How to Manage Money as a Couple

Finances can be a large source of conflict in a relationship if you don’t address it beforehand. Often, couples’ conflicts center around how much to spend versus saving or fears of market volatility. Proactively working together as a team to make a strategy that works for your finances can reduce tension. 

First, understanding your partner’s financial priorities and spending style can help you work together to achieve financial goals. Read on for tips on how to manage money as a couple to simplify communication and make reaching your goals easier.

The Importance of Financial Management in Relationships

Financial management in relationships is essential for long-term success. Not only can finances become a major source of conflict, but if you and your partner aren’t on the same page, savings for big goals like a mortgage down payment can be more challenging. The faster you can get on the same page, the better.  

Strong financial management can mean you’re able to reach both big and small financial goals while building a lifestyle you both are happy with. This can include regular vacations, a comfortable home and significant retirement savings. Couples’ money management will also include trust, understanding and usually a discretionary fund for each of you to make financial management and budgeting sustainable. 

Tips for Managing Money as a Couple

If you’re ready to start managing money as a couple, the first step is communication. With a strong basis of transparency and communication, you can use the other tips to build toward shared goals. 

1. Open Communication and Transparency

The role of communication in successful financial management cannot be overestimated. Unstated expectations or assumptions can escalate into disappointment, distrust or disagreement. 

Setting the stage for open money talks starts with establishing that you’re a team. You both want to live an enriching, interesting life now while saving for the future. Like any good team, you might have to adjust your strategy for sharing finances with time, but teamwork is key. 

Then cover the fundamentals to ensure everyone is on the same page: 

• How much each of you makes
• How much each of you has in savings or assets
• How much each of you has in debt
• Are you already keeping a budget? 
• Do you know how much you spend each month?

Strategies for honest and constructive conversations about sharing finances start with the basics. Don’t come into the conversation with past grudges or in an emotional state. Instead, choose a time when you feel relaxed and level-headed to think. You’ll want to cover the basics of budgeting and long- and short-term goals. More on that in the next steps. 

When addressing disagreements and conflict, listening to the other person is key. A helpful strategy can be to reiterate what they said to ensure you understanding correctly. For example, you might say, “I hear you saying you need a minimum of golfing twice a week, or about $250 a month for golf. Is that right?” 

For conflict resolution, consider listing out possible solutions together and considering where each of you could compromise. Remember you’re on the same team and approach it as group problem-solving rather than one person on each side. 

2. Setting Shared Financial Goals

Once you’re on the same page about sharing finances, it’s time to identify short-term and long-term goals as a couple. The power of shared aspirations is in strengthening bonds. When you work together as a team for shared goals, you’ll get stronger as a couple. 

Practical examples of financial goals for couples include saving for a home, retirement and family planning. Next, you’ll break that down into specifics based on your budget.

3. Creating a Joint Budget

The basics of budgeting for couples include tracking how much you spend and how much you make to set a budget that allows you to reach your financial goals.  

To develop a realistic and effective joint budget, start by allocating funds for necessities. If you’re not already maintaining a budget, discuss a budget for basic essential expenses like food, housing, transportation, insurance and medical expenses. You can use budgeting apps to track expenses for a month to get an idea of how much you’re currently spending.

Once you know how much you need for basics, you’ll need to set a budget for savings, debt repayment and leisure with the steps below:

1. Long-term goals

Start with big-picture dreams to allocate discretionary funds: 

• What is your dream retirement lifestyle? 
• Where do you see yourselves at age 65 or 70? 
• How much do you need to save to reach that dream lifestyle?
• Do either of your employers offer 401(k) matching funds you can take advantage of?

1. Short- and medium-term goals

Then consider other priorities you want to save for right now, like a house downpayment. 

Questions to consider together include:

• Are you happy with your housing, or will you purchase a new house in the next five years?
• How much can you realistically spend on vacations each year? 
• Do you want to increase that vacation budget over time?
• If you don’t yet have children, are you planning to have them?  
• How much do you need to add to your budget for each child? 
• Will you save for kids’ college?
• What other savings goals do you want to prioritize as a couple?

1. Debt repayment

Finally, consider existing debt and how you will manage it as a couple:

• How much total debt do you have?
• What are the interest rates? 
• Do you want to keep paying the minimum or prioritize paying off all debt?

Once you have answers to those questions, you can work together to decide how much you’ll save each month for debt repayment, retirement, vacations, children and other goals. The remaining funds in your monthly budget are discretionary funds you can spend on entertainment, sports, recreation, clothing, housewares or anything else you agree on. 

