5 Tips for Budgeting Together as a Couple

Budgeting Together

Some folks seem to think that finances get more complicated when individuals become a couple. Well actually, that may not always be the case. In fact, it can actually be the other way around. Budgeting together may actually be easier and less cumbersome, especially if you follow these tips!

If you are in a relationship now and want to improve your financial literacy with your partner or are just preparing for when your dream gal or guy comes around, keep on reading to learn about 5 tips for budgeting together, as a couple.

1. Communication is Key

Communication is vital is practically every facet of a committed relationship. This much is also true when it comes to money and budgeting. Talk about things like:

  • Your salary
  • Debt
  • Assets
  • Saving goals

Talking about finances can be an awkwardly private thing. But it doesn’t have to be, especially with your partner. The open and honest you can be about money matters with your partner, the better.

2. Understand Your Individual Money Financial Style

Everyone is different when it comes to how they understand, spend, and save money. The decisions people make as adults regarding their money are largely affected by their upbringing. So, understanding the foundation of your partners financial upbringing is important (and interesting).

Maybe they were raised to be more frugal than you. Or perhaps more free spirited with their money. Whatever the case may be, knowing what their current money style is, and how it meshes with your own allows for more budgeting success as a couple.

3. Determine Your Needs as a Couple

We each have our list of individual necessities when it comes to life. It could be the type of food we like to eat, the activities we enjoy and the type of lifestyle we practice. In a couple, you have to begin to assess the shared needs as well, especially once you begin to live together. 

Considering items rent, utilities, transportation and debt can help to determine the size of budget you need to live the life you need as a couple.

4. Talk About Your Individual Wants

You may think you have a lot in common with your partner, but everyone wants different things. Despite being individual in nature, like gym memberships, hobbies, and home improvements, with a shared budget, individual desires become shared.

There needs to be give and take, or compromise, when it comes to what the individual wants and how it affects not only the shared budget, but also the other person in the relationship.

5. Outline Your Shared Financial Goals

The goals we have for our futures are directly connected to our finances. Talking about each other’s goals, as they relate to finances and life in general, will help you get a better idea for how to budget as a couple. You may check these money apps to achieve your financial goals.

Ask questions like:

  • What does retirement look like?
  • Are children part of your future?
  • What travel plans or dream vacations do you have?
  • Would you like to buy a house?

With answers to questions like these, and by taking a few other tips to heart, you will begin to flesh out differences and commonalities that can help prepare your budget together moving forward.

Related Reading: 8 Healthy Financial Habits You Should Start Today

How to Streamline Your Organization’s Accounting Process

Ever since accounting software became mainstream, back in the early 2000s, accounting departments (and small business operators alike) have been switching to digital account management processes.

The results are easy to see, with massive reductions in accounting workforce numbers (across nearly all industries), but how does this apply to small businesses? Does accounting software really streamline financial processes? What are some other ways of enhancing accounting, especially in regards to small businesses?

Reducing your organization’s resource-related expenses is vital to increasing ROI and improving overall performance. There are many strategies that small businesses can use to streamline their accounting process. Most of what’s covered below can be applied to any size business, no matter if you’re the sole operator, or have an actual accounting department.

Stop Using Paper and Make the Transition to Digital

Invoices, checks, banknotes, and account summaries are just some examples of wasteful paper-use that nearly all businesses make the mistake of doing. The easiest way to solve this problem? Stop using paper.

Getting business checks cheaper than banks is one avenue to explore in regards to streamlining your business’s office management process (and cutting costs while you’re at it). You can also reach out to your suppliers, wholesalers, partners, etc. and ask that all communication be performed digitally. Not only will this reduce costs, but it will also lead to a more seamless workflow (in regards to client/organization communication).

Consider Using a Centralized Document Storage Hub

Vendors often send multiple copies of the same invoice, along with other documents. Keeping track of all of these different documents can be a nightmare (especially if you’re a larger-sized small business). When it comes to saving these documents for potential future issues, having physical file cabinets is a thing of the past.

Transferring your file management system to a cloud-based app is the best way to go about doing this. There are several business document storage apps available, with varying levels of storage options and features. If you’re looking to consolidate your document control processes into one standardized system, this is a good idea to explore further.

Software Consolidation for Multiple Workflows

Just like document storage and access, consolidation can also be applied to software services as well. There are many different software providers that offer suites of their products. From a workflow POV, this would make your business run much smoother, faster, and become more optimized in general.

