Coupledom has plenty of perks—love, companionship, intimacy, etcetera, etcetera. A more practical and less acknowledged perk of having a partner, however? In many ways, it can save you some cash. For some expert advice on saving extra dough as a couple, Brides spoke with Ryan Mitchell, EA, owner of Hoboken Tax, about how couples can work together to save money.
Establish Goals and Cut Back on Spending
“When it comes to spending, couples first have to establish both their personal and joint goals. Then each couple needs to have discussions around where their money is going on a monthly basis,” Mitchell says. Often, examples include redundant expenses, like Netflix, because there's no longer a need to be paying for two accounts. “There are too many expenses that we are not either using or are paying for twice," he says. "Identify those goods and services you need for your family and then trim out those that are either redundant or just not necessary."
Saving versus Spending
Mitchell's tips for saving versus spending include being proactive in reviewing your bank statement and knowing when your expenses are going to occur and how they will impact your daily routine. Once you are engaged with your finances and understand exactly where you are spending your money as a couple, Mitchell says you will naturally notice areas where you are spending money and not really seeing the reward for those dollars.
Positive Spending Habits
Spending can be a high point of contention in the world of coupledom. “One major issue is spending money on things that the other spouse does not agree with. For couples early in the marriage or relationship, I recommend having a spending limit,” Mitchell explains. A spending limit can be any amount that the couple agrees upon, and for any purchase over a specific amount they then have to discuss it first before making a purchase. Mitchell says, "Is that indulgence worth upsetting your spouse? As long you are in agreement, then enjoy your purchases.”
Make a Plan
When it comes to saving, Mitchell likens it to training for a marathon or any other endurance activity, for which a plan is always essential. “The acronym that I personally love is MACE: Manageable, Achievable, Celebrate, and Evaluate," he says. "Is your plan manageable for current necessary obligations? Can you achieve your goal without completely depriving yourself? No matter what, you will be required to have self-discipline.”
Mitchell finds Mint to be the best app for managing money. “I use the free version that will pull information from your bank and allows you to then categorize your expenses, providing you a summary view of where you are spending your money,” he explains.
What to Do with your Savings
In your first few months of saving, Mitchell says to try and keep four to six months of all expenses saved into one emergency fund account. Once this is established and secured, he recommends couples begin saving for their next goal, within limits. He warns, “For your own financial safety do not use this fund for your engagement ring, your next vacation, or a down payment. This money is an emergency fund and needs to be used only for this. What is great here, after you have achieved this goal, is that muscle memory has been built to easily move onto your next goal.” After achieving this, he says it’s where your relationship with money as a couple will become paramount in the discussion. “Once you're in the game of managing your money and not the other way around, you will see incredible improvements,” says Mitchell.
Paying off Debt
Most Americans have some level of debt, and it can become a more complicated issue for couples who begin to take on shared debts. To tackle this, Mitchell recommends starting by listing your debts, interest rates, and the minimum amounts due, then beginning to pay off the smallest balances first. This is great for two reasons: “First, when this is paid off you will achieve success and every success grows," he says. "Second, you can then take the money you used to pay off this debt and apply it to the next one. Thus if you have two debts that are similar in amount owed, pay off the one with the higher interest rate.” He recommends repeating the process until you have successfully paid off all your debts. "Once you achieve this goal, continue putting the money you have successfully used in becoming free of debt to then begin your long-term goals,” he explains.
While finances can be overwhelming and saving is much more difficult than spending, Mitchell says, “Remember, it is your money; just as life is a marathon, not a sprint, your money needs to be treated with the same love and attention.”