Financial planning for newly married couples is one crucial conversation that should never be overlooked.
Getting engaged and married is an exciting time in anyone’s life but marriage isn’t always easy, and money comes with one of its biggest challenges.
However, it is amazing how many couples never broach this important subject of their financial future before and after tying the knot; but financial planning for newly married couples entails that you talk about these things.
It may not be the most romantic topic of conversation and may be tricky, but it is an important discussion to have, and having it regularly with your partner is applaudable.
Listing your financial goals and making plans towards reaching them can as well strengthen your relationship to becoming a more unique one.
Without proper planning, financial disagreements may cause conflict and friction in the union – especially for couples who lack financial management at home.
Hence, this article is necessary to avoid those unnecessary fights, heartaches, and stress, as well as keep you happy and successful until the end of your life. Here you go!
7 Essential Financial Planning Tips For Newlyweds
1. Have Money Talk
Ideally, the first thing that should happen is this conversation. This would have been done prior to the walk down the aisle, but if otherwise, you can do it now.
One piece of evergreen marriage advice I live by is “be honest with your spouse”. This is especially true when it comes to financial planning for newly married couples.
You should be aware of your financial situation. You wouldn’t want to exaggerate your income, nor would you want to lie about the amount of debt you owe.
You should know what each person is bringing into the marriage. It is also good to know how each of you grew up with money.
Revealing how your parents handled money, what you learned from their financial resume, and how they taught you to save or spend can be helpful information for couples. But ensure to stay away from criticism and judgments.
Talk about your financial goals for the future, and listen to your partner. Don’t just assume you both have the same goals and priorities. It will be much easier to reach them if you can work toward them together.
Also, you should take time at regular intervals, such as monthly, quarterly, or annually to sit down and look at your money together. Do you have financial concerns that you may want to talk about? Then do just that.
A lack of communication about anything is usually among the Top Reasons Marriages Fail, but talking about them early and coming to a sensible middle ground may be the key to that happiness you desire. When you can talk about money, you can talk about anything else.
2. Have A Joint Bank Account
Financial planning for newlyweds is of utmost importance and one of the tips for newlyweds on how to deal with money issues in a relationship or how to handle finances in a relationship is to have a joint account.
For many couples, a joint bank account is the ultimate symbolic gesture of their financial unions. Since you have become one, your finances should too!
Choosing to have a shared bank account means both of you will have access to, and contribute to one bank account. It is a good way to combine and grow your money to work towards your common goals.
It projects a very direct approach of “what’s mine is yours, and yours, mine” or “we are in this together” mentality which can be a very sweet gesture for the relationship to grow.
Since you can both see the contents of the account, there is a smaller chance of encountering financial surprises. It helps you keep each other in checking spending habits, and allows you to discuss questionable purchases.
One other benefit of a joint bank account is that (even though both of your names are on the account) it can be accessible to one person.
This can be particularly helpful if one spouse is unreachable. If only one person’s name is on an account and that spouse becomes injured or ill, their partner may be unable to pull out the money needed for medical expenses or other bills, and you know what that means.
So when you think of a happier marriage, a joint bank account as one of the forms of financial planning for newly married couples can help, as it helps to boost your Trust in your partner because you’ve decided there is nothing you want to hide (financially) from each other.
3. Create A Budget
Money and budgeting can be a scary thing to do. Some of you might think, how should married couples split finances?
And some might have even tried to ignore it altogether in hopes that it would just work itself out. But it is an essential part of financial planning for newly married couples.
A budget is simply the best guess regarding the amount of income you and your significant other will receive over a set period, along with how you plan to use it. This means that a budget will direct you on how to manage finances in a marriage.
It will help you direct where your money goes, how you spend it, and how much you save. Because if you don’t have one (budget), it’s easy to overspend without noticing it, leaving you with nothing left over at the end of the month.
However, as a couple, to create a monthly household budget; determine your shared monthly income. Next, make a list of your expenses such as monthly bills, entertainment, mortgage, insurance, as well as loans and other debts.
Once you have studied this list, cut out non-essential expenses. Moreso, while in the process, make sure you practice empathetic listening so you can understand each other’s budget needs.
It is likely your partner will have ideas you hadn’t thought of before. It might even turn out that you actually agree with them.
By budgeting and agreeing on your finances together, you will connect in ways you never imagined, because it sets you up as a team towards your financial goals, and it Strengthens Intimacy by keeping you on the same page.
That also means that it allows you both to air your minds, rather than let it fester until you are ready to explode.
Also, remember that a budget is likely to change over time. As you get more comfortable with the process, your priorities shift and you start reaching your goals, what you decided on day one won’t necessarily serve you later on.
To learn more about creating a budget and sticking to it, check out this well-detailed piece on how to create a budget in 5 easy steps.
4. Start An Emergency Fund
Emergency funds are important to anyone but even more important as financial planning for newly married couples.
