Originally published Feb. 24, 2017.
You may have mastered budgeting for yourself at some stage in your life. However, things will likely get more complicated when you start sharing finances with a partner. Budgeting for couples may not be easy, but it’s important to approach the way you manage money as a team, especially if you’re living together or are planning to get married.
Although I’ve been married for several years, my husband and I only recently started seeing eye-to-eye on this topic. And it’s not for a lack of trying. The plain truth is this: Creating a budget is a process.
Are you and your partner ready to discuss budgeting for couples? Here are some tips to help you get started, broken down by what “phase” your relationship is in:
- Phase 1: Budgeting for new couples
- Phase 2: Cohabitation might be imminent
- Phase 3: Committing for life
- Plus: Remember that life happens in seasons
The way you talk about money together will change as your relationship evolves. Budgeting for unmarried couples usually doesn’t involve a merging of finances, but you might share some expenses. And as your relationship gets more serious, it’s important to start broaching the topic of money.
Here are three tips for the early going:
Feel each other out, as creating a budget takes more than a couple of conversations. Treat this as a getting-to-know-each-other process, one that could even be enjoyable if you let it.
Not ready to talk about specific numbers? Figure out what your relationship with money is like. If you’re not sure, a great way to find out is by talking to your partner. Try word association, or talk about what your family’s financial situation was like when you were growing up.
Getting to know this about yourself and each other can pave the way to productive teamwork when you create a budget later. You’ll be able to work with more than just numbers – you’ll understand why you have the habits, feelings and thoughts you have about money.
The longer you go without expressing the money confessions you’re scared of, the harder it will be. Now that you’re warming up to money conversations together, get those hard discussions out of the way.
It’s not easy to admit to having student loan or credit card debt, or not having a savings account. But these things don’t make up the fabric of who you are. They are circumstances in your life. And, if you work hard at them, they won’t be in your future for too long.
If you really can’t bear the thought of divulging the money skeletons in your closet, this could be a catalyst for change. Part of the fear could be that you don’t have a plan for this money issue yet. If you sit down and strategize a plan, then you can make the money confession and confidently say, “I’m doing something about it.”
On the flip side, opening this up for conversation provides an opportunity for you to collaborate together on a plan.
Just like you wouldn’t want your partner to judge you for your money confessions, you shouldn’t judge them for theirs. Be as open and receptive to your partner as you want them to be in return.
Additionally, keep in mind that you’re not married yet. If your partner doesn’t have a plan, be there for emotional and strategic support. There’s no need to freak out about their money situation because it’s not yet yours. By the time you get really serious and create a budget together, the entire scenario might look different.
Are things starting to heat up in your relationship? Have there been talks of engagement or moving in together? If so, then it’s time to get down to numbers. Even if you don’t get married, moving in with someone creates legal responsibilities that you should be ready for.
Here’s what to consider:
If you’re apartment shopping, then it’s time to create a budget for the apartment – decide on the maximum you’re willing to pay for rent. How much are both of you comfortable paying? How do you want to split it up?
I remember doing this with my now-husband and finding out that our comfort levels were very different. I wanted to spend 20% less on rent than his number – but he wanted certain accommodations that couldn’t fit into mine. While I was pretty stubborn at first, we ultimately decided the right compromise was to go with his number but split the rent 75/25.
This was very hard for me. As an independent woman who’d been making her own way for 28 years, I wasn’t happy about paying less. I believed that costs should be 50/50 until we made a permanent commitment and a decision to pool our money together. I know I’m not alone here.
Kara Perez, founder of financial literacy site for women, Bravely Go, talks about how she and her boyfriend worked through a similar situation. He earns more than she does, especially since she recently started her own business.
“My boyfriend making so much more than me does chafe at me,” Perez said. “I’ve always been independent and I work my butt off as a freelancer. We talked a lot about shared goals and balancing both financial and household responsibilities. Ultimately, we decided to split rent evenly and have him pay 70% of utilities and internet.”
