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How to Manage Money as a Couple

Ask Savvy: How to Manage Money as a Couple

Dear Savvy,

My fiance and I combined our finances shortly after we got engaged last August, and I am in charge of managing our money. We're getting married in November. Right now, we pay everything we can with a credit card. This includes any bills we can charge (phone, cable, rent) and all our daily expenses. The plan was that every month we would pay off the card. I figured this would make sure that we never overdrew our checking account.

The problem is that every month it seems like we spend a little more than we can send to the card, and over time that amount is really adding up. My credit is very good, and the card we use was originally in my name only, so we have a very low interest rate. However, it was never my intention for us to be carrying a balance on this card.

I'm afraid if we switch to using a check card and paying all bills directly from checking, we'll risk overdrawing the account. But I know the current credit card plan isn't working, because we are just going into debt. I need help!

See my advice when you

.

You might be managing the money, but there are two of you spending it. No doubt you both have a lot on your plates with your wedding around the corner, so here is a simple plan for you to regain control of your finances.

  1. Open another account just for your fixed, non-negotiable expenses, and immediately transfer the money when you're paid. Set it up so the transfer happens automatically and neither of you will be tempted to spend that money on other things.
  2. Make a spending plan, together. Combining money means you need to communicate about how it's put to use. Because it sounds like you're not exactly sure where your money is going, I would recommend using a money management site like mint.com which will categorize your expenses and give you both a realistic picture of which areas could be targeted to trim costs.
  3. Get cracking on that credit card balance. Once you've gotten a good idea of your coupled spending habits and have come to an agreement on where to cut back, use that money towards your balance. Like you said, it really adds up over time, so be aggressive with it now.
  4. When you've gotten a handle on affording your everyday, expected expenses, begin to build up your savings in a high-interest savings account. Start putting some money toward an emergency fund and fit your monthly savings goals into your overall budget plan to avoid the excuse of not being able to afford to save.
  5. Source

