Newly married couples usually combine their finances after they wed, a process that’s potentially complex and intimidating. Fortunately, you can streamline this activity and pave the road to a conflict-free marriage by using the right strategies. Here’s some of the best financial advice for newly married couples.
Talk About Your Money Lessons
Taking some time to discuss the money lessons you’ve learned during your life – and having your new spouse do the same – gives you a stronger foundation. It helps you both understand how you view money and why. Plus, it lets you know about hardships you’ve faced that could potentially shape your perspectives.
The goal of this conversation is to figure out why you each treat and view money the way you do. By having a greater understanding, it’s easier to identify areas that could cause conflict before trouble arises. As a result, you can discuss the points together, making it easier to find a happy medium that works for you both.
Be Honest About Your Incomes and Debts
Hiding information about incomes and debts typically leads to trouble, particularly since no one likes being deceived and your financial state is so impactful to the relationship. Your earnings and debts now affect you both, altering your access to credit, your joint cash flow, and more.
As a result, it’s critical to be upfront about what each of you brought into the marriage in regard to your incomes and debts. That allows you to determine how your joint financial situation impacts you as a couple, as well as what steps are potentially necessary to reach various goals.
Determine How You Want to Merge Your Finances
While many couples fully combine their finances, that isn’t ideal for everyone. Some may find that splitting joint expenses while otherwise maintaining autonomy is the best approach. Others might want to keep practically everything separate, such as by assigning specific household bills to them as individuals.
Since there are many options available, it’s best to have a discussion about how merged your financial lives will be and why that’s the case. That allows you to jointly come up with an appropriate strategy.
Have a Conversation About Financial Goals
Many newlyweds believe that their spouse automatically has similar financial goals to them. However, each person is different, so there’s a good chance that your priorities will differ, either slightly or significantly.
By having a conversation about your financial goals, it’s easier to determine if you’re on the same page currently. If so, then you can transition to creating a plan to reach them that works for your both, allowing you to identify your priorities and contribute to them accordingly.
If not, then it’s time for a compromise. Find a way to move forward that respects both of your needs, essentially creating a sense of balance between both of your goals. The priority should be to ensure that neither spouse feels that they aren’t getting the opportunity to address their concerns or desires, so keep that in mind as you start to plan.
Make Budgeting and Daily Finances a Joint Endeavor
While some couples find it’s easier to have one spouse handle all of the bill paying and money management, issues can arise if the other is fully in the dark. As a result, it’s best to make budgeting and daily finances a joint endeavor, promoting better visibility.
Both spouses need access to all account information, with statements or similar logs being the minimum. That allows everyone to see how money is being spent or saved. Additionally, it’s best to work together to come up with a budget, ensuring both partners know why certain funds are allocated a particular way and how much discretionary spending can occur before there’s an issue.
Start an Emergency Fund Right Away
Emergency funds help you navigate unexpected – and financially burdensome – events with greater ease. As a result, if you don’t have one established currently, starting an emergency fund right away should be a priority.
In many cases, it’s best to initially aim to get at least $1,000 in the bank, or an amount that fully covers your homeowners, renters, and auto insurance deductibles. After that, work your way up to three months of living expenses, and then aim for six months of expenses.
Those higher amounts can handle bigger emergencies, as well as support you both if there’s an unexpected period of unemployment. Just make sure the money is only used during genuine emergencies and that both spouses agree that using the fund is a smart move before making any withdrawals.
Make Decisions About Your Taxes
Married couples actually have two options available when it comes to filing their taxes. You can choose married filing jointly or married filing separately, and each approach has its own benefits and drawbacks.
You’ll need to consider your overall financial situation to identify the best path. Along the way, you’ll need to assess how each approach impacts your access to deductions, credits, income-based repayment plans, and more. As a result, you may want to consult with a tax accountant or financial advisor, allowing you to see how each option impacts your broader financial picture.
Have a Strategy for Large Purchases
Once you’re married, making large purchases alone typically isn’t a good idea if it involves joint money. As a result, it’s best to have a strategy for addressing this kind of spending, giving both partners a chance to be involved and ensure their voices are heard before the purchase takes place.
For some couples, planning to discuss this type of spending and only moving forward if both agree is sufficient. For others, setting limits or having separate allowances that they can spend how they please is the better option. Speak with your spouse to see what makes sense for your relationship, then make sure to follow that strategy to prevent conflict.
Do you have any more financial advice for newly married couples? Did you follow any of the advice above and want to discuss the results? Share your thoughts in the comments below.
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