Whatever you do, create a budget for the apartment before you actively search for one. Because once you see a place and fall in love with it, this can be a lot harder to do.
Remember the money confessions section above? Well, if you didn’t do it early on, do it now. Do not enter a legal agreement with financial repercussions until you know what the other person signing the document can or can’t do.
Ask your partner directly if they have debt – and be willing to answer the same question. Ask about charged-off accounts, collections, credit scores and savings.
You wouldn’t want to apply for an apartment together only to realize that your partner’s credit score is too low to pass. And you certainly wouldn’t want to enter into a lease only to find out that your partner can’t pay.
That could spell the end of your relationship and your finances.
Before you sign the lease, talk about all the financial details. And be willing to confess to your own potential troubles. The truth will eventually come out, so make sure it comes out in a way that’s productive, not after the fact.
Once you move in together, pay your rent and utilities together. This is great practice for beginning the regular money dates you should have if you ever combine your finances.
Pour yourselves some wine, or take yourselves out on a date. Do whatever you can to make it a less daunting experience. As you pay your rent and utilities together, use that as a time to talk about your financial fears, goals and immediate issues.
This is the time to admit if it was hard for you to come up with your portion of rent or groceries. Or it could be a great time to talk about saving or paying off debt. Just keep practicing getting these topics out in the open as often as possible. It will make it a lot easier to work as a team the longer you do this.
So far, we’ve talked about how to approach budgeting for unmarried couples. But once you’re married, engaged or “unofficially officially” committed, it might be time to start talking and acting as one unit in your finances, just like you do in life. Here are some steps as you build your lives together:
This is one of the most debated topics on couple money: how to combine your accounts (or not). There are a few ways to approach it.
- All joint accounts.
- All separate accounts.
- Joint accounts and separate accounts.
The first two should be fairly obvious. Couples who want no financial secrets or mystery go all joint accounts and couples who want total autonomy choose all separate accounts. Why would anyone do a hybrid approach? Usually, it’s to keep a joint account for paying major bills or saving together, while keeping a separate account for daily expenditures you don’t want to be held accountable for all the time.
There’s no right or wrong answer to which you choose. Just remember that you still need to be on the same page in your finances, even if your finances aren’t all on the same bank statement. Certified financial planner Dylan Ross explains the idea of a “household” spending plan:
“Just because you keep separate finances and each have your own account, that doesn’t mean you can’t create a ‘household’ spending plan based on the combined amounts,” Ross said.
According to Ross, this joint plan can be done with or without joint accounts:
Combining total amounts for the purpose of developing a household-level spending plan can help to make sure nothing gets overlooked. And because spending plans need to be flexible and may change often, having a single plan for the household should be easier to maintain than separate budgets, even if you’ll continue to maintain separate accounts.
Once you’ve decided on the logistics of your financial accounts, it’s time to talk about your common goals. Here are a few to decide on together:
Then, you’ll want to create a budget itself. After you pay all your monthly bills, how much is left over? If you have annual or quarterly bills, it might help to divide them into their monthly cost and budget for them that way. Then decide how to allocate the leftover money.
This is where you’ll have to make some compromises. Your first priorities aren’t always going to be the same, so if you can’t decide on the same priorities, split the difference. Apply partial amounts to each of your top priorities so both of you are heard and working toward something that’s important to you.
Have your spending plan under control? Great. Now you just need an easy way to stay on top of it together. Finance writer Carrie Smith Nicholson talks about the journey she and her husband took to get on the same page.
“One area of budgeting that the hubs and I found challenging was being able to manage two people using debit cards from the same bank account,” Nicholson said. “I would always have to ask him what a certain expense was for or if he got the receipt. This made it frustrating and annoying on a daily basis.”
So how did they find a way to relieve their frustration?
