Today we have a guest post for you from Anum Yoon.
When you tie the knot, you bind every area of your life together, for better or worse – including your finances. You may have crushing student debt or past marks on your credit that make it difficult to purchase your first home. You may be at a loss when it comes to combining your finances – especially when it involves debt.
Develop strategies together to improve your credit, save, spend and debt crushing goals when it comes to finances. Choose to better your finances as a newly-wedded couple by following these five money tips:
- Don’t Fight Over Money
One of the major challenges all married couples face is the discussion of finances. Fights over money are a major reason couples have problems in a marriage and may end up divorcing, especially when those fights are nearly every day.
For many, money reflects one’s core values. How were you raised to understand the value of a dollar, and what to do with your money? Have your practices with money improved or gotten worse over the years? When the topic of money gets heated, know how you will deal with it in the moment, even if it’s to take a time out for 24 hours.
Of all the various money issues couples fight over, debt ranks number one for what couples argue about the most.
Align your goals toward your major mutual objectives and values right now. You may disagree on which type of debt is good or bad, and how much debt is too much debt. So the best thing you can do is to make sure you’re completely honest with each other. This means no financial secrets are allowed, even if you think “what they won’t know won’t hurt them” (or cause another fight).
- Outline Your Financial Objectives
Plan and outline your most important debt repayment objectives with active steps, even if the initial steps are small. You both need to sit down together and prioritize which loans you want to tackle first.
Once you have a solid outline, you need to make sure you commit to this plan. Debt repayment is all about discipline, and you need to keep each other accountable and work together as a team.
Also, don’t forget to keep saving what’s possible. Automating your savings to roll over into another account will be helpful, as well as automating any bill payments when it comes to budgeting. You can’t let your savings fall by the wayside just because eliminating debt is your first priority. The last thing you want is to take out more loans in the case of an expensive emergency.
- Get Your Ducks in a Row
Money matters may leave you feeling quackers, but it’s time to get your financial ducks in a row. What assets do you share? These include credit cards, accounts and loans you each bring to the marriage table. What will be separate and joint? If you both opted for a prenup, you would have discussed this at length already. Either way, it’s good to figure out what’s yours, mine and ours when it comes to your finances.
In terms of debt, you need to look into different repayment options – do you want to consolidate your loans? Transfer your credit card balance? Look into all the steps you can take for each type of debt you have since there is no “one size fits all” approach to debt repayment.
Also don’t forget to update your paperwork. Call providers and have names changed, with your partner added as a decision-maker on the account, if you agree. You’ll need to have names changed on passports, driver’s licenses, security cards and credit cards.
- Don’t Get Ahead Of Yourselves
As newlyweds, it’s only natural to get excited about planning your lives together. But you should always factor in your debt into your plans. If you have a significant amount of debt, it will impact things like where you can afford to live, family planning, and homeownership.
Planning for your future with your debt in mind means you’ll always be one step ahead of your financial plans (instead of having it the other way around). This will keep your expectations realistic as you both move forward with your lives.
- You’re In This Together
Don’t let all this talk about debt come between you. At the end of the day, it shouldn’t matter how much debt you have because that doesn’t define your relationship.
Things may get difficult or frustrating, but remember to be kind and supportive as you work together. And if only one of you brought debt into the marriage, it’s important to remember that there is so much more you can contribute to the relationship. Don’t let financial guilt put a damper on your relationship and just focus your energy into tackling debt one step at a time.
Topics on debt management, spending, saving and investing are initially awkward for newlyweds, but making financial plans together now will alleviate future stress. When you keep an open mind and come together on what matters, your financial harmony will reflect your marital harmony and a beautiful life ahead.