Month: October 2020

  • How to Set Financial Goals

    Have you ever told yourself that you were going to get your finances in order but then struggled to make any meaningful changes? I hear it from readers and friends all the time.

    “I don’t know where to start.”

    “I know I should be setting goals, but I just don’t know what goals to set.”

    “I try to save money, but I feel like I never have anything left at the end of the month.”

    If any of these sound like you, then this post is for you. I’m sharing why it’s important to set financial goals and how to set financial goals you can actually achieve.



    Why it’s important to set financial goals

    Have you ever decided to start saving money just because you felt like you were supposed to? You tell yourself, “Well, I know I’m supposed to be saving, so I guess I’ll start putting the money I have left at the end of each month into my savings account.”

    Most often, what happens is that you don’t have anything left at the end of the month, and you don’t end up saving money.


    Because there’s no purpose behind your saving. When you’ve set an intentional goal that you’re excited to reach, you can create a plan to save for it. But when you’re saving just for the sake of purpose, it’s hard to get excited about it. 

    Setting financial goals pushes you to get super clear on what you want out of life and then come up with a plan to get there. 


    How to set financial goals


    I see many of my readers setting arbitrary financial goals because they feel like they should. They open a credit card or start saving for a home without really having any intention behind it, all because some personal finance “expert” told them that they should open a credit card or start saving for a home.

    When I help people to set financial goals, I do an exercise where they envision their future. What do you see when you envision your life one year from now? Two years? Five years? Ten years?

    Once you have that vision in your mind, consider what financial goals you need to reach to make it happen. What’s standing in between you and your dream life?

    Brandon and I envision financial freedom in our future and being able to spend our money on things that bring us joy. We got married with a combined six figures of debt standing between us and that vision. As a result, we had plenty of purpose behind our goal.

    The bottom line: Don’t just set goals because you feel like you should. Have purpose and intention behind them.



    Imagine you’re going on a road trip with a friend. What’s the first thing you do? You type your destination into the GPS. And the GPS can give you step-by-step directions based on where you’re starting from. But with no starting point, the GPS won’t work as planned.

    Goal setting is no different. If you want to map out a route to get to your final goal, you’ll first need to identify where you’re starting from.

    Let’s say your big financial goal is to pay off your debt. In order to make a plan and know when you’ll accomplish your goal, you need to know where you’re starting. In this case, that includes things like making a list of your debts, including the lender, the amount owed, and the interest rate.

    Or maybe you want to save an emergency fund of $10K. Figure out how much you currently have saved to know what your starting point is.



    I’m sure you’re familiar with the concept of SMART goals. But this is important, so let’s talk about how this concept relates to financial goals. Smart goals are:

    • Specific: The more specific your goals, the better. Don’t just set a goal of earning money from a side hustle. Set a goal of earning $1,000 per month from your side hustle within the first year (for example).
    • Measurable: The progress of this goal can easily be tracked. $1,000 per month is very specific — you’ll know for sure if you’ve reached it or not, as well as if you’re on track to reach it. And once you know how much you want to make per month, you know what your daily and weekly goals should be.
    • Attainable: While setting your goals high is awesome, make sure it’s something you can actually accomplish. I’m all for setting huge goals — to a limit. Consider what will be required of you to complete this goal, and carefully consider whether you have that to give.
    • Relevant: Make sure your goal is in harmony with your core values and where you see yourself in the future. If your dream life includes you working from home on your own business, then setting a goal of $1,000 in the first year is awesome because it’s moving you in the right direction, not the wrong one.
    • Time-bound: Don’t make the time frame for reaching your goal open-ended. We tend to take as long as we’re allowed to accomplish a task. If your goals are completely open-ended, they may never seem urgent enough to get to. As you can see, we set a time frame of one year for the goal we’re using as an example.



    When you look at your big goal at one big task on your to-do list, chances are you’ll pass right on over it to something a little more achievable. After all, a goal like paying off debt or saving a large amount of money isn’t going to happen quickly.

