10 Financial Tips for Newlyweds
A few weeks ago I was at a wedding where I have known the groom for about 20 years. I wasn’t one of the suitors and didn’t know all of them, but I hung out with them a bit. The groom introduced me as a writer, and the usual questions followed: what are you writing? Where is it published? You get the idea. Upon learning that I was writing about personal finance, one of them chuckled and asked me a million dollar question.
“Hey, any money tips for honeymooners?”
I thought about this for a few seconds and just suggested the first item on this list, which was received quite positively by the group, but the conversation moved from there to other topics.
However, the question stuck in my head. What monetary advice would I give to newlyweds? I know several couples this year who are going to get married, including one couple with whom we are so close that a member of our family is present at the wedding party.
This article is for everyone, especially B. and S., B. and E., V. and A. It is based on my own experiences of more than ten years of marriage, interviews and conversations with married couples. much more than that, and countless personal finance books that passed before my very eyes. Here are 10 very valuable money tips for honeymooners.
This post was originally published on The Simple Dollar .
# 1: Never, Never, Never Hide A Spending Dollar From Each Other
If I had to give one piece of advice to married couples, this is this. Never, never, never hide a single dollar of expenses from each other. Period.
Don’t get me wrong, I think both members of a married couple should have some kind of pocket money that they can spend freely, but that money should be pretty limited and the total should be clear to both. Once you move beyond this pocket money, you will almost always create financial and, ultimately, family problems.
If you have a “hidden” credit card, you are making a huge mistake. If you quietly pull money out of the ATM and hope your spouse doesn’t notice, you are making a huge mistake.
Why? Your spouse assumes and plans, as if all the accounts are on the table and the money does not disappear from the checking account. The financial plans you put together, whether it’s big things like saving for a home or retirement, or even little things like paying bills or buying groceries, depend on the money you expect to receive while there.
If you secretly spend more and more money on things like hidden credit card bills, hidden hobbies, or hidden shopping trips, you are not only ruining those plans, but also undermining trust.
It’s never worth it unless you deliberately leave your marriage.
Again, this does not mean that you need to disclose every penny you spend at every moment to your spouse. This means that you need some kind of clear limit on your individual spending. You might agree that each of you will have $ 100 a month (or more or less, depending on your situation) to spend on what you want, as well as gifts for each other, and that money can be spent without question or even a second thought. If you go beyond that limit, then the conversation has to happen.
# 2: talk about your common goals as often as possible
When talking about general goals, it is vital that you are on the same page as to what goals you have and how your income contributes to achieving those goals. If you are not working towards the same goals, you will literally be working against each other in terms of the use of money and time, which will keep you both from where you want to achieve.
For example, suppose one of you is focused on saving for retirement and the other is interested in saving for international travel. If you both get money from the same pool at the same time, neither of you will reach your goal at any rate.
The best approach is to sit down together and figure out the goals that you share, and then make a work plan to achieve those goals. This can be a tricky process. You may not even know for sure which goals are most important to you. This will also be part of the conversation.
My suggestion for a great conversation about goals is to just talk about what each of you would like to do in your life for the next five years, then the next twenty years, and then the rest of your life. How would you like your life to look five years from now (at least somewhat realistic)? How about ten or twenty years? What about old age?
Then look for areas where your views overlap. So they should be your goals. Make these goals central to both of you, and then develop a plan to achieve them.
However, remember that this is not a one-off item. Your goals and priorities will change both individually and mutually. Return to this conversation regularly and make sure you remain focused on your common goals. Don’t be afraid to let some goals disappear as you change, both individually and mutually, and don’t be afraid to set new goals.
# 3: Your spouse will sometimes really annoy you. Forgive him or her
It will happen. You are about to disagree. After living with him for five or ten years, you will see personality traits in your spouse that really annoy you.
It’s even easier to get lost in these flaws and become negatively obsessed with them. It happens. You get stuck on some little flaw and it grows and festers and becomes overwhelming.
Maybe your husband leaves his clothes on the bedroom floor. Maybe your wife is a little bossy. Maybe your husband loves his daughter more and is more strict with his son. Maybe your wife enjoys watching endless reruns of her favorite TV show, it seems, all the time.
