How to Invest Your Cash Fund

Leftover cash funds or monetary gifts from your wedding? Maybe it's time to invest that money in a joint bank account.

By Emily Forrest

couple plans to invest cash fund
Photo by Zola

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So you included a cash fund as part of your wedding registry and now you’re sitting on a bunch of money. Good for you! While a lump sum sounds wonderful, it can be daunting, too. You and your spouse may be worried about spending it on the wrong things or missing the opportunity to spend it on the right things. To take some of that pressure off, might we suggest investing your cash fund into your first joint bank account? It might not sound as sexy as using that money for a vacation, but investing is almost never a bad idea—especially if you’re investing in your future as a couple. Here’s more on how to and why to invest your cash fund into a joint account.

Why would we have cash fund money leftover?

When you created your cash fund (or funds!) you probably assigned each fund to a certain item or experience. For example, many couples create cash funds to cover costs such as honeymoon airfare and lodging, cooking classes or other lessons, new pets, home renovations, and even a date night fund. When you cash out your funds, however, you just receive the money. How you choose to allocate it post-wedding is totally up to you.

So, if you asked for $500 for a new puppy, but you just started a new job and can’t take the time off to train it right now, then you have a free $500. If your honeymoon came and went and you didn’t get to take those $250 horseback riding lessons or skipped the $300 spa day, well, there’s more loose cash.

You may also have received monetary gifts via checks or actual cash. This is what we mean when we say leftover cash funds.

Why do we need a joint bank account?

You don’t need a joint bank account, or joint investment account—but you may want one eventually. Joint accounts function just like standard accounts, except that both you and your partner own the account. A joint account can simplify basic expenses household expenses—think: mortgage, car payments, and groceries. It can also help you save toward shared goals, such as a new home or a future child’s college fund. Very simply: A joint bank account can help you lay the foundation of your financial future together.

Opening a joint account may also come with smaller advantages that may not be available to individual account holders. These could include things like waived maintenance fees, a higher interest rate, or other rewards. In terms of financial returns, investing together could potentially pay dividends. When you reinvest large returns, they accumulate. It’s better to have one big portfolio than two small ones.

That said, merging finances is a huge post-wedding step. Be open and honest with your partner about expectations for the account and express any concerns. Many couples choose to maintain separate accounts in addition to their joint bank account.

How To Invest Your Cash Fund

So, you and your partner decided to invest some (or all) of that cash fund. Smart move! The great news is that, while investing sounds complex, it doesn’t have to be. Before you do anything, though, make sure you and your partner on the same page. To do that, consider these tips for opening a joint investment account.

  • Settle on your investment goals upfront. What are you saving this money for—a house renovation, retirement, a vacation? You can, of course, invest for a number of different things, but make sure that your money plans are set in stone and you both agree.
  • Use automatic contributions. After you and your partner start your account with your cash fund money, decide how much you both will set aside each month or paycheck for each of your goals. Then, set up automatic contributions to put away money so that you don’t forget and fall short of your goals.
  • Establish a resolution plan. When it comes to merging finances or joint investments, disputes are bound to pop up. Money is a top cause of relationship problems after all. So, it’s best to be realistic and stay prepared with a plan to diffuse and resolve any unrest that may come up along the way.

This seems like a lot. Help!

Investing together is a big step and even the calmest, the coolest, and the most collected couples may benefit from some professional guidance. We’re talking about the ever-changing financial market here after all. This is where a financial advisor can come in handy even just to provide an outside perspective on various investment strategies. Our friends at SoFi can help you decide if a joint bank account is right for you—and help you set one up.

You’re starting your life together with a financial cushion–consider investing to set you and your partner on the right path to lifelong financial security (or at least a major vacation down the line).

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