Two incomes, more options: Making the most of life before or without kids

Read time: 5 minutes

Key takeaways

• A stronger savings rate can give you the freedom to make career and lifestyle decisions later without being entirely dependent on your next paycheck.
• Without obvious default heirs, it becomes especially important to decide who should inherit your assets and make decisions on your behalf.
• The right balance of saving, spending and flexibility is personal, and it can change as your careers, relationships and priorities evolve.

Two incomes and no children can create something valuable beyond extra cash flow: added flexibility to align your money with the life you want to build.

But this advantage can be easy to miss out on. Without a plan, higher household income might simply translate into more spending while important planning decisions, such as estate documents and beneficiary designations, remain unfinished.

If you’re in a DINK (dual income, no kids) household, taking a strategic approach to your cash flow and savings can create greater flexibility and financial resilience for your future.

Turning higher cash flow into increased optionality

With two incomes and no children to support, you may have the ability to increase the amount you save from each paycheck. The most powerful benefit of this is not necessarily saving a certain amount, but rather the choices that your increased savings create.

Consider what would change if you had enough to live comfortably for several months without a paycheck. You might be more willing to take a sabbatical, move to a new city, leave a role or career that no longer fits or start a business of your own.

To build this flexibility, consider dividing your surplus income among three broad purposes: long-term wealth, near-term flexibility and the life you want today. The specific uses for each category will depend on your goals, as will the amounts allocated from your paychecks. However you configure them, having separate pools of accessible savings can prepare you for opportunities or unexpected changes without disrupting your retirement plan.

For many DINK households, this stage presents a window of opportunity to set a savings rate that may be harder to maintain later. By reserving a higher amount while you have it, you may have more flexibility if your household income changes, your expenses increase or your priorities shift.

Whatever you want your future to look like, the goal is using your income advantage intentionally to create more choices later.

Don’t let “no kids” become “no estate plan”

Estate planning can be associated primarily with parents who want to provide for children. But couples without children still need to decide what happens to their assets and who can act on their behalf. In fact, those decisions may require more intentional planning since there are no children to serve as default heirs or decision-makers.

Start by deciding who you want to receive your assets and make financial or medical decisions if you can’t. Then document those choices through beneficiary designations, a will or trust, powers of attorney and health care directives.  State intestacy laws vary, so you cannot assume that 100% of your spouse’s probate assets will automatically pass to you.

Pay particular attention to beneficiary designations as well. They allow retirement accounts, life insurance policies and some other financial accounts to pass directly to the people you name, rather than according to the instructions in your will. Review them alongside your broader estate plan and update them when your relationships, priorities or wishes change.

Without children, you may have more choices about who to include in your estate plan. You might list a spouse, extended family, friends, charitable organizations or other people and causes that are meaningful to you. The important question isn’t simply, “Who gets everything?” It’s “Have we intentionally decided and documented what happens next?”

What can dual incomes and no kids make possible?

A DINK lifestyle doesn’t have to buy you a more expensive lifestyle. Instead, it can buy you options and flexibility.

Making the most of that optionality starts with understanding how the different pieces of your financial life work together.  Two incomes can create meaningful advantages, but they can also add complexity. You may have separate employer benefits, retirement plans, equity compensation, and approaches to saving and spending.

As you save surplus income and assess your estate plan, consider how all the pieces of your financial life are working together to support your goals and keep your options open for the future. Careers, family circumstances and responsibilities can all shift over time. Building flexibility into your financial system now can make it easier to adapt when you need to.

If you’re not sure where to start, consider speaking with your advisor. They can help you make informed decisions about how to use your financial flexibility and develop a plan that supports your goals and lifestyle.

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