Financial Tips For Newlyweds

It is easy to get caught up in the magic of planning a wedding. However, once the big day has passed, it is important to feel as if you and your new spouse are prepared for the financial challenges of living as a married couple.

Your marriage will get off to the best possible start if you have already engaged in extensive discussion about finances. Beginning your new life as a married couple means that you need to have a plan going forward as it relates to money and budgeting. While these discussions can often be awkward, it is vitally important to be on the same page as you head into marriage.

D. Shane Whitteker is the owner and chief broker at Principle Home Mortgage, in State College PA. He recommends keeping the big picture in mind when dealing with a joint financial situation with a spouse.

“While you are pursuing financial goals don’t make the mistake of focusing too much on money. It is an important factor of course but keeping a marriage healthy requires attention to your relationship and partner,” Whitteker says.

Here are 11 proven tips to keep in mind as you embark on this new stage in life:

BE HONEST ABOUT DEBTS AND FINANCIAL HISTORY

Now is not the time to put your best face forward. Begin the conversation by talking about your family's financial habits and how that shaped your views on money. You can learn a lot about how a person will handle financial adversity by having these tough conversations. It is also important to be honest about any debts that you are bringing into the marriage. While this can be a difficult conversation to have, both people in the marriage need to be upfront about what they owe. Making a plan together on how to pay off the debts should be a crucial element of your financial plan moving forward. Even if you do not feel responsible to help pay off the debt that your spouse accumulated before you got married, it is important to understand how this outstanding debt will make it more difficult for the two of you to qualify for credit together.

CREATE A BUDGET

Creating a solid budget should be the foundation of a healthy financial picture. As with most things in marriage, there will need to be an element of compromise when devising this plan. If you were not living together prior to marriage, your financial picture will look much different than it was when you were living as single people. There are many different ways to approach budgeting and splitting expenses. The key is to find the approach that both parties can live with and feel as if their contribution is valued.

If possible, adding even a temporary revenue stream can help improve your long term financial picture.

“Consider options to bring in more revenue even if this is a temporary thing,” Whitteker says. “Don’t take on too much, but a short term sacrifice can really work well to propel your financial future together.”

DECIDE ON JOINT OR SEPARATE CHECKING ACCOUNTS:This is a personal decision that only you and your spouse can make together. There are pros and cons to each approach. Separate accounts may be a better choice if one partner tends to overspend. However, joint accounts make it easier to manage the overall household budget.

KNOW YOUR ROLES:The financial element of your marriage will proceed more smoothly if both parties know and accept their individual roles. For example, one person should be the designated bill payer. This understanding and division of roles will ensure that nothing falls between the cracks.

“Make sure both people in the relationship have a say in what the plan is for your financial future,” Whitteker says. “It takes both partners to really make a budget and long term financial plan work.”

SET A MAXIMUM:Every couple needs to decide what amount of money is the maximum that you can spend without consulting with the other person. This number looks different for every couple. It is important to decide on a figure that both parties agree is reasonable.

START AN EMERGENCY FUND:Do not wait for an emergency to realize that you need to start building a nest egg. The easiest way to start an emergency fund is to open a separate account that is held in both of your names. Making a direct deposit from each paycheck into this account will make it an automatic process. Even if you can only afford a small amount as you start your marriage, every little bit will add up over time. You will both sleep better at night knowing that this accessible money is there should an emergency arise.

Having trouble saving? Whitteker recommends rethinking how you’re spending your money.

“Don’t be afraid to learn how to save money by doing basic things like eating at home and finding entertainment that is not expensive. This also helps to build a relationship. I love cooking with my wife,” Whitteker says.

MAKE SHORT-TERM AND LONG-TERM PLANS

Setting a series of short-term and long-term goals will provide a guiding framework as you begin your new life as a married couple. Perhaps your first short-term goal is to save for a down payment on your first home? Or maybe it is to put enough money away to be able to afford to begin your family? Whatever your goals are, it is important to document them so that you have a plan going forward. Looking at plans in five-year increments is a helpful way to map out your financial future as you grow your family.

BEGIN SAVING FOR RETIREMENT

The experts are right. It is never too early to begin saving for retirement. Leverage the power of compounding interest by making retirement savings one of your primary goals. If your retirement contributions are not automatically taken out of your paycheck, you can find a service that will help walk you through this complicated process so that you maximize your savings potential.

PROTECT WHAT MATTERS

Now that you are a unit, it is important to take the proper steps to protect what truly matters to you. Once you are married, it is critical that you take the time to review insurance policies. Be sure to look at life insurance, health insurance, and disability insurance.

CREATE A WILL

Creating a will is probably the last thing on your mind when you are beginning this exciting season in your life. However, a will is the most important part of your estate and should not be neglected. This is especially important if you have plans to start a family in the near future. If you are bringing pre-existing insurance policies and retirement accounts into the marriage, you will also need to update all of your beneficiaries. Giving your spouse power of attorney and designating them as your health care proxy should also be on your list of legal matters to take care of.

DISCUSS FINANCES REGULARLY

Your finances as a married couple should be a regular topic of discussion in your home. This is not something that you talk about once and then put on the backburner. A good rule of thumb to follow is to set time aside once per month to discuss the month ahead, unexpected expenses, and to re-evaluate your short and long term goals. Being committed to having these monthly discussions will ensure that financial issues do not drive a wedge in your marriage.

Taking the time to have these difficult conversations before you walk down the aisle will help you to best prepare for your financial future together. Regularly evaluating your goals and plans will keep you on track to achieve the financial freedom that you have already dreamed about. While marriage finances can be a tricky matter, these conversations are vital to a healthy and happy life together.

Principle Home Mortgage in Williamsport PA specializes in helping their clients to get mortgages for all types of financial circumstances. Contact them today to learn more.