    When I’m going after a big goal, I like to start by breaking the goal down into as small of actionable tasks as I can. Break it down into small enough tasks that you can do in one sitting.

    Suppose you’re making a plan to pay off six figures of debt. You can’t just throw that on your to-do list and hope you get to it. But you might plan tasks such as:

    • Make a list of all your debts
    • Call your credit company and ask for a lower interest rate
    • Set up autopay for more than the minimum payment on one of your debts



    Once you’ve broken your goal down into as many small actionable steps as you can, it’s time to make a plan to accomplish them. That typically looks like putting those tasks on your calendar.

    Let’s go back to our debt payoff example. Maybe you’ll set aside half an hour tomorrow to make a list of all your debts, including lender and interest rate. 

    Then next week, you’ll set aside some time to call each credit card company. While you’re doing that, you’ll hop onto your account and setup your auto pay.

    I don’t know about you, but I’m far likely to accomplish a task when it’s actually on my calendar. Otherwise, it’s just me constantly making mental notes to do something later without ever actually remembering to do it when I have time. 



    One reason that so many people struggle to stick to their goals is that they don’t have any accountability. They get really excited about a goal when they first set it, but then the motivation starts to wane.

    So how do we go about creating accountability? Here are some ways to do just that:

    • Write down your goal. Seriously, this is a step that most people skip. And studies show that just writing down your goal makes you more likely to reach it.
    • Share your goal. When Brandon and I started saving for our RV, we told everyone — even before we had saved a dime. But everyone in our lives knowing about our goal kept us motivated.
    • Track your progress. Remember that SMART goals are measurable, meaning you can measure their progress. Find a way to do this using a notebook, journal, spreadsheet, etc.
    • Hire a money coach. If you’re struggling to create accountability on your own, hire a coach! One of the benefits of a money coach is that you’ve always got someone in your corner, encouraging you and pushing you.



    One of the things that makes reaching any goal easier is having habits in place that help move you toward your goal. 

    In the case of financial goals, I find that a lot of people ignore their finances or fear opening their bank accounts. A good habit to adopt would be setting aside time on your calendar at least once per week to check in on your accounts and update your budget, whether you use a spreadsheet, budgeting app, etc.

    You could also work on implementing habits that don’t seem related to your goal but will help move you in the right direction. Let’s say you’re working to save for the downpayment on a house, but are finding that you don’t have much money left at the end of each month.

    In that case, you might decide that you’ll meal plan and prep your lunches and dinners each week to prevent you from impulsively ordering takeout because you don’t feel like cooking.


    6 tips for reaching your financial goals


    I see a lot of personal finance experts talk about how they can teach you to save money without a budget. But here’s the thing — every one of those people teaches some method of tracking your spending. And they just call it something other than a budget.

    There’s no way around it. The best way to make progress on your finances is to figure out where every dollar is going and to start intentionally deciding where you want your dollars to go from now on. 

    One of the first things I recommend you do when making changes in their finances is designing a create a monthly budget to help you get closer to your goals.



    For many people, it’s actually their mindset that holds them back from reaching their financial goals. People struggle with limiting beliefs, telling themselves they’ll never be able to reach their goals because they’ve tried and failed before.

    Anytime you’re getting your finances in order or chasing a big financial goal, I recommend making money mindset work a part of the process.



    One of the biggest struggles of setting financial goals is coming to terms with the fact that you might have to cut back in other areas in order to get there. Rather than thinking of those changes as permanent, consider temporary lifestyle changes you can make.

    Let’s say you’re working to pay off debt, and you know you could eat out less to make room in your budget. Rather than permanently cutting your eating out budget, decide that you’ll cut your eating out budget by 50% until you’re debt free.

    Or maybe you get biweekly manicures, and you decide that until your emergency fund is fully funded, you’ll get manicures half as often.



    I tell my readers all the time that they don’t have to stop spending on the things they love to pay off debt or reach their financial goals. And while they can spend their money on anything, they can’t spend it on everything.

