How to Make Household Finances Work as a Couple

Managing household finances as a couple can be stressful. Suddenly, you have to merge different spending habits and savings patterns. Both partners need to agree to a shared system of bill payment, savings and budgeting. Although the percentage of U.S. households with dual earners hit 60 percent in 2012 from just 25 percent in 1960, according to Pew Research, money is still a source of contention in modern families. In a recent survey by Chase Bank, three out of four millennials and Gen Xers admitted to conflicts with their spouse over money matters. Working out the differences won’t be an overnight process, but if both partners are willing to search for the middle ground, you can achieve your financial goals together.

Evaluate Your Income

No couple is perfectly balanced in terms of savings and income. Deciding how you’ll divide up the bill payments and savings contributions may depend on a host of factors such as each partner’s income, child care and grocery preferences. First, set goals for the big items, like 401k savings, a down payment for a house or kids’ college funds. Next, take a look at what’s left, and set up a budget for spending. Lively debates may happen, but talking through money issues is important, as is arriving at a solution you’re both happy with.

To Join or Not to Join?

Couples don’t necessarily need to join every account from the get-go, but in some cases, combined accounts are a better fit. Evaluating the benefits of both combined and separate accounts can help determine which option works best for you.

Benefits of Joined Accounts:

  • Efficiency: If accounts are joined, there will be fewer to manage.
  • Transparency: Combined accounts give each partner access to total balances. This makes it easier to see where you stand financially, as a couple, at any given time.
  • Growing Savings: Larger savings balances may give you access to better interest rates.
  • Career Change: When one of you scales back their work to care for your family, it may be easier to deal with income inequality if you’ve already combined your accounts.

Benefits of Separate Accounts:

  • Maintains Financial Independence: For many people, maintaining some degree of independence is important, even as part of a couple.
  • Limits Discussion Over Minor Expenditures: Rather than tracking every dime spent, separate accounts give each partner some freedom in spending.
  • Forces Both Players to Remain in the Game: If each partner has some control over their money, they’ll be engaged in how the household finances are managed. With a joint account, there may be a temptation for one partner to tap out and avoid taking responsibility for savings and spending.

If you’ve decided to gradually combine accounts, start by opening one joint account and diverting an agreed-upon portion of your paycheck. Set an amount for discretionary spending that you don’t need to talk about as a couple, and leave it at that. As you grow more comfortable with each other’s spending habits, you may be more willing to pool your resources toward a greater goal.

Deciding Who Manages What

To promote efficiency, one of you may take over management of household finances. Alternatively, you can split the work — one person handles bill payment, while the other takes on investments, for example. Make a list of your monthly expenses to ensure nothing slips through the cracks. Money management takes time and effort: Both partners should acknowledge this, no matter who ultimately does the work.

Setting a Long-Term Strategy

A lifelong savings strategy helps both of you keep the end game in mind. Ideally, you want to retire comfortably together and support your family financially. Put together a clear savings plan, and arrive at big financial decisions together. Even if you aren’t the person actively managing household expenses, take an interest through active discussion so that everyone’s aware of your current financial picture.

As part of a couple, you’ll need to work toward common goals. You’re no longer facing life’s financial ups and downs alone. Teamwork is the best way to get you where you need to be, no matter how you decide to iron out the details.

Thank you for subscribing!

Never miss a post with tips, inspiration and insights sent straight to your inbox.
Never miss a post with tips, inspiration and insights sent straight to your inbox.