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Budgeting as a Couple: Key Budget Categories

George Grombacher December 28, 2021

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Budgeting as a Couple: Key Budget Categories

Budgeting as a Couple: Key Budget Categories


It’s important to get a sense of where we are in the world and with our finances. Perspective is an invaluable tool for doing exactly that.


My grandfather grew up on a farm in South Dakota during the Great Depression and the Dust Bowl. 


When he turned 18, he was drafted by the United States Army and fought for our Country overseas. 


Upon returning from the War, he utilized the GI Bill and started a business. 


When war broke out once again, he was recalled by the Army to fight in the Korean War. 


He went on to have a successful career in business, raised two daughters and got to be highly involved with his four grandchildren. 


His perspective on life, work and money were forged by his experiences; just as yours and mine have been.  


My mother’s and aunt’s perspective is different from my grandfathers, and my children’s perspective will be more different still. 


Your perspective may be similar to your partner’s in some ways, and different in others, depending on your lived experiences amongst other things. 


The purpose of this exercise is to help you get clear on your perspective on budgeting, specifically wants versus needs, in service of getting on the same page with your partner. 


This exercise is designed to be done independently. 


Both you and your partner should complete it. Once you’ve both gone through it, you will come together and discuss your experience and talk about getting on the same page and moving forward together. 


Here’s what we’ll cover:


  • Budgeting overview
  • Budget categories
  • Essential versus nonessential
  • How you’ll approach necessary changes


Let’s get started. 


Budgeting overview


Simply put, a budget is a plan for your money. It is one of the most foundational and important steps to financial success. Without a budget, you have no way of knowing whether or not you’re doing the right or wrong things with your money. 


It helps us to make decisions on how we spend, save and invest. It tells us if we’re on track financially over the short and long-term. 


Following a budget let’s us know if we can afford things like going on vacation, buying a new gadget, or investing in Bitcoin. 


There’s not a right or wrong way to develop and maintain your budget. Some people prefer spreadsheets while others use apps. 


The key to budgeting is deciding how you’ll keep yours and consistently maintaining it. 


Budget categories


Putting together your personal and eventually, your family budget will be specific to you and your situation. The following categories and listed percentages serve as general guidelines. 


You’ll decide which categories to track and the proper percentages for your situation. 


  • Housing (25 to 35%) Every expense related to your living arrangements will fall into this category


  • Utilities (5 to 10%) Electricity, water and other services such as internet and phone will fall into this category. You could also combine utilities with housing


  • Transportation (10 to 15%) Every expense related to getting you from point A to point B will fall into this category, including registration fees


  • Food (10 to 15%) All money spent on food, either at home or eating out will fall into this category


  • Insurance (10 to 25%) All of your insurance premiums will fall into this category.  Some people will choose to include car insurance under transportation, and homeowner’s insurance under housing


  • Healthcare (5 to 10%) Every expense related to your healthcare will fall into this category. Should you choose to include insurances in their specific categories, health insurance premiums will fall into this category


  • Debt repayment/Saving and investing (10 to 20%) All money dedicated to the repayment of debt, proactive saving and investing will fall into this category


  • Lifestyle (5 to 10%) Every expense related to personal care, such as clothing and shoes, and gym memberships will fall into this category


  • Fun (5 to 10%) Every expense related to hobbies, concerts and events, streaming services and gaming will fall into this category


  • Pot-pourri (5 to 10%) A “catch-all” category, all additional expenses will fall into this category 


Essential versus nonessential


When Elon Musk decides to disrupt an industry or create a new one, he uses first principles thinking. 


A first principle is a basic proposition or assumption that cannot be deduced from any other proposition or assumption. It’s what is true. 


Here are some examples of first principles for personal finance:


  • Spend less than you make​
  • Don’t run out of money​
  • Maximize your income​
  • Pay yourself first​
  • Play for emergencies/stay insured​
  • Build your credit​
  • Save for retirement​
  • Risks requires a reward​
  • Money has time value​
  • Market prices are generally right​
  • Don’t borrow what you can’t repay


Another is Understand the difference between a need and a want


A very basic way to think about needs versus wants is this: a need is something you can’t live without and a want is something that accentuates your life. 


