OPINION – My experience has been that many couples don’t talk about finances until a major crisis arises. Whether it’s a layoff, forced retirement or major illness, this financial crisis will require a change in your behavior. No more your money or my money, your account or my checking account. The reality is changes must be made in your spending habits before it hits you directly in the face. It’s change or financial ruin.

In pulling that household budget together all parties that generate income and/or spends household resources must be involved. That includes children who often think their parents have permanent access to a limitless ATM.

All couples, married or not, should participate in the family discussion. After you have talked and agreed to take a course of action, the budgeting process begins.

First, do an assessment of what you are earning and spending. Do you know where your money is going? Get out your bank statement, checkbook, receipts, and credit card statements. Calculate your income versus your expenses for the past six months. Then make a list of expenses that are needs rather than wants. Do you spend more than you realize on luxuries like/clothes and entertainment? Can you afford spending $8 for lunch daily? Do you really need that $4.00 cup of Starbuck’s coffee daily?

Now let’s start writing that budget. You must categorize your expenses. There are two types, Fixed and non-fixed expenses. Fixed expenses do not change. You must pay them on the first and fifteenth of every month.The amount of money you need to cover such expenses is already predetermined. They consist of rent/mortgage payment, car note, insurance payments and taxes.

Non –fixed expenses can fluctuate every month. These are expenses you have complete control over. They consist of clothing, entertainment, travel, phone bills, credit card payments, and other non-essential expenditures.

Once you’ve examined these areas you should have a clear picture of what’s coming in and going out of that monthly budget. Discuss those expenditures that can be eliminated or reduced. For example, we all must purchase and wear shoes and clothing but that $1200 St. Johns suit and those $500 Italian shoes may be a bit much. Perhaps that $300 suit and $150 shoes work just as well. It does make a significant difference in the household budget over time.

I saved $100 a month by going out to lunch 2 days a week rather than 5. This saved me $1200 a year. Believe me it makes a difference.

If necessary prioritize those expenses that the family values most. List them from most important to least necessary. If this process is followed, I guarantee you will save a minimum of 10 – 15% of your net monthly income.

Each family member has had input in formalizing the family budget. No more questions and doubts about who, what and why the money was spent.

Most importantly the family will be working cohesively to improve their financial well being.