Managing your money in the current economic climate can be tricky especially as general outgoings are rising faster than what we earn. For couples it can be advisable to manage your money together. There has been a steady rise in two parent earners as more couples realise that they need to be both earning to survive financially. More mothers are taking up part time work or full time work to cope financially. With rising living costs and the economy showing no improvement, this trend is likely to increase. So how can couples better manage their finances?
Managing your accounts separately can be a good start with one person paying the household bills such as the mortgage and energy costs and the other looking after weekly shopping bills and fuel costs. Another useful way is to share everything with both incomes being put into an account and all outgoings shared. For husbands who are earning a larger income where their wife may only be working part time, it can be advisable to pay them an allowance so they can take care of paying for all groceries and their husband can look after all the main bills. It is a good idea to sit down with your partner and decide on what is the best solution for you both.
Splitting Your Bills
Many couples who earn separately like to keep their earning apart. Splitting main bills like rent, mortgage and monthly household bills can be a good option. There are 3 way ways that you can manage your finances separately.
Keep a monthly record of what bills are coming in and out.
Agree on who is paying what. If you are both splitting all monthly bills 50/50 or have another method based on who the higher earner is, just ensure that there is dedicated plan in place that you both agree on.
Agree on what your disposable income will be for the both of you and make sure you both stick to it. This will ensure that bills are separate and you both have a maximum disposable income limited each month. This way it is easier to both take responsibility.
Having a joint bank account
Having a joint bank account can be a great way to manage all your bills. By both placing your income into a joint account, all bills can be paid. This can be a good way to control spending and it provides equal control for both parties. It is possible to see outgoings for both people. Another option is to have a joint account just for bills and separate accounts for monthly wages. By setting up a monthly direct debit, the agreed amount for both parties can be transferred straight to the joint account leaving their disposable income in their separate accounts and providing some privacy.
Tips on having a joint bank account
- Have separate accounts for bills and personal income
- Agree your monthly disposable income so you are both happy. Having a separate account for bills and individual accounts for disposable income will ensure that all your finances are managed.
- It can also be advisable to have a savings account which can be separate from bills and disposable income.
Agree spending limits
It is important to have spending limits. If children are involved, it may be necessary for one of the parents to have disposable income to pay for children’s treats and other necessities.
However you both decide on managing your finances together, it can be advisable to have monthly spreadsheets to plan and coordinate expenses so you both know who you are.
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