To double-check these figures, you can also work backward with your current numbers for essential expenses, entertainment and discretionary spending and savings. Where could you cut back to save more or to ensure the two budgets match?

Remember that your budget isn’t static. Keep reviewing and adjusting as needed. Regular budget reviews and adjustments as lifestyle changes or earning changes can ensure you’re still on target for your goals. Consider reviewing your budget each time you have a change in earnings or every six months. With each review, reallocate your budget and adjust goals as needed. 

4. Choosing Joint or Separate Accounts

Couples may choose joint or separate accounts or a combination of both when sharing finances. Joint accounts can simplify managing income and expenses, while separate accounts give each person some personal funds and flexibility. Each has pros and cons, so choosing joint or separate accounts depends on your personalities, relationship and financial goals.

For many couples, the right balance involves maintaining individual financial autonomy within joint goals. This could be a joint account for shared expenses and separate accounts for personal discretionary funds. While these funds may be small, they give each person some money for hobbies, clothes, sports or interests. Alternatively, you could have shared savings and retirement accounts and separate checking accounts.

Some couples choose only to have joint or separate accounts. Each couple will need to find the balance that works for them. There are no right or wrong answers, and you could try out different solutions to decide what works best for you. 

5. Designating Financial Responsibilities

Everyone has different strengths and weaknesses. Identifying each partner’s financial strengths and interests can allow you to capitalize on strengths. For example, if one partner is great with budgeting and another is more interested in investing, you could divide responsibilities along interests. 

Dividing financial tasks like bill payments, expense tracking and investments can ensure nothing slips through the cracks. The art of delegating and collaborating for efficiency means that both of you can use your strengths while working together for shared goals. 

6. Building and Maintaining an Emergency Fund

When planning your budget and savings goals, building an emergency fund for weathering financial storms is essential. The amount will vary by couple, but many financial experts recommend three to six months’ worth of expenses in an emergency fund. 

Setting up and growing an emergency fund as a couple can be one of the first short-term financial goals you achieve together. To avoid emergency fund depletion, replenish funds after you use them. Depending on the amount, this could take a couple of months. Whenever you have to use the emergency fund, temporarily divert savings goals to that fund until it’s replenished, allowing you to always have an emergency cushion without tapping into retirement savings. 

7. Tackling Debt Together

Addressing existing debts as a team and creating a debt repayment plan is important. Prioritize paying off high-interest debt like credit card debt and then decide how fast to pay off other debt like student loans.

To increase motivation, celebrate milestones and progress toward debt freedom with a special meal out, flowers, special food or other meaningful celebration. Work together to avoid taking on debt without a conscious plan. Support each other to avoid high-interest debt and prioritize savings. 

8. Exploring Investment Opportunities

Investing can be an important part of growing wealth as you build retirement savings. Work together to understand investment options like stocks, bonds, index funds, exchange-traded funds (ETFs), mutual funds, real estate and other alternative investments. Then, consider diversification and risk management in investment decisions and diversify across asset classes and investment types. 

You’ll need to decide whether you plan to make investment decisions together or whether one person will manage investments. However you manage investments, the benefits of financial growth through investments are significant. With consistent savings invested across a diverse portfolio, you could make hundreds of thousands of dollars over your lifetime. 

9. Regular Financial Check-Ins

Establishing a routine for periodic financial discussions is important for couples, even if you’re maintaining your budget and hitting financial goals. You can schedule a check-in once a month or every few months. You can track progress, reassess goals and adjust your financial strategy during check-ins. 

Even in between check-ins, keeping the lines of communication open and active is essential. Talk to each other and support one another to maintain the budget, hit savings and earning targets and work to reach financial goals. 

10. Seeking Professional Financial Advice

Some couples will need to consider professional help from financial advisers or planners. Professional advice can enhance financial literacy as a couple.

Getting help can be especially valuable during transitional times, such as when you’re getting married or before the birth of a child. Expert guidance in complex financial situations can offer insights or suggest financial strategies you hadn’t considered as part of your long-term plan. 

How to Handle Finances in a Relationship

Handling finances in a relationship will look different for each couple, but there are common themes. Achieving financial goals as a couple is rewarding and can strengthen your relationship over time. The keys come down to communication and working together. When you capitalize on your individual strengths while setting shared goals, you can work as a team to reach both short-term and long-term financial goals. 

Frequently Asked Questions