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Places Where Adults Still Live With Their Parents

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Moving out of your parents’ home has long been considered the ultimate rite of passage into full-fledged adulthood.

But today’s young adults are more likely to live in a parent’s household — and to live with their parents for a longer period, according to the Pew Research Center. A range of potential explanations has been offered for this generation’s “failure to launch,” from a desire to prolong adolescence to an aversion to marriage and commitment.

While these factors might play some role, the reality for most adults ages 25 to 40 living with their parents is that they lack the money to move out and establish their own households. Some might be unemployed and looking for work, while some have left the labor force altogether. Other young adults have their own children and live with parents out of a need for child care and support.

MagnifyMoney wanted to find out where U.S. adults are most likely to still be living with their parents, and what factors could be holding them back from leaving the nest.

We surveyed the 50 largest metros in America to identify the largest portion of adults ages 25 to 40 living with their parents along with some other statistics about them. We excluded people in this age group who identified themselves as active students.

Key findings

  • In Riverside, Calif., 28% of adults ages 25 to 40 live with their parents, earning this city the No. 1 spot on our list. High unemployment among these young adults – and for the metro, more generally – appears to be a leading factor.
  • Young adults in Miami, Los Angeles and New York follow, with more than 1 in 4 residents ages 25 to 40 living in their parents’ home.
  • Minneapolis stands at the other end of the spectrum, with fewer than 12% of young adults in this age range living with their parents.
  • Seattle is another city with just under 12% of young adults (ages 25 to 40) living under their parents’ roofs. Then there’s a four-way tie for third place among cities where adults are least likely to live with parents: Denver, Indianapolis, Kansas City, Mo. and Raleigh, N.C. all have 12.3% of these adults living at home.
  • Across the board, about 1 in 4 adults living with their parents have children of their own in the home.
  • Men between the ages of 25 and 40 are more likely to live with their parents in every metro we reviewed (except Austin, Texas).
  • The average unemployment rate for this age group across the 50 metros is 8.6%. That’s more than twice the national unemployment rate of 4% as of January 2019.
  • Nearly 1 in 5 adults who live at home don’t participate in the labor market at all, on average across the 50 metros.
  • Adding together the unemployed and the people who don’t participate in the labor force, only 72% of these adults are currently working while living with parents.

Understanding the metrics

The list is ranked strictly on the percentage of adults aged 25 to 40 who live with their parents. To inform our findings, we also present the following information for this same population (which did not affect rankings). We excluded anyone from the analysis who was identified as a student.

  • Percentage who have their own children at home.
  • Percentage who are unemployed. This refers to people who want to work but are unable to find work. They are part of the active labor force in their communities.
  • Percentage who don’t participate in the labor force. These are people who don’t work outside of the home and are not seeking to work. This is different from the unemployment rate, and people counted in that rate are not included in this metric. We excluded people who are identified as students from our analysis as well, so these statistics don’t include people not looking for work due to educational pursuits.
  • Breakdown of people who live with their parents by sex.

In the 10 cities with the largest shares of young adults ages 25 to 40 living in their parents’ homes, eight were split between two regions: the South and the Northeast. In the South, more adults live with parents in Miami, San Antonio, New Orleans and Orlando, Fla. The four top cities in the Northeast include New York, Philadelphia, Providence, R.I. and Baltimore.

Here are some other highlights of these 10 cities with the highest portions of adults (ages 25 to 40) living with parents:

  • San Antonio, Orlando and Riverside had the highest rates of parenthood among young adults living with parents, out of the top 10 cities overall. In these cities, nearly three in 10 young adults who live at home with parents also live with a child of their own.
  • Of the top 10 cities where more adults are living with parents, the highest unemployment rates among this cohort are found in New Orleans (11.2%), Riverside (10.8%) and Baltimore (10.6%). In these cities, more than 1 in 10 of these adults living under their parents’ roofs are unemployed and actively seeking work.
  • The cities among the top 10 with the highest rates of nonparticipation in the labor force among adults living with their parents are San Antonio (25.3%), New Orleans (24.1%) and Orlando (19.5%).
  • Across the board, men make up the bigger share of adults who live with their parents, but the difference was more pronounced in some of the top 10 cities. In both Providence and Philadelphia, men make up a larger majority (56.7%) of adults living with parents. New York follows close behind, with a 56.2% male majority of adults living with their parents.

