Introduction
Managing money can be hard enough on your own, let alone when you add another person into the mix. As someone who has been married for over a decade now, I know first-hand both the challenges and rewards of financial planning as a couple. When my wife and I first combined our finances, it was a bit of a messy process full of disagreements, confusion, and tension. However, over time and with some diligent work, we’ve been able to really align on shared financial goals and priorities.
So if you’ve recently gotten hitched or moved in together with your significant other, you may be wondering how to navigate financial planning and decision-making with your new financial teammate. Where do you even start? What crucial conversations should you be having? What mistakes do couples often make when merging money matters? Not to worry, I’ve been there myself and have plenty of hard-won advice to offer after years of figuring this out in my own marriage.
In this comprehensive guide, I’ll walk through my top tips for financial success as a couple, including:
- Communicating about money
- Budgeting together
- Managing separate vs joint accounts
- Saving for shared goals
- Investing as a team
- Estate planning considerations
- Strategies for paying down debt
- And more!
Whether you’re newlyweds or have been married for years but struggle to get on the same page financially, this guide can help provide clarity, direction, and a framework for aligning your finances and working towards shared money goals. So let’s dive in!
Communicating About Money
The most important habit you can develop around financial planning as a couple is open, judgement-free communication. I know it can feel awkward at first, but you absolutely must push past the initial discomfort if you want to build aligned priorities and successful strategies.
Here are some of my top tips for effective money talks as a couple:
Share Your Money Histories
One of you may come from an affluent background while the other grew uppaycheck to paycheck. Or perhaps you both experienced financial hardship at some point. Understanding each other’s unique money experiences, perspectives and even baggage is so important.
Discuss Individual Values
Does one of you tend towards more frugal spending while the other loves splurging on experiences or luxury items? Are your risk tolerances different when it comes to investing? Air any potential disconnects in money values early.
Set Regular Money Dates
Don’t just talk about financial issues as they come up. Schedule quarterly or monthly money dates to check-in on budgeting, debt paydown, retirement planning and goals progress.
Listen Without Judgement
It’s so easy to react with criticism when your partner shares their spending regrets or a crazy business idea. Check any judgement at the door.
AssignRoles
Play to each other’s financial strengths. Maybe one excels at investing research while the other handles day-to-day budgeting. Figure out what works best.
Budgeting Together
Now it’s time to look at the numbers. Review both your incomes, debts, assets, expenses, financial goals and start crafting a combined budget. Here are some budgeting tips for couples:
Use Budgeting Software
Apps like YNAB or Mint make it easy to see all spending and income streams in one place. Choose a program and sync your accounts.
Categorize Fixed vs Discretionary Costs
Housing, debt payments, insurance and transportation are fixed. Food, entertainment, travel and shopping budgets can be adjusted.
Identify Past Spending Blindspots
Look back at old bank/CC statements to tally up frequentsplurges like takeout or rideshares that are easy to overlook when budgeting.
Discuss Lifestyle Non-Negotiables
Would you prefer budgeting austerity to supercharge savings goals? Or is plenty of room for dining, travel and leisure essential?
Build In Separate Fun Money Categories
Even in the tightest budgets, each partner should get a monthly “no judgement” spending allowance.
Automate Savings Contributions
Set up auto-transfers from each paycheck directly into joint retirement, emergency and other savings so you “pay yourself first”.
Revisit Quarterly
Make adjustments based on changing incomes, expenses or priorities. Keep budget realistic not rigid.
Managing Separate vs Joint Accounts
One key decision couple must make is whether to combine all money into shared accounts or maintain some financial independence. There are pros and cons to each approach.
The Joint Account Route
Having one primary checking/saving account gives full visibility and requires intentional coordination. All income sources get deposited here and all expenses are paid from this central fund.
Pros
- Aligns you as a financial team
- Maximizes income for shared goals
- Enables easier budget tracking
Potential Cons
- Can reduce autonomy and privacy
- Needs very trusted partnership
- More coordination effort
The Hybrid Approach
With this option, you maintain your own individual checking/saving accounts while also having a shared joint account that common expenses are paid from. You each contribute an agreed upon amount per month to fund the joint expenses. Often retirement accounts are combined.
Pros
- Provides some financial independence
- Less need to justify personal purchases
- Can reduce money arguments
Potential Cons
- Makes budgeting trickier
- Savings may happen more slowly
- Can enable secrecy or overspending
There are good arguments on each side. Decide what feels right for your unique relationship. You can always start one way and adjust later as needed.
Saving for Shared Goals
Aligning on big picture financial goals and developing plansis essential for couples. Common shared goals often include:
Buying Property
Save up for a downpayment, closing costs and furnishings. Develop a realistic timeline for when you’ll be ready.
