If you’re a newlywed, chances are you need to set up a first time budget as a couple. This post will walk you through the basics. No matter if you feel apprehensive or overwhelmed, getting on the same page with your finances will help set you up for success in marriage and as a family.
About 31% of all couples disagree over their finances once a month at least, according to a study by study created by Ameriprise Financial, Inc., in 2016. So know this: it’s normal and expected that you won’t always see eye-to-eye. But having a budget gives you a document with facts about where your money should go, so when disagreements do arise, you have something to fall back on.
How to Set Up a First Time Budget
Using the Excel Template at this link, populate the columns with your estimated monthly figures. This budget shows the month at a glance but is set up according weekly pay dates. You can customize the headings to match the dates you get paid each month.
The “previous balance” column allows you to record the existing amount of income you may have in your bank account. The following previous balance cells are formulated to carry over the existing balance you have at the end of each week.
Record the amount you receive in your paycheck or the amount you pay yourself from your business under the date you expect to receive it.
Record the amount you expect to give to charity, whether it be tithes and offerings to a house of worship or a regular contribution you make to a nonprofit.
Regulate your savings and “pay yourself first” by recording an amount you’ll put away each paycheck or each month. I put as little as $10 each month into special online savings accounts I have set up for my daughters. We also stash $10 away each week toward a vacation fund.
This section is to record any monthly payments you make toward a car loan, school loan or mortgage. These are fixed amounts and long-term payoffs.
This section are for recurring monthly expenses that are a fixed amount. This usually applies to insurance payments, maybe childcare costs and even subscriptions like Netflix.
Utilities gets its own section because the amount may vary from month-to-month. This allows you to quickly update your budget in one section each month. If you have a set budget for groceries, you could put this here, but I keep mine under cash items, since the amount will vary.
The cash items sections is for miscellaneous expenses you may have during the week: gas and groceries and irregular expenses like hair cuts and Girl Scout cookies!
This last section is for special expenses you can anticipate coming up — especially like gifts for birthdays or extra expenses you’ll have while traveling or while a guest is visiting. This keeps you on track.
Below the budget, I have a section where you can tally up your cash items on an ongoing basis if you happen to use your debit card for them. Some may want to just pull out that amount in cash and use envelopes. I find it easier to use my debit card and then keep track right there on the budget.
Once you’ve set up your first time budget, make adjustments where necessary to make sure you’re not overspending in some areas or underestimating in others.
How much should you budget?
In her book, All Your Worth, Sen. Elizabeth Warren and her daughter, Amelia describe a balanced-spending formula: allot 50% of your take-home pay to needs, 30% to wants and 20% to saving.
You might find it helpful to use the highlighting tool to track expenses as they happen during the month, so you know what’s come out of your account and what hasn’t.
How to replicate the monthly budget for the next month:
As you approach the end of the month, right click the bottom tab and make a copy of your budget and rename it for the next month. Adjust your dates and any figures that might change that you know of. If you have variable expenses, you can keep them the same until your bill comes in, then you can factor in the actual cost.
Want to track this online?
Good idea. Those who track their budget online and in an ongoing way are more likely to stick to their budget, according to the Wall Street Journal.
The key is to find what works for YOU and then stick with it. And if you happen to go a few weeks or even months without doing it — don’t give up. Get back into the habit.
Need help using the template?
I’d love to help. Click here to schedule an hour budget coaching session with me.
Have a favorite first time budget tool or tip? Share it in the comments below!