Then there are the cities where fewer adults (ages 25 to 40) are living with their parents, and are more likely to be living on their own. Four of these cities are located in the Midwest: Minneapolis, Indianapolis, Kansas City, Mo. and Columbus, Ohio. The South and West are also well represented in this list. In each region, there are three cities where these adults are less likely to be living in their parents’ homes.

Here is a closer look at other metrics that can inform these top 10 cities and their low rates of adults living with parents:

  • In these 10 cities, adults living with parents were more likely to be parents themselves, compared with the 10 cities where more adults live with parents. In Austin and Denver, 30% of adults living with parents had at least one child of their own living with them.
  • Raleigh and Indianapolis had the highest unemployment rates among these adults of the top 10 cities, at right around 12%. Austin and Kansas City had the lowest rates of unemployment among adults living with parents, at 5.4% and 5.6% respectively.
  • Among these 10 cities, Austin did have the highest share of adults living at home who aren’t participating in the labor force, however, at 22.5%. Portland and Indianapolis also had higher rates of labor nonparticipation among these adults living in parents’ homes, at just over 20%.
  • Minneapolis and Portland have the most uneven breakdown by sex of adults living with parents. Austin, on the other hand, is the only city we surveyed where a majority of adults living with parents are women, at 51.1%.

Full rankings

Our rankings surveyed the 50 most populous metro areas in the U.S. to find the proportion of adults (ages 25 to 40) living with their parents for each. See the table below for the full rankings for all 50 cities, along with key statistics on local adults who live with their parents.

How to prepare your money to move out on your own

Most adults living with parents hope to eventually move out on their own. If that’s you, careful planning can help you prep your finances, pay down debt and save enough money to make this happen sooner.

Here are some specific steps to take while you’re living with your parents to get financially healthy and launch your solo stage of life.

Make a plan to deal with debt

If you’re hoping to move out, you’ll have to deal with your debt first. The monthly payments on debt can be a burden that makes it harder to afford to live on your own.

Living at home is the perfect time to make extra payments toward debt and pay off some balances. Target your high-interest debt first, such as credit cards — these balances will cost you the most to carry from month to month.

Paying down debt is a great start, but your payoff date might still be years away while you’re hoping to move out much sooner. In these cases, you could refinance or consolidate debt to adjust your monthly payments or even secure a lower interest rate. Here are some options worth looking into:

Seek out a better job or side hustle

Unemployment, underemployment or exiting the labor force are among the biggest reasons adults live with their parents — and can’t move out. The only way to find your next gig is to apply, so keep your hopes and efforts up.

Applying for jobs can be tough, however, especially if you’re met with rejections. If your efforts seem to be going nowhere, see what you can do to make yourself a more attractive job candidate. Read up on job-seeking advice and ask for feedback from mentors or potential employers to improve your resume and prep for your next opportunity.

On top of actively seeking new or better employment, you can also consider picking up a side hustle or part-time job. This can help you develop new skills, build a portfolio and avoid a gap in employment — all while earning additional income and keeping money coming in.

Take advantage of low-cost living with parents

Living with parents isn’t always easy, but it comes with one major perk: low costs. Most adults who live with parents do so to benefit from either sharing living costs or skipping typical bills such as rent, groceries or utilities.

This lack of costs leaves more of your money available to tackle other financial goals. You can start building your move-out fund, saving for expenses like a deposit on an apartment and purchasing furnishings for your own place. Having an emergency fund in place before moving out can also be a wise move. Or you can use savings from living at home to pay down student loans or other debt.

Whatever your goal, set your sights and start using your freed-up funds to work toward it.

