“For better or for worse. For richer or for poorer.” This is what many of us promised to our spouses on our wedding day. Unfortunately, many married couples struggle surviving for richer or poorer due to bad money management skills.
As a newly married couple, it is crucial to develop good financial management skills in your marriage. Here are 8 of the Best Financial Management Tips for Newlyweds.
8 of the Best Financial Management Tips for Newlyweds
1. Set Goals
You need to Goal Setting for Couples Course as a couple. Talk about your individual goals with your spouse, and agree on joint goals to work toward. If you plan to have children, will you fund their college education, or will you make them pay for it themselves?
At a minimum you should have three types of goals: emergency fund, one to five year goals, and long term (longer than five years) goals. Make sure to write down these goals and review them together often.
Related: Our Goal Setting for Couples Course is the perfect tool to start your marriage on the right foot!
2. Decide What Bank Accounts You Will Need
As a married couple, will you combine paychecks into a joint account or individually manage your money and split certain bills? If you decide to combine finances, it is important to identify who is the spender and who is the saver in your relationship.
If one of you is the spender and the other a saver, the saver may be the more suitable person to manage the finances. You also need to be aware of how merging your finances will impact your overall financial situation, and what role you need to take.
3. Create a Budget
Whether you are thousands in debt or starting your marriage debt free, you need to create a budget. Start by reviewing your joint expenses over the past three months to determine your spending, and if you need to cut any expenses. Don’t forget irregular or unexpected expenses such as car maintenance and doctors’ appointments.
4. Get Insurance
If you’ve just tied the knot, the last thing you want to think about is your spouse getting sick or dying. However, you need to be prepared for any such possibility. You don’t want to leave your spouse alone and broke, or have them worry about selling the house just to make ends meet. At a minimum you should have car, life, health, and renter’s or homeowner’s insurance.
5. Be Honest About Your Finances
If you mess up or make an impulse purchase, tell your spouse and own up to your mistakes. Your spouse might be upset with you for a little while, but you will be stronger as a couple because you were honest and open instead of trying to hide it.
Lying about money can ruin the foundation of even the strongest couple. Trust your spouse to handle money, and do the same for them. Combining bank accounts is a great way to practice this.
6. Decide Who Pays the Bills
Designate one person to be responsible for paying your monthly and yearly bills. If you are not the bill payer, make sure to keep your spouse in the loop and meet regularly to talk about your spending as a couple. Evaluate your saving and spending habits to see if you are on track for your financial goals.
7. Create a Will
When you’ve passed away, your will becomes the most important legal document in your estate. This document will establish your wishes with respect to the distribution of your estate, and provide direction on how it should be carried out after your death.
If you already have a will in place, make sure to update it when you get married. Be sure to review them every 3-5 years to make sure they address any changing circumstances. You can use a done-for-you service like Legal Zoom for this.
8. Ditch the “It’s my money!” Mentality
While having separate bank accounts is perfectly okay, if you are truly committed to each other, you need to commit when it comes to your money. All assets should be viewed as “ours” and not “mine”.
Marriage and money are a tricky combination, but the most important tip is being open and honest from the start. Talk openly about money management and come up with a rock solid plan for budgeting, spending, and investments. If you form good money management habits as newlyweds, you’ll be able to work as a team no matter what life throws at you.