Managing Money as a Newly Married Couple is not an easy task. Especially when you are a new couple, you don’t have any experience of managing your budget. You need to start with a “ballet of life” where you start with a joint account that is designed just for you. It is important to understand that you will need a more complex system that includes both your joint account and separate accounts.
Joint Accounts Managing finances together is a great way to begin developing a more financially responsible set of financial habits. By sharing your bills and making payments as a couple, both parties have a clearer idea of what they can and cannot afford. By paying bills on time, your credit rating will become more stable, and your ability to access other financial resources will increase. Another advantage is that it gives you time to evaluate your own spending habits and finances. This will give you a better sense of where you are truly at, both financially and emotionally.
There are several ways to create a joint account to help you develop financial responsibility. The most common way is to open two individual bank accounts. Each of these accounts should have their own checking and savings account and be funded accordingly. Some couples choose to keep their joint account dormant until later, after the marriage, to minimize potential temptation to spend excessively or to take advantage of a situation where one spouse is looking for a higher interest rate or lower minimum deposit amount. The decision to open separate accounts should be made based on your individual spending habits and financial goals.
One of the best ways to start saving money is to start investing your joint checking and savings account together. Make small investments regularly that will grow gradually over time. Choose investments that will give a higher return than the interest rate on your joint checking account. This is a good way to build wealth, especially if one of you has a higher retirement age.
One of the biggest stressors for any married couple is debt. Unsecured debt is most often incurred by using credit cards, and this type of debt usually accrues quickly because of high interest rates and payments that are due each month. It may also accrue through home-equity loans and student loans, which most people begin earning money through but which may not be paying off in full and may eventually accrue a lot of debt.
There are several ways to manage debt while you are newly married. First, create a savings goal and stick to it. You may need to make some sacrifices to achieve your saving goal. For example, your first priority may be to save more than double the amount of what you currently spend each week. Once you have achieved your saving goal, then you may want to consider investing in a small portion of your savings so that you have a built-in, higher income. Finally, you can continue to add to your savings by putting away extra cash for emergencies.
Even though you may have joint bank accounts and your partner probably contributes to them, saving money for when you need it is often the best course of action. Make a list of expenses each month and figure out how much disposable income you have before retirement. The emergency fund you create will provide money to cover these expenses as well as for living expenses and education. In addition, if you have children, you can use your accumulated funds to help pay for day care, college tuition, and other related costs.
Although managing money is often a daunting task, once you have a clear idea of where your priorities lie, you will be able to better use your resources. Additionally, this process will also relieve the stress that you may be experiencing due to your new marital status. After all, managing money as a newly married couple isn’t hard to do when you make a commitment to one another’s well being.