Image by Abigail Varney via Andrea & Ben’s Mid-Century Inspired Melbourne Wedding

We want all of our Polka Dot Bride couples to have a happily ever after and hope this financial advice from can help you on your way.

How to effectively manage joint expenses as a couple

Money is definitely one of the most common things that couples argue about. If you’ve recently butted heads with your partner about money, rest assured that you’re not alone. So what is the key to effectively managing money as a couple? Unfortunately, it’s not a one-size-fits-all solution.

Photo by Olu Eletu on Unsplash

Create a budget together!

The very first step you should take is to develop a budget together. You’ll both have different opinions about how much money you should allocate to different things each month and how much you should be saving, so having only one person create the budget won’t work. Your budget should take into account your total joint income and expenses to get the most realistic idea of where you’re at.

Once you’ve agreed to your budget, it’s time to decide how you’re going to pay for your expenses. This is the hard part. There’s no one correct way to manage your finances as a couple, but here are a few potential strategies to get you started.

The percentage-based split

If you’re earning $100,000 and your partner is earning $45,000, is it fair to split your expenses down the middle? Well, that’s for you to decide together. If you have wildly different salaries, you may decide that it’s fair to contribute different amounts to your joint expenses.

For example, if one person earns 70% of the household income, they could contribute 70% towards the household expenses. That way you’re both contributing, but it’s in proportion to what you’re earning.

Pool your money, but give yourselves separate “spending allowances”

If you don’t like the idea of splitting joint expenses in proportion to your income, this option is kind of the reverse. All your income is pooled together, with both of your salaries being deposited into the one account for joint spending.

However, you could consider paying yourselves a “spending allowance” each month that is in proportion to your income. For example, after both your salaries are deposited into the joint account, you each receive 20% of your income into your own account for personal spending. This strategy means that you’re both contributing equally to the joint expenses and your savings, but the person who earns more is granted a larger spending allowance.

Keep your savings separate, but pay bills together

If you’re not completely sold on the idea of combining your money just yet, this may be a good option for you. Basically, you keep your money separate and are each free to spend it as you wish. However, you have a joint transaction account purely for combined expenses that you both contribute to equally. This can be really handy for things like rent, bills and groceries and even when you eat out at restaurants (it solves the problem of awkward IOU post-meal chats).

Keep in mind that this option will work best when you’re both earning a regular income. It may not be an ideal solution if one of you has to leave the workforce, for example, when having a baby and becoming a stay-at-home parent full time.

Share it all and split everything down the middle

This can seem like the most logical and easy solution and it’s certainly something that many couples opt for. After all, what’s mine is yours, right? With this approach, you could open a joint savings account that is linked to a joint transaction account. Both of your salaries would then be deposited into your transaction account, which you could each access via individual debit cards linked to the account.

This may seem like a fuss-free solution, but there are a few things to be mindful of. If one person feels they are spending much less than the other, it can lead to arguments. This is especially true if the big spender isn’t earning as much. It’s a good idea to set some limits on your individual spending, as well as create goals for how much you want to save. The budget that you created together will help here.

Photo by Mayur Gala on Unsplash

As you can see, there are many different strategies for managing your money as a couple, and there’s no right or wrong solution. Whatever you choose, the key is to discuss it openly and make the decision together.

Words by Alison Banney at The team is dedicated to helping Australians find better. We hope that through insights from our money experts, you will learn more about your finances and feel empowered to change for the better.