How do married couples keep track of their spendings? How do they track their net worth each month? Although I’m not getting married until May 2007, I decided to tackle this question during my winter break. My fiancée and I have talked about finances and budgeting and we agreed that I’d handle all financial matters once we got married. I have a personal budget but my goal was to create a combined budget for the two of us for 2007. To do this I first needed to have a good idea of both of our spending habits. I already keep track of my own spendings, but I needed to know the spending habits of my fiancée. Our spending habits of 2006 would become the basis for our combined budget for 2007. So during my winter break I went through all her 2006 bank statements and credit card statements and logged her spendings (this took me about 5 hours, yikes!). I came up with totals using an Excel spreadsheet and got a good idea of how much she spends in various categories. I wasn’t surprised to find out her spendings on coffee and clothes were higher than mine. I was surprised to find out that her spendings on eating out equaled mine. I always thought she ate out less then I did, but I guess she tends to spend more each time she eats out. Both of us need to learn to cut-down on this once we get married by cooking and packing lunch for work.

After comparing both of our spending habits, my fiancée and I sat down and reviewed our 2006 finances and then talked about what we’d like to see for 2007. Our wedding will be our largest expense for 2007, so any extra spendings we can reduce will be helpful. We both feel we spend too much money in areas of coffee, clothing, and eating out. We’ve reduced our allowed budget in each of those categories and will strive to stick to it during this new year. Now instead of tracking my spendings each week, I’ll be tracking both of our spendings, making sure that we are on track.

All this may seem tedious or boring but keeping a budget and tracking your spendings is absolutely crucial for getting a handle on your families’ finances. Going through this exercise will also reveal where your money is actually going. Since my fiancée had never consistently tracked her spendings, she was actually surprised to find out how much she spends on coffee each month. It has given her motivation to be a little more cautious with the “latte factor“. Read my post on “Keeping Track of Your Spendings” if you need help estimating how much money you spend each year. This will help you create a budget.

Here’s a glimpse of our budget for 2007: