There's plenty of personal finance advice out there directed at families and retirees, but what about those who are married, but aren't ready to expand their family yet?
Miel and James Hendrickson fit this profile - dual income, no kids (DINKs) - and given their own financial successes and pitfalls, they decided to start a blog targeted to others like them.
"Given demographic trends today, even couples who later decide to have children may spend a decade or more as DINKs," they told us in a recent interview.
Finances are something all couples will need to deal with at one time or another, and how they are handled has a huge impact on not only individual and joint finances, but also overall relationships.
"Couples can and do fight about money a lot - money ends up getting intertwined with other emotions, like feelings of security, safety, comfort, etc.," the Hendricksons say.
Their blog, DINKs Finance, aims to take some of the mystery out of managing your money with a partner and hopefully prevent a few battles down the road. Here, they discuss how they've handled finances in their own relationship and offer insight on when and how other couples can breech the topic.
Tell us about DINKs Finance. When and why did you start the site?
DINKs got its start in 2006, a few months before we got married. We had been living together for two years and felt that we had a wide variety of couples-related finance issues to share with readers.
We had already paid off credit card debt, bought and sold real estate, flipped a place at the height of the market with a lot of sweat equity, as well as saved for our first apartment, wedding and honeymoon. This included doing exercises in learning about each other's financial backgrounds and values, as well as doing a prenuptial agreement.
Who should be reading it?
Anyone who is interested in navigating through couples-related finance, as well as learning more about finances in general. We cover some of the basics of day-to-day finances, but also focus on how to take things to the next level, wherever you may be starting from. We've found over the last 10 years that while our financial situation has changed, the same topics and issues come up again and again for couples and in managing finances.
At what point in a relationship do you think couples should start talking about money? How soon is too soon, and how late is too late?
We feel it is important start talking about finances on some level as the relationship initially develops. Even within the first few dates, it is likely that you will start to get an idea about how your partner may approach finances, but you can't assume you know very much without some pretty specific discussions.
At the latest, we would advise going into detailed discussions around finances and goals when getting engaged or moving things to the next level. We do not advocate that couples keep money issues secret from one another. We also do not advocate one person in the marriage deferring the finances to the other partner. We believe marriage is a partnership and both people have to be actively engaged in how the cash is managed.
Are there any financial red flags that you think should dictate whether or not a person stays in a relationship? What's not worth the risk even if you might be in love?
We are certainly the first to say that couples won't necessarily see eye to eye on finances or priorities around how to allocate money.
Despite the different financial histories or perspectives you may have as a couple, probably the most important red flag to consider is whether you are fighting about money frequently. You are bound to have certain financial dialogues that get repeated throughout your relationship - don't expect them to go away - but if they feel intolerable, you should pay attention to this.
In the long run, you have to consider whether or not these are deal breakers for you. If your financial priorities are so far apart that you can't come together, then you need to consider the relationship carefully.
What are your thoughts on how couples handle bank accounts? Should you have joint accounts? Separate accounts? What are the advantages/disadvantages of both options?
We've learned through years of blogging about couple's finances that this is a very personalized question. We recommend doing what feels right to you as a couple, but it is essential to discuss this early on, since you can't assume that your partner will have the same perspective that you do.
We have a mixed cash management approach overall. We opened our first joint savings account when we were engaged, but didn't open a functionally joint account until last year. Now we each contribute to that account for specific household expenses and keep our own accounts for the remainder of our money. We find this works for us, since we need to have a way to pay for basic household expenses but we also want the freedom and flexibility to manage our individual finances.
Whichever way you set things up, you should do so with the goal of reducing conflict around finances and both being happy with the arrangement. Like my father once said, it's not worth it to fight about finances.
What's been the toughest money conversation you've had to have with your partner? How did you resolve it?
In talking this one over, we agreed that it is one of those recurring financial conversations that comes up from time to time.
Perhaps the reason we noted above that priorities are one of those important deal breaker aspects of how a couple manages finances is because this is a challenging area for us. For James, his priorities are pretty clear: accumulation above all else. For Miel, she is happy to save, but also priorities spending time with family (which means travel to the West Coast).
One would assume that DINKs have endless options when it comes to how they handle their money. What areas do you recommend your readers focus the most effort on?
Couples finance is a topic that continues to be relevant throughout our lives - i.e., my parents are now dealing with their joint finances as new retirees - but many of our readers are looking at how to start off their financial lives and how to grow from where they are now.
We've spent the last 10 years running through that cycle of growth, paying off credit cards, buying real estate, owning and managing rental and vacation properties, building our nest egg for retirement, growing several small businesses and beyond. Our readers appreciate considering the options they have as DINKs and looking to prioritize their finances.
For DINKs looking to start investing, what are your favorite types of investments? What should we know before putting down money?
Aside from making sure you are taking advantage of matching 401(k) programs, our next favorite initial investment tool is the ROTH IRA. You can get started with very little and watch it grow. It is a good way to get into the stock market and get comfortable with the process without having to access funds until retirement.
If you have the first two in place, we've also recently discovered Loyal3, which is our new favorite way to buy individual blue chip stocks without paying commissions. We've also been happy to own several rental properties, but we also know that not everyone is cut out to be landlords.
You write that you've made tons of financial mistakes. If you had a chance to go back in time to fix one of those mistakes, which one would you pick and what would you do differently?
Accumulating credit card debt is a lesson that both of us have learned and grown from.
Like James says, poor lifestyle choices (i.e., too much beer and sushi during grad school) landed him in $32,000 in credit card debt.
Miel paid off $13k in credit card debt in less than a year when that was more than a third of her gross pay. Being so diligent at paying off her credit card debt enabled her to stick with the same tactics to save for our next goals of saving for our first place and paying for our wedding.
As with the best kinds of mistakes, both of us really took this lesson to heart and manage our finances better because of such experiences.
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