Every couple will go through ups and downs. Challenges are inevitable, especially when it comes to money. After the honeymoon phase, both of you will realize that marriage is not all about love and rainbows all the time. You must take on numerous responsibilities together to secure your relationship and your family’s future.
Debates and discussions about financial decisions may arise with your relationship evolving, such as who pays the bill or how much mortgage to take. The earlier you start planning your assets, liabilities, and equity, the easier it will be for you and your spouse to navigate the succeeding years and overcome unexpected struggles.
With this article’s help, you will discover the six steps to successfully managing finances and preparing yourself for your financial checklist.
6 Steps Couples Can Become Successful in Handling Finances
You may be searching for home-buying tips for newlyweds, exploring mortgages, or planning how many children to have. If you are building a family, having a financial plan is crucial in achieving your goals.
Identify who manages the finances
First, ask yourself who will manage the finances—you, your spouse, or both? The correct way to figure out who will handle the money is relative for every couple and can change as you or your partner commit to new responsibilities.
Nevertheless, having a joint account and a private checking account for each of you allows you to account for expenses more efficiently and creates fewer money conflicts. Additionally, having a “you, me, and we” account ensures individual spending freedom.
The 50-30-20 rule is a flexible and effective way to make financial budgeting decisions. In this framework, 50% of your earnings are dedicated to paying for food, car installments, or rent, 30% should go to your wants, and 20% towards savings and debt repayment.
As newlyweds, you may have accumulated debt, such as student loans, car loans, or credit card debt. Prioritize paying off high-interest debt first. Consider consolidating your debt to make it more manageable.
Be honest with your spouse. Do you have money issues? Debts to be repaid? How is your cash flow? Do your parents expect you to still contribute to the household? What do you want to spend and invest in the future?
Schedule regular financial check-ins with your spouse to discuss your finances. Use this time to review your budget, track your spending, and make necessary adjustments. Set aside at least 30 minutes weekly or monthly to ensure you stay on track.
Joint budgeting, sharing all financial information, discussing financial goals, making decisions together, setting spending limits, being honest about debt, planning for the unexpected, and celebrating financial milestones are important steps toward financial transparency.
Being transparent about these things with your partner will better help you strategize how to achieve your goals.
Synchronizing financial goals
Once you’ve discussed your financial status, the next step is synchronizing your goals. Set a timeline to make each objective measurable and prioritize the most urgent ones. These goals can be long-term, such as saving for a down payment on a house, or short-term, such as paying off credit card debt. By setting financial goals together, you are creating a shared vision for your financial future. It also helps to prioritize what’s important to you and allocate resources accordingly.
Review your finances and reprioritize your plans each year with your partner, as your circumstances will change.
What to invest on
In being there for your spouse, “for better or worse,” you must prepare for unexpected challenges. You can secure your future and prevent uncalled financial problems by availing yourself of a life insurance plan. The sooner you start investing in life insurance, the earlier you can rest assured that your family will be protected regardless of the situation.
Real estate can be a great investment for newlyweds looking for long-term wealth building. Consider investing in rental properties or real estate investment trusts (REITs). However, real estate investments require significant capital upfront, and it’s important to research and understand the risks involved.
When investing, it’s important to research, understand the risks involved, and consult with a financial advisor if necessary. Consider your financial goals, risk tolerance, and timeline before making investment decisions.
Plan for emergencies
Finally, it’s important to plan for emergencies. Unexpected expenses, such as a car repair or medical bill, can come up anytime. Make sure you have an emergency fund set up to cover these expenses. Ideally, you should have three to six months’ worth of living expenses saved up. If you don’t have an emergency fund, save as soon as possible. It’s also a good idea to discuss what you would do in case of a job loss or other financial hardship.
In Sickness and In Health
In conclusion, handling finances as newlyweds can be challenging but essential for a successful marriage.
Given all these steps, a financial checklist for newlyweds will help you easily navigate married life and overcome money problems. In establishing this checklist, transparency, budgeting, and communication are crucial. Remember, marriage can be the key to unlocking financial freedom if you’re willing to work together on a game plan to save for your future. Also, it’s not just about managing your money but also managing your relationship.