3 Money Management Methods for Couples | Doing Well

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Did you know that most couples don't talk about personal finance before they get married? It's probably no surprise that financial stress is one of the top reasons cited for divorce in America.

A study done by the National Library of Medicine found that 37% of divorces are due to financial problems. If you plan to get married one day or are currently married, you should be aware of this and know that there are different methods couples can use to manage their money.

From coaching our own clients, we've seen that it comes down to three different frameworks of how you can manage finances as a couple. In this article, we'll break down each method of budgeting as a couple. We'll also give you the respective pros and cons, along with some tips at the end so you can choose the one that works best for you.

Method 1: The All-In Method

Joint Bank Accounts

The all-in method involves combining all your money in a joint savings account. However, before you do this, make sure you have a deeper conversation with your partner about your financial situation, financial priorities, and spending habits.

This method is based on trust, and it means what's yours is ours and what's mine is ours.

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Pros	Cons
A joint savings account simplifies money management for couples.	Differences in income can lead to hard feelings or resentment.
Clears up confusion on how to allocate resources.	Different opinions on spending and handling debt can create pressure.
Helps couples work towards the same financial goals.	Requires open and direct communication and a shared budget.
Allows one partner to support the other in case of financial imbalances.	Similar risk appetite is essential for investments.
Studies show it makes couples happier and less likely to split up.

Method 2: The Independent Contributor Method

Separate Bank Accounts

If a joint account isn't your thing, then this method might fit you more. As an independent contributor, couples contribute to shared costs but manage their personal money separately. This approach offers more individual control, financial autonomy, and flexibility in managing expenses, especially for newer couples.

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Pros	Cons
Each partner has more control and freedom over their personal finances.	Tracking expenses becomes more complex
Flexibility in splitting bills equally or proportionally to income.	Income disparities can lead to uneven spending and potential resentment.
Greater financial protection in case of relationship issues.	May work best for newer couples as financial duties increase.

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Method 3: The Hybrid Model

Joint bank account and separate bank accounts

The hybrid model involves having joint accounts for shared expenses and individual accounts for personal spending. This approach combines the benefits of both a joint budget and separate finances.

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Pros	Cons
Combined income simplifies tracking, budgeting, and spending.	Partners must juggle both personal and joint accounts.
Differences in income become less of an issue.	Tensions can arise over remaining money after covering financial obligations.
Easier management of debts and expenses for shared financial goals.	Equal allowances may seem restrictive for higher-earning partners.
Promotes individual independence and flexibility.	Requires agreement on allocation and shared vs. individual expenses.
Helpful for buying surprise gifts for your partner.

Choosing the Right Method

Choosing the right money management method for your relationship requires communication, compromise, and collaboration (the three Cs).

Communicate

Open communication about money is a must. Start by identifying your individual goals and assessing your risk appetite. Initiate open discussions with your partner about your financial situation and share your individual financial goals, aspirations, and even your concerns.

Compromise

Find common ground and be prepared to make concessions when necessary. Whether it's determining how to allocate your budget or deciding on major financial decisions, compromise helps in maintaining a harmonious financial relationship.

Collaborate

Building a successful financial partnership requires collaboration. You and your partner need to work together as a team, combining your strengths and insights.

Take into account:

✅ Family responsibilities

✅ Future goals

✅ Short-term and long-term objectives

✅ The lifestyle you both aspire to achieve

Budgeting as a couple and joint finances play a pivotal role in maintaining a healthy relationship, but there is no one-size-fits-all approach. If you're looking for a personalized plan and budget that works for both of you, you can book a one-hour free coaching call with us here.

By aligning your financial goals and values, you can build a solid foundation for your shared financial journey, ensuring both financial stability and a harmonious partnership. Remember, it's not just about managing money; it's about building a strong financial future together.