By: Amy Morin, LCSW
 

Imagine owning a 2 million dollar company. How would you manage that amount of money? Hopefully, you'd have some help. Likely you would employ an accountant, a financial manager of sorts, and have some other professionals to assist you with financial matters. You would probably find it irresponsible not to have a budget to help you control the company's earnings and spending.

Well, as it turns out, your family may very well be a 2 million dollar business. The average family income in the United States is about $45,000. If your family earns a minimum of about $45,000 a year, you'll have seen a cash flow of about 2 million dollars before you retire (based on working 45 years).  Many families will earn far more than this amount of money over their lifetime.

How well do you manage your family’s budget? What will you have to show for your 2 million dollars when you retire? Some people will have a home and a car. Others may have paid for their own education expenses and their children’s' education. Some may have some expensive toys or have memories of great trips. But how much of that 2 million will you be able to account for?

All of those little amounts of money you spend will add up to a lot of money over the course of several years. Whether it's a few dollars a day on coffee, a few hundred dollars each month on dining out, or a few thousand each years on vacations, it will add up to a substantial amount of money before you reach retirement.

Without a family budget, it becomes nearly impossible to reach your financial goals. In fact, many couples aren’t even sure what their financial goals are. Many people have dreams about what they want. Some couples talk about things they’ve always wanted, such as a home on the lake. Other couples talk about wanting to take a dream vacation.  Without creating a timeline and reviewing a budget, these things will stay dreams and not become goals.

When someone establishes a goal, it means they have looked at what they need to do to get there. They set dates they want to accomplish each step. For example, a couple who wants to purchase a new boat would need to determine how much that boat will cost. Then, they need to decide how much money they want to save each month. It’s also important to figure out how much related expenses are going to cost, such as storage fees. From this, they can figure out how long it will take to purchase that boat.

The hardest part about a budget is sticking to it. People sometimes set lofty goals for themselves but have difficulty giving up things that cost too much. Perhaps the couple who has decided to save up for that boat has difficulty saying no to invitations from friends, despite the fact they aren’t able to save any money toward the boat. Obstacles such as these can get in the way of reaching financial goals.

Money can be a huge source of stress for many couples’ relationships. Although many couples want to avoid the subject altogether, it is important to talk about money.  Discuss your financial dreams. Then discuss any lifestyle changes you want to live.

Complete a budget. There are a lot of books and online tools available to help you establish a budget. It is important to know how much money you have coming in each month and how much money is outgoing. Many people avoid finding this out due to their anxiety about how much they spend. Denial isn’t helpful. You can’t make any changes until you face the facts.

If you are having difficulty agreeing on money and financial decisions, consider talking to a financial counselor. If you and your partner have difficulty communicating and problem-solving, consider seeing a psychotherapist. Counseling can help couples in a variety of ways when it comes to making important financial decisions and setting a budget.