The costs of having kids have skyrocketed over the past several years, as expenses like childcare, education tuition, and other essentials continue to outpace average inflation rates. For dual income no kids (DINK) couples, kid-related costs won’t factor into your financial planning efforts for the most part, which means your budget, savings goals, and investment strategies will look pretty different from other families’ finances.
Regardless of the reasons why you’re child-free, it would be best if you still had a solid financial strategy in place to ensure you and your partner are secure in both the short and long term as a dual income no kids (DINK) couple. You may not need to worry about affording childcare, contributing to 529 college savings plans, or spending a chunk of your monthly income on a dependent for 18+ years. However, parents and non-parents alike still need to plan carefully for things like retirement and long-term care.
Strategies for Dual Income No Kids (DINK)
To ensure you’re on the right track as a dual income no kids or DINK couple, consider how you can optimize the other financial aspects of your life in areas such as.
Budgeting Considerations for DINKs
Whereas families spend an average of $8,300 per year, per kid on childcare alone, DINK couples can reallocate money they would have spent on their kids to other categories of their budget. Many people who are opting to forgo having children do so because they still have quite a bit of student loan debt to repay, which means you should be able to pay off loans sooner and minimize the total amount of interest you pay.
While you won’t have access to several tax advantages for parents, you can at least deduct up to $2,500 in student loan interest each year and put more money into an emergency savings fund with the extra income you have as a working couple with no dependents.
Do You Need Life Insurance?
Life insurance isn’t just for parents with one or more children. Life insurance is intended to financially protect anyone who’s reliant on your income in case of your early, unexpected demise. This includes your partner and perhaps parents for whom you provide financial support or caregiving.
With this in mind, you’ll likely want to have some kind of life insurance policy to help your loved ones stay afloat and cover necessary expenses like funeral arrangements, shared debts your partner is legally obligated to repay, and mortgage expenses, to name a few. You probably won’t need a costly life insurance policy compared to parents with children (especially if one spouse isn’t part of the workforce), but this is nevertheless an important thing to keep in mind when planning your financial strategy as a DINK couple.
If you or your spouse are interested in checking out life insurance coverage, check out Ladder. Ladder has created a painless way to apply for the term life insurance coverage you need for those you care about most. Ladder focuses on the speed, ease, and affordability of finding the right life insurance for you and your family’s needs.
Ladder uses real-time underwriting that may lead to on-the-spot coverage. They offer between $100,000 to $8 million in coverage for people between ages 20 to 60.
The entire application process is easy and 100% online. From start to finish, the process of applying and getting a decision takes as little as five minutes.
And, it’s affordable with no hidden fees. Check out Ladder with term life insurance coverage that you can count on with premiums that can start at as low as $5 per month.*
*Policies starting at $5/month are based on a 20-year-old female for $100k in coverage and a 10-year term, preferred plus health class.
Ladder Insurance Services, LLC (CA license # OK22568; AR license # 3000140372) distributes term life insurance products issued by multiple insurers – for further details see ladderlife.com. All insurance products are governed by the terms set forth in the applicable insurance policy. Each insurer has financial responsibility for its own products.
Saving for Retirement
It’s worth noting that not all DINKs have the luxury of plentiful disposable income. Some DINKs have a lot of debt, limited work opportunities, or live in a high cost-of-living area, which can put a damper on your ability to save for retirement compared to parents with minimal debt and/or those living in more affordable communities.
Fortunately, DINK couples typically have the opportunity to save more money for retirement because they don’t need to concern themselves with budgeting and paying for kids’ educational expenses (K-12 private schooling, tutoring, college savings, etc.). This means you should strive to maximize your retirement savings as much as possible, whether that entails contributions to an employer-provided plan, your own IRAs, investing in passive income opportunities, or any combination of these.
If you’re looking for places to keep traditional investment accounts, you might want to check out investing with M1 Finance, Robinhood, Betterment, or Stash Invest.
M1 Finance simplifies the investment process for beginning and experienced investors alike. M1 Finance does not charge a fee per trade, and it gives you the option of taking more control over your investments if you want them (and less if you don’t). M1 Finance is great for buy and hold investors.
Estate Planning
What will happen to your assets when you pass away? Parents often leave a bulk of their money and other assets to their children, but how does estate planning work when you don’t have children to inherit your estate?
First things first: you need a comprehensive estate plan, which specifies who the executor of your will should be, who will receive a power of attorney to make financial and/or medical decisions for you in case you’re unable to make those decisions yourself, and who will receive what from your estate upon your passing (relatives and/or your favorite nonprofit organizations?).
If you have pets, don’t forget to make a plan for them, too. Specifically, a pet protection agreement should outline who will care for them if you pass away before they do (thereby ensuring your beloved pets won’t be left at an animal shelter) and how much money you’ll leave in a pet trust to cover their expenses.
Financial planning is relatively easier when kids aren’t part of the equation, but that doesn’t mean DINK finances are easy to manage without a lot of prior planning, expert-backed advice, and ongoing attention to your financial needs as you get older. Sure, not having kids can save you hundreds of thousands of dollars over the 18+ year average timeframe it takes to raise a child to adulthood, but this is not an excuse to forgo important financial initiatives like regular budgeting and careful estate planning.