Starting a Family
Budget for pregnancy medical expenses, baby gear/supplies, potential loss of income during leave, increased health insurance costs and even future college savings contributions.
Retiring Comfortably
Open retirement accounts like 401ks and IRAs. Use calculators to estimate the savings rate needed to sustain your envisioned retirementlifestyle.
Family Vacations
Whether it’s annual holiday trips or a dream exotic getaway, create a separate vacation savings fund and automate contributions towards it.
For each goal, tally up total estimated costs, determine how much you’ll need to save monthly/annually to reasonably reach it, and hold each other accountable for sticking to the plan.
Investing as a Team
Once you have robust emergency and retirement savings established, investing extra funds is important to build long term wealth. Here are my top couple investing tips:
Learn Together
Before jumping into the market, get educated on investing basics, risk management, asset classes, choosing financial products, taxes and more.
Know Your Risk Tolerance
Are you more hands-off preferring conservative automated options? Or do you enjoy frequently evaluating, trading individual stocks?
Seek Outside Input
A fee-only financial planner who specializes in goal planning and investments can provide an invaluable objective third party perspective.
Document Your Strategy
From your investment timeline, total portfolio target asset allocation, specific fund selections, rebalancing strategy and more, keep decisions written out as reference.
Embrace Teamwork
Leverage each other’s strengths. Maybe one loves tracking market news and performance while the other handles paperwork.
Estate Planning Considerations
Estate planning is easier to avoid but so critical for couples to handle. Don’t put this one off! Key action steps include:
Draft Your Will
Formalize in writing how you want assets distributed upon your passing. Name an executor to oversee the process and guardians for any dependent children.
Set Up Beneficiaries
For all retirement accounts, insurance policies and taxable investment accounts, confirm named beneficiaries are up to date.
Explore Trust Options
Property, assets and guardianship instructions can be outlined in legal trust documents for more control than a basic will.
Share Critical Information
Make sure you both know online banking passwords, credit card PINs, safe deposit box locations, etc. to ease stress during difficult transitions.
By handling this paperwork now instead of leaving loved ones to sort it out later, you save your family major headache and heartache down the road.
Strategies for Paying Down Debt
A sad reality about relationships is that they often come with debt. From student loans and credit card balances brought into the marriage to new debts accrued jointly, few couples manage to avoid this.
If you’re struggling with high interest credit card and loan payments, here is my tested plan of attack:
Tally Total Debt
Log all outstanding balances across student loans, auto loans, mortgages, credit cards, medical debt etc. List interest rates and minimum payments.
Shift Higher Rate Debt
Consolidate credit card balances to a lower rate personal loan or zero interest balance transfer card to save big on interest.
Pay More Than Minimums
With highest rate debt paid off or shifted, put any extra funds towards next highest rate debt each month to accelerate payoff.
Automate Payments
Set up auto-pay minimums on all accounts so no late fees undermine progress. Manually pay added amounts each month.
Celebrate Milestones
With each debt payoff, put those old monthly payments towards the next account. Watching balances drop quick keeps motivation high!
Navigating Major Purchases
Another financial challenge faced by many couples is navigating large purchases that impact joint finances – especially early on before solid systems are in place. Common scenarios include:
Buying Real Estate
Crunch the numbers to set limits on purchase price and monthly payments you can truly afford. Consult your budget, debt obligations and savings rate tradeoffs before committing.
Vehicle Purchases
Track reliability and fuel efficiency against sticker price when replacing an aging car. Weigh buying vs leasing options based on your driving needs.
Home Renovations
Getting aligned on project scope, timing around other goals, relying on savings vs debt, expected maintenance costs and ideal bid process is key for remodels.
Starting a Business
If one partner is pitching a new business venture, carefully evaluate the specific financial resources requested relative to your household’s risk tolerance, reserves and expenses before plunging ahead.
By proactively discussing factors like timing, affordability, risk mitigation for these big outlays, you can thoughtfully support each other’s goals rather than argue over impulsive spend decisions.
When Financial Priorities Diverge
Despite your best efforts, eventually you and your partner may find yourselves simply wanting to spend money in radically different ways. That wonderful tropical getaway sounds like heaven to you but utter agony to a spouse craving mountain hiking instead. Or perhaps one values providing direct support to family members in crisis while the other prefers setting healthier boundaries around financial enablement.
When fundamental priorities seem at odds, try these conflict resolution tips:
Pause and Listen
Rather than reacting quickly when tempers flare around conflicting money choices, press pause. Hear each other out fully on underlying interests and values driving you each towards divergent spending.
