How should newlyweds handle finances? Marriage is an exciting time that will change everything, including how you think about money. Eventually, you might want to buy a house, have children, or retire. This goes smoother with a plan in place. Our financial advice for newlyweds includes ways to work toward common goals together without arguments.
Why are Finances a Big Deal in Marriages?
Newlyweds who begin their life together with the same money management plan are more likely to avoid problems. They’ll realize common goals much easier than those who have divergent plans. They’re also more likely to build wealth. Financial strife is one of the more common reasons for arguments and divorce. So, what is the best advice for a newly married couple? Here are five tips that will give you a place to start working on your finances as a team.
5 Financial Tips for Newlyweds
Before you get married, or soon after, be sure to keep open lines of communication and discuss the following topics:
1. Your Family’s Financial History
Discussing your family’s financial background and your own is vital when building a healthy and honest foundation. This leads to a greater understanding for both of you. Only when you fully understand where you’re coming from will you get to where you want to go.
How did your parents handle money? What was that financial climate like for you as you grew up? What did you learn or take away from the experiences of the adults in your life? How do you think that helped or hindered you when you first started out on your own? This is helpful information for couples and will explain much about who you are regarding money.
2. Your Money Type
You’re on the same team. So when combining finances, take some time to figure out your personalities regarding money. You don’t necessarily have to be the same. If one tends to spend money, while the other is more of a saver, that can be quite helpful, as different spending types can complement each other.
Just knowing each other’s money type allows you to have productive conversations about finances honestly and openly. This will also help you get aligned to work towards financial stability for the long haul.
3. Financial Goals
One of the most important items on a financial checklist for newlyweds is writing down short- and long-term financial goals. Such goals may include:
- Home Purchase
- Home Renovations
Give each item serious thought. At the same time, stay flexible. You’re planning decades in advance, and no one knows what the future holds. Outline and prioritize your financial goals, so you know what you’re both envisioning when you look into the future. Then you can discuss and work together to make sure you get there.
Also, make sure to plan for difficult circumstances, since not everything that comes up financially is within our control. Having a backup plan for your plans can prevent a great deal of anxiety when unexpected events occur.
4. Create a Family Budget
Budgeting for newlyweds is vital. Create a monthly household spreadsheet that shows how much is coming in each month and how much is going out. A budget will guide many of your spending and saving decisions.
Determine your combined monthly income. Then make a list of all expenses, including rent/mortgage, utility bills, entertainment, insurance, car or student loans. Cut out non-essential expenses, such as eating out, and learn how to save money.
5. Save for an Emergency
Start an emergency fund. This involves putting money aside that you can’t easily access. It might be a locked savings or investment account.
Eventually, you want to accrue about six months of salary for anything unexpected that might come up. This could include unemployment or a serious illness. The fund will grow slowly at first, but this will help you sleep better at night knowing you have money in case of an emergency.
In the End
Some of the best financial advice for newlyweds includes being honest with each other. Talk openly and frankly about debts, history, income, and goals. Money issues in a marriage can be tricky, but if you discuss them often with each other, you can overcome any bumps in the road. Navigating through and around hurdles is how the two of you can build a successful future, financially, together