Move over DINKs: SPLITs are the new financial power couple—they have two incomes, no kids yet and no joint bank account

DINKs (Dual Income No Kids) have been popular among millennials, with child-free couples flaunting their luxury lifestyles on social media. However, a new financial power couple has emerged: SPLITs. These couples keep their finances separate while sharing a plan for the future, and they are becoming increasingly common.

Shruti Joshi, president and chief operating officer of the financial planning company Facet, explains that SPLITs have become so prevalent that they have been given a name. Unlike DINKs, SPLITs do not share a bank account or a household pot of money. Instead, they each hold their own savings accounts, debts, and retirement plans while working together towards shared goals.

One reason for the rise of SPLITs is the decreasing stigma associated with keeping finances separate. In the past, it was seen as a sign of mistrust in a relationship, but today, it is viewed as a sign of maturity and openness about finances. Additionally, people are entering relationships with substantial savings and investments, and they do not want to dismantle these assets when they start a family.

Another factor is the growing financial independence of women. With more women earning significant incomes, couples with comparable salaries have less incentive to combine their finances. Furthermore, the high divorce rates have made younger couples more cautious about merging all their finances into one account. This setup allows each partner to manage their money independently, spending, saving, and splurging on their own terms.

SPLITs share the same benefits as DINKs, with two incomes working just for them. However, they avoid the higher costs associated with having children, such as student loans, credit card debt, and mortgage payments. On average, child-free couples are in debt around $100,000, while couples with children are in debt around $168,000 due to loans, credit cards, and mortgages.

The key to the SPLITs' success lies in their financial autonomy. They can still pool money for major goals like buying a home or traveling, but they do not need to justify personal expenses. This financial independence also helps them build their own credit and retirement savings, protecting their wealth in case of relationship breakdowns.

However, the SPLITs' setup may not be suitable for everyone. If a couple plans to buy a home together or start a family, the child-free lifestyle may become less advantageous. Mortgage providers and tax codes favor joint accounts, which could create challenges for SPLITs in the future. Nevertheless, as long as SPLITs maintain open and honest communication about their finances, their setup can be a powerful and flexible financial strategy.