Tips for Budgeting with Two Incomes

Finances are a common point of contention within a household. Management of same can also be a difficult challenge, but it is a challenge that must be met in order to sustain a healthy living environment. Coming up with an agreed-upon plan to successfully manage the flow of money within your household is the best way to ensure you always have enough for what you need and with any luck a little bit left for play.

It can be difficult to bring a two-income house together in a joint fashion if both parties are not 100% on board with the plan. Therefore it is of utmost importance to have a conversation with anyone who contributes to the monthly bills and create a financial plan to successfully guide you through your bills. Here are some budgeting tips which if used accurately can guarantee you always have enough money at the end of the month.

Write Down Total of All Bills

It’s important to have a clear and visual understanding of what you owe. It’s not enough to simply guess at what your monthly hydro and internet bills are each month, you need to know what they are so you can budget for them accordingly. Make a list, or a spreadsheet, of every single expense you have on a monthly basis. Don’t forget to include cell phones, bus passes, gas, groceries and insurance. It’s also important to allocate an amount to debt repayment if debt is something you are attempting to pay down.

Calculate Exactly How Much Income You Have Monthly

Depending on how you divide expenses in your house will guide how you execute this step. Knowing how much money comes into the house each month is integral for balancing your personal budgets and remaining as far away from debt as possible. You should be bringing in more money than what you owe in bills.

Set Money Aside Each Pay

Even though your hydro bill only comes once a month, set money aside for it from each pay. For instance if your average monthly hydro bill is $100, put $50 aside each paycheque to cover the bill once it comes. It is wise to set money aside for each bill in your itemized list, but be certain you are unable to spend it. Place it in a separate savings account every time you get paid to avoid confusion with your spending money. It is helpful to create a chart to keep track of what dollar allocation each bill has from within the lump sum savings. You may notice that some months your bills are lower, however it is still wise to set aside what you normally would budget for and to have an excess amount in the event of a larger bill down the line.

Money can be a difficult subject to broach with your partner, but with open communication channels and a solid financial plan in place, budgeting for your household can be an easy task!

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