We hear all the time that the key to a happy marriage is communication, communication, and more communication. One of the leading causes of divorce is a lack of communication on key issues such as parenting, sex and, you guessed it, money. (For more, read: How to Resolve Financial Friction With Your Spouse.)

Luckily, there are ways to simplify the painful process of talking money with your spouse. Once you have your budget built out, it’s just a matter of checking in once a week and ensuring both of you stick to the budget. Here is how you can create a simple and effective budget with your spouse.

Step 1: Determine Your Goals

Your short-term and long-term financial goals will affect your budget. If you’re saving for a down payment on a house, for example, you most likely will be following a stricter budget so you can focus on saving. If, on the other hand, you already own a home and are established in your careers, your discretionary spending might be greater. Together, decide what your short-term and long-term financial goals are. The rest of your budget will be set with those goals in mind. (For more, see: Budgeting Basics – Goal Setting.)

Step 2: List Your Monthly Fixed Expenses

Fixed expenses are those that you pay each and every month. It could be a fixed debt payment, such as a student loan or a car, or a monthly bill, such as electricity or gas. Make sure to include your cable bill, phone bill, car insurance, health insurance, rent or mortgage, credit card payments, and more.

Step 3: Write Down Your Income

Your gross monthly income is the amount of money you have before taxes; your net monthly income is the amount after taxes. For the purpose of this budget, we will use your net monthly income. If your income varies each month, you’ll need to revisit this section once a month and discuss with your spouse your projected income for the following month. If you have a stable, salaried or hourly job, your net income most likely will not vary month to month. (For further reading, see: Surviving On An Irregular Income.)


How To Build A Budget

Step 4: Subtract Fixed Expenses from Net Income

If your combined net income is $5,000 each month and your monthly fixed expenses are $2,500, you have $2,500 left each month for savings and discretionary spending.

Step 5: Savings

Referring to Step 1, save an amount of money each month that is in line with your short- and long-term goals. After putting money into savings, the amount that is left over is for your variable or changing, expenses.

Step 6: List Your Variable Expenses

Some variable expenses are necessary, such as gas for your car and food, while others are more of a luxury, such as going out eat, buying clothes or going to a concert or play. List your “ideal” variable expenses with your spouse and then see if it fits within the parameters of your budget. If it doesn’t, you’ll both need to make sacrifices to free up some additional money. Perhaps you can skip out on getting your nails done, and he could skip a day of golf with friends. So there are no hard feelings when it comes to finances, try to keep things equal, regardless of whether one person makes more money. (For more on the topic, read: How Marriage Can Improve Your Finances.)

Variable expenses should be discussed each and every month, as they will differ from one month to the next depending on what’s going on. Things to remember to include are gifts for holidays and bridal showers or extra cash for other events like haircuts, car maintenance, date nights and work outings. Discussing these events with your spouse each month will not only get you on the same page financially, but it will also give you a heads-up as to what each person has planned for the month.

Step 7: Have a “Money Date”

To keep the conversation of finances flowing, schedule a “Money Date” once a week to check in and re-evaluate your goals. Talking about finances regularly will keep you on the same page as your spouse and keep you both motivated to meet your goals. It doesn’t have to be a five-hour conversation, but can instead be kept short and sweet. Ways to keep the “Money Date” fun include discussing your finances over a glass of wine or while cooking dinner together and then doing a different activity, such as playing a game or watching a movie.

The Bottom Line

Creating a budget with your spouse doesn’t have to be awkward or cause a fight. Remember that you are on the same team and that ultimately you both want the same things out of life. Use your finances and your budget as a tool to create the life of your dreams. (For more, see: 10 Simple Steps To Financial Security Before 30.)