We know that life is like a bunch of chocolates. You never know what you are going to get. But unfortunately, what you get from life isn’t always going to be as sweet as a piece of chocolate.
Usually, we tend to prioritize expenses right in front of us instead of the unknown ones of the future. But when the future unknown (job loss, ill health, car break down, etc.) collides with present reality, it can create a lot of undue stress if you aren’t prepared.
But wouldn’t it feel great to have a buffer between you and the curveball life throws at you? I’m sure you’d like that. Having a healthy emergency fund might be just what you need.
An emergency fund can simply be said to be “cash put aside, usually in a savings account, for life emergencies, or financial emergencies.
By financial emergencies we mean, unexpected expenses that if not dealt with promptly, can have immediate serious consequences.
The purpose of this fund is to improve financial security by creating a safety net of cash or other highly liquid assets that can be used to meet emergency expenses.
It is your “just in case account”. It also reduces the need to either draw from high – interest debt options – such as credit card or unsecured loans or undermine your future security by tapping into your retirement funds.
Having this fund gives you the peace of mind to know that should something truly awful happen, you can worry about how to deal with the emergency itself and not worry about how you are going to survive financially.
5. Get An Insurance
When considering financial planning for newly married couples, it is important to think about insurance. If you don’t already have insurance, getting married is a good time to think about signing up for these plans.
Protecting yourself isn’t uncommon, however, it becomes sacred when the law is involved. Insurance is a contract, represented by a policy in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
It is a means of protection from financial losses. It shares risks, helps to maintain the standard of living, encourages savings, and eliminates dependency.
So, while engaging in couples financial planning worksheet, or engaging in financial planning for newly married couples, check to see what benefits are available to you and your family and at what cost – be sure to take note of the offerings beyond medicals, like life insurance, dental, and disability insurance.
Then, talk with your spouse about the benefits that he\she has access to and determine which offerings will best fit your needs and budget.
6. Plan For Retirement
No matter how young you are right now, you are going to eventually be old. It’s going to become a challenge to continue to work and you are going to want a few years to be retired and enjoy life before your health fails.
t is the time where you relax, kick up your feet, and start spending some real quality time together. To enjoy that phase of your life, you have to prepare now.
Retirement planning is one of the financial planning for couples’ advice that is evergreen. It is a process of setting retirement income goals and following them with the actions necessary to achieve those goals.
It is one financial planning for newly married couples that needs a significant level of cooperation and compromise. And it’s important because it can help you avoid running out of money in retirement but to do this, you need to sit down with your significant other and discuss your ideal retirement.
One of you may envision retiring at 55 while the other is happy to work forever. You might have different dreams about where and how to live.
However, the key is to save well. Use a retirement calculator to see how much you need to save to help you reach these dreams, and put together a plan to get there.
Each one of you should jump into a retirement plan account on your own. If your retirement contributions are not automatically taken from your paycheck and put into your account, you can automate your savings by setting up regular, automatic transfers from your bank accounts to your investment accounts.
It’s never too early to start saving; the more you invest and the earlier you start means your retirement savings will have that much more time and potential to grow. In other words, the younger you are, the easier it is to make that retirement period go smoothly.
7. Update Your Beneficiaries And Other Paperwork
We know that planning for the departure of a loved one is a difficult thing to think about, but no matter how delicate, it is something any pragmatic planner must consider.
So, who is a beneficiary? A beneficiary is a person or legal entity that is entitled to receive the proceeds from an estate, trust, retirement account, life insurance policy, or transfer on death accounts.
Naming your beneficiary/beneficiaries eliminates confusion. It will help reduce the risk of leaving your assets to unintended individuals or entities.
It will ensure your money goes to your desired person or place. This simple move can save your loved ones time and money. Since you are married, your spouse should be your primary beneficiary and your child or children are contingent.
Contingent beneficiaries will receive the proceeds on your death if your primary beneficiary passes before you do or at the same time as you.
But if you fail to list a name (or names) it may result in unnecessary probate expenses and delays. Also, the beneficiary designation takes precedence over what is in your will.
There have been many cases where family members don’t receive the life insurance or retirement savings payouts promised to them by their deceased loved one, simply because the beneficiaries weren’t designated initially, or updated as life circumstances changed.
So for peace of mind, make sure you have up-to-date beneficiaries, familiarize yourself with what happens if you do not, and identify any action steps you need to take. It cost nothing but a few minutes of your time.
Financial Planning For Newly Married Couples: Recap
Wow! What a ride on financial planning for newly married couples. Money issues are a very interesting topic, but how you handle it speaks volumes.
Your life is just starting as one beautiful and romantic couple. So, don’t let finances be a taboo subject in your relationship.
Do your best to makes these tips work if you want to have a glorious future. Remember that life is hard enough; don’t let money be the reason you don’t have a happy marriage.
I’ll be waiting for your feedback, comments, and suggestions in the comment section below! Sending Love and Light, ciao!
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