“To streamline things, we decided to use the same credit card and have a budget meeting every Monday,” she said. “We now go over the expenses together, categorize them correctly and make a payment for that week’s credit card balance.”
This worked so well for Nicholson and her husband that when she was unable to do much after having Lasik surgery, her husband could manage finances for both of them.
“During the month where I had eye surgery, Ryan was able to take over the budget duties and everything continued moving along smoothly,” she said. “We have one designated credit card for all our household expenses and no longer have big issues over daily transactions.”
I loved Nicholson’s idea for staying on the same page with her husband in their budget, but I wondered if they’ve found help in technology.
“We both use Mint and have it downloaded on each of our phones so we can both see the budget categories,” Nicholson said. “This helps us stay on the same page every week.”
If you and your partner are already glued to your phones, why not use that to your advantage? Budget apps for couples can be a great tool to help. If you use a budget app and add all of your credit cards and bank accounts, then you can track your expenses together on any app. But if you’re looking for a budgeting app for couples to really dig deep on together, Mint and YNAB (You Need a Budget) are two of the most popular budgeting apps out there.
So with all this advice, why did it take my husband and me years to get on the same page and commit to budgeting for couples? Because it took us that long to realize that as life happens in seasons, so too do finances.
You see, we met when we were in our late 20s, an age in which we’d been used to handling our finances ourselves with no one else to answer to or compromise with. This proved to be an unexpected challenge. I was rigid in my money practices, and he was in his.
But as we grew together, the natural changes of life helped us see with a more flexible lens. I stopped worrying so much about the fact that I make less than him, because when he started his own business, I was able to help out. And when he realized I was meeting him in the middle on simple things like budgeting tactics, he met me in kind.
As you and your partner grow together, remember that the situation you’re in today may not be the situation you’re in 10 years from now. So if you feel insecure about earning less, understand that the situation could change. And if your partner wants to be supportive, don’t feel guilty because you might have an opportunity to be supportive later.
If you have different money goals or ideas of how to create a budget plan, keep talking about it. It will get easier to compromise the longer you’re together if you have open, honest and frequent conversations about it. Sometimes it just takes time to come around to new ideas. But keep communicating and working as a team, and you will find your budgeting sweet spot.
Rebecca Safier contributed to this report.
Interested in a personal loan?Here are the top personal loan lenders of 2021!
|Lender||APR Range||Loan Amount|
|4.99% – 19.63%1||$5,000 - $100,000|
|4.37% – 35.99%||$1,000 - $50,000|
|5.94% – 35.97%*||$1,000 - $50,000|
|99.00% – 199.00%2||$500 - $4,000|
|5.99% – 24.99%3||$5,000 - $40,000|
|7.99% – 20.88%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $36,500|
|10.68% – 35.89%6||$1,000 - $40,000|
|9.95% – 35.99%7||$2,000 - $35,000|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
For when we advertise static headline rates w/ all discount (i.e. autopay and money bundle) (NON PQ RATE):
Fixed rates from 4.99% APR to 19.63% APR include a 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 11/2/2021 and are subject to change based on market conditions and borrower eligibility. SoFi Personal Loans are not available to residents of MS. Additional state restrictions may apply. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. Autopay Discount: The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings, checking, or other account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings, checking, or SoFi Money account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To qualify for an additional 0.25% APR direct deposit discount you must: (1) set up autopay with SoFi Money within 20 days of the funding of your loan, AND (2) setup payroll direct deposits of at least $1,000/mo to SoFi Money within 35 days of the funding of your loan. If you do not set up autopay with SoFi Money within 20 days of the funding of your loan, AND set up payroll direct deposits to SoFi Money within 35 days of the funding of your loan you will not be qualified for this additional 0.25% direct deposit discount. Once qualified, you will receive this additional 0.25% direct deposit discount during periods in which you have direct deposits of at least $1,000/mo turned on with your SoFi Money account. This additional direct deposit discount will be lost during periods in which you have turned off direct deposits for your SoFi Money account. You are not required to enroll in autopay or direct deposits to receive a loan from SoFi. The Direct Deposit Rate Reduction excludes members from receiving the $100 SoFi Money® direct deposit promotional program. SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC. Member FINRA/SIPC. Neither SoFi nor its affiliates are a bank. SoFi Money Debit Card issued by The Bancorp Bank.