Software consolidation means combining different types of software that have different functionalities into one central system. The benefits of doing this include the following:

  • Increased workflow capabilities
  • Less time wasted working on different software types
  • Standardized system for easier integration with other departments

Analyzing Your Organization’s Current Workflow

Believe it or not, many businesses (especially small businesses) don’t even know what their workflow is. Which is why it’s important to establish exactly what your work process is, and then identify the key stages of the process that can be optimized.

The objective with this type of analysis is determining where your company has gaps in its workflow/process and then filling in those gaps with optimized systems. One of the best ways to achieve this is by communicating with managers/employees about what they feel can be done differently (or better).

Documentation Is Vital for Improved Workflows

Being able to analyze your company’s work process is one thing, but having the fortitude to actually document every single step of that process is another thing altogether. Documentation is very, very important when it comes to establishing a solid work process. Generally speaking, if a process isn’t documented, it isn’t really a process.

Write down each step of your business’s various work processes. After that’s finished, you can identify which steps need to be improved upon (and yes, there’s always room for improvement when it comes to workflows).

Automation Is Becoming Increasingly Popular

Whether you’re a small business or a giant corporation, automation is becoming the new norm across business verticals. How does this play into accounting and work processes? Automation makes accounting easier and workflows more seamless. Most accounting software has at least some form of automation built-in, and that level of automation will only become more advanced as AI develops.

Go Digital, Automate, and Refine Your Workflow

Improving your business’s accounting and back-office management comes down to making the switch to digital-based apps, refining your various work processes, and automating anything that can be automated. The world is becoming increasingly digitized, and if your business doesn’t follow suit it will be left behind by your competitors.

Can I buy that?

The beautiful thing about having money in the bank is you can afford to buy things. The ugly thing about having money in the bank is, well, you can afford to buy things.

Although I’m grateful to be in the financial position we are currently in, sometimes I miss the days of paying down debt.

That does not mean I miss debt. 

But I do miss the clear and simple objective one has when working their way out of debt.

Overtime income?

Pay off debt.

Tax return?

Pay off debt.

Side Hustle?

Pay off debt.

Birthday money?

Pay off debt.

No matter the situation, the solution was always the same. 

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Within the last month or so, there have been a handful of relatively expensive items I’ve wanted to purchase, but haven’t managed to pull the trigger yet because I feel like it would be irresponsible. Here are a few of the items on my list.

Upgrade my iPhone 5 to a 6+: 

It’s kind of disgusting that we operate in a world where we believe our ridiculously expensive cell phones are essentially garbage after two years, simply because a newer model of the same phone exists. I’m a victim of the “ohhh, pretty-shiny-thing” cult as well. In a week I will be out of my ATT contract. I can upgrade my iPhone 5 to the new 6+ for $299. I’d get a better screen. A better battery. And a better camera.

That said, the primary purpose of my cell phone is to make/receive phone calls, make/receive text messages, make/receive emails. The iPhone 6 doesn’t do this any better than my current phone. Why would I pay to upgrade to a phone that has negligibly better features? Or a better question I suppose is, why do I WANT to do that?

Buy a Weber Grill: 

Five years ago, I got a relatively cheap ($199) Home Depot grill for my birthday. It has lived a long and glorious life, but after two moves, and years of use, the lack of quality is apparent. The burners no longer self-ignite. The thing is ginormous and eats up an excessive area of my patio. But most importantly, it doesn’t burn hot enough.

A burger should take 8 minutes to cook (about four minutes on each side). My grill has declined so much that it takes about 25 minutes for me to grill three burger patties. It’s a waste of propane and a terribly frustrating experience.

A Weber Grill would solve all of my problems. Just as Nordstrom is known for it’s superior customer service, Weber is known for manufacturing stellar grills. They aren’t cheap (base model is $399), but they are unmatched in value.

I love to grill and have been scouring craigslist like crazy trying to find a lightly used Weber. So far I’ve had no luck finding one that I feel is priced fair. The frugal part of me says I should wait until September to buy a new grill as that is typically when the big sales are to be had due to the end of the summer season, but the other part of me says that is stupid as I’d have to endure another grilling season with my barely functioning BBQ.

I’ve made a deal with myself that if I haven’t found one on craigslist by Memorial Weekend, I’m going to Home Depot and buying a brand spanking new one.

Pay for Electrical work:

This one isn’t so much a purchase, but more a “should we pay to have this work done.” We have an outlet in our pantry that we plugged our microwave in to a few months ago. Within one second of turning the microwave on, the outlet went out and our exterior security lights went off. It’s not the breaker. It’s not the outlet. It’s not the fuse. I’ve exhausted my electrical skills and can’t troubleshoot the problem on my own.

