Love and money: Financial planning for couples

  • February 3, 2022
  • malikshehu
  • 5 min read

Soft life.” 

We use this term to describe a life free of financial burdens and stress. Typically associated with dating, it refers to spa massages and long walks on sandy beaches in far-flung locations.

Love is a beautiful thing when you don’t have to worry about finances. Say what you want, but money helps strengthen a relationship — especially since that ring and photographer won’t come cheap. But how can two people make a relationship work financially? Whose money should bankroll the everyday expenses, and what should the other party be doing with their money?

This article will give you three approaches to managing money in a relationship. It assumes you’re in a long-term relationship or cohabiting with an eye towards marriage (or a long-term partnership) — or already married. 

The TL;DR version is:

  1. Combine your wealth and pay things off faster
  2. Divide your wealth and pay things off separately
  3. Decide on which priorities you’ll both focus on: the mental accounting bias

Let’s dive in. 

#1 Combine your wealth and pay things off faster

“What’s mine is ours and what’s yours is our future’s.”

Combining Wealth Assists With Greater Accumulation of Wealth

In a two-income household, this means using one person’s income for expenses and the other one’s income for savings and investments.

This is a fantastic thing when done right. For example, let’s say Malcolm and Marie’s monthly earnings after tax are $5000 and $3000 respectively. If Malcolm’s income can cover the bills and still leave enough to entertain themselves, Marie can put her income into their savings account or save some and invest the rest. Better yet, if Marie’s income can take care of both their needs, Malcolm can use his higher income to save for and invest in their future.

This approach can also be used to wipe down debt. If either of them is in debt and Malcom’s income covers their combined monthly expenses, Marie’s income can be used to reduce the debt for both of them. This extra payment reduces the debt repayment period and increases their discretionary income once the debt is paid off. However, they should both remember to save some money for emergencies.

#2 Divide your wealth and pay things off separately

“From each according to his ability, to each according to his needs.”

Dividing your wealth allows for greater freedom in spending your discretionary income

Some couples prefer each person to spend their money as they wish. In this case, they can come to an agreement about how each income should be split to pay for expenses. An easy solution is to split the bills according to each person’s ability to pay them, and for each person to put aside an agreed-upon amount for the future. The rest is for each of them to do as they wish. 

This is akin to having 2 separate accounts and one joint account. The joint account helps pay for things like school fees and property down-payments.

Here’s what that looks like:


Total income: $8,000 per month.

Malcolm earns $5,000, which is (⅝) of the total.

Marie earns $3,000, which is (⅜) of the total.

Expenses & debt

Total household expenses and debt payments: $3,000 per month.

Malcolm pays (⅝) * $3,000 = $1,875, leaving him with $3,125 after expenses.

Marie pays (⅜) * $3,000 = $1,125, leaving her with $1,875 after expenses.

Savings & investments

Malcom puts (⅝) * $3,125 = $1,953 into their joint account, leaving him with $1,172.

Marie puts (⅜) * $1,875 = $703 into their joint account, leaving her with $1,172.

Discretionary income

Both of them can spend their individual balances ($1,172 each) as they wish.

#3 Mental-accounting bias

Putting money in different ‘accounts’ allows for discipline and accountability

There is a behavioral bias called the Mental Accounting Bias where people put money in different mental “buckets” for specific goals. We’ll cover behavioral biases in a future article, but the gist of MAB is that Malcolm and Marie can decide to put money in different mental buckets such as:

  • Family obligations
  • Health checkups
  • Business ideas
  • Emergencies
  • School fees
  • Retirement
  • Vacation
  • Wedding

The bucket method helps them both focus on different buckets at different times, and they can even bundle some of their obligations into fewer, larger buckets. For example, the wedding and vacation goals can be bundled into one bucket (“next month”) while school fees and business projects can be bundled into another bucket (“next quarter”). 

This method allows Malcolm and Marie to hold themselves accountable. If they are yearning for a vacation, they can shift their focus to the vacation bucket while foregoing the family obligations bucket. Better the Bahamas than paying for Uncle Bob’s third child, amirite?

Next steps

Relationship finances can be a contentious issue, but there are ways to handle the bills, save for the future, and still enjoy your lives. It just takes maturity, communication, and a commitment to building a better future.

Sit down with your partner and draw up a list of things you both want to achieve. Then, decide how you want to split your incomes to help pay for living expenses, repay debt, and save or invest for the future. Remember that a combined income can help you both achieve your dreams faster.

And if you need help figuring out finances within your relationship, talk to a financial planner to help you plan for your future and strengthen your union.

Lastly, remember that to live a soft life, you need hard cash.