Don’t get hung up on a flaw. Instead, think about the many things your spouse does well. Focus on what you like and then find the strength to forgive the flaws.
If your husband leaves his clothes, just toss them in the basket for him. If your wife enjoys being bossy sometimes, go along with her when it doesn’t matter to you. If your husband has a weakness for one of your children, take a step forward and be more disciplined with that child if necessary. If your wife enjoys watching reruns, it is best to read a book while snuggling next to her.
Forgive those shortcomings. Find a way to live with them. Focus on positive qualities instead. You will be much better.
# 4: You are about to grow old. Start planning it now so it’s not a scary process
No matter how young you are now, you will eventually become old. It will be difficult to keep working and you will want to retire for a few years and enjoy life before your health deteriorates.
The difficulty is that the younger you are, the easier it is to ensure that your retirement period runs smoothly. You can save quite a bit starting in your twenties to make retirement easier, but if you wait until forty or fifty, you will have to save a lot more of your income.
So, think about what you want out of retirement life and talk to your partner about it. Then start saving. This brings us to our next point …
# 5: both of you should be saving for retirement in your retirement plans
When you start digging through retirement savings, you will likely find that one of you has a much better retirement savings plan at work. One (or both) of you may not even have a retirement plan at work.
With this in mind, it can be very tempting to ask one of you to make all your retirement savings in order to take advantage of this excellent retirement offer. Don’t fall into this trap.
The reality is that there may come a point where you are no longer married, and in this situation one of you will be left without a retirement plan and really want to have one. You can get some of this money in a divorce, but there is no point in risking it.
It is best for each of you to have a retirement account.
Each of you must log into your retirement account yourself. If you have a plan in your workplace that offers matching funds, use that plan. Otherwise, discover the Roth IRA and start saving.
Each of you should strive for a savings goal of 10% of your individual income in your individual plans, wherever they are. If you do this and start before age 35 or so, you will both be fine in retirement, whether they are together or separately.
# 6: There will come a time when you are likely to support your spouse. Make up with it (and plan for it)
In 2008, when I made the decision to work on The Simple Dollar on a permanent basis, my wife and I knew that there was a risk that it would fail, and in this situation she would be the main breadwinner for the family for a while. Fortunately, the site went viral, so that didn’t happen.
In 2010, my wife took almost a year off due to the Family Sick Leave Act, which meant she spent most of the year without pay. I paid for our health care from my income, and for a time we lived rather poorly.
In 2014, my wife started working towards her master’s degree by attending classes on weekends and summer, as well as on weekday evenings. It’s a little expensive, and it means I’m taking on a higher percentage of parenting than I once did, but in a year or two, she’ll be on a terrific career.
After a year or two, I’m seriously considering going back to school and getting my master’s degree, probably in my spare time, as I continue to write for The Simple Dollar.
In each case, one partner’s career situation changed the relative financial burden (and a different burden) in our marriage. It happens. Sometimes your partner will have a hard time. Maybe your partner wants to go back to school. Maybe you want to be a home parent for a while, or attend homeschooling, or something else entirely.
It will happen. Don’t be discouraged about this. Rejoice that you can be with your partner when changes occur, and rejoice that your partner is there for you when these changes occur. Because they will happen.
# 7: Create an Emergency Fund. Currently. You will never regret it
First of all, what is an emergency fund? It’s just cash, usually deposited in an emergency savings account . The emergency fund can grow during a job loss, a car breakdown, during a family emergency, or just about any other case that comes up unexpectedly and requires money.
Why not use a credit card? The biggest reason is that due to many emergencies, the credit card is no longer useful . Identity theft. Stolen wallet. The bank will cancel your card or lower your credit limit. These things can be very dangerous and a credit card won’t help you. Money is king. Money will help you.
So let’s get down to creating. Create a savings account with both of your names in an account – perhaps with a bank other than your regular bank so that it is a little harder to get it instantly – and set up an automatic transfer to those savings Account. Make sure it’s not that easy to log into this account – you should be able to access it, but not immediately with the card in your wallet. It keeps you from touching the moment of temptation.
