4 Financial Planning Tips for Newlyweds
Starting out as newlyweds means blending your lives — your last names, your closets, and yes, your finances. Though the M word (money, not marriage) might not be the most romantic topic of conversation, it’s an important one to tackle. Check out these tips to learn how to avoid money mishaps and approach your financial future as a team.
Be financially transparent
The best piece of marital advice that applies to all aspects of your relationship is to be honest with one another. This is especially true when you’re talking about money. To ensure you’re on the same page about your finances as a couple, it’s important to understand and discuss your individual financial health. Perform a complete inventory of each other’s income, bank accounts, and assets.
Be open about your debt even if it feels embarrassing. Most people carry debt at some point in their lives, but too much debt can make it hard to apply as a couple for big-ticket items, like a mortgage or auto loan, so it’s best to be upfront about it. Once everyone’s debt has been discussed, you and your partner can create a financial plan to pay off the debt together.
Lastly — and this is a big one — don’t hide your spending habits. Overspending is one of the top causes of money arguments between couples. It racks up debt and can cause mistrust. To avoid fights over spending, if you don’t have a separate bank account, consult your partner before you make any expensive purchases, and be transparent if you’re a big spender.
Set short and long-term goals
Once you’ve discussed the current state of your finances, set short and long-term goals to work toward. In the short term, you might want to save for a vacation or build a Christmas fund. In the long term, you may be interested in buying a house together, paying off your student loans, or investing and building a nest egg for retirement. Discussing your mutual financial priorities is the best way to start managing your money to achieve your goals.
Create a couple’s budget
It’s just as important to budget for your newly married life as it was to budget for your wedding. When you know what your combined monthly income and expenses are, you can create a household budget that supports your everyday needs and financial goals. Setting up your home budget properly as newlyweds is important. Track how much you spend on rent/mortgage payments, car payments, groceries, entertainment, insurance, and loans every month. Take a look at your recurring expenses to find opportunities to save money, including decreasing or cutting out nonessential purchases like fancy coffees or takeout.
Discuss your finances regularly
The work isn’t over after you’ve hashed out the nitty-gritty of your financial plans and goals. It’s equally important to check in regularly on the status of your finances. Circumstances are bound to change throughout your marriage, so make it a habit to regularly review your finances. Routine check-ins are a smart way to make sure your financial strategies and goals aren’t forgotten.
Communication is key. And remember to always respect one another as you build financial intimacy.
Establishing your partnership to support your financial goals early in your marriage will allow you to better enjoy your honeymoon phase and create excitement around meeting your future money goals as a couple.