    Rather than letting your impulses guide your spending, let your values guide you. Decide on a few things that are really worthwhile expenses to you. What expenses are worth putting off your debt-free date or your goal for a bit longer?

    Brandon and I love eating out and we love live music. We could cut those out completely and pay off our debt a lot faster. We also could have stayed in an apartment instead of buying an RV to travel full time. But we decided that those expenses really align with our values, and so they’re worth putting a bit less money toward our debt-free goal. 



    I find that having some sort of goal tracker front and center is the best way to boost your motivation. 

    When Brandon and I started saving for our RV, we put a whiteboard in the kitchen where we tracked our progress. Every day we would see it, and it would be a small reminder. There are plenty of creative and visually appealing goal and debt payoff trackers you can use to help you stay the course.



    Going all-in on your goals can be exhilarating and exhausting at the same time. While you might feel super motivated in the beginning, that excitement can start to wane.

    Rather than letting your lack of motivation completely throw you off from your goal, set small milestones where you’ll treat yourself. Decide that for every $1,000 in your savings account, you’ll have a date night or whatever feels like a treat to you. Make these treats big enough that you keep you motivated but small enough that they don’t throw you off track from your goal.


    Financial goal examples

    Not sure what financial goals to set? No problem! Here’s a list of great ideas for financial goals to set this year:

    • Build an emergency fund
    • Pay off debt
    • Start saving for retirement
    • Save for a house downpayment
    • Renovate your home
    • Plan a vacation
    • Start a business
    • Save for a child’s college education
    • Pay off your mortgage
    • Reach financial independence


    Final Thoughts

    Sitting down to set a new financial goal seems like just about the most daunting thing ever. I get it. I felt it when Brandon and I set the goal of paying off six figures of debt early and when we decided to save up to buy an RV to travel.

    But by setting goals that truly align with your dream life and breaking them into manageable pieces, you can totally do this.

  • How to Get One Month Ahead on Your Budget

    For my first seven years out of college, I got paid on the first day of each month. It made budgeting ridiculously easy. I could pay all of my bills right away, and then I knew how much I had available to spend the rest of the month.

    Then Brandon and I got married and combined our finances, and suddenly budgeting was a little more complicated. Brandon got paid twice a month, meaning we had to time his paychecks to our bills.

    Not too long after that, I quit my job to run my business full-time. And unlike my government job, self-employment doesn’t come with the same consistency, such as a paycheck once a month.

    I knew I had to figure out a different budgeting system before leaving my full-time job.

    Then I learned the concept of getting one month ahead in your budget (aka spending last month’s income). This system has completely changed the way I budget and has eliminated so much of the stress I used to have around my finances!


    How to Get One Month Ahead on Your Budget

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    What does it mean to get one month ahead in your budget?

    Most people budget each month with the income they’ll get that month. For example, someone would pay all of their November bills with the income they’ll earn in November.

    Getting one month ahead in your budget means you’re always living off of last month’s income. So instead of paying November’s bills with November’s income, you’d pay November’s bills with October’s income. Then you’d use your November income to pay your December bills, and so on.


    The benefits of getting one month ahead in your budget


    For people who get paid biweekly or twice per month, budgeting can be a huge hassle. You have to make sure that for each of your bills, you’ll have the money in your paycheck to cover it.

    Let’s say you get paid on the 1st and the 15th of each month. But what if most of your bills are due in the first half of the month? You’ve barely got enough to cover your bills, and then you’re pinching pennies and waiting to buy groceries until your next paycheck comes in.

    When you budget a month ahead, all of the money is in your bank account on the first of the month, so you don’t have to worry about when exactly each of your bills is due.



    You probably already know that saving up an emergency fund is critical to getting ahead with your finances. The general rule of thumb is to save 3-6 months of expenses, but the minimum you should have is one month’s worth.

    When you’re budgeting one month ahead, you’ve already got that small emergency fund built into your budget. If any emergencies happen, you know you’re covered for at least the next month.



    Many people get into a pattern where they put all of their expenses onto a credit card and then use their income from the following month to pay off their credit card. 