Methodology

Analysts used 2017 American Community Census microdata hosted on IPUMS to calculate the following percentages for people aged 25 to 40 and who did not identify as students: 1) Percentage who live in the same household with at least one of their parents. For those who both do and do not live with their parents, we separately calculated: 1) Percentage who live with their own children, 2) percentage who are unemployed, 3) percentage who are not part of the labor force, 4) percentage who are men, 5) percentage who are women.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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Life Events

Places Where Americans Live the Most Balanced Lifestyles

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

U.S. Household Incomes
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As Americans, we’re often focused on status markers, such as the amount of money we make. But research indicates that the time we spend with people we care about, good health and income equality are some of biggest factors that lead to happiness. Feeling fulfilled is about so much more than how much we earn. It comes down to what we have to do to earn it, what we get in exchange for it and whether we have the time and health to enjoy our friends and family.

In other words, a balanced life.

To figure out where people are most likely to find that kind of balance, we compared seven measures in the 50 biggest metropolitan areas of the U.S.

We looked at the following (full methodology below):

  • Average commute times
  • How much of their income residents spend on housing
  • How many hours people work compared with how much they earn
  • Local income inequality
  • How many people are in very good or excellent health
  • Whether they get enough sleep at night
  • How local prices for typical consumer goods and services (excluding housing) compare with the national average

Below are the places that ranked highest — and lowest — for 2019.

Key takeaways

  • Minneapolis takes the top spot for places with the most balanced lifestyles with a final score of 77.4, mainly due to good health and high incomes combined with a moderate cost of living.
  • Kansas City, Mo., and Salt Lake City came in closely behind, with final scores of 76.0 and 75.7, respectively
  • Miami ranked as the metro with the worst lifestyle balance, with a final score of 24.0. High economic inequality, expensive housing and lower incomes are the primary hindrances to the balance.
  • New York and Riverside, Calif., filled out the bottom three, with final scores of 25.4 and 26.0, respectively. Last year, Riverside was included in the Los Angeles combined statistical area.
  • Midwesterners might find it easier to lead balanced lives. Five of the top 11 cities in this study are in this region: Minneapolis, Kansas City, Cincinnati, St. Louis and Columbus, Ohio.
  • The high costs of living in coastal cities can make it trickier to find the right balance between quality of life and financial demands. Of the 10 cities with the least balanced lifestyles, nine are on or near the coastline.

Metros that offer a balanced lifestyle

The map above includes the 11 major cities (with the last two tied) that provide the most balance to residents — where it’s less of a grind to just make a living:

1. Minneapolis
2. Kansas City, Mo.
3. Salt Lake City
4. Cincinnati
5. Raleigh, N.C.
6. St. Louis
7. Portland, Ore.
8. Denver
9. Hartford, Conn.
10. Virginia Beach, Va. (tied)
10. Columbus, Ohio (tied)

If you’re in search of a more balanced lifestyle, you might want to consider a move to the Midwest. Five of the top cities are located here.

Overall, these cities score best in some categories but not others. They score well by having low income equality, low housing costs relative to income, better health outcomes and shorter commutes. Here’s a look at which cities stand out for different factors:

  • Minneapolis was No. 1 overall, and the second-highest city for percentage of residents in very good or excellent health at 57.1%, second only to Washington, D.C. Denver was the other top city that ranked well for residents’ health outcomes, with 56.6% in optimal health.
  • Cincinnati offers the lowest relative housing costs of the top-ranked cities, with a typical resident spending 19.3% of income on housing costs. Kansas City and St. Louis also score well here, with housing costs at 19.5% of income.
  • Cincinnati’s low costs don’t stop at housing. It has the lowest prices on goods and services of any major city, with costs 7.3% below the national average. St. Louis had the next lowest costs, with prices 7.2% below national levels.
  • Hartford. (No. 9) is the city ranked in the top 11 with the highest hourly wages — on average, workers here can earn $50,000 a year with just 24.9 hours per week. Minneapolis (No. 1) also scores above-average here, with a typical worker working 26.8 hours in a week to earn a $50,000 annual income.
  • Denver is where residents are the most well-rested, as only 26.9% of residents say they get fewer than seven hours of sleep a night. Cincinnati and Raleigh locals are also among the U.S. city dwellers more likely to be getting sufficient sleep.
  • Salt Lake City (No. 3) and Kansas City (No. 2) have the shortest commute times of the top group, at 22.4 minutes and 23 minutes, respectively.

10 worst metros for a balanced lifestyle

There are also the cities where high costs can make it hard to get ahead, block locals’ efforts to build up savings and add up to more stress and a bigger mental labor load. The table above shows the 10 cities that scored the worst for lifestyle balance.

