What Newlyweds Should Know About Finances
Congratulations on your recent or upcoming marriage! Getting married is a big step, and most of the time, it means that you and your spouse will now be jointly responsible for the money coming into (and going out of) your household. At this point, you might feel like retirement is a million years away, but in reality, financial planning is something you need to start thinking about now. Here are some financial tips for newlywed couples who want to make the most of their earning and saving potential now.
Pay Yourself First
This is commonly heard advice: Always put money in savings before you do anything else with it. Paying yourself first is often easy when you first get married, because if you were previously maintaining two households, you now have the benefit of only having to make one rent or mortgage payment, one electric bill, and so on. Put away that Pottery Barn catalog and put that money in an interest-bearing account, instead.
Save One Spouse's Income if Possible
Some financial gurus advocate putting 10 percent of your pay in a savings account. This is a great goal to strive toward if money is tight. If you are combining two households into one, however, it might make even more sense to save one person's entire income. Why? The simple answer is that you just don't know what the future holds. If you or your spouse one day want or need to stay home with children, then learning to live on one income makes that a real possibility.
What if you can't live on one income right now? This time, before you have a hefty mortgage or daycare expenses, is the time to get your financial act together, so to speak. Realize that your earning power will likely rise as you put more time into your careers, so resolve to live on your current incomes. When you get promotions or cost-of-living raises, squirrel away that money for a rainy day. Slowly work up toward saving one spouse's earnings as the months and years go by.
Live Within Your Means
One rule to decide upon early in your marriage is to always live within your means. This means creating a budget and sticking to it. It's great for your budget to include some discretionary spending; this is money that you and your partner can, individually or together, decide to spend on whatever you want. Remember that this type of spending only happens after the bills are paid and your savings account is stocked for the month, however.
Get a Financial Advisor
Having trouble creating and sticking to a budget? You are not alone! A qualified financial advisor is the person who will be able to help you. Not only will your advisor assist you in setting up a budget, but he or she can also help you make decisions about retirement accounts, stocks and bonds, trusts, and other financial planning tools that you might not have even thought about yet.
Your financial advisor from a site like http://www.landsbergbennett.com/ can also show you how to figure out how much you can afford when it comes to buying a home. Your mortgage lender might pre-qualify you for a house payment that you may not be able to make in a few years once you have children and accumulate more debts and expenses.
Communicate!
The most important part of being a financially savvy couple is communicating regularly. Both of you need to know how much money you have, where it's kept, and what bills are being paid with it. You should both be on the same page as far as planning for your future goes. Money can lead to arguments in couples, whether they're newlyweds or about to celebrate their golden anniversaries, so keep in mind that talking about money calmly is a great habit to get into.
As you progress through your marriage, you'll undoubtedly have financial successes and setbacks. Keeping up with your savings account, getting help with your budgeting and financial planning as needed, and communicating with your new husband or wife are the keys to keeping your marriage as financially healthy as possible.
