Having lots of money in the bank is never a bad thing. But once you’ve built up a sizable amount in savings — say, $50,000 — it’s time to ask: Is some of that money better off elsewhere?

Once you’ve built up an emergency fund (enough to cover three to six months of expenses), keeping additional cash in your savings account means you’re missing out on chances to grow your money. Here’s where to move that extra cash instead.

Make more by moving your money

Here are a few strong options for earning on your excess savings:

• Certificates of deposit (CDs): With CDs, you’ll lock up your money for a given term — months or even years — but in return you can get a high APY that won’t change. Current CD rates are as high as 4.55%.
• Individual retirement accounts (IRAs): IRAs let you invest for retirement with tax advantages. A Roth IRA, for example, grows tax-free and allows tax-free withdrawals in retirement. Through IRAs, you can purchase stocks, bonds, or funds that grow much faster than cash over time.
• Brokerage accounts: Just like IRAs, brokerage accounts allow you to invest in stocks, bonds, and funds. They don’t offer tax breaks, but anybody can open one and invest as much as they want. It’s a smart place to grow extra savings that you don’t need in the short term.

CDs are great for getting a guaranteed return on your money. And by investing in index funds, like one that tracks the S&P 500, you can safely assume that your money will grow steadily over time — at a much better rate than a savings account.

When to hold on to your cash

There are a few good reasons to hold a big cash cushion. If you’re planning a large purchase or foresee a financial emergency of some kind, a larger savings account makes sense.

But beyond that, holding $50,000 or more in a basic savings account is usually more of a missed opportunity than a smart strategy.

Also, most traditional savings accounts offer interest rates below 1.00% APY. For short-term savings and emergency funds, a high-yield savings account (HYSA) is a better option. Right now, the best HYSAs are offering 4.00% APY or higher. That’s still not as high of a return as you could get elsewhere.

Put your money to work today

Lots of cash is never a bad thing, but letting your excess savings sit in a low-interest account means you’re probably missing out on long-term growth.

Once you’ve covered your emergency needs, consider shifting extra funds into CDs, IRAs, or brokerage accounts. You’ve worked hard to save up — now let that money work for you.

Now’s the time of year you might be reconsidering how you budget your finances, or establishing a plan if you don’t have one already. While it’s possible to do it all yourself, budgeting apps can automate some processes and make it easier to see where your money is going and patterns, both good and bad, that might be occurring. For Black Friday, you can get 50 percent off our favorite budgeting app, Quicken Simplifi.

The Quicken Simplifi app is down to $3 monthly from $6 monthly, adding up to $36 for the year. Quicken Classic, the company’s “original desktop software” for “experienced investors” is also half off at $6 monthly, down from $12 monthly. The sale starts today and is available until Wednesday, December 3.

One of the many things that sets Quicken Simplifi apart from its competitors is its sleek, easy to use interface. The setup is pretty straightforward and it allows for your spouse or financial advisor to act as co-manager of the account.

It also clearly shows figures like net worth, recent spending, upcoming recurring payments and more. Plus, there’s an option to say if you’re expecting a refund. Quicken Simplifi unfortunately doesn’t offer a free trial so testing it out with a discount means less money invested if it’s not for you.

Social Security was never meant to make up the entirety of anyone’s retirement income. The fact is, however, some people are collecting surprisingly big checks. This year’s maximum-possible monthly payment is $5,108, or $61,296 per year. That’s almost as much as the median salary U.S. workers are currently taking home, according to data from the Bureau of Labor Statistics.

How did they do it, and what will it take for you to do it as well? Here’s how to get the very most you can out of the government-managed entitlement program.

1. A minimum of 35 years’ worth of work-based taxable income

There are three components to your future Social Security benefits. One of them the sheer number of years you earned taxable income as an employee. You’ll need to work for at least 35 years to maximize your payments.

See, when calculating your monthly benefit, the Social Security Administration looks at your inflation-adjusted income in your 35 highest-earning years. You don’t have to work a full 35 years to claim benefits, to be clear. It’s just that for any year less than 35 that you don’t earn any reported income, the program fills in those blanks with a value of $0, dragging down your annual average.

Conversely, working more than 35 years won’t necessarily help, since you only get credit for your best 35. There may still be an upside to working more than 35 years though. If you didn’t earn a great deal of money in some of them but are making good money now, you’ll be replacing some of those lower-earning years with higher-earning ones, raising your overall average of your top 35.

