Money and marriage: Building a financial future together

Step 1: Sharing your philosophies on money

Sharing your philosophies on money is a great way to understand your partner's views on money. Before you combine your finances, talk about how you save, spend, and invest. What's your investment risk tolerance? Do you prefer bold investments, or would you rather take the safest path possible? Are you a budgeter or a spender? Do you want to live modestly and save aggressively, or do you favor the finer things in life?

Be sure to communicate openly and honestly as you explore the answers to these questions, since this is the first step to laying the foundation of a healthy financial partnership.

Step 2: Getting organized with big-picture goals

Now that you're part of a pair, you need to get organized and start thinking about the big picture and your collective goals. For some, retirement is a distant goal that can take a backseat to saving for a house, seeing the world, or having children. But, if you plan to retire at age 65, you may have to start saving sooner or setting aside more money each year to get you to your goal on time. Maybe you have student loans and credit card debt you'd like to pay off, but if your partner is planning a vacation to celebrate your birthday, your respective goals could conflict. Whatever your big-picture financial goals, you need to get organized and align with your partner on these major milestones.

After you agree on which milestones are most important, create a timeline for achieving those goals. This is where concrete numbers come into the equation, so grab your calculator and determine how much each of you need to contribute to reach your goals. Like your money philosophy, you should be completely open and honest about your big-picture goals to ensure you and your partner work in sync toward your shared aspirations.

Step 3: Building your financial fortress together

Since finances in marriage are largely about hitting your savings goals, a newlywed budget should always include a strategy for tackling debt and establishing an emergency fund. Sometimes, unexpected expenses threaten your financial goals. To help safeguard your financial future, start building your financial fortress together by focusing on the following:

Pay down debt

• Debt can weigh you down, and in some situations, it may help to prioritize paying off debt before saving or investing.
• Create a debt repayment plan based on interest rates and balances.
• Tackle debt with the highest interest rate first (a strategy known as the debt avalanche method).

Establish an emergency fund

• Set up automatic transfers from your checking account to your savings account to establish a saving routine.
• Aim to save enough to cover 6 months of living expenses. This can help support you in the event of a financial emergency or if you find yourself in between jobs.
• Consider using Vanguard money market funds or a Vanguard Cash Plus Account to help grow your savings with lower market risk.
• Avoid using your emergency fund for non-emergency expenses.

Fund your goals

• Make a budget to take control of your finances.
• Set aside a portion of each paycheck and use it to fund your goals.
• Consider setting up automatic transfers (login required) that directly feed funding your top-prioritized goals.

Step 4: Monitoring your progress and making adjustments

Step 4 in successful money management for couples is about checking in on your progress and making adjustments. You'll grow and change as a couple, and so will your financial goals. A significant life event—like a new job, the birth of a baby, or a financial windfall—is the perfect opportunity to revisit your finances, but you should also regularly monitor your savings and investments. Checking in on your finances periodically gives you the opportunity to:

• Celebrate your wins and stay motivated.
• Rebalance your investment portfolio and adjust to your evolving risk tolerance.
• Reassess your goals and contribution commitments.
• Try not to react to market volatility. Historically, staying the course has been beneficial to investors.
• Hold each other accountable and ensure you stay on the same page.