Polls have found that finances are the leading cause of stress in relationships. Regardless of whether you’re married or just happily partnered, here are 15 ways to improve your finances and protect your relationship from unnecessary money-related drama.
15 Financial Tips Every Same-Sex Couple Should Know
1. Talk Openly About Money
The first step to safeguarding yourselves and your relationship against money-related stress is to get everything out in the open. Take a day to sit down and go over all your debts and assets so you have an honest sense of what your financial life together looks like. This can feel scary if your financial houses aren’t in order, but knowing where you stand is the first step to getting to where you want to be. It’s also important to make couples money check-ins a regular thing; it might not feel super romantic, but having an honest, ongoing dialog about finances will ultimately go a long way toward helping you keep the peace in your relationship—leaving you with more time and energy for romance.
2. Define Your Goals Together
What are your short and long-term goals, both as individuals and as a couple? Do you want to prioritize frequent travel, or saving to buy a house? Do you hope to have an expensive wedding, have kids, or take an elaborate trip around the world? Setting these goals together can strengthen your relationship since it allows you to dream about the future together, create a blueprint for your shared journey, and then develop a concrete plan for living your best lives together. Keep in mind that life happens, and your long-term goals can change over time, so it’s good to stay flexible and make evaluations of your goals and the progress you’re making toward reaching them part of your regular financial well-being check-ins.
3. Create a Budget and Help Each Other Stick to it
If you’re going to reach all of those exciting goals, you’ll need a budget. Budget tracking apps like Mint or goal-tracking checking accounts like Simple can make this process way less painful than it used to be, and can even help “gamify” saving and sticking to your budget to help it feel more fun. They can also help you curb the “latte effect,” or cut back on some of the small, everyday purchases you make that add up in a big way over time. When all your hard work pays off, and you start reaching your savings goals, high-five each other and smugly celebrate your success working well as a team instead of fighting about money like most couples.
4. Learn to be Frugal Without Being Boring
Sticking to your budget doesn’t mean you have to settle for less blandness. Consider investing a little more on the front end to save in the long-term by getting a fancy espresso machine (personally, I’m an even bigger fan of the inexpensive Aeropress for amazing quality coffee) so you can get your luxury caffeine fix at home, or treating yourselves to a cooking class and some adorable bento boxes so you can make yourselves baller work lunches your co-workers will envy instead of opting for either expensive takeout or a boring PB&J every day.
5. Treat Managing Your Finances Like a Shared Business
In addition to talking openly about money, keep in mind that keeping your finances in order and working towards your goals takes time and energy on an ongoing basis—you’re essentially running a little business together. Consider treating managing your shared finances just like would a shared work project: head to a coffee shop with laptops together, set an agenda, and create action items for follow-up. While it can be a great idea to take occasional “financial health days,” it’s also important to remember that reaching your goals and keeping your financial ducks in a row isn’t a one-time thing. It’s an ongoing, collaborative project.
5. Separate Accounts Into “Mine, Yours, and Ours”
This is another tip that can go a long way toward keeping the peace in your relationship. The “Ours” account should be used for all shared expenses (rent, groceries, etc.) and both parties should be strictly required to stick to the budget when spending from it. The “Mine” accounts should each get the same amount of discretionary money—meaning that you can each spend it however you like without having to defend or explain it to the other. It’s a good idea to be as detailed as possible when going through the list of what expenses come from where: if you buy a gift for your mom, does that come out of our shared account, or out of your account? What about a haircut or medical costs? This is something you can touch base on and adjust as needed during your regular check-ins.
6. Split Up Financial Duties According to Strengths
It’s often natural for one person in a partnership to take on responsibility for paying the bills. You may discover that your partner is better at long-term planning, big-picture goal tracking and managing investments. It’s totally fine to split up duties according to who is good at what—just be sure to respect and praise each other’s strengths, communicate openly and regularly about what’s going on in your respective “jobs,” and work to keep both parties equally engaged and invested in your overall financial well-being.
7. Pay off your debts—sensibly
No one likes carrying around lots of debt, and doing so can cost you a ton of money in the long term. It’s wise to make a plan for paying down high-interest debts as quickly as possible, but it’s also worth considering whether it makes more sense to pay off low-interest debts like student loans more gradually so you can allocate some of your flexible income towards achieving your other financial goals.
8. Save for Both Retirement and Inevitable Rainy Days
Saving for retirement is critical (and most Americans don’t save enough, so it’s best to start early and plan thoroughly), but surveys have also shown that a majority of Americans don’t have enough in their savings to handle even a $500 surprise bill—which can easily crop up in the event of a medical emergency, car breakdown, or a big trip to the vet for kitty. Saving enough to be able to deal with life’s inevitable rainy days without stress can take a ton of pressure off your relationship and allow you to do a better job of supporting each other through tough times.
9. Don’t Buy a Too-Expensive House—Even If You Can Get a Loan
The housing market is a little bit different than it was before the mortgage bubble burst in 2008, but we’re definitely still living in a bit of a real estate bubble. Before making what’s likely to be the largest purchase of your entire life, sit down with a financial planner—not a bank lender— and crunch the numbers to figure out what you can actually afford without risking regret.
10. If You Get Married, Take Advantage of Tax Benefits
The tax benefits you can get from being married may be the least glamorous benefit to marriage equality, but they’re a pretty big deal. You can still opt to file separately, but filing jointly can potentially save you lots of money and headaches in the long-run. Plus, you only have to file once. A tax advisor can help you figure out how to reap maximum benefits from your status as married filers.
11. Get a Credit Card with Maximum Rewards—And Pay it Off Monthly
While it’s definitely unwise to carry around lots of credit card debt, it’s also a waste not to earn any rewards on the purchases you’re making anyway, as long as you pay your credit cards off in full every month. Choosing a rewards card wisely can ultimately help you accomplish your goals faster by giving you cash back or points to use toward travel.
12. Invest in Index Funds
If you’re new to investing but interested in growing some of your spare savings, index funds can provide a low-maintenance, relatively safe way to start making money off the money you already have. Index funds carry low fees (unlike mutual funds), and aggregate large chunks of the market at once so you don’t have to spend time following individual stocks or funds. In fact, you can create a kick-ass portfolio with as few as three funds, set it to invest some of your savings automatically every month, and start watching your money grow.
12. Consider Combining Your Savings and Investment Accounts
While it’s good to keep your “Mine,” “Yours,” and “Ours” checking accounts separate, couples can sometimes benefit by combining savings and investment accounts because it reduces fees. Combining any investment accounts can also allow you to diversify your assets and up your income.
14. Create a Will
Thanks to marriage equality, this one is now substantially less complicated for married same-sex couples, but it’s still critical to put your wishes for your finances after you die in writing. Even if you’re still young and healthy, you’ll save your partner and your loved ones a whole lot of headache in the event that something happens to you by creating a will. If you’re not married, and you hope to give your partner your assets after you die, this is going to be even more critical. Your best bet is to hire a lawyer to help, but there are also a number of websites that can help you quickly draft a basic last will to ensure your bases are covered.
15. Empower Yourselves Through Financial Education
For a lot of people, dealing with money isn’t fun, or even necessarily comfortable, but ultimately, the best way to minimize money worries is to become knowledgeable about managing your finances. There are lots of websites and blogs—like NerdWallet, The Simple Dollar and the Mint Blog—dedicated to providing regular folks with financial education through articles and posts that both compelling and insightful. The more you know, the more empowered you’ll be to plan for long-term financial stability and live the life you really want with the person you love most.