Money and Marriage: How to Plan Your New Financial Life Together
The week-long honeymoon is over. Surely, you had a blast. You still can feel the touch of sand on your feet and hear the romantic waves of the sea. After the long and tiring process of wedding preparations and all, you finally get to spend a lifetime under one roof – happily enjoying everything together while you create a family of your own.
But before you daydream once again about the many more joys of the married life, there’s one more thing you need to settle as a couple – how you will manage your financial life together.
Money issues are common among many married couples, especially the newlyweds. The wonderful news, you can avoid major misunderstandings and financial drawbacks by planning ahead. Consider these tips to get started:
1. Establish financial goals
Just as you establish personal goals together, you also want to establish your financial goals as a couple. How much money do you wish to earn together to support your family’s lifestyle and needs? Are you both taking on jobs? Do you plan to launch a business in the future? How much is your target monthly savings? What are the things you would want to allocate funds to? These are just a few questions you need to answer to be able to establish specific goals in your new financial life.
2. Create a monthly spending plan
Creating a monthly budget is critical to managing your finances well. Over a cup of coffee or some pizza, sit down and create a monthly spending plan. This way, you will have a clear picture of how much money both of you need to ensure that your household’s needs are met, and you still have enough for savings. Determine fixed expenses, such as payments to mortgage and/or personal loans, electricity and other utility bills, transportation allowances, food, etc. Make room for adjustments, such as emergencies and unexpected expenses.
3. Establish joint bank accounts
For many couples, opening a joint account is a symbol of their financial union in their new financial life. But more than a tradition, establishing joint bank accounts has a lot of benefits. For instance, a joint account allows each one of you to get a debit card, a checkbook, and the ability to deposit or withdraw cash. Having joint accounts lessens the chance of encountering financial “surprises” as each of you knows how much comes in and comes out of your bank account.
4. Consolidate insurance policies
Some benefits of consolidating insurance policies during financial planning include getting discounts on monthly premiums. Consider combining your car, life, and health insurance plans. This does not only help you save money, it’s also easier to manage. Depending on your needs, consider other kinds of insurance, such as home Insurance.
5. Build an emergency fund
Having an emergency fund is critical to every household, whether you have children or not. You never know what might happen in the future. There can be a major calamity, sickness in the family, or a sudden job layoff. It is always important to be prepared. Financial planning is imperative.
6. Use credit wisely
Lastly, use your credit card wisely. It is easy to overspend when you don’t keep track of your spending. If you create a monthly budget and stick to it, you can prevent unnecessary spending. Remember to borrow only what you can afford to pay back and pay your bills on time. This shows lenders that both of you are responsible in handling your finances, and are more deserving of a higher credit limit and other financial perks. Also, make it a habit to check your credit report at least once each year. This lets you study your credit history and see if there are errors, such as accounts you don’t recognize, loans that were already paid but still showing, and some incorrect personal information.
Sharing life together as a newlywed requires more than just love. You also need to be both responsible for how you handle your finances. You should make financial planning a priority and start working on it as soon as possible.