The Do’s & Don’ts of Financial Planning for Couples

When it comes to combining finances in a relationship, there is no one-size-fits-all approach. Planning involves more than just balancing budgets and paying bills—it’s about aligning values, setting goals, and finding a system that works for both of you. CERTIFIED FINANCIAL PLANNER™, Nichole Coyle, has worked with many couples navigating these decisions. Here’s her breakdown of some do’s and don’ts, along with client avatars to illustrate different approaches to financial planning for couples.

The Do’s and Don’ts of Financial Planning for Couples

Do:

1. Have Honest Conversations: Discuss your financial goals, spending habits, debts, and income before deciding how or when to combine your finances. Transparency is key.
2. Create a Plan Together to Manage your Cashflow: Whether it’s a fully combined budget or separate accounts, decide on a system that reflects your shared priorities. Keep in mind that even if you initially decide on a specific system at the beginning, you can always make changes and adapt your plan over time.
3. Set Boundaries: Establish clear expectations about who is responsible for what to avoid misunderstandings.
4. Review Regularly: Schedule periodic check-ins to discuss progress, adjust plans, or address challenges. It might be helpful to schedule a few “review meetings” on your calendar so you don’t let time get away from you for too long before checking in.

Don’t:

1. Avoid Money Talks: Ignoring financial conversations early can lead to bigger issues and possible conflicts later.
2. Force a System: One partner shouldn’t feel pressured into a arrangement that makes them uncomfortable. Financial planning for couples like other elements of your relationship requires trust and cooperation. Talk through your options and make sure you are both comfortable with the plan.
3. Ignore Financial Red Flags: If a partner has significant debt, poor spending habits, or avoids discussing money, it’s worth addressing before merging finances.

Example Strategies of Financial Planning for Couples

Example 1: Taylor and Jordan – “The Keep-It-Separate Couple”

Profile: Taylor and Jordan are both independent professionals with steady incomes. They value autonomy and prefer to handle their personal expenses individually while contributing equally to shared costs.

Why It Works for Them: They appreciate maintaining financial independence and want to avoid arguments about personal spending.

How It Looks in Practice:

• Each contributes 50% of their income to a joint account for rent, utilities, and groceries.
• They manage their savings, investments, and personal expenses independently.
• They set financial goals together (like saving for a vacation) but use separate accounts to save for them.

Example 2: Sam and Alex – “The All-In Partners”

Profile: Their approach to financial planning as a couple hinges on a strong sense of teamwork. Sam and Alex view marriage as a complete partnership, including their finances.

Why It Works for Them: They have similar spending habits, trust each other completely, and enjoy pooling resources to achieve shared goals.

How It Looks in Practice:

• They combine all accounts, including checking, savings, and investments.
• They create a single household budget, tracking all expenses together.
• Both partners have equal access to the funds and make financial decisions jointly.

Example 3: Isaac and Jada – “The Hybrid Team”

Profile: Isaac and Jada have different financial habits but similar long-term goals. They prefer a mix of joint and separate accounts to maintain balance.

Why It Works for Them: They want to collaborate on major expenses and goals but still have personal financial freedom.

How It Looks in Practice:

• A joint account covers shared expenses like the mortgage, groceries, childcare, and vacations.
• Each partner keeps a personal account for discretionary spending.
• They review their financial plan quarterly to ensure alignment.

Financial Planning for Couples: Crucial Questions Before Marriage

1. What Are Our Financial Goals?: Are we saving for a home, paying off debt, or investing for the future? Do we agree on our timelines and amounts needed for our goals? Discussing short term goals like saving for a vacation is just as important as discussing long term goals like saving for retirement. Sitting down with a CERTIFIED FINANCIAL PLANNER™ can help bring clarity as you create a plan to help you meet your goals.
2. What Are Our Spending Habits?: Do we prefer budgeting every dollar or having more flexibility? Deciding whether to have fully joint or some separate accounts can be very helpful depending on your spending habits.
3. How Much Debt Do We Have?: Understanding each other’s liabilities is crucial before merging finances. Additionally, discussing your goals for debt repayment is very important. Creating a plan together or with a professional can help you build a strong foundation.
4. What Role Does Money Play in Our Relationship?: Is it a source of stress, security, or something in between? Also discuss how you were raised to think about finances. What positive and negative things did you learn about money growing up? What was modeled to us often influences our perspective on financial planning as couples.

Choosing the Right Financial Approach

When deciding whether to adopt a completely separate, completely joint, or hybrid financial system, consider the following:

• Income and Debt Levels: Significant disparities in income or debt might make a hybrid approach more practical.
• Financial Compatibility: Do you share similar values around spending and saving? Completely joint may work well for you.
• Lifestyle Preferences: If one or both partners prioritizes independence, a separate or hybrid system might work better.
• Trust and Communication: A fully joint approach requires high levels of trust and open dialogue.  It can take just as much trust though with fully separate finances. Consider that one spouse may oversee paying the mortgage and you both need to trust that spouse to pay it on time.

No matter which approach you decide is best for you, it is important that both parties are still involved and aware of the big financial picture. Too often we see one spouse take the reins and the other spouse have very little idea of their finances. While we may never expect an unfortunate event like the death or disability of a spouse, it’s crucial that both spouses are equipped to manage the household finances with confidence.

Lack of financial awareness can lead to unnecessary stress, poor decision-making, and even financial hardship. By ensuring that both spouses are engaged in financial discussions, understand their assets and liabilities, and have access to important accounts and documents, you can create a safety net that helps to protect your family’s financial future—no matter what life brings.

There is no right or wrong approach to handling financial planning as a couple. The key is to create a system that fosters transparency, trust, and mutual respect. By having open conversations and tailoring your approach to your unique circumstances, you can build a strong financial foundation for your relationship.

Ready to get started? Let’s work together to design a financial plan that fits your relationship’s needs and goals. Reach out today for personalized guidance!

Nichole Coyle, CFP®, CSLP®

Managing Partner, Financial Planner

2300 St. Clair Ave NE

Cleveland, OH 44114

216.621.4644 x1607 office

330.607.2213 cell

nichole@impactcfp.com

Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC, a Broker-Dealer, and a Registered Investment Advisor.

Cetera is not affiliated with the financial institution where investment services are offered or any other named entity.

Investments are: Not FDIC/NCUSIF insured * May lose value * Not financial institution guaranteed * Not a deposit * Not insured by a federal government agency.

Posted In: Guest Blog