Sticking to a Household Budget

Through most of my twenties, my idea of budgeting was buying one pair of heels instead of two and offsetting pricy dinners with friends by eating ramen noodles the rest of the week.

But as I got older, my financial goals became a bit more serious than saving for a new outfit or night out. Shortly after getting married, my husband and I laid out our big-picture priorities like buying a home. Suddenly, spending money freely on clothes and entertainment felt less like fun and more like a bad habit we both needed to break. We started talking honestly about our spending habits and decided to set up a budget that could help us save for the future. It wasn’t easy at first, but now, spending less is practically second nature. Along the way we learned some tricks for putting our finances in line with our priorities:

Remember your budget goals

Think hard about what you’re saving for, whether it’s furniture to fill up your new place or paying off your student loans more quickly, and write those priorities down. For us, saving for a house and chipping away at credit card debts were at the top of the list. Make sure to divvy up short and long-term goals, so you can keep in mind which ones to focus on in the immediate future. From there, you can estimate how much you’d need to save to reach each goal and re-evaluate the ones that seem unrealistic. Then, put this list under lock and key, as you’ll want to revisit it a few times a year to determine whether you’re on track.

Be smart about spending

For the first few months we lived together, we tracked our spending habits to see where our money went. We were able to track most expenses by checking our online credit card and checking account statements. For cash expenses, we simply held onto receipts until it was time to evaluate what we’d spent for the week.

Once we saw what we spent the most money on (i.e. fun with friends and dining out), we were able to identify places where we could cut back. Then, we divided our primary expenses into categories (groceries, entertainment, toiletries, etc.) and put a cap on how much we could spend in each category per month. To help us track how well we stayed within our limits, we created a spreadsheet with columns for each category. We also added an emergency fund to the mix. Given the challenges of today’s job market, we try to keep a cash cushion that would cover at least 6 months’ worth of expenses.

But this spreadsheet would be useless if we never took the time to update it. So, every Sunday since, we’ve spent a little time tallying our expenditures and adding them to the appropriate columns. While this isn’t the most exciting weekend activity, it’s a great way for us to start the week feeling organized and in control of our finances.

Account for your accounts

One of the tougher decisions we made was whether or not to combine our bank accounts. While I saw how combining our accounts could simplify our spending, I also liked the safety net of having my own account. In the end, we opted to keep our personal accounts, which we use to make smaller purchases for ourselves, like a new piece of clothing or a lunch out, in addition to opening a joint checking account, from which we pay our joint expenses, such as utilities and car payments. We also have a joint savings account for all those big costs we anticipate down the road.

Setting time aside to figure out your finances can be a major headache. But, as we’ve found, putting in a little effort each week can reap major benefits for your bank account and your sense of security. And besides, that second pair of shoes will still be waiting for you next month.

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