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How to Manage Money as a Couple

May 29, 2024
Couple sitting next to each other, reviewing their finances together

If you’re in a committed relationship, then congratulations! Love is a beautiful thing. But relationships aren’t as simple as living “happily ever after.” They take work, compromise, and financial planning — things Disney never told you about.

The good news is, these things don’t have to be unpleasant. In fact, planning out your finances as a couple can actually strengthen your relationship. So, let’s discuss money management for couples, helping you and your partner get on the same financial page.

Start the Money Management Conversation in Your Relationship

Whether you’re dating, engaged, or a married couple, learning how to manage money and develop financial trust is essential to any serious relationship. Without financial harmony, there will be friction over how to spend money, when to spend money, and what to spend money on. This can lead to a great deal of stress and aggravation, and could potentially end your relationship. Like it or not, money is very important to our overall sense of well-being.

Recognizing Money Personalities

Money management isn’t just about making rational decisions. Everyone has their own tendencies when it comes to spending money, influenced by psychological mechanisms. In fact, there are five distinct money personalities: big spenders, savers, shoppers, debtors and investors. Let’s explore each one and the psychology behind their financial habits.

Big spenders are more than comfortable spending money, often splurging on the latest and greatest cars, clothing and technology — or even experiences. They tend to value ‘statement’ purchases, identifying with their possessions or spending habits.

People who are big spenders may be trying to prove something to themselves or the world around them.

Savers are the opposite of big spenders, gaining satisfaction not from possessions but from frugality. Savors don’t accumulate much debt — if any at all — and tend to stretch their budget by capitalizing on sales or prolonging their ownership of things.

For savers, creating a safety cushion for themselves or their family is very important, and any compromises to that plan can feel threatening.

Shoppers feel good about buying new things, especially at discounted prices. Unlike big spenders, shoppers usually make smaller, more frequent purchases — sometimes buying unnecessary items against their better judgment.

In many cases, shoppers may feel a temporary high from their purchases, offering excitement, engagement or distraction as a coping mechanism.

Debtors spend money excessively, racking up debt without thinking twice. They don’t make purchases as a statement — or even to feel good — but rather have a blatant disregard for their financial limitations, living beyond their means.

Oftentimes, debtors gravitate toward instant gratification, choosing to ignore complicated or unpleasant issues in favor of pleasurable matters.

Investors are highly aware of their financial outlook, actively planning or monitoring their investments. Most investors are quite strategic and are willing to take on a certain degree of risk with their time and money.

People who are investors often love the idea of using savviness to get ahead, and want to create a better life for themselves and their families.

Talking Money With Your Partner

Understanding the financial tendencies of yourself and your partner — and the underlying psychological factors at play — will help you frame not only your spending habits, but your overall lifestyle.

Try using these revelations to have an open and honest dialogue with your partner, discussing what sort of goals and spending habits are important to you. If your expectations aren’t aligned, this will give you an opportunity to come to an understanding. It’s important that both of you are open to compromise, taking into consideration that it’s okay to have a balance of different money personalities.

Setting Shared Financial Goals Together

Set healthy expectations with your partner about your finances — making sure you discuss both short-term and long-term goals. While your near future may be more exciting, it’s just as important to start planning out your vision as a couple 10 or even 20 years from now.

Short-term Goals

Short-term financial goals are relatively small and easy to predict. You’ve probably set many short-term goals for yourself over the years — from funding a downpayment on a new car to planning out your next smartphone upgrade.

As a couple, your short-term goals may look a little different, often benefiting your situation together. These goals may include saving for vacations or a down payment on a house, improving your credit, or other plans that can be achieved within a few years.

Long-term Goals

In contrast to short-term goals, long-term financial goals are bigger in scale and take longer to achieve. These goals won’t be as instantly gratifying, but they’re essential to your extended success as a couple.

Your long-term goals might include building up a college fund for your kids, paying off your mortgage, saving up a million dollars, or other objectives that could potentially take many years or decades to accomplish.

Combining Your Bank Accounts

Should you combine your bank accounts or to leave them separate? Many couples ask this question, and research indicates that it’s better to have at least one joint bank account. Why? Because the transparency of having a joint bank account leads to more trust and accountability in a relationship. If there is any controversy over spending, it can be addressed almost immediately.

By contrast, couples using separate accounts can hide any spending that isn’t agreed upon, sometimes for years. This can lead to a great deal of suspicion, mistrust, or even resentment — especially if funds aren’t used wisely.

Although every situation is different — and there’s no one-size-fits-all when it comes to relationship advice — a willingness to pool funds and share resources is a good indicator of trust and commitment.

It’s easy to open a joint bank account, such as an Advantage Savings Account with compound earnings or a Free Checking Account with no minimum balance and no monthly maintenance fees. Simply sign up with both your name and your partner’s name, and you’ll both get access to the account.

