5 Tips for Couples Managing Finances Together

It can be a challenge to track your own spending and stick to a budget. Add a second person to the mix and it can get even trickier. You might think it’s no big deal to drop $100 on a pair of shoes, but your partner might think it’s way too much. When you and your partner can talk openly about money, you can reduce potential conflict and at the same time get comfortable with where your financial lives are headed.

1. Start Talking

“Being willing to share your financial picture with another person helps build trust,” according to Mandi Woodruff, chief consumer advocate at Ally. Talking about money is the first step to financial planning as a couple. It can be uncomfortable – most Americans are taught not to talk about money – but you need to understand each others’ financial position so you can build a stable budget.

2. Keep Talking

The money conversation shouldn’t be just a one-time thing. Set up regular “dates” where you discuss finances, see how you’re progressing toward your goals, and then make any adjustments. Talking steadily helps normalize the money conversation and helps avoid surprises.

3. Track Your Spending

Both of you should track your spending for several months in a row. This helps you understand where your money goes. You can then find areas to cut back on, if necessary, and then create a real budget that you can stick to.

4. To Merge or Not to Merge

There are three common approaches to budgeting as a couple:

• Merge everything together and share income and expenses;
• Create a joint account that you both contribute to for shared expenses while also keeping separate accounts; or
• Keep everything in separate accounts and split the bills.

You might consider, for example, splitting expenses 50/50 if your salaries are about equal, but if one earns a lot more then perhaps that partner would pay a larger percentage.

5. Set Goals

You and your partner will have some shared savings goals, like a wedding or buying a house. You’ll also each have individual goals – maybe one wants to save for a vacation but the other would rather buy a car. You can have different goals, just make sure you’re honest about them and then document your spending and savings habits as you work toward them.

Visit the Servion Financial Advisors website for more tips.