2. Strong earnings for at least 35 of those years

It’s not just a matter of making good money for a minimum of 35 years though. You must earn well above average earnings for that length of time, reaching or eclipsing Social Security’s taxable income threshold in each of those.

And these thresholds are pretty high. This year, for instance, the program doesn’t stop increasing your FICA tax liability until you reach earnings of $176,100. Here’s the minimum amount of taxable wages you would have needed to earn each and every year going all the way back to 1986 to max out your future benefits payments.

To be clear, although you pay into Social Security’s pool of funds via taxes on wages up to these amounts, you don’t pay additional FICA taxes above and beyond these amounts (although you do pay ever-rising income tax the more money you make, since tax rates rise the more you earn). The program stops taxing you beyond these levels because it wouldn’t offer you any additional benefit in return. Again, the absolute ceiling is $5,108 per month.

3. Waiting until you turn 70 to claim benefits

Finally, although you can initiate your Social Security retirement benefits as soon as you turn 62, doing so would dramatically reduce the size of your check by as much as 30% of your intended benefit at their full retirement age, depending on when you were born. Even claiming benefits at your official full retirement age, however, still wouldn’t get you to the maximum-possible benefit. To secure the maximum amount of $5,108, you must until you reach the age of 70 to begin your Social Security payments. That will improve the size of most people’s payments by 24% (if not more) above their payment if claiming at their full retirement age.

Just know that there’s no point in waiting any longer than this to file, since Social Security stops adding credit for delaying your benefits beyond the age of 70. In fact, there’s good reason to claim pretty soon after you reach this point. The Social Security Administration will back pay you some of what it owes you if you don’t file right away. But it will only give you a maximum of six months’ worth of back pay, no matter how long after you turn 70 you claim your retirement benefits.

Prioritize what you can control

You know there’s no way you’re going to qualify for this amount? That’s OK. Most people don’t. Fewer than 20% of recipients see monthly checks of more than $3,000, in fact.

Don’t let that discourage you though. Even modest wage-earners can put themselves in a far better financial situation with their own savings than they’d ever be able to achieve with Social Security. Most calculations of Social Security contributions’ effective rate of return only put the figure in the mid-single-digits, versus the stock market’s average annual gain of around 10%.

Besides, Social Security was never meant to be anyone’s sole source of retirement income anyway. Do what you reasonably can to max it out, but mostly stay focused on maximizing the growth of your own personal retirement nest egg.

7:30 p.m. — After dinner, I sit on the couch; I just can’t stop thinking about the rug. After thinking about it, I decide it’s the right time to get it. I use my Klarna Card to plan a purchase and pay later, so I don’t have to pay in full right at this moment. Making purchases this way feels more natural, comfortable, and responsible because I feel more in control of my spending. And because I can plan a purchase that’s as big as this one, it gives me time to figure out if I actually want it (the answer in this case: Yes. Yes, I want it). $387.33 ($96.84 today)

You’ll make many decisions when preparing for retirement. Choosing when to file for Social Security benefits is one of the most important of those choices.

You have a long period when you could file for benefits, as you can claim as early as 62, but can also wait and increase the amount of your benefits until age 70. Picking the right moment within that eight-year timespan helps you maximize your income and build a more secure retirement.

For many people, an early claim seems like the obvious answer since you can start collecting right away and enjoying the benefits you’ve worked hard to earn all your life. In reality, though, claiming at a young age — and especially before your designated full retirement age — could be something you end up really regretting.

Here’s why.

An early claim limits your ability to work

If you start receiving Social Security before your designated full retirement age (FRA), your decision could impact your ability to work because when you earn too much before FRA, your benefit checks are reduced or even eliminated.

For example, in 2025, if you won’t reach FRA during the entire year, then once you earn more than $23,400, you’ll lose $1 in benefits for every $2 earned above that limit. This could quickly lead to your Social Security checks disappearing entirely, since the Social Security Administration withholds full checks when you go above the limit.

This rule prevents double-dipping of benefits and a paycheck in the years before you reach FRA, and it can lead to a lot of hassle if you’re trying to track earnings to avoid losing benefits.

