Financial Independence Is Easier as a Couple

I’m in San Diego to attend FinCon for the next few days and Pauline of is covering for us today. I hope you enjoy a rare FI article from a woman’s point of view.

Financial Independence is easier as a coupleI have a confession to make. I almost stayed in a relationship because of money. Now, for as horrible as that may seem, I am a very independent woman, and you can be sure it was not so some sugar daddy could spend thousands on lavish gifts and spoil me silly. It was simply because life was much cheaper as a couple!

Rent? Split in two. Internet subscription, utilities, transportation… even the food bill wasn’t twice what I now spend on my own. Car repair? That would be $250 each, please. I cringe when I think about the few times we argued about money, say when I didn’t want to spend $100 on dinner. The guy was literally saving me hundreds every month! We did not break up over money, but the thought of being on my own again financially made me think about how much easier it is to have a partner when you are tackling a big goal such as financial independence and increasing your net worth.

How you save thousands by being a couple

When you are in a relationship, most expenses get split in two. We shared a car, a house, a hotel room when we went on holidays, and so on. Expenses such as water and electric consumption only marginally increase, since you still use one fridge, watch one TV, and turn on one light at the dinner table. Cooking for two requires just a little more food, but again the oven just gets to work once. Unless life paired you with a big spender, this is a fantastic opportunity to increase your saving rate.

You will need to get your partner on board, obviously. But if you are in a serious relationship, it shouldn’t be too hard to get them to agree. After all, you are saving more so you can work less, and spend more time together, who would say no to that?

If your partner is happy to follow you on the path to financial independence, it won’t be a problem to trade expensive date nights for a nice dinner at home, a potluck with friends or board games with your family. On the other hand, if it is just you, it may cause tensions in the early stages of dating, as you try to keep your savings goals, but have to fork out on nights out to meet people.

Using your better half to maximize your savings

Another great thing about being a couple, is that there are two brains looking at one equation. You both want to save as much as possible, invest it wisely, and spend on what is truly important to you. That can be traveling, spending more time with your kids, having a safety net so one of you can go back to college and increase his earnings down the road… It gets much easier because you both see the problematic, and look at it through your own eyes.

I for example, am very good at seeing the big picture. I see the long term goal, and the benefits related to early financial independence. With a detail oriented partner, who sees the day to day optimization of our goal, we form a power team that is unstoppable.

One partner could spend some time researching the best 401k providers, while the other one could make sure the household saves enough money on a monthly basis for both of you to max them out. One spouse could stay at home with the kids and run the household like a small business, making sure everything runs smoothly for the second one to focus on their career and become a top earner. Trying to do so on your own would require much more effort and energy, or hiring out day care for example, which is costly and emotionally hard when you don’t get to see your kids that much.

The math of living on one income

If you make $100,000 per year, and are able to live on $50,000, assuming a 5% annual return on investments and a 4% withdrawal rate in retirement, financial independence is only 17 years away. Meaning a couple in their early 30s can retire before age 50.

Living on one income can be done in two ways. First, you can keep working two $50,000 jobs (or whatever you earn, times two), and live on one person’s income. If you can make it work on the lowest income, even better. Many families manage to live well with only one average income earner, so why shouldn’t you? The advantage of that system is, should you guys break up, each person has a career and it is easy to bounce back.

The other option would be for one person to stop working so she can help the other one make $100,000. Or help the family live on $25,000 instead of $50,000. While the stay at home parent would have a harder time getting back to the workforce if needed, that solution is pretty powerful. You won’t need day care anymore, you can make it work on one car, your tax burden will be lower, and you can still max out two tax deferred retirement accounts. With extra free time, the stay at home parent can focus on making the household as efficient as possible. For example, doing some DIY projects to lower the utility bill. Cooking every night and making sure no food goes to waste. Because when both people work it is easy to justify take-out. Same thing for holiday planning, or running all the errands in one go. No more need for a sitter, the kids will be taken to the park more often and their little minds stimulated with plenty of activities.

