Are you entrenched in debts or surviving on payday loans? You should start on a household budget soon, if you don't want creditors banging down your door. For that budget to work, your household members have to be in total agreement.
Money conflicts happen when you are a frugalisit while your spouse loves shopping and racking up credit card debts. Creating a household budget is meaningless as it won't work, instead there will only be nasty quarrels and fights.
Before you get a household budget going, here are some steps which you can implement.
1. Discuss Money Management Objectives
Take a seat at the kitchen table and get a piece of paper ready. Make a list of long-term money management objectives that both of you agree upon.
It can be getting out of debt, contributing to a college fund for the kids, or bulking up on a retirement fund. Alternatively, you may want to save up for seminars, courses, training which could raise your earnings power.
2. Start Working On The Household Budget
Once you tabled the objectives, start working on the household budget. Decide how much you need to save monthly to meet your objectives. Then, subtract this from your monthly income to see how much you have left over to spend.
Next, subtract your “secured” debt. Typically, this would be your mortgage payments, car payments, or any loans secured by an asset such as your house or vehicle.
The last part is to analyze your other expenses and unsecured debts. For example, your clothing, transportation, food, membership fees, spa treatments, credit card debts -- as these are the usual areas where you can make cuts.
Once again, reach a consensus on where those reductions can be made. If your spouse loves fashion; clothing and shoes are her lifeblood. You know the rest of the story when she is not happy with the way you broach this sensitive topic.
3. Find A Compromise
Compromise on the household budget as it is unlikely that you achieve your objectives straightaway. Arrive at a spending limit which your spouse agrees is fair, even if it is some way off your desired figure. Then, look for another category where you can make cuts to get your final household budget number down to where it needs to be.
4. Make Fortnightly Reviews
Sit down with your spouse twice a month to review your household budget to see if the goals are achievable. You will find that you're under in some categories and over in others. Don't worry about making adjustments at this time. Just make notes as to where you need to buck up.
5. Be Flexible And Make Adjustments
After the first two months, you should know where you've been spending more than you budgeted and where you've spent less. The two of you can then discuss what adjustments you need to make. There should not much arguments since the objectives are agreed and the household budget created together.
The important thing is to keep the discussions from becoming accusatory. If one of you has been the “household budget breaker,” it's better to ask “it looks like we've got a problem here, what to you think we can we do to fix it?” then to say, “you really screwed up this time.”
What can you do if you or your spouse just can't control his or her spending and keeps busting the household budget, month after month? Unfortunately that's an issue that probably needs the work of a good marriage counselor.