Eventually, you do get credit if checks are withheld, as your benefit is recalculated at your full retirement age to account for the missed money — but the process of slowly recovering the benefits you missed out on due to exceeding the work limits can be very frustrating.

You’ll take a big benefits cut that is permanent

Since you have an eight-year window to claim Social Security, there are rules in place to try to equalize out lifetime benefits so you get the same amount of money no matter when you claim.

One of those rules is that if you claim Social Security benefits before FRA, benefits are reduced by early filing penalties. But if you wait until after FRA, benefits are increased due to delayed retirement credits.

The penalties and credits apply monthly, as you’ll lose 5/9 of 1% of your standard benefit for each of the first 36 months you receive a check ahead of your FRA. If you claim even sooner, you lose an additional 5/12 of 1% for any of the prior months.

The monthly penalties add up to an annual 6.7% reduction from your standard benefit for years one, two, and three. For years four and five when you were collecting early Social Security benefits, the reduction in benefits is 5% annually. This means that a claim at 62 instead of at an FRA of 67 results in a 30% cut to benefits overall. That cut is permanent, and benefits will always be 30% smaller than they would have been had you waited to claim.

If you delayed beyond FRA until 70 instead, though, you’d have increased your benefits by 2/3 of 1% or 8% per year and received more benefits instead of smaller checks.

You’ll shrink your survivor benefits

You are not the only one who could regret your early Social Security claim. Your spouse could as well. When you die, your spouse either gets to keep receiving their own benefit or keep receiving yours. If you were the higher earner in your family and your Social Security benefit is a lot bigger, then keeping your benefit would be better for your surviving spouse.

The problem is, if you claimed Social Security ahead of schedule, you’d have shrunk your benefit — so your surviving spouse would be left with a smaller survivor benefit than they could have had. Since living on a single Social Security check instead of two is hard, your spouse could end up really wishing you hadn’t claimed early.

You stand a good chance of missing out on lifetime income

Finally, research has shown that around 7 in 10 retirees would find themselves with more lifetime income if they delay benefits until 70 instead of claiming at a younger age. If your goal is to maximize the lifetime income Social Security offers so you don’t have to rely as much on your 401(k) or other retirement plans, then you’ll want to avoid shrinking your lifetime income.

That’s especially true as Social Security is a reliable source of funds since there are cost-of-living adjustments built in that help you avoid losing buying power due to inflation.

Ultimately, an early claim is simply not the right option for many. When you are making your retirement plans, think seriously about whether you should prepare to try to put off your Social Security claim. If so, have a plan to do that, such as living on retirement savings until the day comes when you can claim a large benefit and set yourself and your spouse up for a more secure future.

If you own rental properties, this post may resonate with you. It’s about what to do with a property once a tenant gives notice: keep renting it out, sell and pay capital gains taxes, sell via a 1031 exchange to defer taxes, move back in to avoid taxes, or—most controversially—simply leave it empty.

For most of my career writing about real estate, I’ve focused on buying properties and building wealth. But as we get older, the question of when to simplify becomes just as important. John, a longtime reader, is facing this very crossroads. His situation offers a useful case study for anyone deciding whether to hold, rent, cash out, or landbank.

John’s Rental Property And Wealth Situation

John owns a San Francisco rental property that will be vacant on November 1, 2025, after his tenants gave notice. He bought the home years ago for $1.85 million and invested roughly $180,000 in upgrades. Today, he estimates it could sell for $2.7 million.

The good news is that the property is free and clear—no mortgage. However, carrying costs still add up. Property taxes alone are about 1.24% of a $2.3 million assessed value (~$25,000/year), and with insurance, utilities, and basic maintenance, total holding costs are around $30,000 a year.

The home currently rents for $8,200 a month, with market rent closer to $8,500, generating $102,000 a year in potential income. But John is tired of tenants and the stress that comes with managing rentals. John is strongly considering selling or leaving it empty. He believes his home will appreciate handsomely over the next decade due to the tech boom.

Further, John invested in several private AI companies during the pandemic that have since grown to roughly eight times their original combined value. More importantly, his seven-figure public stock portfolio is also up ~100% since January 1, 2020. So maximizing rental income is no longer a financial necessity for him.

The Four Main Options For The Rental Property

Although John can afford to leave his San Francisco rental property empty, he must first consider these four more optimal financial choices.

