Sarah sighed as she pulled up the credit card statements on her computer along with her budget spreadsheet. She never looked forward to this task but knew it was important.

She called into the other room, “Hey Bill, what’s this charge for $200 last week?”

Bill was tense as he walked into the room; he didn’t like this task either. “Let me see. I picked up a few things we needed from the big box store. Do you need me to find the receipt?”

“No, it’s fine. I’ll put it under ‘household.’ It’s just that there were a few unexpected expenses this month. We’re not reaching our goals,” Sarah explained.

“Our goals were pretty aggressive,” Bill said. “I didn’t expect to meet them.”

“If we ever want to retire …” Sarah began.

“We still need to live,” Bill said.

Sarah shook her head in disappointment. “We’ve had this discussion a thousand times. I thought you were on board with budgeting.”

“I was. But this is beyond budgeting. You’re second-guessing every dime I spend,” said Bill.

Sarah shut down the computer. “Never mind. I’m ready to give up.”

How can Sarah and Bill stop arguing about money and take control of their finances?

Find out how Jessica McBride, a senior financial advisor from Vanguard Personal Advisor Services®, weighs in on this hypothetical situation.

Jessica’s advice       

Financial stress is a leading cause of divorce, so it’s important that Sarah and Bill get on the same page.

Although it’s great that they have a budget and retirement goals, they clearly don’t agree on either one. That’s why it’s worth taking a step back and reconsidering their approach.

Here are practical steps they can take to reduce arguments over money.

Dream together

Before delving into their budget, Sarah and Bill should first talk about their hopes and dreams. An open conversation about how they picture themselves in retirement can help them identify their goals.

Do they want to travel, take on new hobbies, or dine at various restaurants? Or would they prefer to relax in the comfort of their home and learn how to cook gourmet meals?

Talking about the fun aspects of retirement may help them come together as a team to prepare for that chapter in their lives. It gives the term “retirement” new meaning. It’s not just a monthly amount they’re saving; it’s the painting class they’ve always wanted to take or driving an RV across the country.

If they don’t agree on a retirement picture, it’s important they find out where their differences lie. They can then keep them in mind as they begin building their plan.

Do the math

Once they’ve shared their views of retirement, they can take a fresh look at their budget and figure out what lifestyle choices they may need to sacrifice to get there.

Here’s the basic framework for creating a unified plan:

  • Set goals. It’s important to spell out their retirement goals in dollars. Getting a ballpark number isn’t difficult if they use online tools such as our retirement calculator. For a more accurate picture, a financial advisor can help them estimate what they’ll need.
  • Break it down. After they’ve calculated their nest egg number, they need a plan to get there. For example, to save $1 million, they might need to save $25,000 per year.
  • Work it into their budget. Next, Sarah and Bill should analyze their expenses to see how much they’re able to save each year. They may need to reduce their expenses to reach their annual savings goal. Or they may need to rethink their retirement number.
  • Compromise. Now that they’ve worked together to develop goals, they can prioritize what’s really important to them. If they’re not meeting their annual savings goal, are they willing to work longer? Will they downsize their home in retirement? Or do they want to make smaller lifestyle changes, like trimming monthly budget items? This is the step where they need to be realistic while also being sensitive to their individual priorities.
  • Ease into changes. If Sarah and Bill find it too difficult to immediately save more, they can get a slower start (depending on their ages) with smaller, more achievable goals. For example, they can strive to reduce expenses by $1,250 every 6 months. Over time, this approach will allow them to meet their retirement savings goals.

Build an emergency fund

In addition to creating a unified plan, Sarah and Bill should work on building an emergency fund. This is a great way to ease financial stress. For example, anytime they encounter an unexpected expense, they can tap into this account rather than bypassing their retirement savings. As a bonus, it should help the couple keep their retirement on track.

We recommend setting aside 3–6 months of expenses in a liquid cash account. It’s a big goal for many couples, but it can be accomplished over time.

Check their asset allocation

Depending on their age and risk tolerance, Sarah and Bill might want to change their asset allocation. They can do this on their own or with the help of a financial advisor.

For instance, if they’re willing to withstand greater market volatility, they can increase the stock position in their retirement accounts. A combination of more savings and a higher allocation to stocks may increase the likelihood of achieving their retirement goals.

However, this can backfire if they don’t have time to recover from a downturn. It’s important that they balance risk with the right amount of stability.

Keep separate accounts

Although the couple’s household expenses are tied together, having separate accounts (and possibly a third household account) may give Sarah and Bill a sense of freedom. Yes, the couple’s household expenses are tied together. But if they each have control over their own money, they don’t have to check in with the other person before making a purchase. It’s often an easy way to reduce friction over money.

Of course, if they continue to struggle, the best approach may be to hire an advisor. Getting an outside perspective on their situation might not solve all their arguments, but it often eases financial tension.

To learn more about Vanguard Personal Advisor Services, call 877-279-1709.


All investing is subject to risk, including the possible loss of the money you invest. 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. Diversification does not ensure a profit or protect against a loss.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.

The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review the Vanguard Personal Advisor Services Brochure for important details about the service, including its asset-based service levels and fee breakpoints.

We recommend that you consult a tax or financial advisor about your individual situation.