Buzz
Every Monday, we take on one of your most urgent personal finance questions, gathering insights from various financial experts to provide helpful advice. If you have a financial question, concern, or simply want to chat about anything related to personal finance, feel free to leave a comment or send an email to [email protected].
This week’s question comes from an email sent by Benjamin Bruenig:
How can couples with two incomes manage their finances effectively without just combining everything into one pot? It seems like everyone I talk to either has a complicated system involving multiple accounts and credit cards or complete chaos. In both cases, they're likely letting too much money sit in low-interest accounts, overdrawing those accounts, or spending excessive hours tracking each and every expense. Surely there’s a better way to use apps and automation, though most major budgeting apps don't offer these features.
Here’s what experts generally have to say about this issue, which affects everyone differently. For personalized advice, you should consult with a financial planner.
Everyone Has Unique Circumstances
Running a dual-income household can be challenging, especially since the typical couple manages 16 different financial accounts, as noted by Eugene Park, founder of Honeydue, a budgeting app for couples. As this reader pointed out, there are numerous tech solutions available to simplify the process—and each couple’s financial needs vary.
The key to budgeting as a couple is openness: Both partners need to understand the financial picture, and the responsibility shouldn’t fall solely on one person. While you don’t need to track every penny your partner spends, it’s important to have a general sense of each other's financial situation and to have honest discussions about bills and who is responsible for paying what.
“Figure out how to divide tasks like paying bills, managing investments, or scheduling meetings with your financial advisor,” advises Marcy Keckler, VP of Financial Advice Strategy at Ameriprise Financial. “You might also want to set up a shared bank account for joint expenses and individual accounts for personal spending. This method makes bill payment easy while still allowing both people the flexibility to manage their own spending.”
For more information on this topic, take a look at this post:
It’s true that Mint (and most personal finance apps) aren’t ideal for managing multiple users. That’s why Park suggests that each person in the relationship should use their own preferred app (such as Mint or Clarity Money) to manage their personal finances, while utilizing an app like Honeydue to monitor shared accounts and set up bill reminders. Once you’ve agreed on how to divide the bills, automate as many payments as possible.
An added advantage of Honeydue is that each partner can share only the financial information they’re comfortable with. You have the ability to choose which accounts (whether a joint account or your personal checking or savings accounts) to share and whether you want to display only balances or full transaction details. You can also inquire with your partner about individual charges.
Another option is the traditional budget spreadsheet, which works well because it’s collaborative and accessible to everyone involved. Peter Polson, founder of Tiller Money, a paid service that provides ready-made budget sheets, recommends this setup for couples who are new to managing finances together:
Partner 1 income
Partner 2 income
Partner 1 expenses
Partner 2 expenses
Shared expenses paid by partner 1
Shared expenses paid by partner 2
“Both partners have full visibility,” says Polson. “When they review their finances together, they can focus on shared expenses: Are we making the right choices for joint costs? Is the balance between us fair?”
You can create your own budget sheet using the template above as a guide, or you can try a service like Tiller. Much like a budgeting app, Tiller pulls in your financial data daily, allowing you to track your spending habits while also keeping tabs on both your and your partner’s budgets. Here’s an example of a budget that Tiller generated:
And here’s a more detailed breakdown:
The key takeaway is that it’s adaptable: You can either design your own budget sheets or utilize Tiller’s pre-made templates. The way you organize them and the categories you choose are entirely up to you and your partner.
Once you’ve maintained a spreadsheet for a few months or used an app to monitor your spending patterns and bill payments, you’ll start identifying opportunities to save or invest. Once again, have an open conversation with your partner (maybe over a glass of wine) to discuss your options.
“If the couple finds they have too much cash sitting in a joint account with a low interest rate, it’s a sign to consider setting up an emergency savings fund to cover three to six months’ worth of expenses, if they haven’t done so already,” says Paul Bennett, a certified financial planner and author of The Money Navigator. “Once that’s in place, a long-term investment strategy can be developed. Otherwise, you’re letting money sit idle and its purchasing power continues to decrease.”
If you’re working toward a shared financial goal (like saving for a vacation or purchasing a new couch), consider apps such as Digit or Simple—though they are designed for individual use, sharing a login makes it easy to track progress together.
You can choose to use an app, a spreadsheet, or a combination of both—whatever method works best for you and your partner.