1) Rent It Out Again

John could re-tenant the property for $8,200 – $8,500 a month and continue collecting strong cash flow. The risk is that if he later decides to move back in or sell, tenants might still be in place—creating timing conflicts and potential headaches.

In 2028, John plans to relocate his family back to Charlottesville, Virginia, to be closer to his mother. Ideally, he’d like to sell all his rental properties before the move. But if the new tenants haven’t left by then, he’ll either have to become a long-distance landlord or hire a property manager.

2) Sell And Pay Capital Gains Taxes

John sold another property in July 2025, so he has already used his $500,000 tax-free primary residence exclusion until July 2027.

If he sells now, he faces about $500,000 in capital gains. At a combined 33.2% federal and California tax rate, plus ~5% in commissions and transfer costs (~$130,000), he estimates he’d owe around $300,000 in taxes and fees. A painful number, but one that would free up roughly $2.4–$2.5 million in net cash for other uses.

With Treasury bonds yielding over 4%, John longs for a simple, risk-free way to earn money. At the same time, he owns an ideal single-family home that can comfortably house a family of four or five in the heart of a new tech boom. Potentially missing out on another 30 – 40% in appreciation over the next decade may cause a lot of regret.

3) Sell Via a 1031 Exchange

A 1031 exchange would allow John to defer the taxes if he reinvests the proceeds into another rental property. But this strategy means buying a replacement property and continuing to deal with tenants—exactly what he’s trying to avoid.

4) Move Back In

By moving back into the property for at least two years, John could eventually sell it tax-free under the primary residence exclusion. Even though there’s no mortgage interest to deduct, the SALT cap deduction limit to $40,000 from $10,000 under the One Big Beautiful Bill Act should help reduce John’s taxes.

But moving back in would mean giving up the rental home his family currently enjoys. That said, the timing would work if he really plans to relocate back to Virginia in 2028. He has time to give his 45-day notice to his landlord and arrange for the movers.

The Temptation To Leave The Rental Empty

Now that we’ve covered the most sensible financial options for John’s rental property, let’s consider a fifth choice: leaving the property vacant.

With a healthy net worth and a comfortable income, John is tempted to keep the house as a “quiet asset,” free of tenants. This way, he has minimal headache and maximum flexibility on when to sell when he moves to Virginia.

The annual carrying cost of about $30,000 is manageable, but the opportunity cost of forgoing $102,000 in annual rent is significant.

With the AI tech boom, John is long-term bullish on San Francisco real estate. In 20 years, he believes the property will surely be more valuable than it is today. If mortgage rates continue to trend lower, he believes the pace of annual appreciation will surpass the property’s carrying costs.

How Wealthy Do You Need To Be To Comfortably Leave a Rental Empty?

John’s numbers provide a rare window into what it takes financially to luxuriously hold a high-value property with no cash flow. Here’s how to think about it, both for John and for any landlord weighing a similar decision.

1. Annual Carrying Costs vs. Net Worth

John’s holding cost of $30,000 a year is about 1.1% of the property’s $2.7 million value. Whether that’s “affordable” depends on what share of his total net worth it represents.

• At a $2 million net worth, $30,000 equals 1.5% of wealth—a noticeable bite.
• At a $5 million net worth, it’s 0.6%—easier to stomach.
• At a $10 million net worth, it’s just 0.3%—much easier to stomach.
• At a $20 million net worth, it’s just 0.15%—a rounding error that isn’t noticeable.

For most landlords, if the carrying cost is under 0.5% of total net worth, leaving a property vacant starts to feel like a lifestyle choice rather than a financial mistake. John can afford to wait months, if not years for the perfect tenant to come along and not cause him trouble.

John should also consider the lost income from not renting, along with the carrying costs. A similar calculation could be made to quantify the impact. However, since John has already decided he’d rather forgo the rent to avoid the hassle, that calculation is ultimately moot.

2. Carrying Costs vs. Passive Income

Another worthy metric is whether your passive income—dividends, bond interest, other rentals—can easily cover the cost.

• With $300,000 a year in passive income, $30,000 is only 10% of that income.
• With $60,000 a year, it’s 50%, which feels far riskier.

A helpful rule of thumb: if carrying costs are under 10% of passive income, you have the “luxury gap” to leave a property idle indefinitely.

3. Opportunity Cost: The Rent You’re Giving Up

Finally, weigh the lost rent. John’s property could fetch about $102,000 a year in rent.

