You are now leaving our website and entering a third-party website over which we have no control.
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?
People who are married or living together as partners may share a joint bank account for household expenses like rent or mortgage, utilities, groceries, and savings. They might also maintain individual accounts outside their joint accounts for independence, personal spending, convenience, and emergencies.
Arrangements can vary, but this concept remains true: Budgeting for couples requires communication, planning, and compromise. Here are some tips for how to manage money as a couple:
Create a budget
The basics of creating a budget for couples are like what a single person would go through, except that there could be twice as much information to process. This could require multiple conversations about goals, priorities, values, and compromises.
Here's an outline for the basic process for forming a monthly budget:
-
Gather financial documents. This could include bank and credit card statements, bills, pay stubs
-
List all sources of income
-
List and review all savings and investments
-
List and categorize all expenses. These typically include fixed household expenses, such as rent, utilities, internet and cell phone service; debt payments for things like school loans, vehicles and credit cards; variable expenses like groceries and entertainment; and savings
-
Determine the amount available for things like savings and non-essential spending. Subtract total expenses from total income to determine what's left for other types of spending. You can leave room in your budget for fun
Couples may find that developing a budget requires a series of conversations about important matters:
-
Will they maintain joint accounts, personal counts, or both, for banking?
-
One person might make much more money than the other. How will they split up the funding of joint costs and personal expenses?
-
If one partner has a personal debt load, like a college loan, do they share responsibility for paying it back?
-
Each person could have vastly different spending habits. How do they account for that in the budget?
-
If one person simply must spend money on a hobby or cause that the other thinks is a complete waste of money, how do they compromise?
Make some ground rules
A budget for couples could be meaningless without an agreement on ground rules. These conversations are important to managing money as a couple.
-
Option one: create joint accounts. These accounts are used for all expenses and savings. Each partner contributes their own money to it
-
Option two: maintain separate accounts. In this case, each person takes responsibility for certain expenses
-
Option three: develop a hybrid arrangement. The couple could use joint accounts that are dedicated to certain expenses and savings goals, while both maintaining separate financial arrangements for personal spending
Each arrangement has its strengths and weaknesses and requires serious discussions and possibly some compromises. Each option might be easier to follow if the goal of your monthly budget is to always have your income exceed your spending. It’s when your spending outpaces your income that budgets and ground rules are really put to the test. The key to controlling this is to always maintain open communication.
Part of using a budget is reviewing it regularly, at least once a month. The budget review is a good opportunity for partners to communicate about their finances, goals, and progress toward their goals. Financial circumstances can change frequently. These regular talks can help to bring couples together as they assess the changes.
Set up a management plan
If you think of a joint budget as an ongoing project, then you'll probably need a project manager, or managers.
Sticking to a budget takes some effort—paying bills on time, tracking spending and savings, monitoring credit scores and reviewing credit reports, making sure a free trial subscription doesn’t turn into a monthly payment, even celebrating success.
Two heads are better than one, but not if one head assumes that the other is taking care of something. Part of the initial budget development is assigning and accepting responsibility for the various household finance chores. Couples typically have more budgeting successes to celebrate if they both agree on a finance management plan.
Work together
If couples can learn to work together on money management, it can not only strengthen their finances, but also their relationship.
A monthly review is one example of working together. Another is to come to agreement on defining needs versus wants as you set budget levels and goals. You can reach consensus on what’s important and what’s not. For example, discuss the spending levels for dining out and cooking your own food.
It can help to play to one another’s strengths. The master of details might pay the bills, set up autopayments and review bank and credit card statements. Meanwhile, the tech wiz finds budgeting tools and manages the use of credit cards that offer travel rewards and points.
Also, working together is more enjoyable when partners recognize one another’s efforts. 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.
Use budget tools
Many banks provide mobile apps and online banking services that can be a big help with budgeting. There also are several online tools for budgeting, including some that are designed specifically for couples. These tools could, for example, help a couple create a budget, collaborate within accounts, track spending, and split transactions.
FAQs
There are several effective methods for splitting expenses, and the best approach depends on your income levels and preferences. The straightforward 50-50 split works well, especially when both partners earn similar amounts. If incomes differ significantly, consider proportional splitting based on earnings. For example, if one partner earns 60% of the household income, they might pay 60% of shared expenses. Many couples set up a joint account for shared expenses, while maintaining separate accounts for personal spending. Remember to discuss and agree on what constitutes shared versus individual expenses.
The choice between joint, separate, or hybrid accounts depends on your communication style and financial goals. Joint accounts promote transparency and can help build financial trust in a relationship. They encourage open communication with all transactions visible to both partners. They simplify bill paying and help couples work toward shared goals. However, joint accounts mean less privacy, as both partners can see all spending in the account.
Many successful couples use a "yours, mine, and ours" system. This hybrid approach combines joint accounts for managing shared expenses with separate accounts for personal spending, offering both transparency for household finances and individual autonomy. The key is choosing a system both partners feel comfortable with and can manage effectively.
This is a common issue that’s manageable with open communication and compromise. Start by having honest conversations about your financial values, goals, and triggers. Schedule regular financial reviews to discuss spending patterns and help each other stay on track while giving space for individual priorities. It might help to create "fun money" categories in your budget so each partner can spend guilt-free on personal interests without judgment.