How To Set Up a Household Budget When You Start Living With Your Significant Other

Pekic / Getty Images
Pekic / Getty Images

It’s an exciting time, without question, when you and your significant other decide to move in together. It’s a new beginning, the next chapter in your relationship. But like all big decisions in life, it takes planning — planning that runs deeper than deciding whose couch makes it onto the moving van and whose gets put at the curb to await the trash truck. And that starts with a difficult but necessary conversation about money.

Read: The Do’s and Don’ts of Combining Finances With Your Partner

In fact, long before you start to look for a new apartment to rent or a house to buy together, financial advisors urge the partners to sit down and plan a budget. By sharing information about your monthly income, savings and retirement goals, student loan balances, credit card debts, auto loans and insurance payments and more, you’ll be able to work together to develop a budget that the two of you can live by. Don’t forget to mention regular spending on what would be considered essential to you but maybe nonessential — golf lessons, a facial, donations to favorite charities — to your partner. All of these need to be worked into the budget and shouldn’t come as a surprise when you start to pay the bills together.

“It is no mystery to anyone that one of the top reasons couples fight or argue is because of expenses or money in general,” said Jesse W. Acosta, the founder and head mentor of “Most of the time one is a spender and the other the saver; opposites attract, right? The best way to avoid this is by laying all the rules out on the table and talk about budgeting like paying bills, normal expenses and savings.”

See: 17 Biggest Budgeting Mistakes You’re Making

The process of setting up the budget helps to determine not just what you can afford in a new home, but it also gives a chance for the partners to discuss deeper financial priorities that you might not have focused on while dating, said Tanya Peterson, the vice president of brand at Freedom Financial Network.

“The key to success in budgeting is to start with regular discussion of life goals. Those then translate directly to financial priorities, will guide budgeting and make the process of doing the budgeting and keeping to the budget immensely easier,” Peterson said. “For example, if one person wants to create a work environment that allows her to train for a marathon every year while the other thinks they should be focusing exclusively on work to build savings before starting a family, that may present a conflict. Develop a habit of talking about short-term and long-term goals, writing them down and then building a budget around their shared and individual goals.”

The process also helps to learn more about each other, she said.

Check Out: Tips To Keep Your Finances in Order Without Sacrificing What You Want

“In dealing with these things just as they discuss living together, some couples realize they are not in sync. For example, one may want to live in a modern downtown loft, the other in a suburban single-family home. That decision comes with lifestyle preferences as well as monthly payment considerations. Start early to understand your partner, (their) goals and finances.”

Once the budget has been established, it is advisable to revisit it and retool it on a regular basis.

“Discussing the budget once and then never talking about it again is a recipe for disaster. Household costs can change with seasons or over time, and it’s important to adjust as needed,” said Kyle Beckhusen, a senior financial advisor with Wright Associates in Pittsburgh.

More: The 50/30/20 Rule: Is It the Best Budgeting Method?

“A weekly or monthly budgeting meeting will help avoid misunderstandings and to readjust both partners’ expectations. By talking openly and often about the budget, you’ll help to avoid assumptions, misunderstandings and fights about your budget.”

Beckhusen recommends starting the budget with fixed expenses, incorporating 15% to 20% for savings and then adding in enough to cover fluctuating expenses, such as utilities and food. And on top of that, each person should have a “spend, no questions asked fund” for some of those little extras.

The bottom line in budget planning is that couples must be prepared to work together and stick to it. It will help in developing good habits to reach long-term goals for their future.

Read: 25 Tips for Saving Money With Your Spouse

“There is no one-size-fits-all approach to managing finances as a couple. Some couples split everything down the middle — including paying off debt — whereas others share expenses or debt based on their income or other factors,” said Lauren Anastasio, a certified financial planner with SoFi. “The key with these types of money decisions is that they are made deliberately. Communicate with each other and work together to focus on one financial goal at a time, such as purchasing a house. By focusing on one goal at a time, you will make progress quicker, and progress leads to persistence.

“You should also be sure to consistently check in on your progress once you’ve established a budget. After outlining your cash flow and setting up your spending categories, set some time to check in with your budget and track your progress. A budget is only good if it gets used — and when it comes to building a habit, consistency is key.”

More From GOBankingRates

This article originally appeared on How To Set Up a Household Budget When You Start Living With Your Significant Other