In the end, I didn’t stay in that relationship for the sake of money, and managed to reach financial independence on my own like the independent woman I am. There is no right or wrong. But if financial independence is your goal, and there are two of you, you have no more excuses to make it work!

Looking for an easier way to manage all your investment accounts? Try using Personal Capital for free to keep track of your finances. Personal will aggregate all your accounts and give you a great overview of your savings and investments.

Image by Caleb Morris

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.
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47 thoughts on “Financial Independence Is Easier as a Couple”

  1. I definitely agree with this. When you work together as a couple, not only will you potentially have double the income, but many major expenses you can share such as your mortgage/rent payment, utilities, insurance, and so much more. You can set yourselves up with a stronger financial cash flow than you can by yourself. Working together as a couple to build wealth is far more effective than flying solo in my opinion.

  2. Hmm, “When you are in a relationship, most expenses get split in two.” Not really – most of them also double – of increase by at least 10-20%. Add kids or other live-in relatives and suddenly you’ve got a whole lot more expenses. Plus there’s no guaranty that you’ll both share your financial visions and principals for as long as you’re together.

  3. Hi Pauline,

    Mathematically you have a point, unless the other person has $0 income, then that other partner is a financial drain (doesn’t that sound horrible) on the other.

    However, the point of becoming a couple and then getting married is (for the majority) to have children. Then the math get’s way more complicated, one of the incomes may reduce to zero for a short or long time. The cost of raising a child is almost $250,000 (I think it is way more than that). The cost for the home goes up etc…..

  4. Pauline, Your math of splitting all expenses works only in cases where there is explicit agreement and if both partners earn similar incomes. In my case, with one earning 10 times the other, this division of expenses is not fair to the other partner earning far less. So, I took care and still take care of almost of all the expenses over the 12 years of our marriage. Most of us are in a marriage for reasons other than money, so splitting expenses is not a driver for FI aspiring couple. In the end, it is also learning together. If you believe in Karma (as per true Eastern definition, not the Westernized shortcut), then the marriage serves lessons for both partners to develop and grow. It also doesn’t hurt that filing MFJ is highly tax-efficient!

    • You make a valid point, although if you are married and willing to pay for “almost all of the expenses” why don’t you just have one account and pool together both salaries? My ex was worth 10x what I was but I insisted on living somewhere I could afford to pay half. He wanted better and was willing to pay for it but it would have felt wrong to me. Probably after 12 years of marriage I’d feel comfortable though!

  5. Totally agree with the logic in the post, though I have no personal experience to prove it having mostly been single.

    Have you gone on any actual dates based on your ‘date me’ page on your blog? That is both hilarious and awesome.

  6. You must make sure that you have the same goal. When both of you are rowing the boat, you reach the shore much faster. But what if you sit in the boat and row in opposite directions? Then you’d be better off jumping into the water and swim instead…

  7. We have been married for 15 years. It’s our money – there is no her’s or mine in our case.

    Over the years, we have taken turns to manage money. These days I pretty much handle everything and keep Sarah posted.

    As a couple, we do what is right for us and our family.


  8. I think it depends. I stayed single for several reasons, the main ones being that I could maintain total control over my finances and my time. But two of my siblings who married illustrate both sides of the coin. One married a good earner and strong saver, and they’re pretty much down Joe’s path. The other married a spender, and despite having a high income over two decades, won’t be able to retire anytime soon.

    Statistically I believe spenders outnumber savers by a wide margin; I won’t quote anything as the evidence is pretty much all around us. So a good earner and saver who picks a random partner will probably have their financial independence delayed. Even when financially astute people pair up, they often embark on life choices that become very expensive down the road. Where it works well is when they have a mutual and permanent commitment to becoming financially independent, so they want to make the requisite sacrifices– as a couple. In which case as they say in engineering, the time-to-FI acceleration factor could be as high as 30%.

