A budget built for two: How to manage money as a couple
Managing your own finances can be challenging, so what happens when you add another person's money into the mix? Money management between couples varies – a recent TD Bank survey of people who are married or living with a partner reports that 82% share a joint bank account for household expenses like rent or mortgage, utilities, groceries and savings. But, 42% say they also maintain individual accounts outside their joint accounts for independence, personal spending, convenience and emergencies.1
However you choose to manage your finances, making these decisions early in your relationship can help avoid conflict in the future. Here are some tips to get you started.
Create a budget
Review household and personal expenses together and create a budget that works for both of you. If you want to maintain an independent account for personal expenses like hair care, clothing and gifts, be sure to make a budget for that account as well. And, in both accounts, be sure to leave some wiggle room for fun.
Set up a management plan
Decide if one or both of you will be responsible for managing bills and expenses. If it's both of you, set up a schedule to make sure everything gets paid, and consider using a budgeting tool like online Bill Pay to make it easier.
Make some ground rules
If you have a joint account, how will deposits and withdrawals be made? How much will each of you contribute to the account? These are just a few questions to ask, and the same goes for separate accounts – who will pay what bill, how will you access each other's account if necessary?
Build good spending habits and learn from each other. Your partner may be better or worse with money, so discuss challenges and share advice. If you both struggle with money management, consider attending a financial education class or seminar together.
How to talk about money
- What do you owe?
What are your outstanding debts? Who will pay those off?
- What’s your credit status?
What is your credit score? How many credit cards do you have? What are the balances?
- What do you make?
Who makes more money? Will that affect how much each of you pays towards expenses?
- What do you have?
Does one of you have a lot of savings? Is that now "shared" money?
- What are your goals?
How will you save for what's next? Discuss realistic savings plans for vacations, cars, homes, having a family and retirement