As a newly-engaged couple or newlyweds, you’re probably getting lots of advice (some solicited, some not) from everyone around you. That said, when it comes to your money, words from the wise have the power to transform your financial situation, now and into the future.
Here are a few pieces of advice worth saving:
It's important to be open and honest with your partner in all aspects of your relationship, but especially when it comes to money. Whether you're just engaged and trying to set your wedding budget or just married and saving for your first downpayment, now is the time to come clean about your credit history if you have yet to do so.
For many, marriage means combining finances and financial responsibilities, so it’s imperative to understand where both of you stand in regards to savings, debts, etc.
A great place to start is to get a full credit report and credit score. This will help the two of you understand the current situation so you can make a plan for what to do next.
When it comes to saving for emergencies, most Americans are woefully unprepared. A 2018 study by the Financial Industry Regulatory Authority (FINRA) revealed that 46% of households don't have suitable rainy day funds. The best way to protect yourself from unexpected expenses — like a major car repair, a hospital stay, or a stint of unemployment — is to start saving now.
Most experts suggest having enough money put aside to cover a minimum of three to six months' worth of expenses for your whole family. And as a bonus, if you keep your savings in a high-yield savings account, you'll earn interest on your savings while you grow your emergency fund.
Once your emergency fund is fully stocked, make saving for other short and long-term goals a priority and a habit. Pay yourself first by contributing to your savings before doling out your discretionary spending allowance. It's important to save for sunny days just as much as the rainy ones!
This obviously means you'll need to establish a monthly budget for yourselves. You should have plenty of money left over when you deduct your monthly expenses from your income. If not, you may want to consider finding ways to cut back, or try our next suggested money move for couples!
Instead of looking at each of your salaries as your own, you can take the approach of looking at all of it as “our money.” This outlook will greatly simplify your finances, encourage open communication about money, and help you gain momentum towards as you work together toward your shared goals.
When you pool all of your money together, you have access to more funds, period. For some, it may be possible to live off of just one income and devote the other to a specific financial goal. Whether you put it towards paying off debt, creating an emergency fund, or saving up a hefty down payment for your first home, you’ll find that you’re able to make more progress and keep your motivation levels high when you’re in it together.
If you're not itching to start a family right away, give yourself time to enjoy the perks of the DINK life.
DINK is an acronym for a dual income no kids household and is one of the most powerful money moves couples can make. Using this time can be critical in setting yourselves up for financial success in the long run. Combined with living on one person's income, you can sock away a significant amount of savings during your pre-baby years.
Some ways to maximize your DINK income can include finishing your degree to land a better-paying job, learning a new skill to net you a raise or make you more marketable, creating multiple streams of income.
A lot of younger newlyweds are facing student loans, a car payment, and even a mortgage. A few hundred dollars more each month could make a huge impact on your financial life. Having multiple streams of income is also a great way to protect yourself in case of unexpected expenses or job loss. Side hustles are all the rage, and can be a fantastic safety net should the rug get pulled out from underneath you. (You know, like because of a pandemic or something.)
Some options for earning more can include starting a side business, taking on an extra job like pizza delivery, waitressing, or pet sitting, or finding a way to earn extra money online.
Truly, having something to keep you afloat should your job situation change is an essential money move whether you're single or in a couple.
It’s never too early to make end-of-life plans. Now that you’re married, it’s not just you anymore, and you need to plan for your family’s financial future.
Depending on your age and health, life insurance can be a cheap and easy way to make sure your family is protected from financial ruin if the worst should happen.
All of this may seem a little morbid, but don’t let it ruin your post-honeymoon glow. There’s nothing more loving than ensuring your loved ones' financial security.
As a woman who’s a bit further ahead of you on this journey, I sincerely hope that you consider these pieces of advice. Open communication, defining shared goals, and working together towards them are the keys to financial success and fun in your marriage. Wishing you nothing but the best!
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