Looking for ways to save money as a couple?
If you are a couple living together, know how challenging it is to save money when there is inflation. Even if both bringing money into the house, saving up gets tough when both are not in the same page.
Whether you are looking to save for a down payment on a house, plan a dream vacation, or simply build a nest egg for the future, saving money as a couple requires teamwork, communication, and shared goals.
As per the study, it has been found that money issues bring conflicts in relationships. Learning how to manage your finances as a couple is essential for a healthy and successful relationship.
I have discussed earlier in a post on “how to deal with financial stress in a relationship” in detail. If you are facing the issue, there is no harm in reading the article. You may find some tips that will work in your situation.
However, navigating joint finances can be challenging, especially if you have different spending habits or financial priorities, like I mentioned.
One partner may be more of a spender, while the other is a saver, leading to tensions and misunderstandings. In this topic, we will explore some effective strategies for saving money as a couple.
With a shared commitment to financial responsibility, you can build a strong financial foundation for your relationship and achieve your shared dreams and aspirations.
With my 8 years of married life experience, I can say it is doable only if both the partners have similar financial aspirations.
Save Money as a Couple
Set financial goals
It is important for couples to set a financial goal for themselves. You must identify what you want to achieve as a couple.
Do you want to buy a house, go on a dream vacation, pay off debt, or save for retirement?
Sit and talk with each other about financial goals and prioritize them base on your timelines. Ensure both are on the same page. If not, at least establish a clear communication.
Giving you an example here, I and my husband married early, and we had zero savings. Being young, we used to spend what we earned. But after a financial blow, we took it as a lesson and mend our ways to save money as a couple.
The first thing we did was discuss our financial goals. We discussed our needs and financial aspirations. Like when we want to buy our house, to do that how much approximately do we need to save, what other priority savings do we need to do and so on.
I believe to save money, having a clear money mindset is necessary, and realistic targeted financial goals which will help you move forward.
Create a budget
After you set your financial goals, it is time to create a monthly and track them frequently. Though creating a budget is a tedious and time-consuming process, but can help save money in the long run.
There are several methods of creating a budget. Some prefer to update and track their budget using an app, whereas others do it the traditional way, which is creating a budget on a notepad.
A budget helps to track income and expenses, identify areas where money is being spent unnecessarily, and allocate funds towards shared financial goals.
Here is an example that illustrates how creating a budget can help a couple save money:
Meet Jack and Jill. They are a young couple who are just starting their lives together. Jack works as an engineer, while Jill is a freelance graphic designer.
They want to save money to go on a dream vacation to Europe in two years, but they are not sure where to start. So, they decide to create a budget.
Here are the simple steps they followed, first they identified their monthly income, their monthly expenses based on their needs and on others like entertainment, dining out, transportation and miscellaneous expenses. They noted down everything and after careful consideration; they found how much they usually save and how much they can save if they cut down all the unnecessary expenses.
They have a clear goal in mind and after creating the budget, they now have the understanding of their monthly expenses and savings.
Now, to fulfil their dream vacation, they must mend their lifestyle and save more in two years. They must prioritise and revised their financial goals.
For example, in two years they have this dream vacation, also they have debt to repay. Based on their income, they must do things that will double their income and could save more. A budget will help you go through the process a bit more easily.
Track your spending
Tracking your spending can help you become more aware of your spending patterns and help you find ways to save money.
When you track your spending, you may be surprised to find out how much you are spending on miscellaneous things.
If you are constantly over drafting your checking account or consistently behind on your credit card payments, these are red flags you would need to change.
Let us say that Mark and Sarah are a couple who are trying to save money. Mark works as a software engineer and Sarah is a nurse. They have noticed that they are not able to save as much money as they would like and they want to figure out why.
They decide to track their spending for a month to see where their money is going. While reviewing their spending track, they found they spent a lot on dining out and entertainment. They spent more on dining out and entertainment than they did on groceries for the month.
Tracking their spending habits made them realize why they were not able to save money.
Set up a joint savings account
Having a joint savings account allows couples to set shared financial goals and work together to achieve them. They can pool their resources and save money on fees and interest.
Joint accounts also make it easier to track spending and see where your money is going.
