It’s summer, which means one thing – it’s wedding season. Summer and fall is a popular time to get married, so much so that nearly 80 percent of nuptials take place between May and October.
Getting married is an exciting time. Two people come together to become one and look forward to a life together building memories. However, what many don’t realize is that money is a big part of memory building. With that in mind, here are five financial tips for newlyweds to start the relationship on the right foot.
#1 – Get Your Finances on the Same Page
When two become one, they bring two separate life experiences into one relationship. This can be a touchy subject, especially when it comes to money. Both individuals may have two different backgrounds and outlooks on money.
Bringing those experiences to one accepted norm is vital to building teamwork as a couple. Open and honest communication is key in bringing this about. “The first thing newly married couples should do is sit down and decide how the family’s finances will be handled,” says Phillip Ranger, COO of Intelliquote.
As you communicate, you want to look at a variety of areas, such as:
- Will you combine finances, or keep them separate?
- How will you divide financial responsibilities?
- Will you discuss each purchase, or set an amount you don’t need to get approval for?
One great way to encourage open communication is to set regular meetings to discuss money. This can be weekly, monthly or some other interval. Find what works for you and go with it.
#2 – Put Your Goals in Writing
Deciding on goals should be a natural outflow of getting on the same page financially. Many of your goals will have some tie back to money, so you want to keep that in mind as you discuss finances.
Common goals may include when you want to retire, if travel will be a priority and when, or if you want to start a family. Discuss your goals, being respectful of both partners, and write them down. Making them visual will not only encourage you to work together as a team, but also helps improve the chance of success.
#3 – Build an Emergency Fund
You never know what life will throw your way. If you’re a younger married couple, you may need to look for a new home or apartment, repay student loans or find a new car.
An emergency fund is the best tool to help you through those times, not to mention in every stage of life. The last thing you want to do is rely on a credit card during those times as that will add the stress of debt.
Instead, start a small emergency fund – make it your goal to grow it to $500, then $1,000 and you can grow your savings as income or savings allows. That way, when your air conditioner is on the fritz, or you need to repair your car, you have the funds to pay for the surprise expense.
#4 – Start Planning for the Future
You just got married, and you have many years ahead of you. It’s easy to assume that you can put off planning for your future. While you can, that choice will have long-term repercussions.
Now is the time to start thinking about retirement planning and life insurance. You may also want to think about a will, depending on your particular circumstances as a couple.
“Planning for retirement and the unexpected is one of the biggest financial tasks newlyweds will need to tackle, but planning early pays off,” says Ranger. Time is a big part of investing, so even if you can only set aside a small amount as a couple, that’s fine as time will grow your money.
Starting early holds true with life insurance as well. “Even young couples can be blindsided by illness or accidents that can leave the survivors without the means to replace income or even pay burial expenses,” adds Ranger pointing to the importance of life insurance as a young couple.
In many instances, you both should be able to get a cheap Term Life policy that will provide peace of mind in the unfortunate event something drastic happens.
#5 – Work as a Team
Working as a team is the most important financial tip to follow as newlyweds. You came together to form a team, after all, so working together and being open and honest with each other is the best way to succeed financially, and otherwise.
Remember that each partner brings their own set of beliefs, circumstances and financial outlook to the marriage. By working together and respecting each other’s ideas, you can fight together to reach success.
Getting married is an exciting time. By following these financial tips, you can take on anything that life throws your way.