    The problem with this is that you’re spending money you haven’t even earned yet. First, it’s just not a good habit to get into. Second, if you lose your job and don’t have the income you expected, you may not be able to pay for those purchases at all. Rather than always being one month ahead on bills, you’re always one month behind.

    When you budget one month ahead, you know you’re only spending money you already have.



    I can say from personal experience that my financial stress decreased in a big way when I started using this budgeting system. I didn’t have to monitor my budget quite as closely. 

    It’s also been a life-saver as Brandon and I have been traveling full-time. First, we have to pay for many of our RV park reservations ahead of time. If we weren’t ahead on our budget, we wouldn’t be able to do that.

    It’s also helped us to navigate through the small emergencies that have popped up since we’ve been on the road, such as having to replace all of our RV tires or buy a new car while on the road.

    Edit: Now that we’re done traveling and we own a home, budgeting one month ahead is just as beneficial! This budgeting style definitely isn’t just for those in unique circumstances.


    How do you get a month ahead?


    The first step to getting one month ahead is to create a monthly budget. For this system to work, you need to know exactly how much you’re spending each month and where your money is going!

    Here’s how to create your budget:

    1. Determine your monthly income
    2. Make a list of your monthly fixed expenses
    3. Track your spending for the past 3-6 months to determine your variable expenses
    4. Decide on spending goals (use how much you’ve been spending to figure out how much you WANT to be spending)
    5. Don’t forget to make room for debt payoff and savings goals!
    6. Make sure your spending is less than your income



    Ideally, you won’t be spending exactly as much as you earn each month — there should be some left over. Then, you can start using that extra each month to build your one-month buffer.

    The idea is that every month, your buffer will get a little bit bigger until you’ve saved enough for the entire month of expenses.

    Let’s say you have $3,000 per month of income. You currently spend or save $2,750 each month, which leaves you with $250 left over. You can put that $250 toward the following month’s budget. A month later, you can roll over another $250 for a total buffer of $500. Each month, the buffer will grow a bit until it reaches enough to cover your entire budget.


    What if you’re living paycheck to paycheck?

    This budgeting system is even more beneficial for people living paycheck to paycheck, for whom any financial emergency would throw them off.

    Unfortunately, living paycheck to paycheck makes it especially hard to get one month ahead on bills. Here are a few ways you can start saving money, even if you’re on a tight budget:

    • Use cashback apps like Fetch, Ibotta, and Rakuten. These tools allow you to earn a little extra money on purchases you’re already making.
    • Negotiate your monthly bills. You can try negotiating bills such as your car insurance and internet to reduce your monthly payments.
    • Pick up a side hustle. When you’re living paycheck to paycheck, every little bit helps!
    • Sell stuff on Facebook Marketplace. You’d be surprised how much you can make by selling clothes or household items you aren’t using.



    In addition to using the extra money in your budget to build your one-month buffer, you can use any cash windfalls you have. Common examples include:

    • Tax returns
    • Gifts
    • Extra paychecks (if you get paid every other week, then two months of the year you’ll get three paychecks instead of three)
    • Side hustle income



    Once you save the full month of expenses, you’ll start using this to budget for each month’s expenses. Rather than creating your budget using the amount you’ll earn in the current month, you’ll use the amount you earned last month.

    This budgeting system is really great for self-employed people. With irregular income, it can be hard to know how much to budget. But with this system, you’re budgeting with last month’s income.

    It’s also worth noting that you aren’t limited to just getting one month ahead. There have been times when my income was less certain, so I budgeted two months ahead for added security.



    Tracking your finances when you budget one month ahead can be tricky because you can’t just spend what you have in your bank account. Because of that, I recommend using a budgeting tool to help you stay on track. The budgeting app You Need a Budget is specifically designed to help you budget this way.

    In fact, YNAB is how I first learned about this concept of budgeting one month ahead. I could talk more about the many ways this budgeting app has improved my finances, but I’ll save that for another article.


