The number one reason for couples to develop a spending plan — a budget — is to reduce conflict in their marriage.
"What's that?" you say. "Budgeting can reduce marital conflict?" I can just see all you "My-spouse-and-I-can-talk-about-anything-but-money" people scratching your heads — but hear me out. Budgeting reduces conflict for the simple reason that it provides built-in accountability and an objective standard for all of your spending decisions.
You might be surprised at the number of financial transactions you make. If you add up all the checks you write, all the credit card purchases you make, and everything you pay cash for, you could easily make 1,500 or 2,000 transactions a year. With or without a budget, you are going to spend money, whether it's to buy groceries, pay the rent, or take a family vacation. If you don't have a budget — a spending plan that allocates your income to reflect your priorities — any of these expenditures could touch off an argument. In fact, if you disagree on only about one out of every 100 purchases, you will wind up at odds with your spouse at least once a month. Statistically speaking, money fights or frustrations are a virtual certainty!
Judy and I use a computer software program to track our purchases. According to the computer, we make anywhere from 2,000 to 3,000 transactions each year. But since most of our spending decisions are made ahead of time in our family budget, there is very little disagreement about where our money should go. As a result, we have the freedom and flexibility to enjoy our purchases without fear, guilt, or conflict. Our budget works to eliminate potential problems before they arise.
The second reason why a spending plan makes sense is that it allows you to create and maintain a vision for the future. A budget gives you the guidelines you need to successfully spend less than you earn — which, as any financial analyst can tell you, is the key to long-term financial security. Whether you want to buy a home, start your own business, fund your children's college education, or set yourself up for a comfortable retirement, a spending plan can keep you focused on your goals.
Balance Spouses' Input on Spending
Third, a spending plan means that nobody has to be the bad guy. Most marriages have a spending spouse and a saving spouse. Any time the spender buys something, he or she becomes a potential target: Why did you buy that? It costs too much! And we don't really need it. Couldn't you have found something less expensive? Likewise,when the saver refuses to spend money, he or she may invite criticism: Why can't we buy that? It's not that expensive — and besides, it's on sale. You worry about money too much. Don't be such a killjoy.
A budget can help eliminate such tension. Objective and impartial, the spending plan draws a line between the affordable and the out-of-reach, the wise purchase and the foolish. Because a budget is drafted with input from both spouses, the spending/saving decisions are not "mine" or "yours," but "ours." You're on the same side of the fence.
A fourth reason for a spending plan is that it forces couples to communicate. You can't establish budget categories and allocate income without talking about priorities, needs, dreams, and goals. Fears and insecurities can also be part of the process. By providing a forum for discussion, the budgeting process enables you to define and address philosophical differences — everything from how much to spend on food and clothing to how, where, or when you want to give money to your children, your church, or your charity.
Set an Example
Finally, by establishing and using a budget you set a great example for your kids. As Judy and I often remind ourselves, "More is caught than taught." When your children see you exercising financial discipline and making progress toward your goals, they will learn a valuable lesson about how to handle their own money.
Reducing conflict, creating vision, eliminating the bad guy, fostering communication, and demonstrating wise money management are all good reasons to develop a spending plan. But I'm not pretending that the process will be easy. At times it might even be a struggle. It's like going for a swim in the ocean: You have to get through a few rough spots before you get past the breakers. But I can promise you that once you get beyond the turbulence and out to where the water is gentle and clear, you will never want to go back.
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