One commonality stands out: Many of these are coastal cities. From Miami and Tampa in Florida to San Francisco and Los Angeles in California, down to Houston and New Orleans in the Gulf Coast, these cities prove that it takes more than proximity to a beach.

The 10 worst cities scored poorly across several ranking factors: housing costs relative to income, prices on goods and services, income inequality and commute times. Some of these cities do manage to pull ahead with higher wages — meaning a typical worker can earn $50,000 per year in fewer hours.

Here are some key points on the worst cities:

  • Miami, Los Angeles and Riverside earned their spots thanks to high housing costs. Miami has the highest housing prices relative to local incomes, with these living costs eating up 28.8% of earnings. But Los Angeles is right behind it at 28.7%, followed by Riverside with 27.0%.
  • New York City is ranked second worst for a reason. Of all the 50 major metropolitan areas we studied, the Big Apple has the highest costs on goods and services at 12.9% higher than the national average. It also has the worst commutes and least favorable score for income inequality.
  • The worst cities had some of the worst health outcomes, too. Houston, in particular, has the fewest proportion of residents reporting very good or excellent health — just 39.2%.
  • Some of the worst cities have high costs but also offer higher incomes. That put a few of them among the cities where it takes fewer weekly hours to earn $50,000 per year: San Francisco, New York and Philadelphia. In San Francisco, earning that amount can be done in just 20.5 work hours.
  • Philadelphia and Memphis, Tenn., are among the cities where people are less likely to get enough sleep. In both cities, around 41% of locals get less than seven hours of sleep each night.

How the 50 biggest U.S. cities stack up for balanced living

Our rankings show how local labor markets, pay, costs and other living conditions can add up to have big effects on residents’ lifestyles.

In more balanced cities, locals can more easily cover bills without overworking and economic opportunity is more accessible, which helps create positive health outcomes. But in cities that rank poorly for balance, residents have to make significant personal sacrifices: working more, accepting longer commutes or spending more of their income on housing.

Here are the full rankings:

4 tips to balanced finances and living — in any city

Leading a balanced life is easier when you’re managing your money well and your finances are functioning as they should be. No matter where you live, you can find ways to build a better financial foundation to lead a balanced life. Here are some suggestions to get you started.

Keep recurring living costs affordable. While you can’t decide what your local housing market and rent costs are doing, you do have some control over how they affect your budget. When choosing a home, for example, prioritize affordability over other factors.

Look for other major costs to cut out, too. Can you get a cheaper phone plan that still meets your needs? Would it be cheaper to use public transit than continue to keep and make payments on a car? Lowering these kinds of costs will help you save now, and in the months going forward.

Check your discretionary spending. On top of inspecting monthly costs, track your spending day to day, too. Pay attention to where you tend to spend a lot on “wants.” These could include categories like dining out, purchases on alcohol or tobacco, entertainment and apparel and accessories.

These optional expenses could be opportunities to rein in costs a little to build more of a buffer into your budget. You can cancel subscription services you rarely use, whether it’s video streaming or a neglected gym membership. Cutting back on eating out just once a week could be a fairly painless way to free up $50 or more per month, for example. Instead of heading to a bar or club and paying upward of $10 per drink, you might host a bring-your-own-booze get-together instead.

Limit and pay down debt. Paying down debt can be a burden on your budget and your stress levels. It’s wise to avoid debt whenever possible and prevent taking out new loans or racking up balances on credit cards.

Already have debt? Focus on paying it down. The most effective way to pay debt off quickly is by making extra payments above the monthly minimum. You can also look for ways to lower your debt costs, such as refinancing or consolidating debt. If you consolidate credit card balances, for instance, you can combine them into a single loan that could have a lower interest rate. You’ll also have the chance to choose a different loan term that could lower monthly payments to keep them more affordable.

If you’re truly struggling with debt and don’t see a way you can reasonably afford to pay it back, it can be hard to find a way out. Consider working with debt relief programs that can help you manage debt more effectively and lift some of the burden.

Focus on more than financial health. Working toward raises and making progress on money goals can be worthwhile investments in your financial future. But these objectives don’t have to come at the expense of your health and well-being.