Some banks offer reduced fees for joint savings accounts, which can help couples save money on account of maintenance fees, ATM fees, and other bank fees.
Not only that, joint savings accounts can also offer higher interest rates than individual savings accounts, which means couples can earn more money on their savings.
For example, let us say that John and Sarah are a newly married couple who want to save money for a down payment on a house. They decide to set up a joint savings account and agree to contribute $500 per month towards their savings goal. They also set a goal to save $30,000 within three years.
By setting up a joint savings account, John and Sarah are able to keep each other accountable for their savings goal.
They can track their progress towards their goal and adjust their savings plan as needed. They also benefit from the higher interest rates and reduced fees that come with a joint savings account.
Look for ways to reduce expenses
Every dollar you save on your monthly expenses is one less dollar you have to worry about to your budget.
Till now we have discussed why you should budget and how it helps save money. While budgeting, you will find the loopholes where your money is going, where you can save and so on.
The expenses of every month are not the same. But if saving money is in your priority list, you have to look for the ways to reduce expenses. You can make a list of your non-essential expenses and evaluate them if they are needed or not. Look into your spending pattern and mend your ways likewise.
For example, if you are spending too much on transportation, and petrol, consider traveling in a cheaper mode of transport like the public buses, train.
In your budget, if you see your money is going way more than expected in dining out, you can start cooking at home.
There are probably a ton of ways to reduce expenses. It varies from person to person. What seems to be an unnecessary expense to me, could be necessary for you.
Prioritizing debt repayment
It is no secret that debt can put a strain on a relationship. Not only can it be a source of financial stress, but it can also lead to arguments and put a damper on the things you enjoy doing together.
According to a recent poll, 64% of Americans say that debt is a major source of stress in their lives. The good news is that there are things you can do to ease the burden of debt and even save money.
To start with, identify the debts with the highest interest rates if you have multiple high-interest debts, consolidate them into a single, lower-interest loan to save money on interest payments.
Talk to your bank and try to negotiate interest rates on your debts. If you already having debts, revise your financial goals and avoid taking on new debts.
Set up automatic savings
Between bills, groceries, and other necessary expenses, it can be hard to put away any extra cash. However, by setting up automatic savings, couples can make saving easier and less stressful.
There are a few different ways to set up automatic savings. One option is to have a certain amount of money automatically transferred from your checking account into your savings account each month. This is often an easy way to save, as you do not have to think about it or remember to do it yourself.
As your income increases, consider increasing the amount you save each month to reach your savings goals faster. This way you can maximise your wealth.
Look for ways to earn extra income
Side hustles can always bring in extra money. You can do them alongside with your primary job. As it gives much more flexibility, people are going after side hustles more to increase their monthly income.
There are a ton of ways to earn passive income which will boost your income. You can dog walk, be a virtual assistant, rent your spare room or parking space, start a consulting service and so on.
Side hustles have opened opportunities for everyone. You can easily think of this as increasing your income significantly.
Identify your spending triggers
How can you save money if you don’t know what’s causing you to spend? Think about the times when you have felt the urge to spend money recklessly. What were the circumstances?
Identifying your spending triggers can help you to be more aware of them and make better decisions about whether to act on them. The reason for your spending trigger could be anything. It could be based on your emotions, or a particular shop.
For example, if boredom is a trigger for you, find another activity to do that does not involve spending money.
Once you have identified your spending triggers, tracking your spending plays an important role. Where you are spending more, and how much. Once you have analysed them, you can now control your buying impulses and save more.
How can couples navigate different financial priorities and goals?
Different financial priorities and goals can put stress on a relationship. Money is often a touchy subject, and can be a source of conflict for many couples.
One person may want to save for retirement while the other may want to invest in a home. It can be difficult to find common ground.
It is important to openly communicate about finances with your partner to avoid any miscommunication or misunderstandings. Try to understand each other’s financial habits and attitudes towards money.
If one person is a spender and the other is a saver, find ways to balance your spending and saving habits. Be realistic about what you can afford and be willing to adjust as needed.
Always talk to your partner about your financial aspirations and what you want to achieve. This will help you align your goals and ensure you are both working towards the same thing.