    Getting one month ahead while paying off debt

    One of the most common questions I get from people is about whether they should prioritize saving or paying off debt. The answer is both…sort of.

    If you don’t have any sort of emergency fund in place, then saving one month’s worth of expenses should be your first priority. Once you’ve got that in place, you can start putting extra money toward debt using either the debt snowball or debt avalanche.

    Of course, everyone has a different comfort level and financial situation. If you have a job where you’re at higher risk of losing your income or you have a family who depends on your income, it may be worth pulling back on debt payoff to build your emergency fund even larger.

    And don’t forget that while you’re paying off debt, you can still save for other financial goals!


    Final Thoughts

    I’m not exaggerating when I say that getting one month ahead with my budget has totally changed my finances. Not only does it create a lot of peace of mind, but the financial habits I learned getting there changed everything. I credit those habits with us being able to travel the country for a year, buy a home, save for a baby, and pay off large amounts of debt.

  • 8 Hacks to Boost Your Credit Score Quickly

    In the summer of 2020, Brandon and I bought an RV, sold most of our belongings, and hit the road to travel full-time. It’s been amazing, but we hit a few bumps in the road.

    Most notably, our car started on fire. Yes, you read that right. It literally started on fire.

    As you can imagine, there wasn’t much that could be done to salvage it, and we had to replace it quickly.

    When this happened, I started to panic a little. You see, my husband and I have both had our fair share of financial hiccups along the way, and we’ve both had times when our credit scores weren’t very good. I immediately started to worry about whether we’d be able to get a car loan.

    This worry came out of habit after years of worrying about money. In reality, Brandon and I have worked hard to be in the financial situation we are in today. All of that work not only allowed us to get a loan to replace our car, but our good credit scores also allowed us to get a good interest rate, so we wouldn’t be throwing away a ton of money on interest while we paid off the loan as quickly as possible.

    Like Brandon and I, many people find themselves at points in their lives where their credit score is suffering. And just like we did, you are 100% capable of increasing your credit score and making your financial life a heck of a lot easier.

    In this article, you’ll learn what a credit score is, why it matters, and how to start boosting yours quickly.



    What is a credit score?

    A credit score is a three-digit number that represents your creditworthiness (aka how likely you are to pay your bills on time). It’s based on the information on your credit report, which is compiled by three major credit bureaus: Experian, Equifax, and Transunion.

    You can think of your credit report as your report card and your credit score as the grade you receive. Credit scores range from 300-850 and are considered either poor, fair, good, very good, or excellent. The higher your credit score, the better.


    Why is a credit score important?

    Your credit score tells lenders how risky of a borrower you are. In other words, they use the number to decide how likely you are to pay them back when you borrow money.

    Your credit score has a huge impact on your finances. It can affect things like:

    • Whether you can borrow money. If lenders see you as too much of a risk, you may not be able to get a credit card, car loan, mortgage, etc.
    • Your interest rates. Even if you can get a loan, those with lower credit scores will end up with much higher interest rates. A good score can save you thousands of dollars.
    • Your ability to get an apartment. When you fill out an apartment application, your credit score is one of the factors the landlord considers. A poor credit score can prevent you from getting an apartment. 
    • Your job. Potential employers can access part of your credit report. They might use this information to make a hiring decision, especially if you’re applying for a job where you’ll have access to company or customer money.
    • Your insurance rates. Studies have connected credit scores to driving records. Because someone with a low credit score is a greater risk for insurance companies, your premiums will probably be higher. 


    How do I check my credit score?

    Federal law says that everyone can get a copy of their full credit report from each of the three credit bureaus (Equifax, Experian, and TransUnion) at least once per year by visiting

    That being said, your full credit report doesn’t actually include your credit score.

    Luckily, it’s not that difficult to get your credit score from other sources. First, you can use a free credit scoring site like Credit Karma or Experian. Depending on your credit card company, they may also provide you with a free credit score.

    It’s important to note that there are multiple types of credit scores, including FICO and VantageScore. Experian reports your FICO score, while services like Credit Karma report your VantageScore. The two different major types of credit scores are the reason why the credit score you see may not be the same as what a lender sees.