Building strong relationships and a sense of community can help you establish a life of connection and meaning, for example. And investing in physical health through sufficient sleep, nutritious eating and an active lifestyle will help you feel better now and is a worthy investment in your long-term wellness.

Living a balanced life, after all, is about giving appropriate attention and resources to important areas of our lives. Balance efforts at work and in your finances with care for your physical, mental, emotional and social health.

Methodology

The top 50 metropolitan statistical areas (“MSAs”) are ranked on a 100-point scale on the following seven measures:

  1. Average commute time, as reported in the 2017 American Community Survey (“ACS”) from the U.S. Census.
  2. Percentage of income spent on housing, calculated as (the median monthly housing cost) / (median household income / 12 months), as reported in the 2017 ACS.
  3. The average number of hours per week a person would have to work to earn $50,000 a year, calculated as (average earnings for full-time workers) / (average hours worked per week), as reported in the 2017 ACS.
  4. Gini coefficient to represent income inequality, as reported in the 2017 ACS.
  5. Goods and service costs, relative to the national average, calculated as a simple average of Price Index for Goods and Price Index for Other, as reported by the Bureau of Economic Analysis in the “Real Personal Income for States and Metropolitan Areas, 2016” release.
  6. Share of the population in very good health, calculated as (percentage of the population in very good health) + (percentage of the population in excellent health), as reported in the 500 Cities Project (2017) from The Centers for Disease Control and Prevention (“CDC”). Data was missing for the following MSAs, and so the state averages were used: Raleigh, N.C.; Las Vegas; Dallas; Detroit; Seattle; San Diego; San Jose, Calif.; Boston; Philadelphia; San Francisco; and New York.
  7. Share of the population that gets fewer than seven hours of sleep a night, as reported by the CDC.

The sum of all ranks was then divided by seven, for a maximum possible score of 100 and the lowest possible score of zero.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
Elyssa Kirkham |

Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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How Three Young Married Couples Manage Their Money

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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The age men and women decide to tie the knot has been on the rise for years. In 2018, the median age for first marriages is 30 for men and 28 for women. That gives individuals almost three decades to establish deep-seated opinions related to finances, including how to save and spend their hard-earned cash and how they want their career to play into their future lifestyle.

While one partner may prefer to sock away savings and establish a sound nest egg, the other may see the value in spending money on once-in-a-lifetime experiences. In other words, couples may not always see eye-to-eye when it comes to the big financial picture. To offer some real-life perspective on these real-life struggles, we spoke with three young couples to learn how they handle their finances, divvy up expenses and save for the future.

Splitting expenses — except on old debts

Courtney and Ryan Ples have been married for seven years and live in Baltimore, Maryland. Courtney is 31 and works in sales at an educational technology company; Ryan is 32 and works as a consultant for Verizon.

As the assistant director of the Maryland Fund for Excellence at the University of Maryland, Ryan was used to hearing “no” when he called to ask for donations. And the reason was almost always the same — the person on the phone needed to consult with their spouse because they didn’t personally handle the finances or they needed both parties to agree before committing.

“It was frustrating that members of a marriage didn’t have the ability to definitively say ‘yes’ or ‘no’ without discussing with their spouse,” said Ryan. When he married his then-girlfriend, Courtney, in April 2011, the couple decided not to let themselves be beholden to similar guidelines. “If Courtney wants to donate to a political campaign or fundraiser, I trust she won’t make an irresponsible decision that would challenge our household financially.”

From the very beginning, the couple knew that establishing some kind of financial independence was crucial for their marriage. Since they have similar incomes, the Ples’ each contribute 50% of their take-home pay to a joint checking account that takes care of their monthly expenses, including their mortgage payment, house-related expenses, groceries, and anything that involves their three-year-old daughter (including a 529 plan for her education).

However, the other 50% of their paycheck goes into their personal checking account. From that account, Courtney and Ryan each pay the personal expenses they accrued before getting married, including student loans, car payments, individual credit cards and cell phone bills. Unlike many couples their age, Courtney and Ryan did not live together while they dated, and, as a result, did not have many shared bills before marriage.

