5 Simple Rules to Manage Your Money as a Couple

More money, more problems.

Until you have that problem, I’ve put together 5 simple rules to help you master money the way Biggie mastered hip-hop. If you stick to these rules, you’ll be well on your way to making money moves in no time.

1. Spend less than you earn.

Sometimes this feels easier said than done, but starting off your money journey with this rule will pay you dividends for life. People often ask me what to do if they want to spend more than they earn? My answer, get a side hustle. 59% of millennials have one and they earn an average of ~$600 per month. If you need some inspiration, check out these 70 possible ideas.

2. Pay off any debt over 8% interest.

Before you do anything else, pay off the debt vultures. Debt will keep you down like nothing else, especially when it’s higher than 8%. Don’t go crypto-crazy or try to start investing! Paying off your high-interest debt is truly the most money-making thing you can do. The only time you should break this rule is with a company match (your company gives you free money towards retirement). If you have access to a match, max that out first and then go back to paying off debt.

3. Save 20% of your income towards building wealth.

Save more than 20% if you can pull it off, but that 20% should come out of your take-home pay and go directly into your #slushfund. And I’m not talking about a dreaming-about-Greece-fund or a damn-that-purse-is-cute-fund. I’m talking about a fund that helps you build long-term wealth. Buying a home, retiring on your terms, starting a family, or kicking off your business. Even if you don’t know what your goals are yet, you’ll eventually figure them out. Start carving out that money now so its there when you want it.

If you’ve got these three steps down, you’re legitimately crushing it. So let’s talk next about how to use that #slushfund.

4. Save 3 months of expenses in cash, invest the rest.

One of the most common questions I get asked is how people should allocate their savings. I’ve talked to people with $10 in their savings and others with $100,000. Either way, I give them the same advice. Put 3 months worth of expenses away in a money market account (they usually pay slightly better interest rates than a simple savings account). Then go invest the rest in low-cost index funds. Vanguard, Wealthfront or Betterment make it easy to do that without having to think about it.

Extra credit: If you’re feeling ambitious, slice 10% of your savings and play around in the stock market (Robinhood is my go-to app here). But before you do, ask yourself how you’d feel if you lost all of it. If that freaks you out, lower the amount until it doesn’t.

5. Start by saving $100/month for retirement.

Your investment strategy should start with your retirement. Why? Because retirement accounts are specifically designed to help you make the most amount of money over your life-time (officially referred to as tax-advantaged). One of the best pieces of advice I ever got was from a college finance class — our professor made us each take an oath to commit $100/month to our retirement accounts from our first paychecks. For some reason, the rule stuck with me, and has stayed with me ever since (I contribute more than $100 now).

Contributing to your retirement early will be a total game changer when you’re post 65. Many of these accounts have a fail safe say if you were ever to get sick and really (really!) need the money.