Start off by talking about money management and coming up with a plan for budgeting, expenditure and investment. Forming good financial habits as newlyweds allow you to work as a team through many obstacles in years to come.
Here are 5 tips that we hope might be useful to get you started.
1. Disclose everything
We’re not talking about how many distant cousins here but rather, your financial statuses. Sit down together and go through all your assets, outstanding debts and credit reports. The key here is to be honest to avoid giving the other party an unpleasant surprise down the road.
2. Protect each other
Insurance plays a very important part in your family’s financial security. No one likes to talk about serious illness or death when they just got married, but it’s essential to make sure both of you are properly insured. If something unexpected should happen to one party, the other spouse may suddenly find themselves in serious debt over mounting medical bills, or under tremendous pressure to provide for the entire household – including both sets of parents as well as any children – alone. Make an appointment with a professional financial adviser that you trust, and start building a financial safety net for each other.
3. Build a liquid emergency fund
It’s also recommended to have a liquid emergency fund of around 3-6 months of your household income. This can come in handy for unforeseen circumstances such as unexpected home repairs or sudden loss of job . Unfortunate things happen in life but when you’re prepared, it will be much easier to handle these situations instead of crumbling under the pressure.
4. Discuss your short-term goals and create a budget
To motivate each other to save for your future, talk about short-term goals like a yearly vacation or an extravagant dinner every anniversary. It’s important to work together to figure out what you can realistically afford and to ensure you’re working towards the same goals. Create a budget to limit your expenditure so you don’t go into debt.
5. Get aligned on your long-term goals
As a couple, you should also be aligned on your long-term goals such as how you plan to fund your children’s tertiary education, or your retirement aspirations. Retirement can be an expensive affair, considering we’re talking about 20 years or so of expenses, with no income! While it may seem very far away to young newlyweds, starting early – even if it’s just a small amount every month – means your money will have time to grow.