It’s easy to start funding your new joint account. If you receive traditional paychecks, use DCU’s Online Deposit to conveniently make deposits wherever you are, at any time, or head to one of our branches or ATMs. If you receive direct deposit, you can talk to your employer about designating all or a certain percentage of your paycheck to your new joint account. Making adjustments to your direct deposit information is usually as simple as filling out a form.

Saving for Your Joint Future

To build a happy life together, you don’t want to just scrape by with your finances. It’s important to accumulate some savings, letting you feel comfortable in case of a financial setback, or allowing you to afford a few luxuries.

The Importance of Emergency Funds

Life happens, and it's crucial that your bank account can withstand the ups and downs. From medical emergencies to home repairs, automotive issues, loss of income, and more, there are plenty of unexpected scenarios that could unfold over time. With the proper cushion, these situations could seem catastrophic, adding a great deal of stress to your relationship.

While unexpected expenses are never fun, they’re a lot more manageable when you’ve built up an emergency fund to account for them.

Investing in Shared Dreams

Saving as a couple isn’t all about preparing for a rainy day! In fact, it’s just as important to enjoy your money — using it to gain satisfaction out of all your hard work. This relates back to your discussion about short-term financial goals.

So, whatever those goals may be — from enrolling in school to traveling the world to saving for a dream wedding — a good savings strategy can make them happen. Achieving your short-term financial goals is great for the relationship, not only serving as a shared accomplishment but also helping you live the life you’ve envisioned.

Tackling Debt as a Team

Whether it's acquired inside or outside of the relationship, personal debt can impact your partner, especially when applying for loans or credit together. However, as a team, you and your partner can come up with a plan to alleviate debt.

A good first step is to identify all of your debt, prioritizing what needs to be paid off first — such as high-interest loans and credit cards. These accounts tend to cause more financial burden, as a large portion of your monthly payment goes toward the interest, not the amount borrowed.

To start paying off debt faster, there are several different strategies you can take, such as increasing your payments or refinancing your loans.

Increasing Payments

If you can find the extra money, making larger or more frequent payments is a great way to get out of debt. This helps you pay down the amount borrowed faster, cutting short your interest payments.

To make this happen, you can set repayment goals for yourself — such as making two payments a month instead of one, rounding up your payments, or even making one extra payment each year.

Refinancing Loans

If you’re paying off a high-interest loan, you may be able to find a lower interest rate — and a bank or credit union that’s happy to help you refinance. DCU offers a fast and painless way to refinance your mortgage, refinance and consolidate your student loans, or refinance your auto loan.

By refinancing at a lower rate, you could potentially save hundreds or even thousands on interest. It’s definitely worth exploring, especially if you’re not happy with your current loan.

Retirement Planning: A Team Effort

One of your most important long-term financial goals, it’s absolutely essential to put together a good retirement plan with your partner. Unfortunately, most people aren’t saving enough for retirement these days, leaving their golden years in jeopardy.

While planning out your future retirement might not seem pressing — especially if it's still decades away — your future self will thank you for it. Talking to your partner about retirement and other long-term goals can help shape a full, happy life for yourselves.

The key to retirement savings? Starting early! The more you start saving now, the more you can get interest to work for you — especially years down the road when you start accumulating serious money in your account.

Talk to your partner about starting a retirement fund today, such as a federally-insured retirement account from DCU.

Navigating, Revisiting and Adjusting Your Plan

Your money management plan is never going to be as easy as setting it and forgetting it. It should be monitored and adjusted when necessary — making sure that your goals are still relevant and that you’re on track to achieve them.

Regular Check-ins

No matter what sort of goals you and your partner have, it’s important to continually track your progress. This may seem obvious for short-term goals where time is of the essence, but it’s also an important step for long-term goals, where the end point is years or decades away. This allows you to evaluate your progress and make any necessary adjustments.

Adapting to Changes

Your financial plan shouldn’t be set in stone — it needs to be flexible enough to accommodate new or changing interests. For instance, if you and your partner have a child, your financial landscape will certainly change. You’ll have to come up with modifications to your plan, such as reallocating some of your funds and efforts.

Whether having children, buying a house together, getting a promotion or new job, or relocating out of town or out of state, there are plenty of new chapters that may arise in your life together. New opportunities can be a wonderful thing, but it’s important to adjust your plan when they popup. That way, you and your partner can work toward achieving your newest, most relevant vision.

Wherever Life Takes You, We’ll Be There

At DCU, we believe in building meaningful, long-lasting relationships. As you start planning out your life with your partner, we want to be there for you along the way. Consider applying to be a DCU member today, gaining access to a lifetime of friendly advice and beneficial services.

Want to learn more about personal finance? Check out our Financial Education Center now!

Please note, membership is required to open a DCU savings account. Visit our membership eligibility page for more information.

This article is for informational purposes only. It is not intended to serve as legal, financial, investment or tax advice or indicate that a specific DCU product or service is right for you. For specific advice about your unique circumstances, you may wish to consult a financial professional.

*The national average annual percentage yield ("APY") for savings accounts is updated monthly, please refer to the Federal Deposit Insurance Corporation.