Top Tips to Save Money as a Young Couple

Budgeting is usually the required first step before couples begin saving together. Especially for a first budget, many couples create it from the ground up, starting at $0 and justifying every dollar spent. This is known as “zero-based budgeting,” and can help ensure that needs are met before couples add discretionary spending. More established couples may already have a good idea of their recurring bills, like rent/mortgage, utilities, and groceries, and can build on that foundation.

The Consumer Financial Protection Board (CFPB) suggests that budgets should adhere to the 50/30/20 rule, with 50% of income going to needs, 30% for “wants,” and 20% into savings and paying off debt.² Using the U.S. Census Bureau’s median 2020 income for a two-person household of around $74,000 a year, and allowing for typical taxes, a couple could likely expect a monthly take-home pay of roughly $4,750. Following the 50/30/20 model, that couple could plan $2,375 for necessary bills, put $950 into savings or debt repayment, and use the remaining $1,425 for “other” categories – in other words, the fun stuff.

But that’s a general outline, and every couple draws different lines between “wants” and “needs.” Since both partners rarely agree perfectly on the amount of “fun stuff” they want in their lives, striking a balance that keeps both parties happy can be essential to a healthy relationship. Regular check-ins and adjustments can help prevent one or both partners from building up a perception of unfairness or of overlooking important expenses in the monthly budget.

While general budgeting rules can always be applied, specific goals should have specific budgets. If a couple is saving for a wedding, they may create a special account to fund it, with its own timeline and milestones. The timelines and milestones would be different, though, for savings plans aimed at a down payment for a house or a newborn’s college fund, for example. When setting savings goals, a useful way to categorize them is to distinguish among emergencies, short-term plans, and long-term goals:

• Emergency fund. It’s smart to have a rainy-day fund that generally covers between three and six months of your income, stashed in an immediately accessible account. This can be used in the event of unexpected circumstances, like loss of a job, illness, or a major housing repair.
• Short-term goals. Short-term savings goals could be ones earmarked for a future vacation, an upcoming down payment, a wedding, or other “soon” events. These funds are usually kept in shorter-term accounts that yield more interest than standard bank savings, like a high-yield savings account (HYSA) or CD.
• Long-term goals. For savings goals like retirement, it’s typically best to have specialized accounts, like a 401(k) or Individual Retirement Arrangement (IRA). Consider automatic deposits that allow a couple to “set it and forget it.” It can be difficult to plan for something that will take place decades from now when urgent bills keep piling up, but starting life insurance policies and retirement funds early often reduces monthly payments and yields higher returns, thanks to the effects of compound interest.

Saving can be difficult, especially in tough economic times, but coming together as a couple to set up a saving plan can have many benefits. Collaborations can lead to more ideas, and sharing complex steps, like researching and opening accounts, can help a couple start saving quicker and smarter than someone saving alone. Whether it’s meant to “divide and conquer” a savings to-do list or to support each other through the process, two heads are often better than one.