As you embark on a new season of life as husband and wife, there are a number of unforeseen challenges and obstacles that may arise. In our nation’s current economic condition, it’s no surprise that finances can be one of the greatest sources of tension for newlyweds. Here are a few tips for healthy and effective financial planning…
Plan Ahead: When it comes to financial planning as a couple, the earlier you start the better. There’s nothing exciting or rewarding about keeping your financial state a secret until you are officially husband and wife and then making a big reveal. The earlier you can discuss your financial status and make a plan, the better. One of the best ways to begin planning ahead is by setting a wedding budget and sticking to it. As important as your wedding day is, you don’t want to start your marriage off with a dark cloud of debt hanging over your heads from the nuptials. Once you’re engaged, sit down to discuss your current salaries, savings, and debts and make a plan. Try to set a list of financial goals to achieve during the engagement period (i.e. paying down a credit card, setting aside a new savings account, or coming in under budget on the wedding plans) to prepare for your married life together.
Be Honest: Honesty is the best policy, especially when it comes to finances. Be upfront about your current financial condition, spending habits, credit score, debts, savings, or financial hopes for the future. Talk with your spouse about any concerns you have or ideas of ways to delegate your finances. Planning your budget and setting financial goals is a two-person job that needs to be determined by both you and your spouse.
Meet With an Expert: Consult with a financial planner to discuss various investment opportunities, including a varied stock portfolio, mutual funds, and other asset classes. Decide together on a reasonable amount of money to invest and don’t be afraid to take reasonable risks, especially if you’re young.
Tackle Debt: Set a reasonable goal to pay down any debt you may have, including student loans, credit cards, or car payments, and be wary of accruing new debts as a couple. It’s easy to be drawn in by flashy deals and promises of 0% interest and no money down, especially when making big purchases like furniture, automobiles, or electronics, but take time to read the fine print. If there are large items that you’re in need of, set a goal to save the money in advance and pay for things with cash.
Create a Budget: Regardless of how much money you and your spouse make, it’s imperative to your financial health to set a budget. Sit down together and work through all of your monthly expenses. Once you get through all the necessities (housing, utilities, groceries, insurance, etc), discuss how you want to divvy up the excess income. Don’t forget to include budget line items for fun and entertainment or you’ll never stick to it. Make a decision about which one of you will oversee the checkbook and paying of bills, but continue to work on your budget together, having regularly scheduled meetings to keep you both abreast of how things are going.
Set Goals: Do you want to buy a house? Have kids? Start your own business? Talk about what things are important to you, both in the immediate future and down the road. If you want to be homeowners, begin putting away money for a down payment. If you’re hoping to have kids with one of you being a full-time stay-at-home parent, figure out a budget that lets you live on just one salary. Whatever your life goals are, you can begin to prepare for them financially today.
Prepare for the Future: It’s never too early to give thought to your future. Put money away in your 401k at work and invest in a Roth IRA, if eligible. Also, consider purchasing a sizable life insurance plan in the unfortunate event that tragedy should strike.