    What is a good credit score?

    Credit scores range from 300-850 and break down like this:

    • 300-579: Poor
    • 580-669: Fair
    • 670-739: Good
    • 740-799: Very Good
    • 800-850: Excellent

    850 is a perfect credit score. The good news is that you don’t need a perfect score to get the perks that come with good credit. Those with a score of 800 or above will have access to the best rates on the market. 

    If you have a very good score, meaning 740-799, you still have plenty of advantages going for you. You probably won’t struggle to get a loan, and you’ll have access to better-than-average rates.


    How can I raise my credit score quickly?

    If your credit score isn’t quite where you’d like it to be, you don’t need to panic. Your credit score is an ever-evolving number. And by making a few changes to your finances, you can start to see your score consistently increase.



    Paying your bills on time is one of the easiest things you can do to consistently improve your credit score. 

    When you fail to pay a bill on time, the company you owe money to reports it to the credit bureaus. It then shows up on your credit report and damages your credit score. 

    Be sure you’re paying your bills on time, and catch up as quickly as possible on any bills you’re currently behind on. 



    Your credit utilization, meaning the percentage of your available credit that you’re using, is one of the biggest factors going into calculating your credit score. 

    The lower your utilization, the better. And anything above 30% can damage your credit score. If you’re using more than 30% of your available credit, try to pay some off to get that number below 30%.



    Paying off debt isn’t the only way to improve your credit utilization. You can also try to increase your credit limits.

    Most credit card companies have a form on their website you can use to request a credit limit increase. I find that calling their customer service line is more effective. There’s something about talking to an actual person that seems to get the job done better.



    Your credit score tells lenders whether or not you use credit responsibly. So the best way to show them that you do is to — you guessed it — use your current credit responsibly.

    A few rules of thumb for credit cards include paying off your full balance each month (not just making the minimum payment), and keeping your total usage below 30% at any given time.



    We know that your credit utilization is important for your credit score. So is your age of credit, meaning the average number of years you’ve had each credit account. The longer your average age of credit, the better. 

    I have lots of people ask me if they should close old credit cards. But keeping them open actually helps improve both your credit utilization and your average age of credit!



    Opening a new credit card can be great and all, but it doesn’t check all the boxes to increase your credit score. It increases your credit utilization but shortens your average age of credit and goes on your credit report as a hard inquiry.

    But becoming an authorized user on someone else’s credit card can check all the boxes.

    • It reduces your credit utilization, assuming the credit card is under 30% of the limit
    • It increases your age of credit, because you get credit for the full life of the credit card
    • It doesn’t appear as a hard inquiry on your credit report

    I can tell you from personal experience that this one does the trick. My husband had a far lower credit limit than I did, meaning his credit utilization was higher when he used his credit cards. 

    We added him as an authorized user on my cards, and his credit score immediately shot up!



    Applying for new credit can hurt your credit in a few ways. First, it shows up on your credit report as a new hard inquiry, which can slightly decrease your score. This will stay on your credit report for two years.

    Opening new credit also decreases your average age of credit, which can drop your credit score.



    Data from the Federal Trade Commission shows that about one in five people has errors on their credit reports. This could look like a debt showing up as delinquent when it isn’t or a debt that isn’t yours at all showing up on your credit report. 

    Sometimes it’s simply a mistake on the part of a lender, but it could also be something more sinister like identity theft.

    Unfortunately, you have to be proactive about removing these errors from your credit report. No one else is going to do it for you. 

    This is why it’s important to check your credit report at least once per year. You can spot any errors right away, and dispute them with the credit bureaus.


    How long does it take to increase your credit score?

    Turning your credit around isn’t an instant process. You can’t start paying your bills on time or pay off some debt and expect your score to shoot up instantly.

    The good news is, however, that you can start boosting that number fairly quickly. Some things work faster than others.

    If you have a low credit utilization or short credit history, having someone add you as an authorized user to their credit card can boost your credit score a lot in just a few months. Similarly, paying off a bunch of credit card debt can make a big difference quickly.