• For a $2 million net worth, that’s a 5.1% yield—hard to ignore.
• For a $5 million net worth, it’s 2%—still meaningful.
• For a $10 million net worth, it’s about 1%—easier to justify if peace of mind matters more than incremental return.
• For a $20 million net worth, it’s about 0.5%—almost insignificant for the benefit of peace of mind.

Example Comfort Levels

Net Worth	Annual Carrying Cost ($30K) as % of Net Worth	Lost Rent ($100K) as % of Net Worth	Comfort Level
$2M	1.5%	5%	Tough unless income is very strong
$5M	0.6%	2%	Manageable if passive income covers it
$10M	0.3%	1%	Comfortable “luxury choice”

These ratios give any landlord a framework for deciding when leaving a property empty is a sensible trade-off for freedom and flexibility.

Lessons for Fellow Rental Property Investors

If you’re facing a similar crossroads, here are a few takeaways from John’s experience so far:

• Taxes Drive Timing. The IRS’s primary residence exclusion and 1031 exchange rules can save hundreds of thousands of dollars, but they dictate your calendar. Plan your sequence of sales early.
• Lifestyle Over IRR. A spreadsheet might tell you to hold for higher returns, but if a property causes stress or limits your freedom, selling can be the smarter long-term move.
• Simplicity Has Value. Carry costs on a vacant property may not break you, but they weigh on you over time, financially and mentally. The simpler your life is, the less of a desire you’ll have for selling a rental property.
• 1031 Exchanges Are Powerful but Binding. They’re great for investors committed to real estate, but they don’t fit well if your goal is to downsize or exit the landlord role.

Final Thoughts

John admits that paying about $300,000 in taxes and fees to sell when he could simply rent or hold feels extreme. He could hold onto the property until death so his kids could benefit from the step-up in cost basis and pay no taxes. At the same time, selling would simplify his life and bring him one step closer to his goal of relocating to Charlottesville to care for his mom.

For other landlords, the takeaway is clear: if your carrying costs and lost rent are a small fraction of your net worth and passive income, you may one day earn the rare privilege of keeping a property empty purely for peace of mind.

But if those numbers still feel significant, the math will likely push you toward either renting for income, selling for liquidity, or exchanging for a more strategic property.

Readers, What Would You Do?

If you were in John’s shoes, which path would you choose?

• Rent it out for $8,500 a month and keep the income stream alive?
• Sell now and pay the taxes and commission for a cleaner, simpler life for the next two years?
• Move back in to reset the primary residence exclusion clock, but go through an inconvenience and lifestyle downgrade?
• Execute a 1031 exchange to defer taxes but stay in the landlord game?
• Leave it empty and just pay the carrying costs for simplicity given his high income and net worth.

I’d love to hear your thoughts! Have you ever considered leaving a rental vacant even when you could rent it for strong income? At what wealth or income level would you feel comfortable doing so? John’s case shows that while financial freedom creates options, every option carries its own trade-offs.

Suggestions To Build More Passive Wealth

Invest in real estate without the burden of a mortgage or maintenance with Fundrise. With over $3 billion in assets under management and 350,000+ investors, Fundrise specializes in residential and industrial real estate. The wealthier you get, the more you’ll want to earn passive real estate returns and not bother with tenants.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. You can also get my posts in your e-mail inbox as soon as they come out by signing up here.

Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

Cristina has a $1.2 million portfolio and hopes to make work optional within the next decade.
Is she invested in the right way? Or should she change up her asset allocation?

Anonymous and her husband plan to retire in 5 years. They have 10 rental properties and a $2.75 million portfolio. They dream of slow travel, generosity, and family time. How should they structure their assets to support the lifestyle they want?

Paula and her husband are planning for three kids, private school, and possibly college down the road. Should they front-load a 529 plan with a large lump sum, or take a different approach?

__________________________________________________________________________

Cristina: I’ve been reworking my portfolio. The Efficient Frontier talk got me thinking and overthinking. I built an asset allocation that looked solid on paper, but it didn’t feel right.

Here’s my snapshot: I’m 43 and hope to make work optional between ages 50 and 55. I have $750,000 in retirement accounts, $65,000 in emergency savings, and a paid-off rental worth $300,000 that nets about $950 a month.

