How Does Being a DINK Impact Your Finances?
Dual income no kids couples have some advantages when it comes to finances. Here’s how to optimize your personal finance strategy as a DINK couple.
July 20, 2022
This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.
You may have heard or seen the term “DINK” being used to describe a certain type of couple. But what does DINK mean, exactly? DINK stands for "dual income, no kids." As the name suggests, the term refers to a couple who are both working and who have no children.
Being a DINK couple certainly affects household finances and presents a number of unique opportunities. Here’s what you need to know about the DINK finances.
What is dual income, no kids (DINK)?
The DINK meaning refers to “dual income, no kids.” A DINK couple is a couple who are both working and who do not have any children.
Couples in a DINK household often have more disposable income than households with only one source of income or households with children. DINKs also tend to have more free time, as they are not caring for children.
The term is thought to have originated in the late 1980s, but has risen in popularity in recent years. Couples are increasingly choosing not to have children, which has led to a rise in the number of DINK couples.
There are various types of couples that end up as DINKs:
New couples who don’t have children yet.
Empty nesters whose children are grown.
Same-sex couples without kids.
Other couples without kids.
How is dual income, no kids different?
It might seem obvious, but it’s helpful to take a step back and look at the differences between DINK couples and other populations.
Dual income: This means that both people are working, or have some source of income. This can lead to higher household income and (typically) higher disposable income.
No kids: This means that the couple doesn’t have children. This tends to mean lower household expenses and more free time.
To compare DINK couples to other populations, let’s break this down further. For the purposes of this article, we’ll look at the financial implications.
Not having children means reduced expenses. The USDA reports that it costs $233,610 on average to raise a child to age 18. That breaks down to around $12,978 per year (although costs would vary in reality). Plus, this figure was from 2015 — adjusted for inflation, it would be quite a bit higher.
If a DINK couple took that $12,978 per year and invested it in the stock market, earning around 7% per year, they would have over $485,000 in 18 years. If they kept that invested for 40 years, they would have over $2.7 million in savings.
In other words, not having a child — and investing the money that would have been spent on raising a child — would result in a very comfortable retirement for a DINK couple.
This is just one example, but it highlights the significant financial advantages that DINKs have over other populations.
Of course, having children can be a rewarding and fulfilling experience. Again, this article is focusing solely on the financial implications of being a DINK couple.
Financial strategies for DINK couples
Dual income, no kids couples tend to have more flexibility when it comes to their finances. Here are some strategies that DINKs might consider.
Without the expense of raising children, early retirement is certainly feasible. This strategy simply involves saving as much as possible, investing those savings and planning to retire before the traditional retirement age of 65. Some DINK couples plan to retire by age 40 or even younger.
Other savings priorities
Couples with kids are often preoccupied with saving for child-related expenses, such as college savings, daycare or medical expenses. DINKs can often funnel those funds into other savings goals, like vacations or a second home.
However, DINKs need to be mindful of their spending habits. It can be easy to spend a lot when you have a lot of discretionary income, particularly if you’re not paying attention to your spending patterns. It’s helpful to maintain a budget to help stay on track.
The process of estate planning also looks a bit different for DINKs. Estate planning is making a plan for your assets after your death. For those without children, there isn’t necessarily an obvious heir or beneficiary.
Many DINKs choose to leave assets to other family members or loved ones. Others choose to support charities or causes that they support. Regardless of your wishes, it’s important to at least have a will, even if you don’t have children.
With more disposable income, it becomes easier to pay off debt faster. And in most cases, paying off debt should be a top financial priority — even over other goals like saving for retirement.
This is because debt is costly to maintain, especially if it's high-interest debt. And DINK couples can usually qualify for high credit limits, making it tempting to spend beyond their means.
To get a handle on credit card debt, some DINK couples are turning to Tally†. Tally is an app that helps qualifying Americans consolidate their credit card balances into a lower-interest line of credit. Learn how Tally works.
Discuss your goals and dreams with your partner
If you’re part of a DINK couple, here’s a powerful thought exercise to discuss:
What are your goals? What are your dreams in life?
Many couples follow the traditional path of career, kids and retirement. DINK couples have more options and can think of possibilities beyond the default.
However, it’s important to actually acknowledge this potential and to discuss things with your partner. Do you want to own a vacation home? Start a small business? Retire by age 45? These are all possibilities, but you’ll need to set clear goals before you can work towards them.
Being a DINK couple isn’t a golden ticket to financial success — couples still need to be financially disciplined in order to achieve their goals. With that said, DINKs do tend to have some substantial financial advantages compared to other populations.
If you plan ahead, you can utilize these advantages to find financial freedom and security, and potentially even retire early. For more resources on personal finance, browse the Tally blog.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.