For API partners when we return pre-qual offers only with all discounts (i.e. autopay and money bundle) plus direct payoff discount for those borrowers who select credit card payoff:
Fixed rates from 4.99% APR to 19.63% APR include a 0.25% autopay discount and a 0.25% direct deposit discount. SoFi rate ranges are current as of 11/2/2021 and are subject to change based on market conditions and borrower eligibility. SoFi Personal Loans are not available to residents of MS. Additional state restrictions may apply. Your actual rate will be within the range of rates listed and will depend on the term you select, evaluation of your creditworthiness, income, and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings, checking, or SoFi Money account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Autopay is not required to receive a loan from SoFi. Direct Deposit Discount: To qualify for an additional 0.25% APR direct deposit discount you must: (1) set up autopay with SoFi Money within 20 days of the funding of your loan, AND (2) setup payroll direct deposits of at least $1,000/mo to SoFi Money within 35 days of the funding of your loan. If you do not set up autopay with SoFi Money within 20 days of the funding of your loan, AND set up payroll direct deposits to SoFi Money within 35 days of the funding of your loan you will not be qualified for this additional 0.25% direct deposit discount. Once qualified, you will receive this additional 0.25% direct deposit discount during periods in which you have direct deposits of at least $1,000/mo turned on with your SoFi Money account. This additional direct deposit discount will be lost during periods in which you have turned off direct deposits for your SoFi Money account. You are not required to enroll in autopay or direct deposits to receive a loan. The Direct Deposit Rate Reduction excludes members from receiving the $100 SoFi Money® direct deposit promotional program. SoFi Money® is a cash management account, which is a brokerage product, offered by SoFi Securities LLC. Member FINRA/SIPC.Neither SoFi nor its affiliates are a bank. SoFi Money Debit Card issued by The Bancorp Bank. If you selected credit card payoff as your loan purpose then your pre-qualified rate also includes a potential additional 0.25% Direct Pay discount. To secure this discount, you will need to select Direct Pay as an option to pay off your credit card and apply 50% or more of your loan proceeds directly to your creditors.
2 Includes AutoPay discount. Important Disclosures for Opploans.
Direct Deposit required for payroll.
Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.
3 Includes AutoPay discount. Important Disclosures for Payoff.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage and history. The APR ranges from 10.68% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 9.56% and a 5.00% origination fee of $300 for an APR of 13.11%. In this example, you will receive $5,700 and will make 36 monthly payments of $192.37. The total amount repayable will be $6,925.32. Your APR will be determined based on your credit at time of application. The origination fee ranges from 2% to 6% (average is 4.86% as of 7/1/2019 – 9/30/2019). In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,001 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Avant.
*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.
**Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33.
Based on the responses from 7,302 customers in a survey of 140,258 newly funded customers, conducted from August 1, 2018 – August 1, 2019, 95.11% of customers stated that they were either extremely satisfied or satisfied with Avant. 4/5 Customers would recommend us. Avant branded credit products are issued by WebBank, member FDIC.
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
Personal loans made through Upgrade feature APRs of 5.94%-35.97%. All personal loans have a 2.9% to 8% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Accept your loan offer and your funds will be sent to your bank or designated account within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes the transaction. From the time of approval, funds should be available within four (4) business days. Funds sent directly to pay off your creditors may take up to 2 weeks to clear, depending on the creditor. Personal loans issued by Upgrade’s lending partners. Information on Upgrade’s lending partners can be found at https://www.upgrade.com/lending-partners/.