As a new life begins, commitments also will grow. In order to have a smooth start finance has to be well managed from day one. Every couple who is newly married should share commitments as well along with love and care. When it comes to managing finance both should take responsibility and consider it as a part of married life. Be open to discuss about finance at the early stages of married life, this even includes –earnings, expenses, losses and even profits.
10 Money Management Tips for the Newlywed Couples
- Talk about Finance: Just as you share information of both family, history and childhood, start sharing talks about finance. Get to know how much earn of you earn and ensure to always leave 10% of each person’s income for personal (independent) uses. Of course, at the end of the day all money is going to needs of a family but having clarity is very essential. The earlier talks about finances and debts are shared, better and easier it will be to manage. After marriage, there is nothing like his debts and her debts, it should be termed as “our” debts. Come up with plans to handle money with this mentality after marriage.
- Make Goals: Once you have clarity about how much each of you earn, it will be easier to keep aside a budget for expenses and savings. Have a yearly, 5 years and 10 year financial plans/ goals. These can be like an international trip, having child, buying a car or bike or even owning a house. When budgets are created, try to stick within it unless there are emergency expenses. Make sure there is enough money kept aside for personal needs. Nobody would like to give count of every penny spent.
An amount up to 5% -10% of each person’s salary should not be calculated at all. If your spouse wishes to surprise you with some gifts or if he/she wants to do something to their parents, this spare money will always come to help. Counting to the last penny of one’s salary will not be a good way to manage finance.
- Discuss about Bank Accounts: Many of us would have heard about couples opening a joint account, but think over it before you start one. There are many pros and cons of opening a joint account. There is nothing wrong in continuing with individuals accounts by sharing and transferring money for meeting various needs and wants. Once you have budgeted your expenses for a month, decide who pays what and leave it up to them to do the payments. Now that most of the things are through online payments, there is equal opportunity for both. Who earns more and who earns less should not be the question instead it should always be “can we” afford.
- Build Emergency Fund: Top priority should be given for creating an emergency fund. A good amount should be kept aside very month for emergency needs. Of course, most of us have medical insurances in case of emergencies but there is a huge list of medical assistance that is not covered by the insurance. Having some emergency fund will even come to help during jobless situations or if anything affecting the capacity to earn regularly. Usually 15% – 20% of the income should be kept aside as emergency fund month on month. These emergency funds can also be used for major home or vehicle repairs, any emergency for your parents or kids. But at the same time, ensure only right and necessary amount is kept aside for emergencies.
- Budget Designing: Couple should take responsibility in creating a budget and also sticking to the same. This is will help in avoiding situations such as debts. Never get into commitments by foreseeing income. Plan it according to what you have and how much you can afford. Budget designing should start from reviewing joint expenses. Taking records of last few months’ joint expenses will help in understanding and creating budgets. Unexpected or irregular expenses should be kept in mind while designing budget, these will include doctor appointments, routine car or bike insurance, maintenance and even special occasions.
- Budget Tracking: Just making budget is not the end of managing expenses and debts. Couple should strictly stay close to following the budget and also tracking the same. The spending allotments should be rightly maintained plus it is necessary to adjust according to expenses, situations as well as income changes. Have a monthly spreadsheet to track if you are in-line with your budget or at least a small book to record the expenses. This way controlling the expenses will be quite easy.
Monitor your budget and expenses for the first couple of months and see if you are able to stick to the budget, else do a thorough scrutiny and try to understand what is lacking. Most of the times, the lack will not be money in itself, but could be controlling expenses that are out of budget.
- Monthly Money Meeting: No matter how busy life might seems to be, there should always be time to sit together to discuss about finance. These monthly money meetings will help in giving enough space to think practically about different aspects of finance. It will also help you to understand if you are in track with the expenses and if the budget planned is apt. These budgets should be prepared thoroughly understanding the requirements and in case if they do not meet the expenses, it should be revised from time-to-time.
These monthly meeting will also be a great way to strengthen communication between the couples. It will create any type of distances and there will be more and more clarity. Knowing where we stand financially will help in increasing the bonding the between couples and there will be feel of security and trust.
- Retirement Savings: It’s never too late the start saving for retirement. The earlier you start; quicker you might be able to relax. Plan for future, for children education and also at the same time save bit by bit towards retirement. If your company is providing any options to save towards retirements, grab those opportunities and also try to add a bit extra from your monthly income. Contribute towards this as much as you are able to afford.
Additional contribution need not be in great amount. Even a small contribution every month can pile up to big savings during retirements. Moving aside a small portion will not be very difficult and might not impact your monthly expenses much, but in the long run it will be definitely turn out to be a good savings through the little amount that you kept aside.
- Stay Out of Debt: Being in debt during single person is different from being married. Try to start marriage by eradicating debt as much as possible. Discuss with your life partner ways to get out of debt and also to not getting involved into debts. No matter how educated or not he/ she is, when it comes to saving money, everyone will be able to suggest some smart ideas. Thus pay enough attention to what your spouse has to say, share your opinions and also respect each other. Living debt-free life might not be a healthy life from financial stand point but it will definitely helpful from marriage stand-point. Thus try to have minimal debt at least at the first 3 years of your marriage life.
- Trust Your Spouse: Having said all these, a happy married life is possible only when there is trust and love. While finance is one aspect of being happy; having trust on each other plays a very vital role. Don’t withhold responsibilities, share all aspects of married life equally and make the other person feel very important in your life. If there is enough trust on each other, 98% of rest of the things will fall in place by itself.
Just as all other matter, trusting your partner about managing finance will make them feel very comfortable and genuine to you. The minute you learn to give sufficient space, money and time for your life partner, family life will be smoother. Managing finance doesn’t mean one person taking complete responsibility of a family’s finance; it’s all about sharing what is earned in the best possible manner with mutual understanding. Never ask for explanation for petty spending, each of us require our personal space when it comes to time, money and freedom.
The more solid your budgeting, spending and investing is, better will be a newly married life. There is no right time to start talks about family finance, the sooner you start, easier it will be to manage. No matter what life brings to you, always remember your vows – You will love your spouse for poorer or for richer. There is no doubt that, all of us will go through difficult times in a married life but make use of those opportunities to learn and grow.
