Financial Tips for Newlyweds
Matrimonial vows signal the start of a new journey. The emotions, jubilations, and every other feeling that accompanied my marriage were something else. However, deep down, I knew that living happily ever after wasn’t going to be a walk in the park. My consort and I needed to be on the same page on many things, key among them, our finances. Every successful marriage needs a strong financial foundation. Money matters aren’t the most romantic stories but are vital. Below are effective financial tips for newlyweds.
Here are some of my top tips and things I consider important but, please, do your own research if you would like to learn more about how to manage finances. I’m certainly not an expert in actual family law and it would be wise to get help from an expert in the field if your situation is more complex than mine.
Be Honest on Debts
Marriage experts often advise newlyweds to be open and honest on everything. This advice carries even more weight when it comes to matters of money. We need not exaggerate about our incomes, debts, or the businesses we run. However, most of us feel embarrassed discussing the debts we’ve accumulated over time, when there is no shame in getting secured loans or the like at all. Most people have debt these days, after all.
The debts could be anything, auto loans, mortgages, student loans, or credit card dues. Whatever the obligation, we should disclose this information to our loved ones way before marriage. The responsibility of settling these arrears cannot be imposed on our spouse. The other party can only chip in on their volition.
Joint or Separate Bank Accounts?
An important financial issue that I had to resolve from the go was whether my wife and I should have a joint bank account or retain our accounts. That discussion wasn’t as straightforward as I thought, but we reached a consensus that suited each of us. Both joint and separate bank accounts have their pros and limitations.
Separate accounts mean that we need to monitor budgets and separate bills closely. It comes with the risk of handling finances without the opinion of the other partner. The advantage of separate accounts is it guarantees individual financial privacy. On the other hand, joint accounts ensure that bill payment and other costs can be made with little problem. Issues arise when one spouse tends to overspend.
Embrace Emergency Funds
We live in an uncertain world, where anything can happen. Be it recessions, job losses, or economic meltdowns; we won’t want our marriages disrupted by these happenings. It’s, therefore, necessary to set up an emergency fund immediately after marriage.
The savings account can be joint and automated to deduct a certain percentage of our monthly incomes. Within months and years, the fund will have grown astronomically and can aid us in difficult periods. We also live peacefully, knowing we have a financial backup somewhere.
Create a Budget
Once couples move in together, they need to manage finances jointly. A budget is the best tool for managing finances. Creating a joint budget isn’t that hard. First, we need to determine our cumulative monthly incomes. The next step is listing expenses like mortgages, utility bills, insurance, entertainment, among other things.
The budget list needs to be studied by both partners and any adjustments made. Having a budget will likely cut down unlikely expenses, prevent overspending, tackle debts, and monitor income streams. In the end, we won’t face major financial difficulties in our marriages.
Reconsider Financial Goals
Goal-setting immediately changes once we marry. When single, our financial goals tend to revolve around one person. After marriage, we need to set new goals and ways of accomplishing them as a couple.
The financial objectives that need to be re-drafted include savings, debt re-payment plans, retirement plans, and adjustments to cater to kids. These financial targets should have timeframes and outlines on how they should be met.
A Happy Financially-Stable Marriage
Newly married couples shouldn’t shun money discussions. Such discussions are healthy and carve a clear financial path. If followed to the latter, the above tips should be beneficial to couples.