I am a huge fan of budgets. I find them essential to syncing up on monetary issues. But not just in business. The Gotham Gal and I use them in our personal life to avoid conflicts about money.
For a long time, probably the first fifteen years of our life together, we lived paycheck to paycheck. Sometimes it was two paychecks, other times it was one. For a brief period as I was starting Flatiron, it was none. I got shingles that year.
As our income went up and down, our spending had to do the same. I created "fredsheets" that we looked over, debated, discussed, and then adjusted and signed off on. Then we created budgets so that each of us would live to these spending plans. It worked. We always made it to the next paycheck. Many times by the skin of our teeth.
In the second fifteen years of our life together, we've had the pleasure of living in a different financial situation. But we still use budgets. We created budgets for our kids which they live up to. We created budgets for our real estate projects, our angel investing, art collecting, and so on and so forth.
Another trick we frequently use to deal with personal financial issues is multiple accounts. We have bank, brokerage, and money market accounts for various projects, all of which have budgets. We fund these accounts based on the budget and then pay the expenses as they come in out of the various accounts. This means that we can look at the available balance and compare it to the budget to make sure everything is in good shape.
Managing money and financial issues is hard. It leads to a lot of tension in relationships. I suspect it leads to divorce in many cases. Better education (mine sure helped me), better tools, and better communication around these issues would help a lot.