While their approach works for them now, Courtney wishes she had had a deeper discussion about finances with Ryan before getting married. The couple started married life on one income — Courtney had just quit her job to move across the country — so Ryan organically took the lead in financial planning. As a result, he initially handled the bills and budgeting. The couple adopted the 50/50 system once Courtney started earning money, but Ryan still handles the majority of the financial decisions.

Courtney admits that, at times, she gets frustrated if she doesn’t understand something specific about their shared finances, but acknowledges that she needs to ask more questions.

“I don’t want him to feel like he has to carry all the weight for our family,” she said.

Saving for the future: Courtney and Ryan have a joint savings account, a joint IRA account, and individual 401k plans through their work.

In order to save money, the couple uses apps like Qapital, which acts like a digital piggy bank by rounding up transactions to the nearest dollar (or however much you allow it to) and storing it in an FDIC insured savings account at one of the company’s partner banks. Users can attach a goal to the account, which makes it simple to save up for a vacation or a down payment for a car.

“A couple of dollars each week adds up quickly,” said Ryan, who once saved $2,500 with Courtney in four months through the app.

The couple also expects each other to save on their own. Both Courtney and Ryan have individual savings accounts they fund with leftover cash from their personal checking accounts.

Establishing common ground: When it comes to additional income, like performance bonuses, the two discuss exactly how the funds are being used.

“I never would be like, ‘This is my bonus, I’m going to get golf clubs or go on a boys trip,’” said Ryan.

To make sure they are on the same page, the couple came up with three top goals for extra income: lowering debt, enjoying life experiences and increasing their savings.

“We’ve lived in debt our whole lives and we want the only debt left to be our mortgage,” Courtney said. “That’s where the majority of extra income goes. However, we also prioritize us a lot, even if that means lessening debt payments, because life is short and we want to experience as much as we can while we physically can.”

Soon, the couple will have additional income: Courtney will start earning a commission on top of her salary. Their plan is to have 85% of the commission check go into their savings account to help finance a future move, and the remaining 15% will go into their joint checking account.

Separate accounts, but an even split on expenses

Nichole and Cole Huber have been married since September 2018 and live in Tucker, Georgia. Nicole is 32 and works as an IT recruiter; Cole is 30 and works as a welder.

Even though Nichole and Cole Huber have separate bank accounts and credit cards, the couple makes a point to split joint expenses evenly. Through cash-transfer apps like Venmo, the two can make sure their contributions are 50/50, and they take turn paying whenever they dine out.

While the couple has discussed having a joint account when they have children or are saving up for a big expense, like home renovations, past experience has taught them to be cautious. Nichole was previously married and said her past marriage ended with a lot of “money attachments.”

“My ex-husband and I pulled our money together and lived a lifestyle that required both our incomes,” Nichole said. “He made substantially more than me so when it came to separating, I had to trust he would follow through on paying for things until we fully separated all our financial obligations.”

“I felt stuck because I didn’t have an account of money on my own and money was used to have power over me,” she said. “[My ex] would reiterate that he was still paying for me — rent on a house we had, the mortgage we had together, cars we bought based on our dual income lifestyle — so part of my mentality now is to live a lifestyle I can afford on my own and to have my own money saved up for the future.”

Although Nichole earns about 30% to 40% more in annual income than Cole, the couple decided together that they would split expenses 50/50 because their joint expenses don’t total up to much.

“It all comes down to being fair,” explained Cole, who said that when expenses are split evenly, “there’s nothing to argue about and there’s nothing to discuss.”

“If she wants to go buy something, that’s great,” he continued. “Same for me. The thought of asking for permission … it creates animosity around finances.”

Saving for the future: Right now, the couple maintains individual savings accounts. However, they each know how much their spouse contributes to their 401k plans and have agreed to start individual IRA plans in 2019.

“We just have an open conversation about what we’re doing,” said Nichole. “I don’t know exactly how much is in Cole’s banking account and he doesn’t know exactly how much is in mine, but we know each other’s credit scores.”

Establishing common ground: Before Nichole and Cole were engaged, the couple sat down to identify common financial goals. One was to purchase a house, and since Cole had enough savings at the time, he agreed to cover the down payment for the home.