    Other things will take longer to recover from. Delinquencies — aka missed payments — stay on your credit report for seven years. Bankruptcies stick around for ten years. If you have either of these, it’s just a matter of waiting for them to fall off, while making other positive changes in the process.


    Final Thoughts

    Your credit score is one of the most important numbers when it comes to your finances. It can be the determining factor when it comes to the loans, interest rates, and apartments you can get.

    While many people struggle with a low credit score at one point or another, there are plenty of changes you can make to start improving your score.

  • How to Manage Your Money as a Couple

    This weekend marks one year of marriage for Brandon and me. One year of sharing a last name and one year of sharing a bank account.

    It probably doesn’t surprise you to know that Brandon and I talked about how we’d manage our money as a married couple long before we actually were a married couple. Just as we talked about our future goals and plans, we also talked about our future finances.

    When couples decide to spend their lives together, the discussion of how they’ll manage their money together is often an afterthought. Most people don’t find it quite exciting as the other big talks.

    But it’s actually one of the most important conversations you’ll have.

    In this post, you’ll learn about the different ways you and your partner can manage your money together as a couple, along with the pros and cons of each method. Plus, I’ll share a few bonus tips at the end for tackling finances in your marriage.


    How to Manage Your Money as a Couple


    Joint vs. separate finances for couples

    One of the biggest financial topics you and your partner will have to tackle after getting married is deciding how you’ll organize your finances. Will you combine all of your bank accounts and have joint finances? Or would you rather keep things separate?



    The first way that you and your partner can manage your joint finances is to go all-in and combine all of your bank accounts. With this money management style, the two of you have joint checking and savings accounts. All money flows into and out of the same accounts. 

    This is the method Brandon and I decided to go with when we got married, and a year later, we have no regrets. However, that doesn’t mean it’s right for everyone.

    • Pros: I find this to be the easiest way to manage money as a couple. There’s no arguing about who owes who money or worrying about which account a specific bill comes out of. Everything comes into and goes out of the same account. You’re tackling all of your expenses as a team. What’s yours is mine, and what’s mine is yours.
    • Cons: If there’s a huge income discrepancy, this method could lead to conflict. There can be discomfort and resentment on both sides if one of you makes most of the money. It also might make one or both of you feel like the other is checking up on you. You’ve worked hard for your money and want to be able to spend it how you like. Joint finances = joint decisions. Joint finances may also not work if one of you has children from a previous relationship that you’re financially responsible for.



    Another method you can use to manage your finances is to maintain fully separate accounts. This is how all couples start out. When you begin dating someone, you each have your own finances. And often, this is the case for years, even when you’re living together.

    This method has some more logistical pain points to work out. First, you have to decide how the bills will be divided up. 

    Will you each pay 50% of the expenses, or will you each pay a share that is proportional to your income? Let’s say you make a combined $100,000 per year. One of you makes $40,000, or 40%, while the other makes $60,000, or 60%.

    You could decide to split the bills 50/50. But you could instead have the person making 40% of the income pay 40% of the bills, and the person making 60% of the income pay 60% of the bills.

    Another question to answer is how you’ll actually pay for everything. Will one person pay for everything, and the other pay them back for their share each month? Or will each partner be responsible for paying certain bills?

    You’ll also want to decide how you’ll handle shared financial goals. Will you each be responsible for saving up half of the amount, or will one of you save more? Will you keep the money for these goals in a separate savings account, or will you open a joint savings account for specific goals?

    • Pros: Each partner maintains their independence and doesn’t have to feel as if they’re answering to anyone else for their spending habits or priorities. Plus, neither of you has to be responsible for the other’s debts if you don’t want to. Each of you pays for the debt that you brought into the relationship.
    • Cons: This method might prevent you from ever fully feeling like a financial team. This is especially true if one of you would prefer joint finances, but the other is dead set on separate. Another disadvantage of this system is that it’s just logistically a lot of work. When bills aren’t being paid out of a joint account, you have to decide who will be in charge of paying for what. Finally, this method may cause conflict if one of you significantly outearns the other or one stays home to care for children. One partner will could up with lots of spending money while the other is struggling to make ends meet.



