Build a stronger marriage by following the right investing strategies

“All you need is love” can sound like a profound truth about relationships, especially in the starry-eyed early days of a new marriage. But it’s a lot harder for love to be enough when you’re arguing with your sweetheart over budgeting, family loans, investing, and just who the heck ordered so much DoorDash last month. During those arguments, love seems insufficient for overcoming economic problems.

This is why it’s so important to invest in your marriage—literally. Newlywed couples who jointly invest their money can reap the benefits of lower stress and a closer connection, not to mention a well-funded future. Here’s how recently married couples can invest their finances to create a happy future together.

Create a timeline of your goals

The honeymoon phase is all about potential. You have your entire lives ahead of you with your favorite person by your side. This is the best time to have deep conversations about what you both want to accomplish over the coming years. Talking through the things you want can help you both get excited about taking these steps together.

But naming your goals is not enough. The real magic happens when you start putting them on a timeline. Perhaps you dream of hiking through Peru and also want to buy a house. By putting each of these goals on a timeline, you can start making the financial decisions that will help you achieve them.

For example, let’s say you want to go to Macchu Picchu before you turn 30 in five years, and you’re hoping to buy a house in about 10 years. You estimate the Peruvian holiday will cost around $5,000 total, while you will need at least $40,000 set aside for a down payment. Knowing when you want to accomplish these goals will help you figure out how to save and invest for them. You’ll be able to ask yourselves the following questions:

1. Can you reasonably set aside enough money from your current income to accomplish these goals on time?
2. If that’s not possible, what kind of investment return might you need to reach your goals? (A compound interest calculator can help you figure this out. For example, you may be able to comfortably set aside $3,000 for Peru in the next five years, meaning you’d need a return of 25% annually to make the $5,000 you’d need).
3. Is that needed investment return realistic (7% per year or below)? If so, you can set up a regular, automatic investment into an asset that has historically offered that return.
4. If it is not a realistic return, can you either increase the amount you set aside for the goal or extend the timeline?

Getting in the habit of putting your goals on a timeline gives you concrete steps to follow, rather than assuming you’ll achieve them “someday.”

Pay off high interest debt

A recent survey of divorced people found that nearly 20% cited debt as a contributing factor to their divorce. This means working together to pay off any high interest debt early in your marriage can pay financial and relationship dividends for years to come.

Getting on the same page with your debt payoff plan will also help you feel like you’re presenting a united front. It’s the two of you working together against the debt, rather than spouse versus spouse.

Since money you’re using to pay down debt is money you can’t invest, it can be tough to decide between debt payoff and setting money aside for your future. It’s helpful to use the 6% rule of thumb to help you determine which debts to prioritize.

This rule suggests that you focus on paying off any debt with an interest rate higher than 6% before sending additional funds to your investments. That’s because the historical rate of return for the market as a whole hovers around 7% per year[1] after factoring in inflation. That means any debts with a 6% or higher interest rate will offer approximately the same or higher “return on investment” as traditional investing.

Make friends with life insurance

Life insurance may not be the sexiest topic for newlyweds to discuss, but it’s a vital part of your investing-together strategy. That’s because your new family unit could be vulnerable if the unthinkable happens.

For instance, would either of your incomes be enough to cover your current bills by itself? If not, then you need to have life insurance to ensure that a surviving spouse could stay in your home and maintain your standard of living.

Life insurance may also be necessary when you buy a house, since one income may not be enough to cover the mortgage. And if you hope to have children, it’s important to make sure you have enough life insurance coverage to protect the surviving parent and kids if one spouse passes away.

Invest together

Money may be a common marriage stressor, but it doesn’t have to be. Starting your married life by investing in your shared future can give you a blueprint for achieving your big dreams and life goals, help nip future arguments in the bud, and ensure the money you need will be there when you need it. And what’s more romantic than that?

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