“Most importantly, setting joint goals gives us confidence that we are both looking to follow the same path financially,” Cole said. “Gaining an understanding of how you both view and value money allows you to then segway into a conversation about financial goals.”

Cole explains that “discussing” and “compromising” is what led the two to understand their financial goals as a couple and in turn, the big financial decisions become “much easier because we are both shooting for the same thing and we understand what is important to one another.”

Splitting costs in proportion to their income

Tara and Jon Sims have been married nearly three years and live in Matthews, North Carolina. Tara is 34 and works as a probations/parole officer; Jon is 32 and is in a director role in the admissions office at a local university.

Although Tara and Jon Sims have been together for a decade and married nearly three years, the two have yet to open a joint bank account. While they aren’t opposed to it, their banks of choice aren’t the same — Tara banks with Wells Fargo and John is a loyal PNC Bank customer — and they haven’t felt a need to make any transitions.

The couple handles their money in much the same way they did at the start of their relationship. The Sims moved in together after eight months of dating — mostly because Jon moved from Virginia to North Carolina for work and Tara decided to leave her job to start a new life with him.

In those early days, the couple was living paycheck to paycheck. Although Tara had some savings, Jon wanted her to go back to school and finish her degree. The couple was a one-income household and money was tight. But once Tara got a job, they decided to split the bills in proportion to their income.

Tara is responsible for budgeting and managing the couple’s money. Every month, she adds up their expenses — a mortgage payment for the home they purchased together in 2016, utilities, joint credit cards — and comes up with an amount for Jon to contribute, which is usually about 75% to 80% of his paycheck. Jon’s contribution covers the majority of the couple’s joint expenses. He will deposit this amount into Tara’s personal checking account every month since the two never opened an account together.

After paying their bills, Tara budgets for groceries and moves the rest of the money into a savings account that, while technically in her name, is understood to belong to both of them. Jon has access to the account.

Jon earns about 25% more income annually than Tara does, so he feels that it’s fair that he contributes more. The money that he keeps in his personal account is his spending money, and he said whatever is left in her account after paying the bills is her spending money, as long as they’re able to put away $200 to $300 every month into their savings.

Each person’s spending money or “allowance” is used to pay for their personal expenses, which includes their cell phones, car payments, and the personal loans they both took out to pay off the debt they racked up when they first started dating.

Saving for the future: The money that’s in Tara’s savings account belongs to the couple. “I don’t really ask questions,” said Jon. “I just let her transfer it over. Even though it’s in her name, it’s our savings.”

The couple has 401k plans through their work. Jon said he would like to start investing once the couple has a little more money saved up, but won’t make any major moves unless Tara agrees to it.

Establishing common ground: The percentage that Jon contributes each month feels fair to the both of them. “It never felt like a 50/50 or 80/20 thing, but more of ‘We’re trying to get the bills taken care of,’” Jon said.

Key takeaways

Here’s the truth about personal finance: it’s personal. In order to have a successful financial partnership, couples have to communicate to make sure they see eye-to-eye. No matter what your financial situation is, identifying what is important to both people and establishing common ground is critical for a lasting happy and healthy union. The couples above have very different ideas on how to handle their finances, but there some areas that they have in common:

They believe the division is equitable. No matter what your financial situation is, each person needs to believe that the system is fair. In order for this to happen, communication is key, which sounds easy enough but can be quite tough when you’re balancing modern life’s busy schedules.

They have a system for bill paying. Whether each person contributes to an agreed upon percentage and/or dollar amount that goes into an account that pays the bills, like the Ples’ and Sims’, or each pay their share from individual accounts, like the Hubers, it’s important to have a system to make sure bills are taken care of. Additionally, designating one person to handle all joint payments may make life less complicated, but make sure the person taking on the extra responsibility doesn’t feel burdened.

They have financial independence. Each couple said it’s important to have access to spending money that they feel is their own. The amount of this “allowance” should be determined by both parties ahead of time and can be a percentage proportional to income. This can also release tension in a marriage, especially if the people in the marriage have very different ideas on how to spend and save money.

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Vivian Giang
Vivian Giang |

Vivian Giang is a writer at MagnifyMoney. You can email Vivian here

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