4 Great Strategies To Manage Your Finances Together as a Couple to Consider

The Chinese have a saying: 谈钱伤感情 (any discussion about money will result in hurt feelings).

There’s certainly truth to that saying as surveys have shown that money is the biggest cause of stress in relationships.

Thus, navigating managing your finances together as a couple can get quite complex as it is a coming together of two people with different incomes, different spending habits and different financial situations.

When you are trying to manage your finances together as a couple, there could be quite a bit of friction due to some big differences.

For example, one partner could be earning quite a bit more than the other, one could be a spender while the other is a saver, or one partner could be on the way towards FIRE – Financial Independence Retire Early and the other could be burdened with steep debt.

Regardless of whether you have only just started talking about finances together as a couple or been trying to navigate this issue for quite some time.

Here are some of the best strategies for combining finances as a couple and avoid financial stress.

1. Keep it Proportionate 

First up we have the Proportionate Strategy to managing your finances together as a couple.

Simply put, this strategy is where the couple contributes to the joint expenses according to a percentage that is proportional to each partner’s income.

For example, we have a scenario where partner A earns the median income in Singapore and takes home about $3,100 a month while partner B takes home $4,600 a month.

This means that they are earning ~40% and ~60% of the total household income respectively.

For simplicity’s sake, let’s say that this couple’s joint expenses add up to about $3,500 a month. In this scenario, partner A contributes $1,400 and partner B contributes $2,100 a month respectively.

Also, couples can contribute to the joint expenses in this manner while keeping the rest of their money for their own individual spending.

Pros

For this strategy, the main pro would be that there would be less pressure on both sides to either earn more to keep up or reduce their budget to match the earning power of their partner.

Cons

However, the main con of it would be that the partner who earns more might become resentful that they are penalised for earning more.

2. Split it 50/50

Alternatively, you can consider the 50/50 strategy where the couple’s joint expenses are split equally.

Let’s say partner A earns the median income in Singapore and takes home about $3,100 a month while partner B takes home $4,600 a month.

But in for this strategy, both partners contribute equally to the joint expenses of $3,500 a month and contribute $1,750 each.

They then keep the rest of the money for their own personal use.

Pros

For this strategy, the main pro would be that everything is more equal.

The partner who earns more would not feel that they are being penalised. At the same time, the partner who earns less will not feel that they are being carried by the other partner.

Cons

However, the main con to this strategy would be that if the partner who earns more wants to have a higher standard of living, the partner who earns less will feel the pressure to keep up.

This might strain the relationship.

Also, some people might feel that this strategy may make the relationship seem like the couple are not really a couple but just really good roommates.

3. Keep it Together

Otherwise, you can consider this Keep it Together strategy where couples need to comprehensively combine their finances together.

This strategy requires the most trust and cooperation as couples will have to do things like funnel all their money to a joint savings account, pay for all their expenses from this joint fund and save and save and invest for retirement together.

Let’s say partner A earns the median income in Singapore and takes home about $3,100 a month while partner B takes home $4,600 a month.

For this strategy, all their savings and monthly salary are channelled to this joint savings account which is used to pay for all their expenses.

This means that there would be no differentiating between individual purchases or joint purchases for the household.

Pros

The main pro for this strategy is that the couple will feel more united as a unit as they are living out the saying ‘what’s yours is mine.’

This strategy is also easier to manage when it comes to accounting.

Cons

However, one thing to be cautious about is that the partner who earns more might be unhappy that the partner who earns less is spending their salary.

Also, if one person is more of a spender and the other is a saver, there could be a strain on the relationship due to the imbalance.

4. Live Off Just One Income

If you like the Keep it Together strategy, you might want to consider taking it further by living off just one salary.

In other words, the couple will have to pretend that the other partner’s salary does not exist.

Instead, all the couple’s expenses will be paid for using the salary of the partner who earns more.

Undoubtedly, this strategy will be challenging and would require a lot of commitment from both partners.

You should implement this strategy if both partners are really determined to save money.

But, I think it would be very rewarding as it challenges couples to be more frugal and find clever hacks to save money since you are only living off of one person’s salary.

With this strategy, the lower or irregular salary can be completely put aside as savings and/or invested for retirement or other goals.

Pros

Implementing this strategy will help couples save and put aside more money for their goals.

This strategy is also easier to manage when it comes to accounting.

Cons

This strategy is only accessible to couples where one partner has a high enough salary to support the household’s expenses.

Closing Thoughts