Suggestion on how dual income couples can manage their money
Relationships aren't easy, and managing two incomes can be just as hard.
In order to meet your goals — both collective money goals and individual goals — you'll have to start making sure that you and your partner are on the same page about your spending, saving, and plans.
Whether you regularly talk about money or are approaching it with your partner for the first time, there are a few key rules to follow.
1. Set up an effective way to talk about money
Talking about money with your partner may not come easily, but it's something you'll need to do to align your goals and create a financial plan that works for both of you. Some couples find "money dates" helpful as a way to sit down and talk finances, and others like a shared spreadsheet. While the way you talk about money is as unique as your relationship, the conversation has to happen for you to get on the same page.
Start the conversation by asking your partner how they view money, what goals they have individually, then focusing on what goals you will have collectively. Remember, making sure that both partners have an equitable voice is key.
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2. Have a common goal
It might be helpful to talk about goals and priorities, and see where you both overlap and where you differ. Then, you can start to make concrete plans for those agreed-upon goals, and make compromises on the different goals.
While often easier said than done, most people are able to come to an agreement. If not, contact a professional finance advisor who will help you formulate a pathway towards a common goal.
3. Know you can (and should) have individual goals, too
When both people are making money, not everything in a couple has to be done jointly, should continue to invest independently and have their own goals within the context of their relationship.
Having individual finances is not only important to avoid conflict over how to invest and how to plan for the future, but it can also help both earners feel a sense of autonomy.
4. If there's an income imbalance, address it
According to a Business Insider Consult survey, 88% of millennials in long-term relationships have some sort of financial imbalance. Of that 88%, 66% said that money caused stress in their relationship. If there's an imbalance, it's important that it's addressed.
Discussing how you can each cover expenses with your income is an important step to addressing it. One suggestion, dividing expenses among your incomes proportionally if you like to keep your expenses and accounts separate.
No matter how large the disparity, both partners should have an equal opportunity to be included in the discussion and an equal chance to be involved in creating shared goals.
5. Know how to effectively use your 2 incomes
There's no one-size-fits-all solution for managing two incomes, but there are some general guidelines that work for most.
Especially when it involves having a mortgage, you want to make sure that you are not over-committing. A good rule of thumb is for couples making two incomes is, don't rely on two incomes to cover your minimum mortgage repayments.
It will only add more financial stress if one partner loses their job, or if costs associated with owning a property goes up.
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This article via BI does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.