Just like it is on every sphere of life, the issue of finance is a huge one, even in marriage. At some point newlyweds have to address issues to do with the household money. Whether you have married at 22 or 55, you will find yourself having to share the wrath of foreclosure history, student loans, commitment to child support and credit card debt or bringing all these issues to your new bride or groom. There is no romance in matters finance. It is the elephant in the room that must be addressed or it will strain your marriage just when things should be getting better.
On the other hand, as newlyweds you might not have glaring financial malpractices, but money in the marriage is such that it must be wisely thought out. You must know who should be paying bills, division of expenses and whether some things will be combined, if not all. The truth in monetary matters in marriage is that if you do not talk about it now, sooner or later you will have to. Many couples strain their partnership later on when circumstances force them to talk about funds.
A study by Kansas State University indicates that newlyweds who argue on matters to do with finance at the start of their marriage down the line report a poor relationship. As newlyweds, you have a wonderful chance to start working on your new financial status jointly and avoid the fiscal complications that afflict all marriages down the road. Following you'll find a collection of crucial finance tips to guide you on your path to fiscal stability.
Start with a talk in real finance
This is tantamount to looking your husband or wife in the eye and telling him or her "we must talk about finances." Marriage counselors and experts say monetary issues need to be handled early. If such a serious issue can be handled by a couple by talking about it early in marriage, it creates a culture of talking about things. In the process, you would have killed lots of birds with a single stone.
Talking in marriage is everything and so far you are doing great. However, lots of couples make the blunder of postponing financial discussions to a time when things get out of hand or become unavoidable. Essentially, you really do not want to wait until you are in a crisis to begin talking about finances, raising your voice, straining your marriage. The time is now. You do not have to wait for your partner in matrimony to make a humongous purchase with your savings to talk about the domestic income. It might start excavating long buried issues as new financial improprieties come into the fore.
Dig into the issues
Everyone knows the issue of money is not just awkward but plain hard. Before you got married you were in control of your fiscal worth and did as you pleased with your income. However, that disappeared the moment you said "I do." Right now your love meter is at its highest level, perhaps more than it will ever be in your marriage for the most part. You are now ready to compromise on lots of topics and talk just about anything before life returns to normal and distractions and stresses set in. The idea is to get a notebook and pen and start digging into bank statements, monthly incomes, debt, credit card statements and documents related to the issue at hand. Addressing everything now might not be possible but doing it early enough will flag off a successful marriage where people talk and share as they should.
Financial goals, assets, must be clear
As indicated, newlyweds need to build their relationship on solid ground right from the beginning. It means they need to trust one another, engage in open communication and simply talk about any topic ailing them. In financial matters, the last thing you want is hide any of your assets, incomes or debt to your partner in marriage. Your income will stop being your money, but the household income as you blend into a single unit, a couple. Others started talking finance right before they got married and as they went down the aisle, they knew what they were getting into.
However, as newlyweds, that is behind you and the time to talk about it is now at hand. At the same time, discussions on marriage usually extend the couple's financial goals, where they would like to be in a number of years financially, how much they are earning at the moment and to set goals as man and wife and keep monitoring them for as long as it takes. Perhaps you can make it a habit of regularly talking about money every fortnight or week. Others wait until the bills have arrived at the end of the month; they come together and sort the issue out once the income, expenses and what goes where is clear. Any upcoming monetary issue is also discussed at such a time.
Come up with numbers
It is true numbers do not lie. As newlyweds, avoid beating around figures and come up with real numbers about your finances. Your financial situation and goals need to be reflected in numbers. For instance, if you are planning to have a child, you must know the amount you need to save every month or every payday to guarantee the child receives a better education later in life. Know the average amount of raising a child in your city or around the country, right from infancy to college. After putting numbers on the table, all liabilities and joint assets including overall net worth as a unit that you have become will not be a secret. You will eventually have a place to start as you map out financial goals for now and in the future.
It is easier to say that you can live affordably as a couple as you did as a single person. You might want to sell your car and use public means or sell one car and use one. The truth is, you will save a lot of money. But, you need to be realistic because it might be the beginning of your troubles. Such money is like free funds you have found on the way to work. A surplus income makes you feel like you have won the lottery and all of a sudden you are able to spend on dining lavishly out, traveling around the world, buying exquisite clothes and top gadgets. However, you should be realistic. You can spend wisely and tweak it a little bit, but do not change it extensively. What you need to do is basically plan for your combined incomes to pay credit cards, student debt, boost savings and even contribute regularly to charities.
A budget is a must
Most people today have gym buddies they attend fitness workouts with. Even when they do not want to go something compels them to avoid upsetting their dedicated friend. This is also true in matters finance in a marriage. A budget must be drawn and together you must learn to stick to it. If you do not, remember you are upsetting your most valued ally in life. Joint expenses and income need to be calculated before outlining the areas to be allocated. After you have come up with a budget, you can then create separate accounts for the different things that must be paid, such as emergency fund, holiday savings, education and retirement. According to your budget, transferring the money every month to these accounts will be automatic. However, it all begins with knowing your total joint income.
Live on a single salary
If you are both employed, you might want to live on one salary while saving the other. Do not for one moment think that the amount you are earning today will be constant for the rest of your working life. Every single day there are serious interruptions to jobs and salaries, unexpected and involuntary that occur when you least expect it. For example, one of the couple could be laid off, started a personal business or changed careers or employers. Both or one of you might decide to return to college, part-time or full time and it costs money. After you have started your family, it might become prudent for one of you to remain at home for a couple of years. With one salary tucked away safely for a long time, you will have enough savings to cater for that unexpected turn in life when one salary will not be available for the family.
Retirement savings should be reinforced
As newlyweds, financial problems 40 years down the line may seem unreal but the truth is you are on your own for the rest of your life. Decades later, you will still have to provide for yourself. Social security will be there in your old age although the amount will be so meager you might not be able to meet your basic needs like you have always done. Even as you wait for that monthly benefit, invest in tax-deferred types of retirement plans as you save a minimum of 10 percent of your income every month. Also invest in other areas that do not jeopardize your savings as you grow your income.
Insurance makes a lot of sense
Just like other married folks, you also need some cover against some long-term disability in case you lose an income or medical expenses later on. Get life insurance later on once the children have arrived. Above all, enjoy life particularly at this point in your marriage when you just got married. Avoid living beyond your means and be realistic. Everything else will iron itself out as the reality of life sets in.