Supercharge Your Savings for Couples
Together Stronger
Goal-driven results will be achieved faster together, as the motto of the Welsh National football team states: “Together. Stronger”.
You will see the most gains once you start looking at everything from a team perspective. In my view, this is the number one way to mathematically supercharge your savings as a couple.
Once Tania and I built this into our plans, it was revolutionary!
Of course, I use this term for dramatic effect, but it truly felt this way once the results bore out in the coming months. We were able to shorten our timeline to become nomads quite considerably.
You will see the difference once you adopt the mindset of seeing everything as one large pot, not mine versus yours. It requires trust and good communication from both parties, but hey, you’ve come this far, right? I assume you’re on good terms with your partner.
Ego is the Enemy
Of course, I understand the pushback. I heard it from my friends when we started implementing this.
I gave this very advice to a friend of mine after seeing the results on paper, and he recoiled in the horror at the thought that they would share their higher disposable income. After all, they were the one that had worked hard, gone to university, put the effort in, and now they were getting their rewards.
These thoughts must be put aside for the greater good. Ego, as we know, is the enemy.
How it Works
In very basic terms, both incomes will be combined into one pot to begin with. From here, the overall amount of money is separated out into various allocations or buckets, for example, 20% into savings.
This is the core foundation, rather than each having your own earnings and contribution half of this bill, half of that bill.
Want to take this to the next level? Another game-changer or long-term goal here is to move to live off one income ONLY. Do you see the possibilities there? It might seem like a long way off, but big goals that push us out of our comfort zone are good for us.
In Practice
Let’s say you’re doing well for yourself, and your salary is $100,000. You take a 20% portion of that into savings. After five years compounded at 6%, you would have a total of circa $105,000 in savings. Not bad.
However, the lower income earner is unlikely in the current climate of high inflation and higher prices to be able to save the same 20% so you’re missing out on those gains. Also, asking a partner to save 20% of their 60k income is very different from asking a person on 150k to save 20%. There is a vast difference in available disposable income.
To save more, you combine the two. With two incomes, one at roughly 100k and one at 60k over the same period, you would have $186k, a massive difference to your pot of funds to invest and use for emergencies in your future freedom-filled life. Makes sense, no?
From our own experience, the initial 20% soon turned into 40% once our goals were aligned, allocations set in Excel, and we gamified the experience of reducing outgoings and saving more. This is not just about the numbers it’s about the commitment to the dream.
Not to also mention couples that combine incomes typically stay together. It promotes trust, cooperation, and a feeling of oneness.
As Bob Marley once said, “One love, one heart, one destiny”.