I had two electricians come by last week to get quotes. Since they aren’t yet sure what the problem is they could only give me estimates on how long they think it might take to identify the problem. Essentially, it’s going to cost about $300 for them to simply diagnose the problem, and potentially a lot more depending on what the issue is.

I hate having lights and outlets that don’t work. That said, these are probably the least important lights and outlets in my entire house so I don’t feel a rush to necessarily get them fixed. Why spend $300-$500 when we don’t need to? But when the time comes to sell our house, we are probably going to have to pay for this service anyways since a home inspector would surely note the issue.

I’ve never understood why people wait on upgrading their home. People will live 20 years with their builder grade laminate counter tops, only to replace them with granite when they decide they are ready to sell their house. Why not pay for the upgrade earlier and actually enjoy your counters? This is how I feel about my outlets. If I’m going to spend the money now, or down the road, why not have the electrical work done today?

I guess my issue is that I never want our financial privilege (money in the bank) to cloud my judgement and distort my perception of being a good steward of God’s resources (the money he has put in our bank).

Do I believe it’s okay to enjoy nice things? Absolutely.

Do I believe it can also be crippling? Absolutely.

 

How much does child care cost?

Girl Ninja and I just got back from a glorious 10 day San Diego / Palm Desert vacation. I ate many a California Burritos (9 total), Baby Ninja ate a gratuitous amount of sand at the beach, and Girl Ninja consumed her body weight in Starbucks. We spent time with old friends, visited our Alma Mater’s campus, and reminisced on all the memories Girl Ninja and I have from our time living there.

While Girl Ninja and I made the 2.5 hour car trip from San Diego to Palm Desert we talked about a whole slew of things, one of which was her role as a stay at home mom.

We’re fortunate to be in a position where Girl Ninja can stay at home with Baby Ninja full-time and even more-so because my job allows me to spend about half of my work day at home (I’m out in the field the other half). Baby Ninja is kind of growing up with two stay-at-home parents.

Leaving teaching was hard for Girl Ninja. She loved her job and loved the school she worked at. About twice a month, Girl Ninja’s mom will babysit and GN will take a substitute job at a local school. It’s a win-win for everyone involved.

  • Girl Ninja’s mom gets quality time with her grandson.
  • Girl Ninja gets to relieve herself of her motherly duties for a day
  • She still gets to dabble in the profession that she loves
  • She makes $150 each day she subs.
  • The school she teaches at gets a Substitute that legitimately loves teaching.

Next fall year, Baby Ninja will be 15 months old. Which also means he will be significantly less dependent on “mom”. If GN isn’t pregnant by summer (we aren’t trying, but we’re not preventing… was that too much information?), we started toying with the idea of her working more consistently next school year.

I doubt that would mean her taking a full-time teaching position, but she could start subbing two to four days per week instead of once every two weeks like she has been. If she substitute taught three days per week next school year, she would make $16,200 in additional income for our family. It’s nowhere near the $45,000 she would make if she took a full-time job, but every little bit helps.

The only problem with this idea is we have no clue how much child care costs. Sure Girl Ninja might make $16,000 more next year, but if it costs us $10,000 to put Baby Ninja in to child care during the school year is it really worth it?

No way. 

From what I’ve learned from friends is it seems full-time childcare runs about $1,200-ish per month. If we used child care three days per week, I’m guesstimating it would cost about $600 to $800 per month. She would be earning about $2,000/mo subbing at this rate.

The way I see it there are two ways to look at this…

Extra money is extra money

Sweet! We net a little over $1,000/mo in additional income. This could be used to further advance our taxable investment account. Perhaps open a college savings plan for Baby Ninja. Or allow us the freedom to spend a little more frivolously (meaning travel a bit more, or do some work on the house. not meaning buy a new tv just for the sake of buying a new tv). It would be a welcome addition in deed.

Extra money is extra money, but at what cost

Sure we would bring home $1,000 a month more than we do now, but Girl Ninja would also be away from Baby Ninja much more than she is now. Is $1,000 really worth missing out on some significant milestones or entrusting a large chunk of our child’s development to a stranger? I’m not too sure.

I guess what I’m really getting at is I would love to hear from a few of you who have dealt with a similar decision.

  • Did you pay for childcare (if so, how often and how much)?
  • Did you forfeit an income so one parent could stay at home (if so how much did you give up)?
  • How does one have their cake and eat it too (get to be with their child while make a ton of money) 🙂 ?

