Financial Advice for Newly Married Couples
Marriage is not only sharing the home! In all form of marriage, the couple promises to share happiness, sorrows, and responsibilities. But sharing financial life is always left behind and no one talks about it. Sharing finances between couples is a very important thing and has equal importance as that of sharing happiness and responsibilities.
The following tips would help the newlywed couples to manage their finances
1. Discuss your Current Financial Situation
Sit down together and discuss where you are in your finances currently. Your individual and collective spending habits, personal debt, things you want to enjoy or purchase in the future (individually and collectively). Also, discuss what you cannot go without. Take the time to speak and discuss your desires, dreams, and needs, even if at this stage they don’t seem to be heading in the same direction. And, remember to be patient with each other.
2. Set Financial Goals Together
Discussion on money will help both of you to know and understand each other better. The obvious next thing to do will be to finalize both the long term and short term goals. The couple will need to then mutually agree on the set goals and the contributions that it would require. In general, the couple should make yearly, 5 years and 10 year and retirement financial plans/goals. The goal should also include decisions on investment, savings and emergency funds.
3. Create Separate Bank Accounts and One Joint Account
This is one of the most important decisions the two of you need to make regarding your finances. Having your own money that you can spend however you want can lessen arguments about money. We disagree with the belief that having separate joint accounts lessens the sense of unity in marriage and shows a lack of trust in one another.
4. Save 10% of your Income
Couples living month-to-month often rationalize that they just don’t have enough money to save. Make the decision to save at least 10% of your income. After saving enough cash as an emergency fund, invest in a retirement account. The earlier the two of you start saving money for your retirement years, the easier it will be have a retirement lifestyle that you both hope for.
5. Create a Budget
Couple should take responsibility in creating a budget and also sticking to the same. This is will help in avoiding situations such as debts. Never get into commitments by foreseeing income. Plan it according to what you have and how much you can afford. Budget designing should start from reviewing joint expenses. Taking records of last few months’ joint expenses will help in understanding and creating budgets. Unexpected or irregular expenses should be kept in mind while designing budget, these will include doctor appointments, routine car or bike insurance, maintenance and even special occasions.
6. Track your Budget
It’s not enough to just make a budget. You need to make sure you stay within your spending allotment and adjust accordingly as your situation, expenses, or income changes. One very effective way to stick to your budget is to use the design a spreadsheet that tracks all your spending and totals it up at the end of the month. This is perfect for young couples who typically have lower incomes and must be careful not to overspend.
7. Save for Retirement
It’s never too late the start saving for retirement, neither it is ever too early for the same. The earlier you start; quicker you might be able to relax. Plan for future, for children education, and also at the same time save bit by bit towards retirement. Contribute towards this as much as you are able to afford.
Additional contribution need not be in great amount. Even a small contribution every month can pile up to big savings during retirements. Moving aside a small portion will not be very difficult and might not impact your monthly expenses much, but in the long run it will be definitely turn out to be a good savings through the little amount that you kept aside.
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