Open communication about money is essential to a healthy relationship. Many strive to achieve this by combining at least part of their finances and maintaining joint accounts. Others, however, prefer to keep all their accounts separate, and that’s especially true for the younger generation.
according to a Bankrate Survey as of February 2023, 43% of Gen Z and 31% of millennials say they prefer to keep all their accounts separate. That compares to 19% of Generation X and 18% of baby boomers.
If you prefer to maintain complete financial autonomy in your relationship, you may need to work a little harder to make sure that you and your partner are on the same page about financial issues. CNBC Select offers advice on how you can achieve this and what tools can help.
Be clear about how you are dividing up expenses
You may keep your finances separate, but if you live together, you inevitably have shared expenses, which may include housing, utilities, groceries and more. It is crucial to determine what expenses you consider shared and how you are dividing them up.
If you and your partner have similar incomes, this can be as easy as agreeing to a 50-50 split. But when one person earns considerably more than the other, you need to have a serious and potentially awkward conversation.
Each couple will define what is fair in a different way. You can decide to divide the expenses proportionally to your income. For example, if you make $5,000 each month while your partner makes $2,500 (50% less than you), then they will pay half of what you pay for everything. If your rent is $3,000 per month, you will contribute $2,000 while your partner or spouse will pay $1,000.
If that doesn’t sound right to you, you can still agree to pay for everything equally. But this will limit what you can afford as a couple to your partner’s much lower income. In the example above, you may have to agree to live in a $2,000 per month apartment in order to split the rent evenly.
No matter how you divide your expenses, you should also agree on how to organize your money as a couple. If you’re not completely opposed to a hybrid approach where you share some accounts and keep the rest separate, a joint checking account may be the answer. If not, you need to find other ways to ensure transparency.
A budget app like dear it can be a useful tool. It lets you choose bank and credit accounts to connect to and share information with your spouse or partner so you can track spending and coordinate bill payments together. The app will also send you bill payment reminders to help you stay on top of your shared expenses.
dear
Information about Honeydue has been independently compiled by CNBC and has not been reviewed or provided by Honeydue prior to publication.
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Cost
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Outstanding Features
Allows couples to view both partners’ bank accounts, credit cards, loans and investments (and each partner can select what to share with the other) so they can manage money together and see everything at a glance
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Categorize your expenses
Yes, but users can customize
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links to accounts
Yes, your bank and your partner’s credit cards
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Availability
Offered on both the App Store (for iOS) and Google Play (for Android)
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security features
Data encryption, Touch ID and multi-factor authentication
Plan how you will save for shared goals
As a couple, you almost certainly share goals and dreams (and if not, finances probably aren’t the biggest concern in your relationship). Of something big like a From a down payment on a house to more modest ambitions like a small vacation or a new sofa, you and your partner must figure out how to manage your savings.
A good solution is to keep your shared savings in a high-yield savings account. These accounts earn higher interest rates than traditional savings accounts. And thanks to the power of compound interest, or earning interest on interest, your earnings will grow even faster. You can also withdraw the money when you need it, although many financial institutions will limit you to six withdrawals per month before imposing fees.
CNBC Select has ranked the best high-yield savings accounts and suggests LendingClub High Yield Savings as our top pick. We also recommend UFB Premier Savings as it currently offers a generous APY.
LendingClub High Yield Savings
LendingClub Bank, NA, Member FDIC
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Annual Percentage Yield (APY)
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minimum balance
No minimum balance requirement after $100.00 to open account
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monthly fee
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maximum transactions
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Excessive Transaction Fee
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Overdraft Fees
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Do you offer checking account?
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Offer ATM card?
UFB Premier Savings
UFB Premier Savings is offered by Axos Bank, Member FDIC.
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Annual Percentage Yield (APY)
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minimum balance
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monthly fee
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maximum transactions
No maximum number of transactions; maximum transfer amounts may apply
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Excessive Transaction Fee
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overdraft fee
Overdraft fees may apply, in accordance with the terms, but no specific amount is specified; overdraft protection service available
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Do you offer checking account?
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Offer ATM card?
create a budget
You and your partner may agree on how to split expenses, but that doesn’t mean you’re in sync on how much to spend. To help you get on the same page (and stay there), you need a budget.
We already mentioned Honeydue, which is our top pick for the best budget apps for couples. With the app, you can set monthly spending limits for each spending category. The app will notify you if you or your partner are about to reach a spending limit.
Another excellent option is good budget that keeps track of your household expenses using the “envelope method.” Essentially, an “envelope” is a spending category, and you decide how much to allocate to each envelope. This is an especially good option if you’d rather not connect your bank accounts, since the app requires you to manually enter your transactions into each envelope.
good budget
Information about Goodbudget has been independently compiled by Select and has not been reviewed or provided by Goodbudget prior to publication.
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Cost
Get 20 free envelopes; for unlimited envelopes you need to upgrade to Goodbudget Plus which is $7 per month or $60 per year
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Outstanding Features
It allows users to plan their household expenses using the “envelope method”, where they allocate a certain amount of their income into categories like groceries, rent, and paying off debts. Users are only supposed to spend what is in their envelopes and if they exceed their budget, the envelope will show red to indicate that they overspent.
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Categorize your expenses
Yes, but users can customize
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links to accounts
No, users manually create “envelopes” and enter their transactions
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Availability
It has a web version and is also offered on both the App Store (for iOS) and Google Play (for Android)
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security features
256-bit bank-grade encryption in a secure data center
Consider a prenuptial (or postnuptial) agreement
If you and your partner decide to get married, you are not only entering a new phase in your relationship, but you are also taking on a new set of legal responsibilities that directly affect your finances as a couple.
If you have an asset in your name, you may believe that it is only yours. Let’s say you’re paying a mortgage and the deed is in your name only. Or maybe you’ve financed a car, and since you’re responsible for this debt today, you might assume your partner never will be.
This might not be the case for spouses, especially in the event of divorce or death. These things aren’t pretty to think about, but separating your finances doesn’t offer much legal protection when it comes to such events.
If you are getting married, consider signing a prenuptial agreement. This will allow you to put in writing what you want to happen to your assets. You can change this agreement later if you need to. If you’re already married and don’t have a prenuptial agreement, a postnuptial agreement might be an option. Talk to a lawyer about what to consider and how to proceed.
Keep communication open
Successful financial management as a couple requires frequent and open communication. Your financial life is dynamic, and circumstances, goals, and priorities can change for both you and your partner. by regularly By having honest conversations about money, you can ensure that you stay on track with your current budget and goals, as well as stay on top of any changes.
Also, as difficult as it is, talking about money can improve the intimacy in your relationship. It is a difficult topic that can make people feel vulnerable. Showing understanding, especially if you and your partner have different money styles, and working as a team can bring you closer.
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Bottom line
If you are married or living with your partner, you can choose to keep your finances separate. But even in this case, he will still have shared goals and expenses that require a budget. As with anything in a relationship, communication is key. Keep it consistent and honest, and it could help you support each other in new ways and reduce confrontation.
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Editor’s note: The opinions, analyses, reviews, or recommendations expressed in this article are solely those of Select’s editorial staff and have not been reviewed, approved, or otherwise endorsed by any third party.
