Saving as a couple

Deciding to save money together as a couple means combining forces to tag-team expenses, aligning your goals and building future plans with your partner – plus it could be a smart way to save up faster. Get ready, a friendly debate over whether streaming subscriptions count as an essential or a luxury may be in the mix.

 

From your financial profiles and savings goals to budgeting and opening a joint savings account, here’s what you need to know.

 

Who are you, financially?

Saving as a couple is more than just combining your money. It’s about understanding each other’s approach to personal finance, and that includes a deep dive into your financial profiles, risk tolerance, opinions and emotions about money.

 

These may be sensitive topics for some, but when joining forces financially it’s important to understand how each person operates. If you’re a stringent saver and your partner prefers to live in the moment through impulse purchases, being aware of any differences now may save confusion and difficulties further down the track.

 

Start by going through your financial similarities and differences

What are your attitudes towards debt? How do you approach saving? What are necessities? What are non-negotiables? It’s crucial  to identify where your money habits align – and where they don’t – at the outset, bringing on open communication about goals and expectations.

 

Part of your financial makeup is also understanding your individual risk profiles, as these play a significant role in financial decision-making. Some individuals are more risk-averse, preferring stable and conservative choices, while others may be more open to risk for the potential of higher returns. One of you might prefer meticulous budgeting, while the other leans towards a more flexible approach.

 

When it comes to managing these different approaches, it’s about compromising to align your risk profiles so that both partners are comfortable with the chosen financial strategies, joint savings account, and investments.

 

Define your mutual savings goals

It might seem obvious, but once you decide to save money together, make sure you’re on the same page about what you’re saving for.

 

Is it a holiday? A deposit on your first home? A wedding? A new car? Whatever it is, make sure you’re both clear about what the endgame is – and even better  – both feel enthusiastic about achieving it. By having the same level of commitment towards saving for your mutual goals, you’ll both be far more likely to work in harmony to achieve them.

 

It’s crucial to sit down together and outline short-term and long-term goals, ensuring they align with both partners’ aspirations. And, while they might seem far off, thinking about what retirement aspirations look like for both of you is also important.

 

Budget together

Once you know what you’re saving for, it’s time to put some actual figures against your target and build a savings plan around it.

 

Decide how much and how often you’ll each contribute – we’ll talk about ground rules next – so there’s a clear path to reach your joint savings goal.

 

Creating a budget is a crucial step in managing finances as a couple. It provides a clear overview of income, expenses, and savings, and can set the parameters for financial decision-making, promoting transparency and accountability.

 

If you bank with Westpac, the mobile app has some handy budget tools that allow you to compare spending across categories, track trends in your cash flow, and identify savings opportunities. 

 

 

Setting some joint account ground rules

If you’re considering opening a joint savings account with your partner, kick it off with an honest discussion about where you’re both at financially, keeping in mind that you or your partner may not find it easy to talk about money and finances.

 

Points to cover may include:

 

• Will you both contribute the same amount to the savings account or, if one of you earns more than the other, will they put in more?
  
  
• Are you only combining your savings in a joint bank account, or will you combine other expenses as well?
  
  
• What happens if either of you is unable to keep up with the contributions you’ve decided on?
  
  
• What sort of account will you be saving in, and will you both have access as account holders?

 

Ground rules could also include limits on discretionary spending, communication about major purchases, or a commitment to regular financial check ins. Remember, both partners need to feel secure and involved in financial decisions.

 

Consider a joint savings account

You’ve worked out what you’re saving for, have opened the lines of communication with your significant other and have laid down the ground rules. The next step may be to open a joint account.

At the broadest level, a joint savings account is a savings or transaction account that is held in both names. However, some accounts will require both account holders to approve transactions, whereas others will only need one account holder to approve them.

 

Joint accounts can simplify shared expenses, making it easier to track contributions and manage bills. Pooling resources can also help achieve your shared goals faster. 

 

Some couples choose to maintain individual separate bank accounts as well as their joint bank account to maintain autonomy and flexibility over their personal spending.

 

When it comes to joint saving, some savings accounts may reward you for regular saving by offering bonus interest when you reach certain conditions, such as making a minimum deposit and not making any withdrawals within a month. 

 

For example, a Westpac Life account offers both a competitive base rate as well as bonus interest at the end of each month when you make a deposit into the account and the account balance has grown by the end of the month.

 

With a Westpac Life savings account, you can also split your savings into different goals, so if you’re saving together for more than one thing, you can bucket your savings into up to six different goals with just the one account. A holiday and a house deposit? Now we’re talking. 

 

 

Grow together with a long-term joint saving account

When your joint account reaches a certain amount you might want to consider a term deposit, with both individuals set up as a joint account holder.

 

With a fixed interest rate over a set term (Westpac offers terms from one month to five years) you’ll have the certainty of knowing exactly what the return on your savings will be.

 

A term deposit can also remove the temptation of dipping into your joint savings account, as your money will be locked away for the set period you’ve chosen.

 

 

Keep tabs on your progress

Now that you’ve had the conversations and set up your joint account, the fun part is watching your balance grow and seeing how much interest you’ve earned by regularly checking your bank account –  it’s a great way to motivate you both to keep going.

Set aside time each month to sit down, monitor your progress, make any adjustments, and keep the financial conversation flowing.