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thelorax thelorax 7 years
I manage my money the same way - use a card with a good rewards program and pay off the full balance every month so there's no interest. What you really need to do is sit down with your man and work out a budget. It doesn't have to be down to the dollar, but write down your combined income and expenses for the past 3 months. My bank does this for me. Seeing it on paper might be a wake up call. Also, you really need to discuss ALL purchases with your man, and vice versa. If you don't, you WILL overspend. Good luck!!
ffemt1201 ffemt1201 7 years
my boyfriend and I tackled our bills last night, and although we basically only have fixed expenses and both make good money, it seems like our money just disappears!
gabiushka gabiushka 7 years
You can also check Dave Ramsey's website. I know it helped my husband and me.
death-by-chocolat death-by-chocolat 7 years
Oh and I forgot, I was going to mention that most larger banking chains will let you get balance alerts emailed to you or sent to you via text message so you can keep track of a checking card. You just need to log in with your account online and search for balance alert, then you should be able to set particular standards. Example- send an alert if my account drops below $1000, or send a daily update of my account balance every morning.
death-by-chocolat death-by-chocolat 7 years
My husband and I have been married only 2 months and we decided long before that to use a system much like what Emily described above. We have the spreadsheet that has the estimated spending in each category for the month, and then we input the actual at the end of the month. But the easier part is that we have a mini version of the chart on our fridge that shows only one week. When we come home, we put our receipt in the envelope on the fridge and then write up the amount we spent in the appropriate categories. The plus of doing this is that a) we can see at point in the month we spend the most and b) we can average out what we spend PER week. With receipts handy, if we go over in a category (for instance, the 'health' category might seem higher than usual), we can look back and see oh yes, that's because we bought a $20 economy-sized bottle of excedrin to get ready for the school year.
death-by-chocolat death-by-chocolat 7 years
My husband and I have been married only 2 months and we decided long before that to use a system much like what Emily described above. We have the spreadsheet that has the estimated spending in each category for the month, and then we input the actual at the end of the month. But the easier part is that we have a mini version of the chart on our fridge that shows only one week. When we come home, we put our receipt in the envelope on the fridge and then write up the amount we spent in the appropriate categories. The plus of doing this is that a) we can see at point in the month we spend the most and b) we can average out what we spend PER week. With receipts handy, if we go over in a category (for instance, the 'health' category might seem higher than usual), we can look back and see oh yes, that's because we bought a $20 economy-sized bottle of excedrin to get ready for the school year.
emily60608 emily60608 7 years
My husband & I recently set up a spreadsheet using Google docs where we could track all of our expenses.We have each column set up for different categories (clothes, groceries, bills, entertainment, misc, etc) and enter every purchase and expense under the right category. We also input all our income into the spreadsheet and periodically double check in against our bank account which keeps us from over drafting.This was our solution after almost 3 years of marriage & trying to figure out the best way to get a handle on our spending.Lots of good advice here! There are so many different ways to deal with your money & its going to take some trial & error to figure out what works best for you.Good luck!
emily60608 emily60608 7 years
My husband & I recently set up a spreadsheet using Google docs where we could track all of our expenses. We have each column set up for different categories (clothes, groceries, bills, entertainment, misc, etc) and enter every purchase and expense under the right category. We also input all our income into the spreadsheet and periodically double check in against our bank account which keeps us from over drafting. This was our solution after almost 3 years of marriage & trying to figure out the best way to get a handle on our spending. Lots of good advice here! There are so many different ways to deal with your money & its going to take some trial & error to figure out what works best for you. Good luck!
tina_marie tina_marie 7 years
Most banks now offer free on-line account access. I pay all my bills through my bank so I know when the money comes in and when it goes out and how much is left at the end. I also log on 1 or 2 times a day so I can see the daily activity if there is any. That way I know if I'm getting to my "low" point and will stop spending un-necessarily.
lizs lizs 7 years
I pay for almost everything with my card (points! and better credit than his), and once a month we tally our joint expenses and he writes me a check for his half. My friends think it's a complicated system, but it works for us.
sorrowja sorrowja 7 years
How about if they figure out the total amount of all their bills for the entire month and each time they get paid they deposit some money in the bank to cover all their bills for that month she wouldn't have to worry about their account being over if they spend accordingly.
ilanac13 ilanac13 7 years
see joining finances is always hard when you're a couple. my fiance and i talked about it and we've agreed that the #1 reason that couples argue is becuase of money. for us, we split who pays for what - and if for some reason the balance is messed up, we work it out together. for example, i pay the cable and electric, and he pays for parking - and it's equal usually (i usually pay a bit less - remember we are in NYC where it's insanely expensive to park). so this past month, our electric bill was really high - so he gave me $$ for it. when we go out - he usually pays for things - i.e. food, drinks, movies etc. that's just how we do it since it's really hard to manage it otherwise. i thow that someone would forget to transfer money - or we would have a balance if we had it on a credit card - and that's not helpful - when you're paying with $$ that you don't have right then.
ilanac13 ilanac13 7 years
see joining finances is always hard when you're a couple. my fiance and i talked about it and we've agreed that the #1 reason that couples argue is becuase of money. for us, we split who pays for what - and if for some reason the balance is messed up, we work it out together. for example, i pay the cable and electric, and he pays for parking - and it's equal usually (i usually pay a bit less - remember we are in NYC where it's insanely expensive to park). so this past month, our electric bill was really high - so he gave me $$ for it. when we go out - he usually pays for things - i.e. food, drinks, movies etc. that's just how we do it since it's really hard to manage it otherwise. i thow that someone would forget to transfer money - or we would have a balance if we had it on a credit card - and that's not helpful - when you're paying with $$ that you don't have right then.
bchicgrl bchicgrl 7 years
I think the best way may be to have the joint account for household expenses and then both have your own for everyday charges. That way there's no arguments over spending each others money.Me and my fiance currently split the household, he takes 2 of the bills, i take 2 and we split the rent. We will switch over to a joint household account once we are married.Whatever we have left in our own accounts is for us to spend/save whatever. Of course "Huge" purchases should most definitely be discussed first.
bchicgrl bchicgrl 7 years
I think the best way may be to have the joint account for household expenses and then both have your own for everyday charges. That way there's no arguments over spending each others money. Me and my fiance currently split the household, he takes 2 of the bills, i take 2 and we split the rent. We will switch over to a joint household account once we are married. Whatever we have left in our own accounts is for us to spend/save whatever. Of course "Huge" purchases should most definitely be discussed first.
Vespa Vespa 7 years
The nice thing about having everything charged to your credit card, though, is that you can see where you're spending. I know when I log in I can sort by the merchant, merchant type, amount, etc. It's really helpful to figure out, like, "Oh, I spent $300 eating out at restaurants last month" or "I spent $45 at Starbucks." My weakness is actually Target, $20 shirts add up!
jen1975 jen1975 7 years
Good tips, but this doesn't really address the issue of how to pay for those little purchases (if not on the one credit card). Should they stick to cash for all negotiable expenses? Should they make them with a combined debit card, separate debit cards, or something else entirely? It sounds like it's figuring out how to pay for coffee, clothes, books, etc. that's getting them into trouble.
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