How to make a couples budget in 4 steps

Step 1: what comes in

Start from take-home pay, what actually lands in your accounts, not gross salary. If one of you has variable income (freelance work, commissions, overtime), use the average of the last six months, or the lowest month if you want to play it safe.

In the example: $5,000 and $3,500 a month after tax, $8,500 in total.

Step 2: the shared costs

Write down every cost that covers the home and your life together, in two groups.

Fixed, roughly the same every month:

• rent: $1,600
• utilities: $400
• groceries: $720

Variable, they change but they're always there:

• meals and nights out together: $300
• vacations, set aside a bit each month: $240

That's $3,260 a month. The variable group is the one couples usually underestimate: if you don't know what you spend on eating out, look at your last three statements and take the average.

Step 3: how to split, and how much to save

Before you split anything, decide how much you want to save together. In the example, $500 a month into a shared fund. The total to cover becomes $3,760.

Then choose how to split it:

• Fifty-fifty: $1,880 each. The partner earning $3,500 keeps $1,620, the other keeps $3,120.
• In proportion to income (59% and 41%): $2,212 and $1,548. You keep $2,788 and $1,952, about 56% of your pay each.

When incomes are far apart, splitting by income is the most common choice. All three methods, including splitting by bill, are covered in how to split bills with your partner, and the split bills by income calculator does the math.

What's left is each person's own: clothes, the gym, gifts, personal savings. It stays out of the couples budget and nobody has to account for it.

Step 4: log your spending and check it once a month

A budget you write and never check lasts a month. Two habits make it stick:

• Log expenses when you pay, not at the end of the month. By then nobody remembers who paid for dinner on the 12th.
• Look at the numbers once a month, twenty minutes, same day every month. Compare what you spent with what you planned, line by line.

If a line runs over two months in a row, the plan was wrong: raise it and take the difference from somewhere else rather than pretending to stick to it. There are three ways to keep track: a joint account that shared costs come out of (read the pros and cons of a joint bank account first), a spreadsheet, or an expense sharing app for couples where each of you logs what you pay and the app shows how much you've spent this month and who owes whom. The options are compared in our guide to expense sharing apps.

The most common mistakes

• Putting everything in the couples budget. If one partner's haircut goes through the shared budget too, every expense becomes a discussion.
• Forgetting yearly costs. Car insurance, registration, holiday gifts: divided by twelve and added to the variable group, they stop being surprises.
• A budget that's too tight. If it leaves one of you $200 for the whole month, it won't last. Better to save a little less and actually make it to the end of the month.

If you're married in Italy, who owns your shared savings also depends on your property regime, explained in community or separate property in Italy. More guides are in couples and money.