How to Start a Budget Conversation

During a recent girls' getaway, I brought up a thought-provoking question to the ladies I was traveling with: "How do you feel about spending money when your partner is the main earner?" To my surprise, almost every one of them admitted to grappling with a sense of guilt. They believed that because they didn't earn as much as their partners, they shouldn't have the freedom to splurge on their desires whenever they wished. What's interesting is that almost all of us had, at some point, resorted to creative tactics to navigate this tricky situation.

In fact, one of our savvy friends devised a rather ingenious strategy she playfully called "money laundering." Without delving into the nitty-gritty details, she basically came up with a plan to channel money through a friend who would safeguard the funds until she'd saved enough for her desired purchase. I, too, had engaged in some financial acrobatics to avoid disputes with my husband over my spending choices.

The big question is: how can we liberate ourselves from this guilt and the need for such sneaky maneuvers to manage our finances? A fundamental gap in the financial priorities between partners seems to lie at the heart of the issue. To tackle this, let's engage in candid conversations with our partners about our financial values and dreams. Then, we can begin the process of establishing a financial plan that accommodates both partners' needs and desires effectively.

How to Start the Conversation.

To kickstart this financial dialogue, start with a fun exercise. Arrange a date night, pour a glass of wine, or savor your favorite meal together and begin discussing your dreams for the next 5, 10, or 20 years. Then ask each other: What do you want money to accomplish for you? Some common responses include security, providing for family, and contributing to charitable causes. Next, delve deeper- for instance if one of you says “security” inquire about what financial security looks like. Perhaps it involves having no mortgage, a vacation home, or the ability to help family members. This type of dialogue helps us align our spending strategies toward common goals. It also serves as the catalyst for shaping our overall financial vision as a couple.

Example Financial Vision

Travel annually, create a destination spot to gather family and friends, be able to support extended family.

Once you've carved out your financial vision, you're all set to formulate your cash flow plan (a more positive spin on the term "budget.") With your financial vision as your guide, you'll construct your budget. 

One idea is to use the three-bucket approach with each bucket holding a specific type of money, and each type of money has a specific use.

• Bucket #1 includes money spent on fixed costs such as your rent or mortgage, utilities, and insurance.

• Bucket #2 includes money spent on variable costs like food and clothing.

• Bucket #3 includes money saved for future spending, like travel, remodeling your home, or college and retirement savings.

Agreeing on the budget for the first and third buckets isn't too challenging. However, when it comes to the second bucket - variable costs - things can become a tad tricky. During our own budgeting journey, my husband and I found it necessary to strike a mutual agreement on how much we'd allocate to categories like clothing, dining out, and gifts for friends.

Once we set those limits, it liberated us from taking on roles like the 'bad guy' or feeling guilty. So now, when I'm about to indulge in some retail therapy, I already know my agreed-upon clothing budget. I no longer experience a sense of guilt because together, we developed our annual budget, and I recognize it's both of our responsibility to honor it.

When it comes to managing finances with your partner, constructing a shared financial plan makes budgeting a whole lot more straightforward. An agreed-upon budget minimizes conflict over spending. Allowing both of you to be on the same financial wavelength while giving each partner the flexibility to manage their spending.

Need help with starting the conversation? Contact me here for a complimentary 30-minute session to discuss your financial priorities and how I can help you organize them.