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Personal finance

Money and marriage: Building a financial future together

7 minute read
April 26, 2024
Personal finance
Financial wellness
Investor goals

Money and relationships aren't always a perfect pair, which can sometimes add to the financial stress 74% of Americans already feel.1 With more than half of Americans admitting they couldn't afford a $1,000 emergency expense, the idea of doing more financially is daunting.2 Fortunately, there are some benefits to joining financial forces with your life partner. A healthy financial partnership starts with an open and honest conversation, and with some planning and help from tech tools, you can achieve more financially with less effort and stress.

If you want to learn how to manage finances in a marriage, here are 5 steps to help you align with your partner and move closer to your goals.

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.

Step 5: Automate, relax, and enjoy your life

Financial planning for couples doesn't have to be complicated, expensive, or time consuming. A new marriage is an ideal time to organize your finances, and with tools like Digital Advisor, you can do more with less effort to help achieve better financial outcomes. Digital Advisor can create a personal strategy based on what's right for you and automatically rebalance your investments so you can free up time to focus on what truly matters—enjoying your life together.

With clear communication, shared goals, and the right tools, combining your finances can transform your relationship into a powerful financial partnership.

Learn more about Digital Advisor and how you can partner together to help improve your finances.

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1CNBC, Majority of Americans Feeling Financially Stressed and Living Paycheck to Paycheck According to CNBC Your Money Survey. (Jennifer Dauble) September 7, 2023.

2Fortune Recommends, 57% of Americans Can't Afford a $1,000 Emergency Expense, Says New Report. (Ivana Pino) January 25, 2023.

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Diversification does not ensure a profit or protect against a loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.

The Vanguard Cash Plus Account is a brokerage account offered by Vanguard Brokerage Services, a division of VMC, member FINRA and SIPC. Under the Sweep Program, Eligible Balances swept to Program Banks are not securities: They are not covered by the Securities Investor Protection Corporation ("SIPC"), but are eligible for insurance by the Federal Deposit Insurance Corporation ("FDIC"), subject to applicable limits. Money market funds held in the account are not guaranteed or insured by the FDIC, but are securities eligible for SIPC coverage. See the Vanguard Bank Sweep Products Terms of Use and Program Bank list for more information.