Savings Strategies for Young Couples

1. Talk openly about your finances

Whether it’s feelings or finances, being able to talk openly with your partner is key to a healthy relationship. While talking about money may not be romantic, these conversations can save a lot of future heartache.

No doubt love and money can be tough conversation topics. Relationship experts have noted that the issue of money is consistently among the top reasons why couples fight. But talking about money doesn’t always have to result in an argument. Communication and empathy are key to helping you navigate the conversation.

A part of this means making sure you’re both on the same page when it comes to your savings priorities, financial goals and respective financial responsibilities. For starters, consider sharing some important numbers with each other like how much money and debt you’re each bringing to the table. Having a clear picture of your financial circumstances could help you better plan for shared goals, including saving for vacations, buying a house or starting a family.

If you find that talking about money is difficult for you and your partner, consider bringing in a financial advisor as a mediator who can help provide some professional guidance.

2. Re-evaluate your budget

Now that you’re sharing your life with another person, it’s a good idea to revisit your budget. Ask yourself: How will you and your partner cover certain expenses? In other words, who is going to be responsible for what? And how will you manage your money together?

For example, when it comes to expenses, one option for couples who have chosen not to combine everything would be to open one joint account to which you both contribute and then that account would be used to pay for shared essentials like rent, utilities, groceries and vacations.

3. Define your savings goals

What are your savings priorities as a couple? A good place to start may be your emergency savings. Is your emergency fund where it needs to be? Remember, the general rule of thumb is to save enough to cover at least three to six months of your living expenses.

As you identify your savings goals and work towards them together, consider opening up different savings accounts for different goals and set up recurring deposits if you’re able to. By automating your savings, you won’t have to think about putting money aside each month – it just becomes an automatic habit. Keep in mind that there are different savings accounts and strategies you can use to help you reach your goals. Check out our Guide to Savings Accounts to learn more.

4. Don’t forget about your retirement accounts

Thoughts about retirement might take a backseat while you and your partner are thinking about more immediate plans like buying a home or starting a family. But don’t let saving for retirement fall off the radar completely. Remember, the sooner you put money away for retirement, the more time your money will have to grow.

And hopefully at this stage in your life, you’re earning more than you did when you were first starting out in your career. If your budget allows, kick those retirement savings into high gear and max out your contributions whenever possible (if you’ve already maxed out your 401(k) at work, consider opening an IRA).

If you can’t maximize your contributions, try to dial up those contribution amounts gradually. Some 401(k) plans include an “automatic escalation” feature that will automatically increase your contributions by a certain percentage over time. Take advantage of that as well as any employer match arrangements. Every little bit helps.

5. Paying down debt

With the increasing cost of higher education, there’s a chance you and your significant other might still be paying off undergraduate or post-graduate debt. Financial wellness can seem elusive as long as debt is still hanging over you. That’s why a part of your budget should be dedicated toward paying off debt as soon as possible – whether we’re talking about student loans or credit card bills. Remember, the quicker you’re able to pay off your debt, the sooner you can free up your dollars and put them towards your other financial goals.

Bottom line

Sitting down together at the kitchen table crunching numbers and looking over your finances may not be the most romantic thing you do as a couple. But getting a clear picture of where you and your partner are when it comes to savings and debts may save you from bad surprises or potential conflict down the road.

Once you get to know each other financially, you can better divide up your financial responsibilities. For example, maybe one of you is more skilled at handling investments while the other is more disciplined when it comes to keeping everyone on budget. Being able to talk openly about money and tackle your financial goals together head-on will help set a positive and supportive tone in your partnership for the years to come. Now that’s relationship goals.