Conscious Financial Coupling

Richard Soucheck, Air Traffic Controller, recently told me his keys to financial success:

1. Make a lot of money.
2. Spend little.
3. Save more.
4. Boom. Financial dominance.

Though this was largely a close friend trolling me on Facebook when I asked for insight into how Millennial couples manage their finances, some measure of truth rings in this advice. Actively saving and spending less than you make is essential to, um, “financial dominance” – whatever that is.

David Mailloux, a financial planner with LPL Financial in Portsmouth, also stressed the importance of saving, and expressed how important a personal financial advisor is in a time where people are much more likely to just Google their money problems: “Google is not wisdom,” he said. In our conversation he said the best financial advice is to “save, save, save.” Thankfully, according to a recent survey from Bankrate.com, Millennials seem to be saving more than some of the generations before them.

In Motif’s last Economy issue, I took a deep dive into the generational tensions between Millennials and Baby Boomers, finding that “Millennials currently contend with higher rates of unemployment, less money and a higher likelihood of living in poverty than our parents did.” We’re the most educated generation in the history of the world, so why can’t I be married with kids and a house big enough for more cats (and maybe a dog) already?

The traditional financial structure of conscious coupling involves joint checking accounts and a mass pooling of marital resources, but how does that landscape look when a couple has income disparity, or where student loan debt impacts their decision to settle down, marry, have kids or buy a house?

In my case, our finances are pretty independent: We each have our own student debt, car payments and checking and saving accounts (though we do have one joint savings for impending wedding expenses), but for the most part we pay for all our own things. We split expenses 50/50 on the essentials, and we track that progress via a Google Doc spreadsheet.

Nearly all of our large decisions are severely impacted by our financial situation. In the years since we’ve dated, we’ve lived with each set of parents for a time, and also in an apartment with two cats and four humans (our own non-nuclear fam included in that count). Buying a home just isn’t in the cards, and living independently hasn’t been financially viable. Like many excited and eager future husbands, I delayed my marriage proposal mostly for financial reasons. I was in grad school until May 2015, and we largely do not have the income to support anything … drastic?

It’s the same for many couples out there, like financial center manager Troy Cassidy and his girlfriend Katie Beesley, a client service analyst. Recently, Troy told me, “If it were not for student loan debt, we would very likely have already bought a property.”

Couples like Rachael Dunn and Nick DeStefano, a learning specialist at a university and assistant team leader at Whole Foods, “dated for four years before getting engaged and the idea of financial stability was a big reason why” they waited. Their choice to rent instead of buy a property has everything to do with the current market and their financial situation. Large amounts of student debt are a burden. Like my fiancee and me, they have independent checking and savings accounts with joint savings for their upcoming wedding.

Though they try their best to share expenses evenly, uneven incomes are a factor, and Rachael told me, “We don’t like getting too detailed with making sure we’re paying exactly half of everything all the time because we just feel like it isn’t healthy in a relationship that is centered around sharing our lives.” But at the same time, “Neither of us want to completely conjoin our finances/accounts,” she explained. “Because we think it is important to maintain some level of independence.”

Our other couple, Troy and Katie, also split housing expense and other necessities evenly, mainly by having weekly, consistent deposits from their respective accounts put into a joint checking account. Any overflow gets put into a joint savings account. Troy also offered up a sage bit of wisdom on love and money: “The key to everything with finances in our relationship is the fact that we have agreed on a budget. We both set aside enough money to go out for food or drinks, but we also put a great deal of emphasis on saving for our future.”

Financial advisor David Mailloux explained, “When it comes to debt, couples should just attack whatever highest interest rates they are dealing with.” And there’s no correct way to manage a couple’s finances; both joint accounts and financial independence can work. “I’ve seen it successful in both cases. There is no right or wrong way to do it. It’s just a matter of finding out how it works within the couple.”

Also keep in mind that loan consolidation is only beneficial if it means getting a better interest rate overall. Student loans can be overwhelming, but Mailloux reminded me of the Creighton Abrams quote: “When eating an elephant take one bite at a time.” For some young couples ready to take the plunge into marriage, working together to aggressively pay off the loans with the highest interest rates – regardless of whose they are – could be a way to foster long-term financial success.

Some tips and resources:

• Roth IRAs are the best go-to for maximizing retirement savings. They’re built for people who make less than $117,000 per year.
• Digit is a really cool app that basically hacks your checking account and squirrels away some spare money for you, sounding a lot like the transaction virus from “Office Space.”  
• Acorns is a comparably sneaky app service that will pull regular amounts of money from your account (no minimum) and invest it. There’s also a feature called “Round-Up” that will round every transaction up to the dollar and move that remainder into your account.
• Mint is another popular service that aggregates all of your accounts and cards and helps you track your spending categories and maintain budgets.
• One couple I talked to suggested a program called “You Need A Budget”, a robust budgeting software