I max out my 401(k) with the match – about $30,000 a year — and also contribute $30,000 annually to my brokerage. Altogether, I’ve got about $1.2 million in assets and no debt.

I modeled a three-bucket drawdown strategy and came up with a mostly serious, slightly spicy allocation. And this is what I want to run by you:

25 percent U.S. total market

20 percent U.S. value tilt

15 percent international high dividend

5 percent emerging markets

5 percent REITs

6 percent ARK funds (my “spice”)

24 percent bonds

I asked ChatGPT to role-play as you and give me feedback. Now I want the real deal. What do you think?

Anonymous: I’m 57 and semi-retired; my husband is 53 and hopes to leave full-time work in about five years.

We believe we’re invested along the efficient frontier. Our $2.75 million portfolio is about 58 percent large-cap growth, 16 percent small-cap value, 20 percent international ex-U.S., and 6 percent divided among individual stocks, REITs, and bonds. Roughly 98 percent of this sits in retirement accounts. We also have $80,000 in cash.

Beyond that, we own 10 rental properties worth about $2.1 million, with $1 million in mortgages. Seven of those have 5/1 ARMs at 7 percent, and three are on 30-year mortgages at 3.5 percent. Gross rents total $18,800 a month, with $12,400 going toward PITI and another 10 percent toward management. 

Our primary home is paid off, and our only other debt is a $35,000 car loan at 3.9 percent. At full retirement age, we’ll each receive a pension of $1,000 a month.

Looking ahead, we want to slow travel, spend a few months at a time in different places, give generously, and eventually stay near our daughter once she starts a family. We estimate our lifestyle will cost about $12,000 a month, and we expect to earn at least $4,000 from part-time work in retirement.

My husband is still contributing to his 401(k) up to the match, and we’re both funding a backdoor Roth and an HSA. On top of that, we can save about $3,000 a month. I’m torn on whether that money should go toward cash, bonds, or our current allocation. 

Here’s what I’d love your perspective on: how we should view our assets as a whole and how strategies like the Golden Ratio or All-Weather Portfolio might apply. And finally, I wonder if we should rebalance now to mimic the All-Weather Portfolio or wait until we’re closer to retirement.

Paula:  How much should I put into 529 plans for my kids’ education — and should I front-load contributions now or pace them over time?

My husband and I are expecting our first child, and we plan to have three kids. We want to send them to private school and then possibly public or private universities, so we know it’ll be a big financial commitment.

I’m trying to figure out how much to contribute to 529 plans. My Fidelity advisor mentioned I could front-load five years’ worth of gifts at once, which seems smart since the money would have more time to grow.

Right now, we have about $200,000 sitting in a high-yield savings account. It was originally set aside for property, but we’re rethinking that plan. I’m debating whether to move that money into 529s – or at least start with $90,000 when the baby’s born.

The challenge is there are so many types of 529 plans, all with different rules. I need one that allows $10,000 a year in withdrawals for private school, in addition to covering college expenses. We’re in California now, but may not stay here long term.

Can you share your thoughts on using 529s for both private school and college costs? And do you have any recommendations for the best 529 plans?

 

Resources Mentioned:
Interview with Frank Vasquez
Risk Parity Cheat Sheet
The All Weather Portfolio by Frank Vasquez
The Golden Ratio
Caller Christina’s original call
Afford Anything Episode 618 
Risk Parity Portfolio Blueprint 
Joe’s episode Stacking Benjamins 1698 
Run The Line half marathon with Joe
SavingForCollege.com

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Moving In Together: How to Combine Finances and Responsibilities

You’re staring at the stack of bills on your kitchen counter—half yours, half theirs—and wondering how couples actually make this whole “shared life” thing work. Sound familiar?

If you’re reading this, chances are you’ve recently discovered that combining two financial lives is more complex than anyone warned you about. 

Most couples dive into shared living arrangements thinking love will figure out the logistics. But research shows that financial stress is one of the top predictors of relationship conflict. The good news? It can be managed effectively with the right approach. 

Here’s What’s Really Happening When You Avoid the Money Talk

When couples skip intentional financial planning, they often start making money decisions reactively rather than proactively. One person ends up paying more, resentment builds quietly, and suddenly you’re having heated discussions about takeout that are really about fairness, control, and shared values.