  9. I think the biggest money advantage as a couple is saving on housing expenses. There’s just no way around it, renting a 1 bedroom apartment as a single person is just much more expensive then living in that same apartment with 2 people. Since housing expenses are typically most of our largest costs, being able to cut that down by half (or sometimes more) is huge!

    Another thing, having 2 incomes in a relationship can really make it easier to pay off debt. Use one income to live off and use the other income to pay off the debt.

  10. We are currently living on one income of $55 000 per yearly. So many people are wondering how we are handling all the expenses with this income.

    Actually, we are doing pretty well. As mentioned in the post, we pay less tax, no childcare cost, my wife make meals at home – less eating out expenses, and our little one is getting best care from his mom.

    Financial independence is possible!


  11. Couldn’t agree more. Not only are the financials better for a couple, but quality of life as well! Having a partner with a similar financial outlook is key to making it work, but then, the savings are huge. Plus, they can help to support you when you experience those momentary lapses in self-control…60″ HD Flatscreen TV anyone? 🙂

  12. Joe, have a blast at FinCon!

    Pauline, thanks for the article. There are definitely some big savings to be had as a couple. When my wife and I first moved in together, we moved into an apartment that cost about the same as we were each paying for our separate places. Rent expenses cut in half instantly!

  13. Thank you! I write for the single older woman trying to achieve financial security — and finally someone else is delving into this reality. Would RB40 have been able to retire early without his wife continuing to work? Her health insurance keeps huge healthcare bills at bay that might have derailed those FI plans. (just my opinion — I work in healthcare and see the bankruptcy and bills. I’m surprised Americans don’t riot in the streets).

    But please, please, please, be careful on the idea of one person staying at home “to sacrifice for the partnership.” WHOA. That’s a social contract that gets broken more than 50% of the time (i.e., divorce). Better odds at the Casino. Getting back into the workforce is tricky and low-pay when you’ve been out for even a few years as a stay-at-home, years of networking and contact building are gone. Most divorce settlements only give 2 years alimony, if you are lucky, then child support — and that goes away when the kids are 18. Even your social security is less because of a workforce break, unless you are married for 10 years or more. It’s too much to think about one for one comment space, so … just a kernel of thought for consideration.

    • I agree that two are better than one for saving, but I also think it can be really tough on the person staying at home if that person has plans to re-enter the workforce eventually. I’m a former software engineer, attempting to find work again after a 2-year break, and I’m struggling.

  14. I totally agree Pauline. When my partner moved in with me and started paying rent it was like getting a 50% raise. Amazing! She has been great for my net worth for exactly the reasons you mentioned. Have a wonderful time at FinCon!

  15. No doubt. Easier as a couple. We too decided to live in one income once our third child was born.

    Meeting the needs as a family when one of the couple stays home also benefits in the quality of life. This is more true with children and the complexity of health, car, life, home, dental, and vision insurance. It takes time to navigate through claims, appointments, deductibles, and coverage. Being frugal is proportional to your ability to parse through these policies, budget your expenses, save money, and respond appropriately to life emergencies effectively.

    We found that the sacrifices we made for that partner to stay home has intrinsic benefits beyond money.

  16. Agree that being a couple makes everything much easier. It also helps that I currently live in the USA where there’s so many options of investing and so much more opportunity available.

    Back when I lived in the Philippines it took me 8 years just to save $12,000! It was absurd given that I used public transport, was living with my parents, and brought my lunches to work. Then again I only get paid an average of $800/month so does take forever to save alone!

  17. I agree for the most part, but the math and behaviors of the other person are key here too. I entered a relationship with someone who was in deep debt (when I had zero debt) and if I would have continued in that relationship – I believe I would never be FI now. We had a lot of fun, but our core values in the end were really different – and a lot of that was based in money. My husband was married and had the same problem and it ended in divorce. Expensive vacations, private colleges – and mounds of debt to please the kids and “enjoy” life. It’s easier as a couple if you are on the same page – it can drown you and make FI just a dream if you’re not.


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