Identify Shared Interests
Chances are good you both share deeper goals around financial security, family wellbeing or lifestyle vision even when specific spending preferences differ. Connect on these.
Get Creative on Trade-Offs
Is there a version of occasional financial support for family that still works for the boundary-setter? Could beach and mountain locales be alternated to honor both visions? Find compromises.
Check Aligned Big Picture
Return to your joint financial plan looking at long term savings and retirement numbers. Will sporadic splurges actually undermine or be manageable relative to the big picture?
When Needed, Split Resources
As last resort, set aside some percentage of discretionary income as fully individual to use (or save) however each person wishes without needing to consult the other.
Maintaining Healthy Money Habits
Once you have financial systems firing on all cylinders – open communication channels around spending, aligned budget priorities, strong savings habits and investing wins – staying consistent with healthy habits is key. Don’t let inertia set in!
Conduct Regular Money Meetings
It’s easy to get lazy checking-in consistently as a couple on financial issues after the initial motivation fades. Push past the urge to let things coast. Revisit your budget, goals and investments in recurring meetings.
Make Plans Adjustable
Life changes mean financial plans need to as well. Major events like job loss or transitions, moves, growing families or even windfalls require reworking your budgets and timelines. Embrace course correcting.
Automate Everything Possible
From bill pay and debt payments to savings contributions and employer sponsored retirement plan increases, put your finances on autopilot so consistent passive progress continues even during busy seasons of life.
Keep Growing Financial Literacy
The markets, tax laws, banking products, risk management models, estate planning strategies – they all change continually. Commit to continually learning by reading articles, taking courses, or consulting paid professionals. Knowledge is power!
Avoiding Relationship Hurdles Around Finances
Even in the healthiest relationships, tensions can flare around money issues resulting in pain and conflict rather than unity and progress. Watch out for these common hurdles:
Separate Secrecy About Spending
Hidden credit card balances, secret loans or investments, withdrawals from joint savings for personal use – deception poisons trust and alignment around shared finances.
Fighting Over Financial Priorities
Partners lacking assertiveness skills to influence each other towards better decisions often resort to crushing criticism, play victim or give the silent treatment until the other gives in and does what they want.
Enabling Overspending
Spouses may consciously or unconsciously support each other’s shopping addictions or refusal to stick to budgets due to fears of disapproval, lack of security in the relationship or assumptions discipline shouldn’t be imposed.
Dependency and Control Issues
When one spouse takes over managing all household finances without input, the other loses competencies from lack of participation. Imbalanced power dynamics can also emerge.
Neglecting Shared Visioning
Partners fail to align on shared money goals like retirement dreams, wealth building or estate planning. Lacking vision provides no incentive to budget or sacrifice in the present.
Making a point to share financial information openly, resolve disagreements with effective communication tactics, say no to enabling behaviors, participate equally in money management and regularly connect on unified money goals will help you bypass these hazardous ruts others often slide into.
Benefits of Couples Financial Planning
- Achieve shared financial goals
- Increase savings through combined incomes
- Build wealth and stability
- Joint accountability
- Share expenses and taxes
- Plan for retirement together
Disadvantages of Couples Financial Planning
- Disagreements over money decisions
- Financial infidelity possibilities
- Shared debt obligations
- Complexity if relationship ends
Applications of Couples Financial Planning
- Crafting an aligned budget
- Paying off debt strategically
- Saving for major purchases
- Investing for the future
- Estate planning decisions
- Retirement planning
Conclusion: Continually Evolving Together
Here’s the simple truth about financial planning for couples – it’s a continual work in progress! Early on, just opening up initial conversations about money and making attempts at joint budgeting can feel like massive wins. As the years pass, you tackle more complex strategies around investing philosophies, managing insurance needs, estate planning conversations and adjusting goals based on changing life stages and priorities.
Rather than viewing the need to keep hashing out compromises around spending differences or the effort of having recurring money meetings as a negative, embrace this ongoing joint money journey! Handling financial issues will force growth for both you and your partner in communication skills, problem solving abilities, and closeness. Nowhere is the statement “the couple who plans together stays together” more true than with finances.
Rather than dreading money talks, use these critical conversations to better understand each other’s values, identify shared interests, get creative on resolving different priorities, become more empathic and patient, find new ways to align intentions, and ultimately deepen intimacy and trust through this embodied act of continually moving towards shared goals around finances.
So take heart! The effort is well worth it. May your money discussions become a source of strength, partnership and even greater connectedness in your relationship over time.
Now I’d love to hear from you! What money challenge are you and your partner currently tackling? Do you need advice or encouragement around budget disagreements, investing decisions, estate planning next steps or anything else? Let me know in the comments!
