Last Updated on March 4, 2022 by Parentology
5 Key Financial Habits for Newlyweds
For newlyweds, even for some couples who have been married for a couple of years now, talking about money is a very sensitive matter. But as couples, both parties should be honest and open about their finances to be a step closer to having a happier and more financially secured married life.
Couples can start off their healthy financial habits by discussing ways they can strategically manage their income and expenses, make a plan to budget cash flows for monthly expenses and financial goals; both short-term and long-term. These small but significant financial habits can prepare newlyweds to build up their finances and be a team to push through any obstacles that may come their way.
These 5 tips can help you and your partner start a journey of good financial habits for Newlyweds to build a financially secured future.
1. Put up a liquid fund for emergencies
It’s very important for newlywed couples to remind themselves to not spend everything they earn. Saving up a portion of your monthly household income to build up a liquid emergency fund for unexpected events; such as emergency repairs or a sudden loss of employment or business income. It is recommended to build an emergency fund equivalent to about 3-6 months of your monthly household income to prepare for these types of unexpected circumstances. Being financially prepared for fortuitous events that may come your way will make things a lot easier for you and your partner to face these kinds of problems.
2. Financially protect each other with Insurance
A big chunk of building a financially secured future for newlyweds is getting insurance. Even long-term couples don’t like serious illnesses that may come their way in the future. Talking about financially preparing for serious illnesses or a sudden death of a partner can be a big elephant in the room, especially for newlyweds, but it is very important to make sure that you and your partner are properly secured for the future. Not having insurance to prepare for unforeseen illnesses and events can put you and your partner into serious financial liabilities over medical bills, which can put a lot of pressure into your household. If you’re not yet secured, taking the time to schedule an appointment with a trusted professional financial adviser to help to get the appropriate insurance for you can help you and your partner build a financial safety net for each other when worst comes to worst.
3. Discuss short-term goals and build up a budget
Saving everything you earn for the future is not healthy for newlyweds, even for old couples. Not making a budget for short-term goals can be exhausting for both partners. These short-term goals can be as simple as dining out at a fancy restaurant for your anniversary, buying a new household appliance, or as fancy as a week-long vacation in a foreign country. These types of rewards for you and your partner can motivate the both of you to smartly save for your future. However, it’s important to discuss between your partner what your household income can realistically afford, and that the both of you make sure that each does their own part in reaching agreed goals. A little reward here and there doesn’t hurt, as long as you don’t go into debt going into vacation or dining out.
4. Long-term goals should align as couples
Getting married is a long-term commitment, so the couple’s long-term goals should also be aligned to build a stable and satisfactory future. These long-term goals can be your children’s college education funding, retirement ambitions, new business ventures, or a housing upgrade. Discussing long-term financial plans can be quite a daunting task, and listing down these goals can seem to be an expensive affair when summed up. Retirement expenses can sum up to a lot of money, considering recommended retirement plans should be good for 20 years or more for monthly expenses. But do not fret, even a fraction of your money household income set aside for your retirement and other long-term goals can amount to a big sum of money considering the time you have as a couple to prepare for the future.
5. Disclose financial statuses
As newlyweds, you and your partner should always be transparent when it comes to finances. Disclosing financial assets, outstanding debt, and credit standing will help the both of you overcome any existing debt and other existing financial hurdles that you currently have. Taking the time to disclose current financial statuses can also help the both of you plan out more realistic financial goals. Hiding current debt and assets from your partner is also not a good habit to have as newlyweds as it creates trust issues between partners and financially planning for the future is near impossible to achieve as this undisclosed debt can balloon to a bigger financial problem and hurt your monthly household income.
As you go into this fresh chapter in your life as newlyweds, keep in mind these healthy financial habits to make the most of your household income and have a financially secured married life for you, your partner, and your children.