Getting married is such an exciting milestone! There are so many fun events to plan between the showers, rehearsals, wedding, and honeymoon, but what many couples often forget to plan for is their financial household.
If you’ve only had to worry about yourself so far, combining your finances can be daunting to think about. The good news is it doesn’t have to be difficult. In fact, if we put half as much effort into planning our finances as we did our weddings, we’d be in excellent shape.
Here are my best financial tips for newlyweds who aren’t completely prepared for the realities they may face when managing money together.
1. Be Honest With Your Spouse
First and foremost, be upfront and honest with your spouse about your debt, savings, and retirement accounts. Don’t be afraid to discuss all of your finances in detail – the good, the bad, and the ugly.
No one likes surprises, especially after a wedding. You should be respectful of your spouse by being honest about where you stand financially so you can move forward on a clean slate.
2. Start a Household Budget
Once you’ve opened up to each other about your finances, start your marriage off right by tracking your money and where it goes. If you start now, it’ll be no big deal down the road, and you’ll easily maintain a record of how you spend your money. It’ll also make budgeting so much easier!
A budget is important when you’re married because you now have two incomes coming into one checking account. It’s all too easy to get carried away thinking you’re swimming in money once you see that balance rise, but there’s no need to be spending all your money.
You really don’t want to start your marriage off by living paycheck to paycheck. Start a budget so that you only spend your money where it counts.
3. Live Off One Income
While you’ve got your budget in mind, now that you have two incomes, try to live off of one income. The idea is to send one income straight to savings and let the other serve as your monthly budget amount for all living expenses. If you can manage this, you will rack up some big savings quickly, and after you get married is the best time to start.
It’s also a great idea if you need to pay off some debt first. Live off of one salary so that you can apply all of the second paycheck to your debt each month, until your debt is completely gone. Once it’s gone, you’ll already be used to living off of one income, and you can then allot the second income to savings.
Living off of one income will be handy if you decide to have children and you want to be a stay at home parent. The transition to one income will be easy for you if you’ve already done it in the past.New to managing #money as a newlywed? Follow these 6 tips to avoid financial issues in your marriage! Click To Tweet
4. Discuss Your Goals
In a marriage, it’s important to share common financial goals so that you can both work towards the same objective. If you want to retire early, but your spouse would prefer to make more money now to travel, then you’re bound to hit some snags in your finances.
Discuss what your plans are, even if you have more than one goal, and then use your budget to set aside money for each endeavor. If you both know what you’re working towards, it’ll be easier to stick to your budget and you’ll reach your goals faster.
5. Start a Baby Fund If Kids Are In Your Future
Are you going to start a family one day? If kids are in your future, start saving for it now. Kids don’t have to be expensive, but there will be surprise costs along the way.
A couple of years before I decided to have a baby, a coworker suggested that I start a “baby fund” to help pay for costs associated with having a baby. At the time, I loved the idea. Who couldn’t use a little bit of extra cash around that special time?
You can set it up in your budget just like you would any other line item, even if it’s just $20 a month, and when the time comes, that money will be there for you when you need it most.
6. Be Smart When Buying a House
Often times, a new marriage also means buying a new house, but just because it seems like the thing to do doesn’t mean it’s necessarily right for the two of you. If you aren’t sure where you want to end up or how your careers will turn out, then by all means continue to rent.
If you do decide to buy, be smart about it because getting a mortgage is a major step. Often times, newlyweds get caught up in buying too much house for their needs. It’s nice to think of your first home as being your forever home, but you never know what life is going to throw at you in the way of a work transfer or who knows what else.
If it’s just going to be the two of you for a while, be honest with yourself and admit that you probably don’t need a 3,000-square-foot house. You also might not be able to afford the kind of house your parents have right now, and there’s nothing wrong with that.
It’s also important to remember that you don’t have to keep up with what everyone else is doing. You don’t have to buy in a fancy, gated neighborhood because that’s where your other friends just purchased their home. You don’t have to worry about finding a house with granite and stainless steel because that’s what everyone else wants.
Who cares what everyone else is doing anyway? Buy what is suitable for your budget and what makes you happy, whether that means a vintage fixer-upper or a tiny house in the middle of the woods. It’s your life, not anyone else’s, so live it the way you want to.
Managing money well doesn’t come easily for everyone, but if you can learn to discuss your finances openly as newlyweds, you will undoubtedly face fewer financial bumps down the road. Maintaining a budget, planning for important family events, and learning to live off of one income are all great tools to help you both grow together financially.
How did you learn to manage money within your marriage? Were you upfront about things from the start, or did you hit a few bumps?