The account will slowly rise over time. Just leave it alone. Only use it when you need it.
With the reserve fund, an unexpected problem will not escalate into a crisis. It won’t turn into a fight. Instead, you have the money to deal with it and life will go on.
# 8: You Don’t Need A House As Big As You Think
Many newlyweds quickly start thinking about buying a large home to live in. They have visions of a well-selling version of the American Dream that includes a large, beautiful home in an ideal neighborhood with two and a half children running around. area.
The problem is that the “dream” is expensive . The larger the house, the larger the bill. So the mortgage is bigger. Means big utility bills. This means more insurance. This means higher property taxes. This means higher maintenance costs.
Another problem is that a large home usually turns into a bunch of storage spaces for your belongings. Most people regularly use only a few rooms in their home – the bedroom, kitchen, master bathroom, and possibly the living room, which has a TV and / or computer. The rest is eventually used for storage or for guests.
There is more room for things, and things are expensive.
Instead of daydreaming about a huge house and shopping for it, get small. Go really small. Look for an inexpensive small home, spend a little more to renovate it the way you want it, and keep your bills low. It will be much easier for you to allow yourself to do what you want in life.
# 9: You Don’t Need A New And Shiny Car As You Think
The above arguments for a smaller home also apply to your cars. A shiny new car is expensive. This means a higher car payment. This also means higher insurance coverage. These bills really add up.
In most situations, the best ROI in terms of buying a car is to buy a used car of the latest model from a reliable manufacturer , drive it until problems start to arise, and then replace it with another used car of the latest model from the manufacturer. reliable manufacturer. (I trust Consumer Reports when it comes to identifying reliable manufacturers, and I look at Toyota and Hondas first and foremost.)
This plan allows you to have lower car payments when you actually pay for the car, and then you have several years without paying for the car. In those years, put those “car payments” into a savings account so that when it comes time to replace that car, you have enough money to either make a giant down payment or pay for the car in full. Enter this cycle and you will never have a car loan again.
Set this car buying cycle together, and you end up saving a fairly small amount each month for savings, and you never have to pay for your car again. You will also have reasonable insurance bills.
# 10: spend non-passive time together as often as possible
This last tip is about feeding and caring for a marriage. In fact, half of all American marriages end in divorce. This is a sad statistic, but it is a reality.
Another reality: divorce is expensive . Lawyer bills, legal fees, rapid lifestyle changes and housing … these can all be very, very expensive.
One of the best financial steps you can take as a married couple is simply to keep the marriage strong. If your marriage is strong, you won’t get a divorce, and this will be one of the best things you can do financially.
How do you work on your marriage? The best thing you can do is spend time together, preferably time that is not wasted on passive things like watching TV. Get active together. Talk to each other often.
Sarah and I try to maintain at least a few healthy conversations every day. Yes, there are days when we do not meet face to face until the children go to bed in the evening, but at this moment we will always talk about our days. We’re talking about goals. We are talking about the state of the world. We’re talking about things in the world that everyone thinks about.
We also do a lot of things together. We play board games. Go for a walk. We practice a little. We work on projects around the house.
One of our favorite things to do together is cleaning the house. We both spend 20 minutes cleaning the kitchen and living room at the same time, so we talk together during the entire cleaning period. It’s a surprisingly effective way to bond because we not only have a great conversation, we are both working to make the home a better place for everyone, and we know our partner helps as well.
Do something together. If necessary, set aside time for this, which may be necessary if you have children. Working together can be the foundation of your marriage.
Final thoughts
Marriage can be a wonderful thing. Having someone in your life you can rely on, who truly loves you, and who makes life choices that also benefit you is life-changing and life-affirming.
However, marriage does not happen automatically. It won’t always be easy, and money is often one of the biggest problems in a marriage.
If you take these ten financial tips and take most of them to heart, you will find that financial problems (and some other problems) in your marriage will become much easier to deal with.
Good luck!
10 Financial Tips for Newlyweds | Simple dollar