How to accidentally save money.

Girl Ninja and I have made multiple intentional decisions on how we can best reign in our spending and control our monthly expenses. There are numerous ways in which we intentionally cut costs to save money.

Last night, however, I started thinking about all the ways I unintentionally have saved my family a bunch of money. Here are a few of the things I came up with…

Alcohol:

I’m one of those rare human beings that actually hates alcohol. This is not a religious thing or moral thing, but more a I-hate-the-way-it-tastes kind of thing. It amazes me how much some people wish I drank. I swear every time I go out someone is begging me to try their glass of wine (Girl Ninja always asks me to try her wine), their beer, or their rum and coke, as though, my taste buds will suddenly do a 180 and be in alcohol heaven.

I’ve done a lot of taste tasting over the years and the scale in which I use to describe alcoholic beverages ranges from “extremely disgusting to moderately disgusting”. I’m yet to find a drink I legitimately enjoy. Actually, I did have a Mike’s Hard Lemonade once and that was actually tasty. Only problem is, I would never be caught dead ordering such a drink at a bar. Haha.

Since alcohol has never really been a part of my life, I don’t really know how much I’m saving by not drinking it. I’m assuming most other 20-somethings probably drop between $30 and $200 a month on alcohol. Is that reasonable? How much do you spend? 

Haircuts:

From age 18 to 28, I kept my head shaved. I probably saved $2,000 in haircuts over those ten years. But in 2013 I decided to join the “hair having” club and grow out my luscious locks a bit.  I kept my hair around for a year, but after spending $20 per haircut I was sick of the expense. I shaved my head again.

Girl Ninja got pissed because she liked my hair so I made her a deal I would grow it back out if she learned to cut my hair. She’s given me two haircuts so far and while she is no Picasso, she is showing potential.

The only thing I miss about going to get my haircut is the way the hairstylist would run her fingers through my hair during the shampoo process.

Coffee:

I must have some extremely jacked up taste buds, cause not only do I hate the taste of alcohol, but also the taste of coffee. In fact, just about anything with coffee in it makes me want to projectile vomit all over the place. Mostly on to a cat because I hate cats.

Girl Ninja, however, loves her some Starbucks.

It’s a good thing I don’t, otherwise we’d probably be there every day. She does her best to minimize her “Tall non-fat vanilla latte” purchases, but probably averages two or three a month. If I was joining her each trip we’d be out a couple hundred more dollars each year. Extrapolate that over the next few decades and we are talking TENS OF THOUSANDS of dollars saved by not liking the flavor of coffee. Booya for sensitive taste buds. 

Video Games:

I may get beat up for mentioning this one, but I don’t really get the point of video games. I played them in elementary and middle school, but by the time I got to high school I cared more about my outfit, girls, and sports then I did about what type of gun Lara Croft used. While video game consoles are reasonably priced (most around $200), the video games are a budget killer. At $40 to $80 a pop, I don’t know how gamers sustain themselves.

Oh that’s right, they all live in their mother’s basements.

Kidding….kind of. Thank goodness World Of Warcraft and NCAA Football ain’t my thing.

Okay now that I’ve pissed a bunch of video-gamers off, it’s time I step down and give you an opportunity to share some ways you’ve unintentionally saved some money.

Do you hate desert? Or Flying? Never shave your armpits? Or do use public transportation? It might take a minute to think something up, but when you do drop a comment below.

You wish you could be like me.

At the end of each calendar year I review our financials, update my Excel spreadsheet, and calculate just how much Girl Ninja and I were able to increase our net worth (NW) by.

We started 2014 with a NW of $234,000, and ended with a NW of $288,000.

In other words, we improved our financial position by $54,000 last year, an average of $4,500 per month.

You wish you could be like me.

DON’T YOU!!! 

I mean, we managed to increase our NW by more than the 2014 national median household income ($53,000). That means half of the households in the United States couldn’t save as much as we did, even if they paid no taxes and saved 100% of their GROSS income.

Like the title of this post says; You Wish You Could Be Like Me

…or do you? 

I hope for your sake, you were nothing like me in 2014.

While increasing our net worth by $50,000 in a single year might be impressive, it becomes significantly less so when you consider we made about $110,000 in 2014.

Girl Ninja and I were fortunate to have a healthy income, so it only makes sense that were are able to save and invest more than many other American families could.

An increasing net worth on a $110,000 per year household income shouldn’t be something to brag about.

It should be expected. 

You see, our big financial gains in 2014 are only really half of the story.

…The better half.

…The prettier half.

