As a millennial couple, you and your partner might not be planning to blend finances, even if you’ve been together for a while.
Venmo is convenient, after all; the peer-to-peer money transfer app makes it easy to split costs like rent and utilities. Or perhaps you’ve each agreed to pay specific bills while keeping separate bank accounts.
In a Bank of America report released last year, 28% of couples between the ages of 23 and 37 surveyed said they kept their finances separate. That compared with 11% of couples ages 38-52 and 13% of couples 53-71.
There’s no “right” way to manage finances, but there are benefits to mixing love and money. Here are tips from millennial couples who make it work.
First, set expectations
When Juli Olson and her boyfriend, Travis McClelland, both 31, moved in together in Houston, their finances remained separate. Olson says she had a frugal upbringing, and mismatched expectations led to arguments. “He may think spending this much money on going out to eat is OK, but it didn’t feel good for me,” she says.
Eventually, the couple created a shared budget and goals. They compromised, spending on necessities as well as amusement. “He’s introduced more fun into my life for sure,” she says.
When you’re ready to talk with your partner, be honest about your attitudes toward money and agree on expectations. How much is reasonable to spend on things like eating out or groceries? Will you both save for a shared goal, like a vacation or car? Using the 50/30/20 budget gives you a good place to start. It divides spending into needs, wants and savings.
Save time, hassle
A joint account is not just for convenience. Suppose you have separate accounts, and you don’t know or remember your partner’s login information. If an emergency arises — your partner is hospitalized, for example — getting access to pay a bill takes effort, says Christine Centeno, 36, a certified financial planner at Simplicity Wealth Management near Richmond, Virginia.
“Even if you are married, you have to jump through a couple of hoops to get access to the funds,” she says. If you don’t have a joint account, she advises adding your partner as the beneficiary on your checking account.
Centeno, like many millennials, uses an online-only bank. She says it was easy to add her husband, Osmin, 37, to her account; the bank mailed her paperwork to sign.
Opening a joint account doesn’t imply you have to close yours or give up control, Centeno says. To prevent fights, agree on an amount you each can spend on wants, no questions asked.
50-50 not always fair
Splitting things equally may not be fair when one partner makes a lot more than the other. Consider a proportional split instead, Centeno says.
Calculate your total household income before expenses, and what share of the total comes from each income. Use that as a guideline — you pay 60% of expenses while your partner pays 40%, for example.
This also helps each person put money away for retirement or general savings, Centeno says. That’s crucial if you split up or your partner dies.
Ashley Patrick, 34, and her husband Tyler, 35, took less than two years to pay off more than $47,000 in student loans, a tax bill and a car. The Charlotte, North Carolina, couple used a mix of budgeting, taking on extra work and selling things.
Ashley, who blogs at BudgetsMadeEasy.com, uses her husband’s bigger paycheck — which arrives a week before hers — to pay larger bills, and her own paycheck to cover smaller bills the following week.
“It’s something after a couple years I figured out, after paying late fees and missing payments,” she says.
Olson and McClelland have a weekly budget check-in, using an app called Honeyfi. While paying off debt, the Patricks tracked their progress every Friday on a spreadsheet.
Millennials aren’t shy when it comes to talking about money; 97% of couples ages 18-34 said they discuss finances at least once a month, compared with the average 88% for all age groups, according to a 2018 survey of more than 1,700 U.S. adults by TD Bank.
“For a lot of couples, it’s easy to fall into the trap of only talking about money when something stressful happens,” says Sam Schultz, co-founder of Honeyfi. “Try to get into the habit of checking in about money even when stuff’s not bad.”