That being said, this is where perspective really comes in. Something that was a want for my grandfather when he was five may be a need for my son who is currently five. 


The goal of this exercise is for you to determine what you believe are needs and wants. 


Your partner will also complete this exercise and then you’ll come together and come to decide which is which moving forward.   


As you go through the list circle the items you believe to be wants, and underline the items you believe to be needs. 


There’s no right or wrong answer. 


Don’t judge yourself, just circle or underline. 


Once you’ve gone through all of them, go back through and spend some more time thinking about which category the item should be in. Adjust any answers you’d like. 


A word on nuance; many of these items could fall into both categories. Getting clear on where you think they belong will make the conversation with your partner more constructive. 


Rent or mortgage

Sporting event tickets

Theater/movie tickets

Investment property expenses

Gym memberships


Personal trainer

Eating out


Happy hour

Streaming services

Subscription services

Cooking classes






Dry cleaning












Cleaning Supplies

Online Shopping



Holiday Gifts

Make up


Coffee/Coffee Drinks

Laundry items


Toys for kids

School for kids

Educational/learning programs for adults

Car payments

Car insurance

Car maintenance

Home utilities

House cleaning

Landscape maintenance

Landscaper costs

Swimming pool costs

Swimming pool cleaner


Supplements and vitamins


Student loan payments

Cell phones

Cell phone plans

Life insurance

Health insurance

Car insurance


How you’ll approach necessary changes


Looking into the future, after talking with your wife about this and taking the time to develop your personal budget, you may find there are no changes necessary. If that’s the case, great!


But what happens if you discover your current financial habits aren’t going to get you where you want to go? What will you do? 


Will you have to reduce spending? Will you have to modify your lifestyle?


Oftentimes, when confronted with this reality, fear and shame come to the forefront.


The thought of taking steps backward isn’t a fun one. 

But it can be one of the most important decisions you ever make. 


The thing is, you and I don’t have time. So much of personal finance is time sensitive; the longer we have to save and invest the better. The shorter we have, the harder it is to accumulate enough to reach our chosen goals. 


If you find yourself confronted with the possibility of having to make changes, I encourage you to think about those changes as temporary. Think about taking one step back so you can take 10 steps forward in the future. 


Because that’s what you’ll be doing. 


Whenever I get worried about something, I go through this exercise and I’d like for you to do the same. 


Think about your biggest current financial concern. 


Let’s say you’d like to get out of debt and use that as our example. 


  1. What change do you want to make? I’d like to get out of debt. 


  1. What do you think might happen if you made the change? I’d have to reduce spending in certain areas.


  1. What is the worst thing that could happen to you if you made the change? I’d have to give up doing things I enjoy doing. 


  1. How likely is that to happen? Almost certainly. In order to pay off my credit cards, I’ll need to make cuts in other areas. 


  1. What is the worst that has happened to others in this situation? How often did it happen? How did they deal with it? My friend stopped going out to eat for one year. She cancelled her gym membership. She also downsized her car. It was hard for her at first and I think she was embarrassed, but she got used to it. 


  1. What is likely to happen based on your experience and the experience of others? How would you respond? I would be embarrassed and worried about what other people thought of me. 


  1. If the worst did happen, then what would you do? I would get over it just like my friend did. I was proud of her for making those tough decisions and I know she came out of the experience a better person. 


  1. Based on this discussion, what do you need to do to put this worry behind you? I need to figure out what changes need to be made and how long I’ll need to make them for. 


Worrying about what other people think of us is a perfectly human thing to do. 


We all know someone who has gone through tough financial times and emerged from it better than before. 


Recognizing a change is needed and having the courage to act on it is an important step on the path to financial success. 




The purpose of this exercise is to help you get clear on your perspective on budgeting, specifically wants versus needs. 


Once you and your partner have gone through it, you will come together and discuss your experience and talk about getting on the same page and moving forward together. 


If changes are required, you’ll be prepared to make them together. 


Additional resources


If you’d like to dig deeper into this, you can have a no-cost conversation with one of our Certified  Coaches.


You can also join one of our two-week online Sprints to help you get on the same page with your partner. 


You can also access our Get Out of Debt, Goals and Values courses at no-cost. 


Finally, check out the LifeBlood podcast.


Let us know how we can help you on your path to financial success!

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