Five Steps to Financially Combine Lifestyles as a Couple

Five Steps to Financially Combine Lifestyles as a Couple

Properly managing money as a couple is not only a great way to reach goals as a team, but it’s also valuable to you and your partner as individuals. Setting, working toward, and achieving lifestyle goals together builds milestones that strengthen your relationship along the way.

This article provides five important steps to take to manage your money together like the rockstar couple you are.

Step 1: Have an Initial Chat

When it comes to money, honesty is critical. Start with a truthful conversation about finances with your partner. This will help you find out if the two of you make a good financial match. Many couples not only struggle with managing money together, but they also don’t have the same financial goals. In fact, being on the same page about money is so important that if you two don’t see eye to eye, there’s a good chance that your relationship won’t make it.

For example, if your ultimate goal is to save for retirement, but your partner’s is to spend every penny from every paycheck, there will be problems – and plenty of them – for certain. Save heartache and stress down the road by having a talk about money now.

Step 2: Set Financial Goals                                                                                 

Once you’ve determined that you’re both on the same page, decide some financial goals to work toward. There are three types: short-term, intermediate, and long-term.

Short-term goals: These are goals that can be achieved in one year or less. Examples might be building an emergency fund, paying off a credit card, saving for a summer vacation, or saving to buy a new computer. Focus on small goals that you can easily work on as a team.

Intermediate goals: These goals can be accomplished within three to five years. Saving for a down payment on a house or car, paying off student debt, or saving enough money to start your own business are good examples.

Long-term goals: These goals can be achieved in five to ten years. Envision where you see yourselves ten years from now – wherever that is, your long-term goals need to be the tools that take you there. These goals might be things like saving for your children’s education, paying off a mortgage, achieving financial independence, or saving for retirement.

Step 3: Create a Joint Budget

Always keep in mind that reaching financial goals isn’t going to happen overnight, and it will take self-discipline, honesty, and dedication to each other to make it work. Recognize that small daily decisions will snowball into big financial gains, and that’s what will win the future of your financial well-being, not to mention the future of your relationship with each other.

To reach your goals, you’ll need a workable budget. Get your goal numbers to determine exactly what you need:

  • Determine how much money you’ll need to accomplish each goal.
  • Divide each number by the years it will take to reach the goal. That will tell you how much you need to save each year.
  • Take that number and divide by 12 to see how much money you’ll need to set aside each month per goal.

Part of creating a budget is choosing a budget style, then sticking with it! Will you and your partner completely combine incomes, expenses, and savings? Will you share some of those, but not all? If so, which ones? Will you each maintain your own bank accounts and be responsible for your own expenses, but share savings accounts for goals? Regardless of which budgeting style you choose, you need to make sure you can easily track it.

Some of the best software programs for budgeting are ones that are simple. Google Sheets is an option if you prefer spreadsheets. Mobile apps like YNAB and EveryDollar are also popular budgeting programs you might like.

Step 4: Set Up Joint Accounts

A joint account for all expenses, incomes, and savings will make it easier for you both to contribute and manage finances. With a joint bank account, both of you will have access to the funds and have complete oversight over fund management. All money between you two will be in one “place”, making it simple to manage.

You might prefer to have separate accounts for income and expenses, then a joint account for saving for your financial goals. If both partners contribute to the savings account and rules regarding withdrawals are followed by both, this method works well for many couples.

Automation is everything; no matter what accounts you choose to share, always make sure you’re hitting your monthly deposit targets easily. Automate savings, automate debt payoff payments, and automate investment transactions. Arrange transactions to take place on or near paydays. This automation is important because the less you must think about your goals, the less effort it will require to reach them.

Step 5: Hold Regular Money Dates

Once you’ve decided on goals and have set up your accounts, be sure to meet regularly to discuss progress and check in with each other. You can meet once per month for this discussion, once each quarter, twice a year, or on some other schedule that works for the two of you. If you have a financial advisor, enlist his or her help to discuss progress at least annually. Be prepared to discuss anything that may affect your finances.

Optimize Your Wealth-Building Together

Managing money together as a couple is a great way to not only advance your relationship, but also to work together as a team to set goals. Your relationship will deepen as you set and reach goals together. It’s imperative that you communicate, automate, and check in with each other regularly.

An excellent option for saving to reach your goals is a high-yield savings account with high interest earning potential. As for checking accounts, look for options that do not charge fees or have low fees. The lower the fees are and the higher the interest rewards are, the more money you both will have to reach your goals.

Cristina Macias
Cristina Macias is a 25-year-old writer who enjoys reading, writing, Rubix cube, and listening to the radio. She is inspiring and smart, but can also be a bit lazy.