After Eric and I got engaged we moved in together and got a real-world reality check. It quickly became obvious that we needed to figure out how we were going to handle our expenses and financials as a COUPLE… yikes! We knew that we needed and plan and that being on the same page with our money was a must. Here are some budgeting tips for newlyweds.
Talk about money early and often. Hopefully, you’ve had some serious conversations about money long before your wedding day. If not, don’t wait any longer — knowing your new spouse’s money history, hang-ups and hopes will help you create a realistic budget. Thankfully Eric and I are open books with each other and we both knew exactly what we were getting into. We discussed things like what money was like growing up, how we’ve managed our money up to now and what our financial goals are. This allowed us to better understand one another.
Combine your finances or at least some of them. Deciding whether or not to combine finances in marriage is a personal decision, if you choose to do so there are several ways to merge your money. However, even if you and your new spouse decide to keep individual accounts, it makes sense to have one shared account for reoccurring shared household expenses such as your mortgage or rent, utilities, and shared vehicle payments. We knew we wanted to combine our finances to help keep things easy for paying bills and to help hold each other accountable for both spending and saving. Regardless of your decision, be flexible. As with most aspects of budgeting, you’ll learn which specific money management approaches work best for your marriage over time.
Knowing your priorities. I come from a finance background, but that doesn’t mean that I’m perfect at budgeting. However, I understand the importance of saving for retirement, paying off debt and having an emergency fund. But this was the first time Eric had to set financial priorities, so we started with the basics: saving for retirement, the double-edged sword of needing debt, but keeping it in check and building an emergency account to fall back on.
Commit to responsible budgeting. If you make saving and investing a habit, it will be easier to live without the money you’re setting aside. Chances are, you won’t even miss it. That is the method that Eric and I stick to when it comes to budgeting responsibly. We have our money automatically transferred out for savings and bill paying so that we know how much exactly we have left for extracurricular spending. Budgeting takes time and effort – and a lot of willpower. Talk with your spouse, make a plan, put it in writing and make it happen. Using a budgeting tool was a must for us.
The truth is you’ll be much better off financially – now and in the future – if you have the “money talk” with your new spouse today, make a budget, and stick to it. Once you’ve made the commitment, getting started is easy.