When your income and expenses are nearly the same, it's time to create a budget. Want to purchase something that you couldn't afford unless you charged it on a credit card? Budgeting would be the answer. Money is a personal thing, so there's not a one-budget-fits-all solution for those looking to make a plan. Discover four options for budgeting your bucks and be on your way to taking better control of your money.
Merging finances can be a tricky part of marriage. Wise Bread offers a few smart suggestions for how to do it right.
Sharing is hard.
When I was growing up, my parents would often only buy a single toy for me and my two brothers. That forced us to do something that we found very difficult — share. In my early 20s, my wife and I got married, and I was quickly thankful that my parents forced my brothers and I to share, because marriage involves a lot of sharing.
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Sharing doesn't come naturally. Sharing money is especially hard. Here are five steps for creating your first shared budget.
1. Determine Your Net Spendable Income
Your net spendable income is how much money you bring home each month after all taxes have been removed.
Your first budgeting task is to determine how big the financial pie is that you'll be sharing. Both partners will need to be completely open about income and fixed financial obligations (like alimony). It's going to be impossible to create a successful budget until you have a sense of your spending limit.
2. Hoard Financial Paperwork for a Month
While there are faster ways to set up your first budget, the most effective method is to slowly start getting all your paperwork in one place, so that you'll be ready to put together an actual budget. For an entire month, both partners should keep every receipt they get. If it's not easy to remember what you bought, then just write the item on the top of your receipt. Purchase a small notebook, and if you buy anything for which you don't get a receipt, write it in the book.
Designate a single place in the house where you'll conveniently keep the receipts.
During that month, get the totals for some of the bills you regularly pay. If it's something like power bills, try and get at least the last three statements, so you can have a fair idea of how much you pay.