Are you in a DINK (double income, no kids) household? Whether you and your partner are waiting to expand your family or have no plans for children, being kid-free can impact your finances in a variety of ways. If you fall into the DINK category, take full advantage of this period of your life with these tips.
Financial planning essentials for DINK couples
Whether you have combined finances or keep separate accounts, make the most of your extra funds by being on the same page about budgeting.
Setting financial goals together
Are you saving up for a dream wedding, investing in your retirement or putting money aside for a down payment on a home? Whatever your priorities, it’s important to set financial goals that matter to both you and your partner.
Read more: Reach your savings goals faster with buckets and boosters in an Ally Bank Savings Account
Maximizing your two incomes
To make the most of your double income, first determine how much your household earns. Then, review joint expenses, including needs (think rent, utilities, etc.) and wants (like dining out or entertainment). Understanding your full financial picture will help you set realistic goals and determine where you can spend and save.
Preparing for the unexpected
You can’t plan for every possibility, but setting up an emergency fund can help. You’ll want to have easier access to this money, so consider keeping it in a savings account, rather than in investments. With an Ally Bank Savings Account, smart savings tools like boosters can help you grow your savings faster.
Consider life insurance
Additionally, life insurance is an important piece of creating financial security for you and your partner. Without kids, you might think it isn't as much of a priority, but it can help take care of your significant other financially in the event of your passing.
The amount of life insurance you need depends on your life stage, goals and budget. One rule of thumb is to purchase a life insurance policy worth approximately 10 times your income. But you may need more depending on your individual needs.
Planning for retirement
Without the costs of kids, DINKs may also have more money to put toward retirement. Depending on your personal, professional and financial goals, that could mean an early retirement. If that is one of your goals, consider contributing a little bit extra from your paycheck.
Preparing your legacy
Estate planning is an important but sometimes difficult part of planning your financial future. Whereas couples with children might leave their assets to the next generation, DINKs might choose other options like donating to a charity, or leaving assets to family and friends.
Free to choose your financial future
DINK status means you have some clear-cut financial benefits: Two incomes and more flexibility with where that money goes. Make sure your budget reflects your priorities and you consider using extra income to plan for unexpected expenses, invest more for retirement and prepare your legacy.
