5 of the Best Financial Decisions Young Couples Can Make

To build a stable life with your partner, you both need to make smart choices with your money. The decisions you make early on can set the foundation for long-term financial stability and peace of mind. Here are five of the best financial decisions young couples can make to get and stay on the right track.

1. Create a Joint Budget (and Stick to It)

Sitting down together to map out your income and expenses might not sound romantic, but it’s one of the most important conversations you’ll have. A joint budget helps you see where your money goes each month and identify areas where you can lower or remove costs.

Start by listing your fixed costs: rent or mortgage, utilities, insurance, and loan payments. Then add in variable expenses like groceries, entertainment, and dining out. Once you have a clear picture, decide on spending limits for each category.

2. Build an Emergency Fund Together

Life throws curveballs. Your car breaks down, someone loses a job, or an unexpected medical bill arrives. An emergency fund gives you a cushion so these surprises don’t derail your finances.

We suggest having three to six months’ worth of living expenses. Therefore, if your combined monthly costs total $3,000, aim for at least $9,000 in your emergency fund. Start small if you need to—even $50 a month adds up over time.

Bonus Tip

Put your emergency fund in a separate, easily accessible savings account. This way, you will be less tempted to dip into it outside of emergencies.

3. Tackle Debt Strategically

Debt can weigh heavily on your relationship and your wallet. Whether it’s student loans, credit card balances, or car payments, having a clear plan to pay them off will free up money for other goals.

Consider these two common approaches:

• The avalanche method: Pay off debts with the highest interest rates first, and make the minimum payments on the rest. This saves you the most money over time.
• The snowball method: Focus on the smallest debt first, then move to the next. This approach gives you quick wins and momentum.

Pick the strategy that works best for your situation and commit to it together. Additionally, avoid taking on new debt unless absolutely necessary.

4. Start Investing Early

Compound interest is your friend, especially when you’re young. The earlier you start investing, the more time your money has to grow. Moreover, even small contributions can add up over decades.

If your employer offers a 401(k) with a company match, take full advantage of it—that’s essentially free money. Beyond that, consider opening a Roth IRA or a low-cost index fund. You don’t need to be a financial expert to get started; many platforms offer beginner-friendly options with minimal fees.

5. Make Thoughtful Choices About Big Purchases

Big expenses like weddings, engagement rings, and home down payments require careful planning. Instead of falling into the trap of overspending to meet societal expectations, focus on what truly matters to you as a couple.

Weddings, for example, don’t have to drain your savings. Prioritize the elements that are most meaningful and cut back on the rest. When shopping for an engagement ring, you might go with moissanite or lab-grown diamonds to get a beautiful stone without the hefty price tag of a mined diamond.

Wrapping Up

Now that you know the best financial decisions young couples can make, apply them to your relationship. Being smart with your money today will lead to more stability and a happier, lower-stress partnership in the future.