Being a couple is more than just fun times. When a relationship moves forward and people decide to live together, you’re both facing more serious topics such as house chores and handling finances together. We all know there is no such thing as free money so, if you and your partner are having a hard time paying the bills and saving for two, check out these handy money management tips.
What to Do if Your Incomes are Equal?
If you and your partner are receiving a very similar income, then this situation can be easier than you think for the both of you. Since your earnings are practically half of a whole, then the best solution would be to split your expenses two ways, making sure each one pays the same amount of money for utilities, groceries, vacations, etc. A great way to keep control of this method is by opening a joint account where the two of you contribute the same amount.
What to Do If There’s a Big Difference in Your Income?
If one of you makes more money than the other, that could be a bit trickier, since trying to split things in half could create a financial and emotional strain on the relationship. When this happens, you might want to consider taking on different responsibilities and cover them completely. For example, the one that makes the most covers the most expensive bills while the other person covers smaller expenses such as groceries or date nights.
What to Do if There’s Only One Income in Your Household?
It’s not uncommon to find couples where one person supports the whole family, while the other one takes care of the house and children. In this scenario, both of you need to be very careful not to overdo your expenses and purchase unnecessary things. If you’re very careful with your money you’ll even be able to save a bit each month for leisure activities.
Related: 8 Effective Money Management Tips
Money Management Tips for Couples
Because there is no free money it is probably the main topic why couples argue. If you want to have this situation under control, try applying one or more of the following tips.
1. Take Turns at Paying for Groceries
Some expenses are not fixed; such as utilities and rent, which makes them a bit more flexible in terms of who can pay them. If you and your partner haven’t decided on the smaller purchases, you might want to take turns and keep track of who paid what last time. When you have to get groceries (which can be a weekly or bi-monthly trip), each of you can cover the expense. It won’t be the same amount each time, but it’s a way of equally splitting this duty.
2. Split the Bills by Percentage
A great tip for couples that don’t earn nearly the same amount of money is to split their bills by a percentage. Start by adding up your incomes, which will result in a 100% total, then do the math to determine what percentage of the total income each one brings. With this percentage, you’ll know exactly how to split any bill or unexpected expense.
3. Open a Joint Bank Account for Important Expenses or Savings
Even if you don’t feel the need to fully merge your incomes and expenses, every couple needs to bring their best to the biggest and most important projects. If you want to buy a house, get a new car, or take your dream vacation, you’ll definitely want to create a joint account where both of you can pitch in.
4. Make Sure Both of You Have Spare Money Individually
Even if a couple wants to manage their finances as a whole, it’s still important that you keep a certain amount of money for individual activities. Whether you contribute to a joint account and keep separate savings accounts or you set an “allowance” for both of you.
5. Be Transparent about Your Spending
You need to start exercising full transparency as a couple, especially if you’re going to be managing your finances through a joint bank account. There should be no secret purchases, you both need to set a spending limit for all sorts of things (eating out, trips, leisure activities, coffees) and agree together on how much money should you both save each month.
6. Download an App to Manage Your Expenses Easily
If keeping track of your personal finances is hard, keeping track of income and expenses as a couple is even trickier. But you can handle this challenge easily by using a personal finance app where you and your partner can see who made which expenses, what utilities need to be paid, and how much was left for you to transfer into your individual accounts.
7. Make Sure Both Partners are Involved in all Financial Decisions, Even if There’s Only One Income
There’s a misconception that when a couple consists of one working partner and one stay-at-home partner, the one who works makes all the decisions. Truth is, both parts should be fully involved in financial aspects since these decisions affect them both. Make sure both of you set spending limits and saving goals so you achieve them easier.
8. If One of You is Better at Saving or Investing, Let Them Take the Lead
Sometimes in a couple, you’ll find a big saver and a big spender. It’s important that you know each other’s strengths and delegate. If your partner is better at saving money than you, have them handle your emergency funds. Similarly, if you’re better than your partner at how to invest money; like how to invest in stocks, for example, then you might want to take care of that task for both of you.
There’s no fool-proof way to manage your finances because there are no two identical couples. Also, there is no such thing as free money so it is essential to manage what income you do receive. This means budgeting expenses and knowing how to invest money and how to invest in stocks. With these tips, you can start creating your own financial management method and get the stability you need.