Research shows that couples who have structured financial conversations early in cohabitation report higher relationship satisfaction over time. Why? Because they’ve created systems that honor both partners’ autonomy while building genuine partnership.

The truth is, combining finances isn’t really about money. It’s about trust, communication, and creating a shared vision for your life together. Every conversation about who pays for what is actually a conversation about your values, your future, and how you want to show up for each other.

What You Can Do Starting This Week

Strategy 1: Have a Conversation About Financial Transparency

Before you can build anything together, you need to know what you’re working with. This means having what might feel like an uncomfortable conversation about your complete financial picture.

Try this: Set aside approximately two hours for a “financial transparency conversation.” Each partner should gather:

• Current income and pay stubs
• All debt balances and minimum payments
• Savings and checking account balances
• Credit scores
• Monthly expenses

Approach this as information gathering, not judgment. Remember, you’re on the same team now.

Strategy 2: Create Your “Yours, Mine, and Ours” System

One of the biggest mistakes couples make is thinking they have to choose between completely separate or completely joint finances. Many successful couples actually use a hybrid approach that maintains individual autonomy while building shared responsibility.

Here’s how it works: Each partner contributes proportionally to shared expenses based on income, maintains individual accounts for personal spending, and builds joint savings for shared goals.

For example: Anna makes $60,000, Tom makes $90,000. Their shared monthly expenses (rent, utilities, groceries, joint savings) total $3,000. Instead of splitting 50/50, they each contribute based on their income percentage—Anna pays $1,200 (40%) and Tom pays $1,800 (60%). This feels fair to both because it reflects their actual earning capacity.

Starting this week: Calculate your proportional contributions to shared expenses. Determine what percentage of total household income each partner brings in, then apply that percentage to shared costs. The remaining money in your individual accounts? That’s yours to spend or save as you choose.

Strategy 3: The Monthly Financial Check-in Ritual

The couples who thrive financially don’t just set up systems, they maintain them. This means creating a regular time to review your finances together without it feeling like a business meeting.

Try this: Schedule 30 minutes monthly to:

• Review your joint budget and actual spending
• Celebrate wins (stayed under budget, reached a savings goal)
• Address any frustrations without blame
• Adjust your system if something isn’t working
• Dream together about your financial goals

Make it a money date! Order takeout, pour wine, whatever helps you both feel relaxed and connected.

The Truth About Managing Income Differences

One thing that surprises many couples is how emotional income disparities can become. The higher earner might feel pressure to pay for everything, while the lower earner might feel guilty or less valued. Both responses are completely normal and both can damage your relationship if left unaddressed.

Gottman research shows that conflict about money is rarely just about dollars and cents, it’s about the emotions, values, and dreams underneath. Couples who talk openly about how finances make them feel, not just about how to split bills, build stronger trust and partnership over time.

Remember: your financial contribution isn’t just your paycheck. Maybe one partner handles all the budgeting and research, or takes on more household responsibilities, or brings other forms of value to the partnership. A successful financial merger honors all the ways partners contribute.

When Money Gets Complicated

Not everything will go smoothly, and that’s okay. What matters is how you handle the inevitable challenges:

If one partner has significantly more debt: Approach it as a team problem to solve together, not a character flaw. Create a plan to repay debt that works for both of you.

If spending styles clash: One person’s “necessary expense” is another’s “wasteful spending.” Consider setting individual spending allowances where neither partner has to justify purchases under a certain amount (maybe $50-100).

If financial stress triggers old patterns: Money often brings up feelings about security, control, and worth that have nothing to do with your partner. When conversations get heated, pause and ask: “What am I really feeling right now? What do I need from you?”

Your Path Forward

Creating shared financial systems isn’t about losing your independence; it’s about building something stronger than either of you could create alone.

When you’re ready, start with just one conversation this week. Pick the strategy that feels most doable right now—maybe it’s the transparency conversation, maybe it’s calculating proportional contributions, or maybe it’s simply scheduling your first monthly check-in.

Small steps create lasting change. And every conversation you have about money is really a conversation about the life you’re building together.

Remember: if financial conversations consistently escalate into conflict, consider working with a couples therapist who can help you navigate both the emotional and practical aspects of merging your lives. You don’t have to figure this out alone.

I recently got a cool perk from my employer: $1,000 to invest however I want. The idea behind it is to help everyone at our company get familiar with investing, try out our internal tools, and learn about growing wealth with stocks.

