After you tie the knot, there are many things that require your attention, such as setting up joint bank accounts and making a plan for living together.
Finances are a big part of married life and should be considered when creating budgets and making other plans.
Discussing finances doesn’t have to be complicated. Here are some tips for newlyweds that will help you start your new journey together:
6 smart financial tips for newlyweds
1. Establish a budget together
Budgeting in marriage is an essential component of financial planning. Budgeting ensures that you live within your means. Otherwise, you can easily descend down the rabbit hole into a financial nightmare.
Therefore, develop a monthly budget as soon as you return from your honeymoon and consider both long-term and short-term couple goals when creating your budget.
For example, if you plan to buy a house in the next five years, be sure to set aside savings for this purpose. Also remember to include short-term needs such as groceries in your budget.
It is better to be as realistic as possible for budgeting to be effective. Otherwise, it will become unsustainable after a while.
However, your budget should be flexible and fluid. Be sure to budget for unforeseen circumstances and recreational activities. Be disciplined and stick to your budget, because one misstep can put you in a bad financial situation and affect your marriage.
2. Set up an emergency fund
Unforeseen expenses can ruin even the strongest financial plans. Setting aside funds for emergencies is essential for financial health, especially for newlyweds trying to build their financial security from scratch.
Deposit a certain amount into your emergency fund account each month – these funds will cover hospitalization, home renovations, vehicle repairs and other emergencies. Do not use or reduce this fund, even if it takes a long time to spend it in an emergency. It is advisable to create a joint account for an emergency fund.
An emergency fund will come in handy on a rainy day, which hits every wedding at some point. Don’t worry if you haven’t created an emergency fund yet. You can still get instant payday loans from online loan matching platforms like vivapaydayloans.com. This platform will put you in touch with a panel of the best lenders who offer fast loans on advantageous terms.
Do not hesitate to quickly withdraw money in case of emergency. Just make sure to repay the loan on time.
3. Erase your debts
Debt set-off is an important financial decision for any adult. Find a way to erase your debt as efficiently as possible. Now that you’ve tied the knot, you need to make sure to erase any debts that you both bring into the marriage.
Clearing your debts as soon as possible means you’ll have control of your finances sooner. Start with the debt with the highest interest rate.
When planning your future finances, make sure you and your spouse don’t accumulate unnecessary debt. Your future financial plans should lead you towards a financially independent life.
4. Start setting goals
As a married couple, discussing your goals will go a long way in defining what your financial goals are. Since you have decided to spend your life together, you necessarily have common goals.
You will also have mutually exclusive goals. Therefore, you should discuss finances to determine what to work towards as a couple and what goals you will achieve individually.
You can consider the following:
- What do you want to save for?
- Do you want separate or joint investments?
- Do you want an early retirement?
- Do you want to start saving for your kids’ college now or after you become parents?
This discussion is the foundation of a solid financial plan for couples.
You need to invest wisely to build long-term wealth. Financial planning for newlyweds should include research and discussion of ideal investment plans that are right for them. You can decide to invest in real estate, stocks, mutual funds, cryptocurrency, etc.
Choose an investment that matches your long-term goals and has minimal risk factors. Consider your partner’s opinion before investing instead of ruling it out. If you suffer losses on your investment, your marriage may be affected in ways you can’t imagine if you haven’t consulted your spouse about the investment.
6. Plan for the worst
Life is full of uncertainties. Illness, accident, death or loss of income can destabilize your life at any time. You and your partner may agree for now, but you don’t know how long it will last.
It is therefore essential to prepare for such eventualities from the beginning. Even though it’s hard to have conversations like death and disease, it’s a must-have discussion.
Make sure your partner is listed as a beneficiary of your bank accounts, savings plans, investment plans, and insurance policies. Share with your spouse details such as the location of essential documents, secure access codes and any other useful information.
Although money is a touchy subject in many marriages, it holds the key to security and happiness. Financial planning for newlyweds can save you a lot of uncertainty and trouble later in life.
Communication, transparency and planning are the key factors that will help you develop reasonable financial goals and work towards them.