Financial Moves To Make As A Married Couple
Marriage should ideally involve finances. However, sometimes, these same finances are what make people fight most times among other factors. Money is an integral part of the relationship such that it needs both parties to be open about it.
In the case that you are newly married, what financial moves should you make.
Table of Contents
1. Open up about your financial status as an individual
Ideally, this should be done even before you get married. Your partner needs to know where you stand financially. Opening up about your finances should be a natural thing because this is somebody you intend to spend all your life with.
Do you have any mortgage loans, student loans or car loans? Where does your credit score stand? Sometimes, you may have made poor financial mistakes in the past, and they pushed you to file for bankruptcy. Talk to your spouse about it so that you can figure a way of repairing your credit after bankruptcy.
After you both know the current financial status, it’s easier moving forward.
2. Emergency fund as an option
Do you have an emergency fund as a couple? This is probably one of the things every couple should consider. What would happen if you both lost your jobs or main income stream right now? Would you be forced to move into a smaller house?
An emergency fund is great for saving for a rainy day. Most financial experts recommend that you have 3-6 months worth of your expenses.
Take, for example, if you decide to save for five months, and your monthly expenses are $1,000, you need to have $5,000 in savings.
Different banks offer different terms on their savings accounts. However, you can identify one where your savings will gain interest on a monthly basis. The amount may not be much, but at least your savings are not just idle.
Come up with a monthly figure where you get to save until you are comfortable with the amount in your emergency fund.
3. Plan how to pay off debt
Since you already talked about your financial situation, it’s now time to plan on how to pay off your debts. Have a list of all the debt you both have. It could be credit card debt, car loan, mortgage, money from family or any other.
Communication plays a huge role here. Have a conversation and come up with a way of paying the debt. Patience and discipline are what will help you complete this mission. Put in mind that you can’t pay all debt at once, come up with a monthly amount that is directed to offset the debt.
Sometimes, this will call for sacrifice. No more eating out every Wednesday. Have a realistic budget that will help keep you on your toes and avoid overspending.
Be each other’s accountability partner and aim for the price (living a debt-free life)
4. Consider investing
Investment is something you should be heavily considering. What are your areas of interest? Different investments come with different risks. Some are high-risk, high return while others are low-risk low return.
Research on different ideas, talk to people who have invested in what you’d prefer and get to know the ropes around it.
There are different options you could consider such as peer to peer lending, bonds, money market funds, real estate and so on. Figure out what works for you and how much capital you have.
5. How do you plan to retire?
Growing old is inevitable. The sooner you think about retirement, the better. In the case that your employer offers the traditional 401(k) plan, it will help you contribute money before taxes. Your aim should be to increase your contributions to the maximum limit on your 401(k).
It is important to discuss this with your spouse so that you can make the necessary financial steps required.
When you are young, it’s important to think about retirement instead of squandering all the money on monthly vacations. Save early, and you’ll be smiling during your old age.
Also, you don’t want to start asking your children for financial support just because you didn’t save when you had the money.
6. Focus on working together
Marriage should be working together. Even as you embark on streamlining your finances, don’t forget that you are in the same team.
Budget together, plan your finances together as well. Know that you are both accountable for every financial move you make towards leading a fulfilling journey. The truth is that there will be challenges but remember always to work together because the gains are both yours. This helps bring you closer and increases the chances of the marriage working.
Financial decisions are critical and should be done in all honesty. The tips above should help you figure out your finances as a couple. They will help give you a direction towards a happy life.