I’ve dabbled in stock picking before — and let’s just say my win/loss ratio isn’t exactly Hall of Fame material.

So with this $1,000, I’m not rolling the dice or doing anything risky. I’m going back to the same boring-but-beautiful approach that’s worked for me all along… Index funds.

My “index and chill” strategy

I could spend hours analyzing charts, earnings reports, and news headlines. But I’ve tried that before and never found it either fun nor profitable.

So rather than chase individual stocks, I’m investing my money into a total stock market index fund — something like VTI (from Vanguard) or FZROX (from Fidelity). These index funds own thousands of companies across every sector, giving me instant diversification.

When the stock market goes up, my investment goes up too. When it drops, yeah, mine drops with it. But over time, the market’s gone up more than it’s gone down.

How my $1,000 could grow to $17,449

I’ve got a couple decades left on my investing horizon. So I’m trying to play the long game.

If this $1,000 investment grows at 10% annually (which is in line with the historical average return of the S&P 500) here’s what it could turn into:

Data source: Author’s calculations.

Of course, markets fluctuate and there are no guarantees. But historically, the U.S. market has bounced back from every downturn — and gone on to hit new highs each time.

So while I’m not saying this $1,000 is destined for exactly $17,449 (let’s not jinx it), I like my chances betting on the market as a whole.

This bonus was wired straight into my brokerage account. I keep most of my investments at Fidelity, because it has no account fees, no trade fees, and a massive menu of index funds I can choose from.

Read my full Fidelity review here if you’re curious why I chose it (and how it stacks up for beginners or long-haulers).

Other cool things about index funds

It’s not just this $1,000. I put nearly all my long-term money into index funds.

They’re simple, but also really flexible. Here’s why I love investing in index funds:

• They’re liquid — I can buy or sell anytime the market’s open, and in small or big amounts.
• Easy to hold in any account type — I own index funds in my Roth IRA, my traditional IRA, 401(k), my brokerage account… even my health savings account (HSA).
• Super low cost — With most brokerages, there are no trade commissions and no monthly account fees. Index funds also have low expense ratios.
• No ongoing management — I don’t need to check on anything or do any maintenance.

Another cool thing is I can automate investments. So putting in new money to invest each month can happen automatically on a set schedule. Easy!

Investing is a long game

So that’s what I’m doing with my $1,000 bonus — the most boring thing in the world. Putting it into a low-cost index fund and just… letting it slowly compound.

This strategy has already panned out well for me over the years, and I’ve got no reason to switch it up now.

If you’re thinking about doing something similar with your own money — whether it’s $100 or $1,000 — you don’t need to overthink it. You just need a setup that’s simple, low cost, and built for the long haul.

Check out all our favorite top-rated brokers here, and find the one that matches your investment goals.

Behavioral economist Etinosa Agbonlahor joins us to discuss “money scripts” — the unconscious beliefs we inherit or develop about finances. 

Agbonlahor, CEO of Decision Alpha and former Director of Behavioral Science Research at Fidelity Investments, is the author of “How to Talk to Your Parents About Money.” 

She studied financial management at Cornell University and explains how these hidden biases create problems when we try to discuss finances with family members.

You might assume everyone thinks saving money makes sense, while your parents operate under completely different beliefs. These conflicting scripts can derail conversations before they start. 

Agbonlahor shares the story of a single mother who became so anxious about money after her divorce that she refused to buy her teenager expensive shoes. Years later, she realized she was trying to teach extreme frugality to protect her daughters from the financial insecurity she experienced.

The key to productive money conversations lies in three principles: care, curiosity and cooperation. You approach with empathy rather than judgment, ask open-ended questions to understand their situation, and work together toward solutions instead of trying to be the financial savior.

The conversation covers specific topics you should address with aging parents: debt, retirement planning, long-term care preferences, and estate planning. Agbonlahor emphasizes starting these discussions early, before a crisis hits. 

You want to understand their vision for retirement — whether they prioritize security, adventure or leaving a legacy — and then assess the gap between their goals and current reality.

When parents refuse to discuss finances, you might need to involve trusted friends, spiritual leaders or professional advisors who can have these conversations instead. 

 

Resources Mentioned:

Book: How to Talk to Your Parents About Money, by Etinosa Agbonlahor

The Humble Dollar Forum

 

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