…The half that I like blogging about.

But there is another side to this personal finance tale and it is ugly.

How ugly you ask?

Try $45,000 ugly. 

That amount represents exactly how much money Girl Ninja and I spent on our credit card last year.

We use our credit card for virtually everything we can and pay the balance in full at the end of each month.

I’m used to seeing a couple thousand dollar balance each month, but I had never taken the time to figure out just how much we were charging over the course of a full calendar year.

$45,000 makes me sick to my stomach. Especially when you consider that doesn’t count any of the money that came out of our checking account, which would be another $30,000 or so for mortgage payments, utilities, and the occasional check or ATM withdrawal.

Sure, Girl Ninja and I improved our financial situation by $50,000 last year, but we spent nearly $75,000 along the way.

I’m disgusted. 

I write about the “Joneses” as though they are some family that Girl Ninja and I are nothing like, but numbers don’t lie.

When you spend $75,000 per year, you are a Jones.

At the time I was justifying purchases with thoughts like…

…”We’ve worked hard, it’s time to upgrade to a more sophisticated couch” ($1,700 in July)

…”Our kitchen isn’t how we want it, we have the money, let’s improve it” ($4,000 in August)

…”Baby Ninja’s upstairs is the worst part of our house, let’s demo it” ($5,000 March)

…”We deserve a vacation. Let’s go somewhere.” ($4,500 in April)

While I believe an occasional splurge is appropriate every now and again, Girl Ninja and I could hardly argue that our splurges were limited or appropriate.

To put it bluntly I’m embarrassed by my failed leadership. 

I have a responsibility to ensure Girl Ninja and I are being good stewards of the finances we have been granted. Somehow, I lost sight of that.

And that really makes me sad. 

Didn’t know our house came with a free pool.

As you all know I live in Seattle. Yes, what you are thinking is true. It literally rains here 400 days a year 😉

seattle seasons rain

Since rains is the norm here, not many people have pools installed on their properties. Girl Ninja and I, however, discovered two weeks ago we were bucking that trend and are now the proud owners of a sweet pool…

…in our basement.

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Maybe we can call it a wading pool? A kiddy pool? How much you think I could charge families for swimming lessons/practice?

The good news is, the water issue seems to be isolated to the unfinished section of our basement, as it sits about six inches lower than the finished area. 

Now I’m no handyman, but as far as my investigative skills can tell, the water is coming up through the pores of our concrete floor right where it meets the cinderblock wall going to the crawl space.

When I peeked in to our crawl space I was expecting to see a lot of wet dirt, but the opposite was true. At least the top layer of dirt is dry as a bone (I’f I dug down about 4 feet in the crawl space to reach the depth of the basement floor I’m sure there would be a different story).

After a bit of online reading, I’ve learned that as heavy rains come, the water table rises.

What’s the water table?

Basically, if you dig down deep enough (no matter where you live), eventually you will hit water. That point is the water table. When it rains heavily, the water table level rises. 


water table

It’s rained enough lately that the water table level is now at (or above) the level of our basement. As a result, water is being pushed up through our porous concrete floors/foundation.

Moral of the story

I’m pretty sure we are screwed. 

As far as I can gather, the only way to keep the water table level below our basement during heavy rains is to have a french drain installed in our basement.

frenchdrain

And after getting my first bid, the numbers aren’t pretty. Looking like it will cost me upwards of $6,000 after all is said and done. (I have another estimator coming out Tuesday).

This makes me depressed for a few reasons: 

  • I feel like this is a sunk cost. Meaning, we aren’t adding value to the property, simply trying to maintain value. Buyers expect their basement not to leak and aren’t going to pay for a problem that isn’t theirs.
  • It’s really tough getting bids right now. I called one company and the secretary tried to book me for a March 24th appointment. Ummm, Lady, there is water gathering in my basement, I don’t necessarily have the luxury of letting it continue to accumulate for another month or two.
  • This is the first “not fun” money we’ve put in to the house. We’ve dropped $8,000 on our house so far, but it’s all been for beautification purposes. Installing a french drain is probably the least sexy way possible to spend $6,000. Guess those quartz countertops will be put on indefinite pause.

At the end of the day, we don’t have much of a choice but to have the work done. It’s pretty annoying, and YES it totally makes me rethink this whole homeownership thing. When I was renting, the biggest headache I had was the time my landlord didn’t cash my rent check.

Those were the days.

Homeowners: Have you had any unexpected or totally annoying repairs spring up on you?

Renters: Point your finger at me, laugh, and say “Told you so!”