9 tips for newlyweds for better money management
It is natural for newlyweds to dream of a life full of happiness and joy. But that can only occur with the simultaneous taking of practical decisions. And one of the key areas that practical decisions need to be made is the area of finances.
Provided below are 9 money management tips that can help newlyweds to live a fulfilling, happy life.
- Reveal your financial status to your partner: Knowledge about your partner's finances is instrumental in strategizing a budget. Sharing data about debt and income can help understand the financial standing of the couple, their level of affordability, and the methods/amount of savings that need to be done to achieve the financial objectives.
- Make a deal: Making a deal to create a better financial future is paramount to a stable relationship. Even though a couple may not be business partners, but they are partners in life. Setting restricts on the basis of goals and income can help plan and avoid unwanted surprises.
- Set long-term and short-term financial goals: List both short and long term goals after sorting out the incomes and expenditures. Short term goals are vital for achievement of long term financial objectives. Short term goals can include creation of an emergency fund, increasing income, reducing debt, and saving money, etc. Long term goals can be buying a house, saving for retirement, etc.
- List earnings and expenses: List the expenses and incomes and find the money left each month. Then find the expenses that can be reduced or completely cut-off. This will help save for the future.
- Save money for unforeseen expenses: This is a kind of emergency fund that will help newlyweds to avoid borrowing money for sudden expenses like medical issues, car repairs, etc. All extra monthly savings can also be added to this fund.
- How and what amount to save: Discuss about what expenses can be avoided to be able to save an amount that both partners agree upon. Avoid comprising excessively on expenses when planning this. After that, discuss the manner in which the agreed-upon amount needs to be saved; it can be as investments, bank savings, and physical assets, etc.
- Be prepared to shoulder extra financial responsibility: If both newlyweds have a job at the time of marriage, then both partners have to be ready to take on added responsibility in case of any possible financial adversities in the future. If one of the partners loses his/her job, then the other should be prepared to handle the additional financial burden. Also, if the wife becomes pregnant, then the husband should take care of the finances till the wife gets back to her job.
- Purchase intelligently: Money can be lost when purchases are not made smartly. Go for products that help save money; buy furniture, appliances, etc., that are right for both and not just because it is popular or big; and don't overspend when decorating the house, particularly when it's a rented home.
- Verify if finances allow purchase of a house: All newlyweds want a house of their own. However, it is important to verify whether they have the finances to purchase a house. Some of the things that can be checked are availability of funds for down payment, no major debt or loans to repay, savings in addition to down payment funds and emergency fund, great credit scores (of each) for better interest rates, and alternate income sources in case one of the partners becomes unemployed.