This is the third article in a series of four about money and couples. I have presented them in an order that couples can follow to improve their financial outcomes.
When you have tailored your money conversations to avoid your style differences and you have revealed the finances on both sides with full transparency, you are ready to make projections about spending that will work for both of you.
Many of the couples that I work with are hesitant to do this 
because it means that something will have to be sacrificed. Usually the fear is that the "something" will be the fun things in life. In order to move past this obstacle it is crucial that all the expenses of your lifestyle choices are included in your planning.
I see lists of budgeted expenses all the time...the bills and the monthly fixed expenses (housing, tuition, taxes, etc.) Two things are usually missing: the complete list of irregular expenses (including kids' enrichment and summer programs, veterinary care, vacation, birthday and holiday gifts, etc.) and a complete list of flexible expenses (personal care, health care, entertainment, recreation, electronics, etc.).
The budget that is based only on the monthly bills and fixed expenses is doomed, because a large portion of our money goes to irregular and flexible expenses. Without having these in the picture, you will accidentally overspend.
One client-couple with whom I worked brought in this kind of budget. They had stopped meeting. Their money conversations were unproductive and tense, debt was continuing, and they couldn't seem to save money. Together we created a money map which included everything, monthly fixed expenses, irregular expenses and flexible expenses. When they began following the money map, they had money in the bank waiting for all of their expenses. Now their savings survived because they had accurately planned for all of their expenses. The husband appreciated knowing for certain how much money they could actually spend and said it was freeing.
The other common budgeting problem I see from clients is a complete list of all expenses but based on inaccurate numbers. Groceries and eating out are under estimated, and allowances for other expenses are meager. This budget is also going to be frustrating and will encourage the life partners to blame one another while trying to live within it. Conversations become brittle and money meetings then disappear.
One client described how she couldn't live within the amount of money her husband gave her each month. She was confident in his money skills and respectful that he was a master at making their money grow. But her side of
the equation was filled with blame and judgment from him because she "wasn't able to manage her part."
When she provided the actual amounts of her expenses, her husband could see that it wasn't about her ability to manage the money, but rather that the money wasn't going to cover the expenses she was responsible for. We worked out a plan the covered all the expenses and investments, while making it possible for her to operate without feeling wrong about everything.
The key to planning is to start with the right numbers. Here are three key steps to take to successfully plan your income and expenses:
- Review your credit card statements and bank statements to get the actual numbers. You can highlight various categories in different colors (green for groceries, yellow for eating out, blue for entertainment, etc.) or different geometric shapes next to the amounts so that they are easy to add up and get an average.
- Build three columns: monthly fixed expenses and bills (including savings and debt repayment), irregular expenses, and flexible expenses. Under each column list the various expenses. Be very thorough so you are sure to include everything. Hint: If it feels like a one-off expense, put it with the irregular expenses.
- Add up the irregular expenses and divide by twelve. Add to that the monthly average of the flexible expenses and the fixed monthly/bills. This is the per-month cost of your lifestyle choices.
Of course this can be trickier than I've made it sound. I've been doing this for many, many years and am very aware of the obstacles, both outer and inner, that can get in the way. If this is the case for you, then give me a call or email me so we can schedule a free Strategy Session to help you clarify your objectives, obstacles and possibilities. When you plan, you will be able to meet your goals and have the life that you intend without guilt or worry.
