Creating a Joint Budget: Tips For Newly Married Couples

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Cheesy but not wrong to say marriage is the meeting of two souls. But a realist might add that it is also a meeting of two bank accounts. Well, whatever way you see it, money is an integral point of discussion in your dream lifestyle bucket list. And, like many things, as a newly married couple, managing your finances together can be both exciting and challenging.

Creating a joint budget is a great way to start your financial journey on the right foot. It helps align your financial goals, manage expenses effectively, and prevent misunderstandings. Here are some essential tips for newly married couples to build a solid financial foundation for their future.

Discuss your financial goals and priorities

Before creating a budget, discuss your goals and priorities. This includes saving for a home, planning a vacation, or investing. Understanding each other's financial attitudes will help you create a budget that aligns with your shared vision.

Create a comprehensive list of income and expenses

List all sources of income, including salaries and bonuses. Then, outline all expenses, both fixed (rent, utilities) and variable (entertainment, dining out). Include savings and investments as expenses. This overview will help you identify areas for savings and effective allocation.

Allocate responsibilities and set spending limits

Assign tasks like paying bills or managing investments. Set spending limits for discretionary expenses to prevent overspending. Agree on a reasonable amount you’re both comfortable with and stick to it. This approach not only ensures that you’re both contributing equally but also fosters teamwork and communication.

Save for emergencies and long-term goals

Create an emergency fund for 3-6 months' worth of expenses. Additionally, save for long-term goals like buying a house or retirement. Regular contributions to savings or investments will help you achieve your financial goals.

Communicate openly about money

Money can be sensitive in any relationship, but open communication is key to financial harmony. Be transparent about your financial situation and discuss your budget regularly. Avoiding financial secrets and having honest conversations will build trust and reduce stress in your relationship.

Here's a sample joint budget for newly married couples, including common expense categories and an example allocation based on a monthly income of ₹2,00,000. This can be adjusted according to your income and expenses:

Category	Percentage	Amount (₹)	Notes
Income		₹2,00,000	Total combined monthly income
Essentials		₹1,32,000	Essentials should be a top priority
Housing (Rent/EMI)	30%	₹60,000	Rent or home loan EMI, including property taxes if applicable
Utilities (Electricity, Water, Internet)	8%	₹16,000	Household utility bills (electricity, water, gas, etc.)
Groceries	10%	₹20,000	Monthly food, household supplies
Transportation	8%	₹16,000	Fuel, public transport, or car payments
Insurance (Health, Car, etc.)	5%	₹10,000	Health and auto insurance premiums
Debt Repayment (Loans, Credit Cards)	5%	₹10,000	Minimum payments on debts
Savings & Investments	15%	₹30,000	Savings for emergency funds, retirement, or investments
Emergency Fund	5%	₹10,000	Build up 3–6 months of expenses in savings
Retirement Savings	5%	₹10,000	Contribute to PPF, EPF, or other retirement accounts
General Savings/Investments	5%	₹10,000	For vacations, home purchase, or investments
Lifestyle		₹30,000	Discretionary spending
Dining Out/Entertainment	5%	₹10,000	Restaurant meals, movies, outings
Personal Care	2%	₹4,000	Grooming, salon, beauty services
Gifts & Miscellaneous	2%	₹4,000	Birthdays, holidays, and unexpected expenses
Travel/Leisure	6%	₹12,000	Vacations, weekend trips
Total Expenses		₹2,00,000	Should not exceed total income

Note: This is just a sample budget to give you an idea of how you can allocate money monthly. You can change the percentages and amounts based on your specific needs, lifestyle, and financial goals.

Regularly review and adjust your budget

Life is dynamic, and so are your finances. Regularly reviewing your joint budget ensures that it aligns with your current financial situation and goals. Set a monthly or quarterly meeting to discuss your budget, track your spending, and make necessary adjustments.

The first step in creating a joint budget is to have a shared account where both partners can contribute funds for joint expenses. A Zero Balance Savings Account, like the Kotak811, Zero Balance Digital Savings Account, is a great option because it allows you to manage your finances without worrying about maintaining a minimum balance.

FAQs

1. How do you split finances for married couples?

Splitting finances for married couples can be done in various ways, such as combining all income into a joint account, maintaining separate accounts with a joint account for shared expenses, or splitting bills proportionally based on income.

2. How do I set up joint finances?

To set up joint finances, start by opening a joint savings account, which allows both partners to contribute towards shared expenses.

3. What type of bank account works best for married couples with joint accounts?

A Zero Balance Savings Account, like the one by Kotak811, is ideal for joint accounts for married couples as it offers flexibility, easy access, and no minimum balance requirements.

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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.