The first rule of getting your finances in order is to create a household budget and spending plan based on a realistic assessment of your income, expenses, wants and needs.
Few things are more frustrating than doing your part — scrimping, sacrificing, going without — only to find that your partner or someone else in the household blew the agreed-upon budget with a splurge.
Money is infamous for destroying relationships. So if your partner, family member or roommate is living beyond an agreed-upon spending plan, here’s how the experts say you should restore financial order to your household.
Use the Moment To Identify the Source of the Slip — But Be Nice About It
When one partner comes up short, it’s natural for the other partner to react with anger — but that won’t prevent a repeat in the future. So instead, take it easy and try to use the failure to ferret out the problem.
“Give your family and partners grace when they do not stick to an agreed-upon household spending plan,” said Adrienne Taylor-Wells, an accredited financial counselor with Tailored WealthSaver. “Simply ask what triggered the unexpected expense. When you better understand the disconnect, it is easier to create a solution and a plan of how to spend money that meets both your needs and your partner’s needs as well.”
Taylor-Wells thinks a simple change in language can go a long way in changing mindset — and, therefore, behavior.
“Stop calling a budget a budget,” she said. “Instead, consider calling it our monthly spending plan — in the sense that it is our plan that we created together of how we want to spend our money to better reach our financial goals.”
When a household member does slip, try to focus not on the dollars and cents but on what that money represents in real life.
“When a partner or member of your family isn’t sticking with a budget, be open with them about the emotional impact it’s having on you, your goals, and your dreams,” said Grant Sabatier, author of “Financial Freedom” and co-founder of Bank Bonus. “Don’t make it about the money or focus on some dollar amount or a specific purchase. Anyone going over budget will already likely be stressed about the money.”
Instead, make the discussion about your goals.
“Let them know that it’s causing you stress and you won’t be able to take a vacation or get that new car, whatever it is,” Sabatier said. “Likely, your family member or partner won’t want to hurt you or cause you stress, so they’ll be more likely to stick to a budget if they understand the impact it has on you. But first and foremost, you have to be open with them and tell them how you feel.”
Spending plans require checkups, check-ins and maintenance. Once your household agrees on a budget, the stakeholders have to revisit their progress regularly — but it only works if you do it on a consistent schedule.
“The first step is to try to build a routine,” said Chris Kampitsis from The SKG Team at Barnum Financial Group. “Make an appointment in your calendar to review spending in a couple of simple, key areas each week or month — same day, same time.”
Remember that it’s not a work meeting — it doesn’t have to be strictly business.
“Make it fun by combining it with something enjoyable,” Kampitsis said. “Your favorite show or a glass of wine, etc. Create a simple reward or incentive if the partners or the family stay within their goal. Maybe it’s a household chore or a favorite activity or meal.”
If the household has children, they should be involved in the household’s spending plan, too.
“I don’t think it’s just your partner,” said personal finance expert and “Crawl Before You Ball” author Buffie Purselle. “It’s anyone who is in your orbit that you are financially responsible for. They all need to be on this budget.”
She also believes that no budget can work without an accountability plan.
“I’m a big proponent of having a family budget and having everyone sign off on it and having specific consequences if someone falters,” Purselle said.
Just as Kampitsis builds fun into the periodic review meetings, Purselle reminds her followers to build fun into the budget itself — and that the fun part can come in handy when enforcing discipline.
“For example, you can include that one night a week you order in,” Purselle said. “And if someone doesn’t abide by the budget that week, then they can’t participate in that. Or, consequences like they have to contribute more to the family savings plan.”
Especially for the younger people who are just starting to learn about saving, spending and the value of money, this kind of tough love can be a gift.
“It teaches people a great lesson of responsibility.”
Trae Bodge, a smart shopping expert who founded Truetrae.com, also thinks that creative fun can go a long way to keeping everyone on budget — but she recommends stoking a little bit of competition along the way.
“Create a challenge where you compete to see who can spend the least,” Bodge said. “Or set goals, which, once achieved, end in a fun night out for the household. Adding some fun to it might make it more doable.”
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