    The final method of managing money with your partner is a bit of a hybrid of the two previous methods and involves having both joint and separate bank accounts. I love that this strategy gives you the best of both worlds.

    First, you’d have a joint checking account that you use to pay your bills. This is likely where your paychecks are deposited each month. You’d also have joint savings accounts for any financial goals you’re saving for together.

    But in addition to the joint bank accounts, you would each have your own individual checking an/or savings accounts as well. It’s this account that you’d use for any personal spending money. You and your partner can decide ahead of time how much spending money you’ll each get per month and then transfer it into these accounts. 

    • Pros: This method has the advantages of both of the others. It’s easy to share expenses because all bills are being paid out of the same account. You and your partner are approaching your finances as a team. But you each still have the independence that comes with your own spending money.
    • Cons: A potential downside with this system could occur if one partner makes a lot of money while the other only makes enough to cover their portion of the bills. Depending on how you fund the personal spending accounts, you could end up with a situation where one partner has spending money but not the other.


    Tips for managing your money as a couple


    Financial decisions should be made 50/50 with your partner, but it’s likely that one of you will be doing more of the hands-on managing of the money. 

    Brandon and I are both active participants when it comes to our money, but I’m the one who keeps up with the budget throughout the week and handles all of the bill-paying. 

    In your relationship, you can decide to divvy up the financial tasks in a way unique to your relationship — The important thing is that it’s clear who is responsible for what tasks. This helps to ensure nothing slips through the cracks.



    Honesty is important in all areas of your relationship. But this advice especially applies to your finances. And even though you may not both be tackling all of the financial tasks, it’s still important to talk about your finances openly. 

    Fighting about money is one of the leading causes of divorce, largely as a result of financial infidelity. Talking about money isn’t a cure-all for everything in your marriage. But you can bet that not talking about money is an easy way to make things go south quickly.

    My favorite way to keep communication open is by having regular money dates. This is how Brandon and I have our money conversations.



    These days, most millennial couples say “I do” with one or both partners bringing some debt into the relationship. Debt can be a huge emotional burden on couples. I know that for Brandon and me, making a debt payoff plan took a lot of pressure off our marriage. 

    When you get married, one of the first things you should do is figure out a plan to tackle your debt together. However, the plan might look different for every couple.

    You have a few different options to do this. Many couples treat debt as a joint bill after they get married, while others each pay off their own debts. 



    I think having financial goals is the absolute best way to make progress with your money, whether you’re single or sharing your finances with someone else.

    It’s easy to get stuck in a rut with your finances. You make decent money and pay all of your bills on time but don’t really feel like you’re accomplishing anything. This is what happens when you don’t set financial goals!

    Unless you have a goal in mind, you can’t create a game plan to get there. And without a game plan, you’re unlikely to ever start saving.

    If you and your partner want to start making real progress in your finances, sit down and set some goals together. Dream about what you want your life to look like one, five, ten, or even twenty years from now, and figure out what you need to do to make that happen.



    Regardless of how you decide to manage your joint finances, it’s important to set clear ground rules and boundaries. It’s important that you make financial decisions together while each still maintaining some semblance of independence. It can be a tough line to walk, and every couple has to figure out exactly how to do it for themselves.

    One common ground rule people set is about how much each partner can spend on a single item before consulting the other. For example, you and your spouse might decide you can spend up to $100 on a single item without consulting the other. But if the price tag is more than $100, then you’ll talk to your partner about it first.


    Final Thoughts

    Deciding to spend your life with someone is a big decision. You’re working through the process of merging every other area of your life. And at the same time, you have to figure out how you’re going to manage your finances as a couple. 

    There’s no one-size-fits-all approach — each couple has to decide what works best for them and their relationship. Any method can work as long as you’re both on the same team and keep the lines of communication open.