With the excitement and uncertainty of starting a marriage, it’s easy to overlook critical steps such as choosing a budget and making financial goals.
In this article, learn about what to do with your money once you’re married; from creating your first couple budget, to establishing your family financial history, to having a family chat about your financial plans and how to implement them.
It’s never too soon to start getting financially ready for marriage! So here we go!
Create a couple’s budget
The start of financial freedom in marriage begins with budgeting as a couple. Bring your minds together and create a functional budget based on your combined income to see what is available to spend in the month.
Budgeting also involves making a list of all expected expenses for the month, such as loan repayment, rent, or even insurance payment. Determine what can be paid without accumulating unnecessary debts.
Ideally, expenses should not exceed income unless in extreme cases. If you find you are using more than you are earning, it’s probably time to find out what is causing it.
Discuss your family financial history
Family financial history is an important topic that every newly married couple should discuss early on. Open your marriage finances conversation by revealing how your parents handled money and how much has been passed to you.
Share what your parents taught you about both saving and spending money. This will help clarify each person’s background and how it influences financial decision-making.
Family history also includes inheritance as part of personal wealth. As a couple, sit down and check what you’re due to inherit from your parents as it forms a significant financial asset that requires prudent management.
Create financial goals as a couple
Like budgeting, you need to make your financial goals as a team. Goals are the lifeblood of any vision in life.
Sit down with your spouse and create measurable short and long-term goals on what you’d like to achieve together and whatever can help you reach there.
A good example of a short-term goal is planning for a vacation. You need to agree on the destination, when to go and most importantly how much to spend.
Long-term goals include home ownership, ideal lifestyle for your children and life insurance. And speaking of the latter, be sure to conduct due diligence especially with so many options available in the market today.
We particularly recommend exploring the level term life insurance plan which is the simplest to understand and works on a fixed basis. Others worth considering include income protection and family income benefit.
Open a joint bank account
Some people advise sharing while others recommend separate bank accounts for married couples. Each has its pros and cons.
If you decide on using separate accounts, it could create an issue in budgeting and separating bills that affect you both. Special attention is needed in financial management when banks are different, but if you can do it, then things will run normally.
When you have a shared bank account, both of you can have access to and contribute to a shared objective. Besides, it makes it even easier when paying bills and tracking expenditures.
On the downside, a shared account makes things more difficult if one spouse is careless about spending or even saving as it drains the available funds.
Whatever option you choose, be sure to agree about it early on to avoid needless disagreements down the road.
Be honest about your debt
For any marriage to grow stronger and last longer, honesty is everything especially when it comes to a sensitive issue like finance and money. For starters, you must be honest with your spouse about the debt you have accumulated and your income sources.
Often, debt is considered embarrassing, but your spouse should be the last person to hide yours from. After all, most people incur debt at some point in their life, whether that’s student loans or even car loans.
You may also be tempted to exaggerate your income to lie about the deductions due to debt; this won’t help anything so avoid it.
Conclusion
Starting your life together as newlyweds is an exciting time, but it can also be a little overwhelming financially. These tips should help you get started on the right foot and keep your finances in good shape throughout your marriage.
If you have any other questions or concerns, be sure to speak with a financial advisor to get expert advice tailored to your specific situation.
Good luck and wishing you everything good marriage life has to offer!