit. This month I’ll make more coffee at home.”

Tip #2

Expect missteps the first few months after you start a budget. When my partner and I first started budgeting, we underestimated how much we spend on necessary expenses.

We forgot about things like car tabs, car insurance (which we pay every 6 months), and similar expenses that, on their own, happen rarely but together happen with some frequency.

Tip #3

Automate your savings and investing. Most financial companies let you automatically save or invest a dollar amount or even a percentage of your paycheck each month.

To ensure you and your partner are consistently saving and investing, consider setting up these automatic payments. The bonus is that you won’t have to check in on each other to ensure you’re both saving if you have separate accounts. 

Tip #4

When you’re dreaming up your goals, timeline them out. How many months or years away is your goal? And how much do you expect that goal will cost? Use those two numbers to determine how much you’ll need to save together each month to reach that goal and build those into your automatic savings.

If you’re looking for ways to save money on dates, you’ll love these posts:

• 60 Awesome Date Night at Home Ideas for Married Couples
• Couples Monthly Subscription Boxes: The Ultimate Guide
• Happily Date Box Review: Is this Subscription Service Worth the Hype?
• Crated with Love Subscription Box: Unboxing and an Honest Review
• 7 Reasons You Should Try DateBox Club

Budgeting ideas for couples

If you are spending more than you expected, I recommend chatting with friends and family about what they do to save money. You might be surprised at how much people love to talk about how they save money.

Some other ideas for budgeting your costs include:

∙       Meal plan. Packing your own lunches costs, on average, about half of the cost of eating out! Plus, packed lunches are generally much healthier than restaurant or fast food.

∙       Negotiate your bills. Your phone, internet, car insurance, and even rent are all up for negotiation! Some finance professionals recommend trying to negotiate your car insurance once a year, as rates are based partially on age. You can even use some budgeting apps to negotiate your phone and internet bills (I discuss these below).

∙       Use public transportation. My partner and I use one car. If you can walk or bus regularly, it can save you thousands of dollars and help the environment.

∙       Replace single use products. Paper towels, plastic bags, and other single use products add up. And they’re destructive for the environment. There are tons of great options for reusable snack bags and paper towel-like products you can throw in the wash after a few uses.

∙       Use the library. In addition to loaning out books, many libraries loan out museum passes, toys, and even tools! Check out your local library for cool resources you probably didn’t know about.

∙       Enlist the family. Gamify budgeting by having a family challenge to lower your utility bills relative to the previous month. You might be surprised at how quickly kids get on board with turning out the lights if it’s turned into a challenge.

∙       Limit presents. I know, I know, I love presents too! But if you’ve started to feel like holidays and birthdays have become overwhelming, consider drawing names or chipping in for a shared experience. My family has drawn names for Christmas for the past 10 years and we are obsessed with it. Each person shops for one adult and each couple shops for one kid (we have 12 adults in our family and 5 kiddos). We also have a spending limit. It’s still tons of fun, but costs way less money.

∙       Use workplace discounts. HR professionals say this is almost always the most underutilized employee benefit. Many larger workplaces offer discounts at local businesses and venues such as gyms, childcare facilities, and restaurants. Recently I purchased theater tickets for half the market price through my workplace. Check with HR or your workplace website to see if there are discounts you could be missing.

If setting a budget turns into a conflict, I recommend reading this post on conflict resolution or this one about improving communication in your marriage.

Budgeting for couples apps that you’ll love

Nowadays, budgeting apps are incredibly smart and better than ever for complex financial situations. The advantage of using a budgeting app is that, with most apps, you can integrate multiple accounts in one place.

Consequently, if you and your partner do not have shared bank accounts, you can use an app to get a complete picture of your savings and spending as a couple without having to merge accounts. These apps make it easy to have money discussions and see both the details of your spending as well as your big picture financial situation.

You might consider using one of the following budgeting apps:

Rocket Money

Cost: You can set your membership price. Most people pay $7/month

Pros: Lets you connect multiple accounts, track your assets and spending, set spending and saving goals, cancels subscriptions for you, sends alerts when bills go up or are due, and can negotiate some of your bills for you.

Cons: It’s not specifically built for couples with separate accounts so there’s a little legwork you need to do if you have separate accounts and are paying each other back for expenses. It also doesn’t let you hide expenses from your partner if you integrate accounts.

YNAB

Cost: $14.99

Pros: Up to 6 people can add accounts, allows you to set up savings and spending goals, track your assets and spending, and calculate loan payments.

Cons: It’s one of the pricier options out there, can be less user-friendly than some apps

Zeta

Cost: Free

Pros: Allows you to hide expenses, integrate joint bank accounts, issue IOUs to your partner, track spending and saving

Cons: Users report more glitches with this app than others, offers somewhat limited services compared to other apps

Honeydue

Cost: Free

Pros: Designed for couples, allows you to integrate joint bank account, tracks spending and saving, offers bill reminders

Cons: Offers limited services compared to other apps

Goodbudget

Cost: Free or upgrade to PLUS $8/month, $70/year

Pros: Allows you to set up envelopes to allocate your savings (like an envelope for travel and an envelope for a new roof); tracks your debt, income, spending, and saving

Cons: Offers limited services compared to other apps, doesn’t integrate with your banking accounts so you have to manually enter transactions

Mint for couples

Mint is the most popular budgeting app out there and for good reason. Similar to Rocket Money, it allows you to connect multiple financial accounts, track your assets, set savings and spending goals, and it will negotiate some of your bills and track subscriptions for you. It’s truly comprehensive.

However, like some of the apps above, it is not designed for couples. While you can merge your accounts, you won’t be able to hide any expenses (so that anniversary present might get revealed) and you’ll have to do your own tracking of who paid for what.

Mint is free, though iOS users can upgrade to a premium account for $4.99/month. 

Free budget app for couples

Among the budgeting apps mentioned above, you can access the following ones for free (though most include paid upgrades):

• Mint
• Zeta
• Honeydue
• Goodbudget

What is the best budgeting app for couples

Personally, my favorite budgeting app is Rocket Money. It’s extremely comprehensive, easily integrates with multiple accounts, and I love its extra features. In particular, I’ve used its “Negotiate Bills” feature to have a member of the Rocket Money team call up my internet provider and negotiate a lower internet bill. I’ve also used it to cancel a subscription I no longer needed.

You can quickly see all of your wealth and assets and scroll through all of your recent spending purchases. It allows for both a big picture and nuts and bolts view of your collective finances.

Budgeting for couples worksheet

If you’re looking for a couple monthly budget template, you’ll love this budgeting for couples worksheet! Just fill out the form below to sign up for our emails and get access to this awesome free printable. You’ll also find other amazing printables: date night planner, 30 day marriage challenges, and more!

Couple budget template Excel

If you’re a spreadsheet person, I love this budget template by NerdWallet. It even has a budget template for parents with slots like toys and music lessons.

Final thoughts on budgeting for couples

While setting up a budget as a couple takes time and effort, it can save fights and stress later on by creating transparency and encouraging communication around finances. Plus, it can help you get on the same page with your partner about your financial goals. Money may not be able to buy happiness, but smart money management can help support your shared dreams.

What do you and your partner use to budget? Do you have a hard time creating one together? We’d love to hear your experiences in the comments below!

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