When we start living together with a loved one or get married, we are romantic and we are inspired by the thought of a common future. This is a time when the division of daily expenses, possible future financial difficulties and other practical considerations seem distant and insignificant.
Sometimes, I still think about the budget of a young family and the division of costs. However, even the closest people often seem uncomfortable to discuss these topics with, and they do their best to avoid them. In fact, it is best to discuss these issues as soon as possible in order to avoid unpleasant surprises in the future. Timely agreeing on family finances, you will save yourself from quarrels and disappointments in the future.
How to divide everyday expenses
Every couple will inevitably witness this issue. It is most likely that the income of one partner will be more than the income of the other. There are a few tips how to effectively share costs if partners' incomes differ.
Firstly, you need to agree on whether you will divide expenses in half or keep the proportion of income and the division of expenses, for example, 60:40 or 70:30.
If 50:50 is very important for both of you, then make sure that the partner who earns less can still lead an equivalent lifestyle and save something.
Such applications as Tricount or Splitwise will help to score a fair division of everyday expenditure. They can enter expenses and monitor the balance – who and how much more spent.
If you are constantly using applications to share costs, you should not get carried away and mark every small waste. It would be better if you agree to use the application only for accounts or relatively large purchases. Remember that the majority of purchases is done for your general well-being, so it makes no sense to count every penny.
Another strategy is to divide the costs by areas, for example, one pays the bills, and the other buys food and other household goods for the home.
Whatever model may seem closer to you, be sure to discuss all doubts with your partner.
How to prepare for unexpected expenses?
Savings "for a rainy day" is an important component of the family budget of each young family. Experts believe that it is desirable to have such savings so that, (for example, in case of loss of work or during a long illness) it is possible to pay bills and cover other absolutely necessary expenses within 3-6 months. You can use Advisa service to get more loan money.
It is not so difficult to create a "fund" of unforeseen expenses by joint efforts. For example:
If each of you saves 10 Euros once a week, you will accumulate more than 1000 Euros. And if each of you allocates 20 Euros per week, the amount of accumulation will exceed two thousand Euros. This amount is already quite enough to cope with unexpected high costs, for example, to pay for car repairs, unexpected travel, medical services. Savings for unforeseen expenses will protect you from forced loans and will not allow you to plunge into the quagmire of debts for a long time.
How to start saving? Where is the best place to keep the accumulated funds? Each pair will have its most convenient format for creating savings. Some people like to put money in a real tangible piggy bank, but nowadays more reliable and convenient solutions are also available. We give some advice below.
Open a separate bank account, to which you will both transfer a specific amount, for example, 40 Euros per month.
Use the service of automatic payments offered by banks – thanks to it you will not be able to forget to make a payment or to evade it for any reason.
Do not keep money in accounts that will be difficult to access if necessary. If you have chosen a savings account in Monetti, make sure that you will not be penalized in case of withdrawal.
Try not to keep the money in the same account from which you pay for your daily needs – it is important to separate the finances and indicate that these funds are for emergencies only.
Determine the financial purpose of your savings, for example, you may accumulate 1000 Euros for six months or a year. This goal should be real and appropriate to your budget so you can stick to the plan on a monthly basis.
It is important not to allow exceptions and to assign priority to accumulation – for example, it is impossible not to make money in one of months because it was necessary to allocate a lot of money for entertainments or clothes purchase.
In cases where there are no extra funds at all, analyze your spending habits and, most likely, you will still find some area in which you could spend less. A variety of applications, such as Mint, Monefy and Money Lover, will help you save and maintain self-discipline.
How one should plan large purchases?
The life of each pair witnesses a time when you need to prepare for a major purchase. A major purchase can be considered a product or service, the cost of which exceeds 500 Euros. Depending on the income of your family, this amount may be more or less. A great purchase can include home appliances, car, apartment renovation, travel or a new apartment. Whatever it is, a significant purchase affects the relationship deeper than the daily costs, so it is important when the partners discuss it with each other.
Author, Freelance writer