6 Quick Financial Tips for Newlyweds
Newly hitched, you say? Congratulations on that new finger bling! This is a great time in your life, no question; but you have to take steps to help ensure the good times keep rolling. It's not a fun search, but simply Googling "reasons for divorce" will provide you a laundry list of misery culprits, with money guaranteed to be reigning near the top of the heap. But don't fear. By simply addressing a few financial items early in your marriage, your odds of falling victim to a marriage without bliss will be greatly reduced. Here are 6 quick items I recommend every newly married couple review to assist in their journey.
Talk About Money
I know, it sounds simple and cliche, but too often personal finances are considered a taboo subject. This is a mistake, as it can lead to financial surprises that cause undue stress on a relationship. Put these three topics of discussion in your regular conversation today and you'll be off on the right foot.
1 - Financial goals, 2 - Current income, 3 - Current debt
But Maintain Some Independence
I will always encourage new couples to open a joint bank account to cover all their shared expenses and goals. Based on income, each partner should chip in a portion of their earnings to cover these items. This develops a sense of shared responsibility which is unifying.
However, a need for freedom in miscellaneous spending is also warranted to alleviate unnecessary arguments over individualistic purchases. That is why I recommend that each partner also maintain their own personal bank account and credit card. In addition, both spouses need to build their own financial/credit history so that the sum of your finances are stronger when you do decide to make a larger joint purchase.
Become the Good Kind of Preppers
Along with a joint checking account, establishing a combined savings account is also a smart move. Use this account to build up a minimum of 3 months of your combined living expenses. This way, when a financial setback occurs (which it will), you will not be racking up credit card debt, or digging through old birthday cards for loose cash. But the best benefit of all to an emergency fund is general peace of mind. Most people find themselves a little more happy-go-lucky with a financial lifeline in place, which can act like a Super Mario mushroom for a marriage.
Combine for Cash
Good news! There are some lucrative financial benefits to being married. Yes, you now share rent and utilities, but also consolidate in the areas below for some cash back in your pocket. (Note: tackle #1 early as there will be a limited window to make a change upon marriage).
1 - Health insurance, 2 - Car insurance, 3 - Taxes, 4 - Cell phones
Protect Your Teammate
Now that you're both in tandem for life's adventures, you need to also protect your partner in the event life throws a curve ball your direction. Update your spouse as the beneficiary on both your life insurance policies and retirement plan accounts. You should also establish a will together, which (along with a larger life insurance policy) becomes more important when a child is in the picture. Just know that beneficiary designations in your insurance and retirement plan documents take precedent over a will. Update those bad boys ASAP!
Screw the Joneses
You are a young and vibrant couple and want to prove yourselves to the world. I get that. However, too often I see bad monetary decisions made because they are rooted in this energy (and a bit of ego). Don't buy the big house simply because you can. By doing so, you are likely staking ground in a world where you will feel the need to always keep up. This causes unnecessary stress and detracts focus from the parts of life that liberate you and make you who you are. Establish a practice of living below your means and very quickly you will realize that financial security triumphs over financial flash. Plus, without guilt, you'll eventually be able to take that trip to Europe that's been on your bucket list.