Good personal finance used to be pretty one-note. It was based in the idea that all of us would grow up, get married, have the 2.5 kids and dog in the nice home with dad as the primary breadwinner while the mom focused on the kids, before finally retiring to sunny Florida.

There’s nothing wrong with that picture (or the personal finance strategy that goes with it), but that’s not the way the world works for many of us these days. And if your life path is headed in a different direction, then a standard money management strategy may not work for you either.

The information below is a beginner’s guide to budgeting for couples. But in the end, it’s up to you to map your own financial destiny. If you have questions or you’re having trouble with debt, call us and we can help. We also encourage you to sign up for a personal financial management platform to make it easier to manage your money – no matter which strategy you choose.

Key Question No. 1: Joint or Separate?

The biggest question to tackle when budgeting for couples is whether you want to maintain separate accounts or plan on eventually merging your finances with joint accounts. Joint finance means you have the same bank accounts, file taxes together, apply for credit and loans together, and – as a result – suffer the same fate if you have problems with debt.

It’s important to note that even if you get married and decide to maintain everything jointly, you’ll still have individual credit scores – and they may even be slightly different because you both start off in different places with credit before you got together. You will both still have individual credit scores, but since the same penalties and debt problems will impact you both, it’s effectively like your credit score is hitched to someone else’s score, too.

Making the case for managing your finances separately

By contrast, you can also maintain everything separately. Even if you get married most of your accounts and outlook can be separate. You can be “married filing separately” and have different bank and credit accounts. Obviously, you both will have your own credit scores and they may be very different.

Keep in mind that separate doesn’t necessarily mean that you don’t have a single financial strategy. You can maintain your financial lives separately and still work towards the same financial goals. There are unique issues with being entirely separate, such as whose name will be on the deed to the house.

Of course, most couples exist somewhere along the spectrum between those two extremes. And there are certain advantages and disadvantages to each extreme. It may be easier to manage your money day-to-day with joint accounts. At the same time, completely separate credit scores can be useful. If one of you had problems with credit in the past, the other can qualify for the financing you need.

There’s no one right answer to this (or any of the questions below). The point is you need to ask this question as a couple and decide what works for you. Talk about your past financial issues, your goals for the future, and your daily habits. Then you can decide what will and won’t work for you as a couple.

Key Question No. 2: Rent or Buy?

Signing a rental agreement as a couple is one thing; buying a home together is entirely different. Bear in mind there’s nothing that says you have to buy the home together as a couple. But even if just one name is going to be on any future mortgages, you need to have a conversation about housing if you want to avoid trouble and build a solid financial strategy together.

If you’re both just starting out, it’s likely your first financial step to sign a rental agreement together. Otherwise, you may be in a situation where one or both of you already have a mortgage. Then it’s a question of putting someone else’s name on your mortgage or selling both homes to get one together.

Again, there’s no one right answer here and the answer may even change over time. For instance, if you decide to buy a first home, it may be in your best interest to just use one person’s outlook to qualify for financing if other partner’s credit score and bank account will only make the approval process harder. But later, once you’ve rebuilt the other partner’s credit, you may choose to get the next mortgage together.

Just be sure to include this question as a big part of your budgeting for couples conversation about your financial future so you’re on the same page.

Key Question No. 3: Kids or No Kids?

Let’s be honest – kids are expensive. A recent study found one kid will cost about a quarter of a million dollars to raise to the age of 18. And no, that doesn’t include the cost of any college savings or tuition planning. That’s just the cost to get them graduated from high school and (theoretically) out of your house.

So you need to have the kids conversation early and decide what you want to do as a couple. And if one of you changes your mind, you may have this conversation more than once. In any case, in an ideal world, you have this conversation as early as possible so you have plenty of time to save up ahead of the first extra mouth to feed.

Parents have more of a burden to maintain financial stability, so you really need to focus on savings so you have a safety net for your family to fall back on if something happens. Budgeting for couples needs to be consistent and may get tougher with each kid you add. And long-term savings needs to be split between your retirement and your children’s education costs.

By contrast, if you don’t ever want to have kids, then you should set aside the money you’re saving for your retirement. It’s critical that you have what you need to support yourself and pay for any healthcare services you need because there are no kids to fall back on if your retirement savings run out.

So while DINK (dual income, no kids) households have more disposable income, they shouldn’t just spend it frivolously. You should be squirreling away as much as possible to make sure you’re set up nicely for the long haul.

Key Question No. 4: Marriage or Partnership?

You might think this question should’ve been higher up the list, but everything answered above may just be more critical these days. It may sound kind of unromantic, but the role marriage really plays in budgeting for couples now comes in things like prenups, asset division during divorce, inheritance and estate planning, and financial power of attorney.

While many couples will end up tying the knot, some won’t for one reason or another. Believe it or not, some couples just choose never to get married. That means you must make sure your partner is protected if you die or are medically incapacitated.

Fact: In Western cultures, roughly 90% of people have gotten married at least once by the age of 50.

And marriage itself can represent a significant financial risk for one or both parties. If you both have assets going into the marriage, you may want those protected. If you live in a state where divorce would favor your spouse or just split everything in half, then a prenuptial agreement may be even more critical. So it may be in your best interest to educate yourselves on your financial situation before tying the knot. Again, honest conversation early can help avoid misunderstandings and emotional reactions to money questions.

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Article last modified on June 21, 2023. Published by, LLC

Reviewed By

Donna Freedman

Expert contributor