Managing Your Money Together as a Millennial Couple

Keith & Willow

Willow, 28, is an executive assistant for a private equity fund, and Keith, 32, is head of photo at one of the top tabloids. They live in New York City and their combined annual income is over $200,000. They got married this past year, but are saving to have a reception on their one-year anniversary. Willow is nearly done paying off her student loan debt, and Keith’s parents are taking care of his.

When the couple first moved in together in 2012, they decided to keep their finances separate. While they both have access to each other’s checking account, they don’t access them. “We make our money and spend our own money,” Willow says.

They split their living expenses according to income. Now that one of them makes more money (they wouldn’t share who), they no longer split the rent 50-50, and they split utilities by bill: Willow covers the internet and Keith covers electricity.

“We like to treat each other and not keep an exact tab; but it is also important that we feel like we are both contributing,” she says.
Frequent and open communication keeps them both comfortable with the arrangement. Whenever they disagree about money, Kevin usually gets a pen and paper and writes things down as they discuss. Willow likes to pull out a calculator and shows how things balance.

“We make sure we listen to each other and try to find a compromise we are both happy with.” Although they’ve discussed opening a joint account down the line, they’re maintaining separate accounts while they save for the upcoming wedding reception.

They decided to get married legally last year, because Keith is Canadian, and they wanted to clear up his immigration and permanent residency paperwork. They’ve been saving for a big reception ever since.

The reception will be upstate in Cooperstown, NY. It’s more central for both their families, and it allows them to avoid the city’s markup on wedding costs. Their working budget is $30,000, and they’re both aiming to put about 10% of each paycheck into the wedding fund, with a head start from Willow’s year-end bonus. “Anything we get from our parents is just a bonus to make it bigger and grander.”

After the reception, next October, they’d like to start putting that 10% toward retirement and savings. But they’re not in a hurry to change up their lifestyle.

“We make enough money to get by; but we live in New York City and it’s not easy to save extra,” Willow says.

Financial Feedback

Malani recommends Keith and Willow break down their financial goals as follows:

Short-term: saving to finance a wedding reception.

Mid-term: building an emergency fund, paying off student debt.

Long-term: saving for retirement.

“The first thing to do is to see if your general spending habits are within reasonable limits, because then you can find ways to optimize your income to line up with your priorities in a better way,” she says. “At Stash, we use the 50/30/20 split as a healthy budget guideline.”

Assuming you’re making $200k, it would breakout as follows:

No more than 50% (or $100k) of your income should be going toward your fixed costs (housing, bills, student loans, etc.)

No more than 30% (or $60k) of your income should be going toward your flexible costs. (daily expenses and the fun stuff like dining out, etc.)

No more than 20% (or $40k) of your income should be going toward your future costs (retirement funds, etc.)

Malani also recommends the couple looks into opening an account at Capital One 360. They could take advantage of the sub-accounts feature, as well as earn higher interest rate on the cash, instead of if they left it in a traditional bank account.

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Managing Your Money Together as a Millennial Couple

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