7 Pieces of Financial Advice for Newlyweds
If you just got married, just got engaged, or you’re making the leap in marriage soon, please do not go into your union unprepared to do finances together.
Some of you may have been wise enough to engage in pre-marital counseling before you tied the knot. During these sessions, the topic of money mayhave been expressed as “something you’ll want to talk about”.
Yes. You’ll definitely want to talk about it.
But guess what? That’s not a bad thing. It’s not a scary thing. Talking about money can be fun! However, let’s make sure you’re talking about the right things and being fair and honoring to one another.
Today we’ll start at the beginning and give you seven practical steps you can do with your spouse or soon-to-be spouse that will revolutionize your relationship and set you up well to win with money and make finances one of your relational strengths.
1. Share honestly about your money background
There’s something important that both of you will need to understand: where you’ve been will affect where you’re going (if on auto-pilot). Even if you don’t know it, there have been behaviors programmed into you from a young age. These behaviors are your default for how to act with money.
In order to change and modify these behaviors to line up with what will make your marriage most successful, you’ll need to first realize what behaviors you have.
So, the bit of advice is to SHARE about your money background with each other. Go ahead, tell all.
Talk about what your parents taught you about money, both verbally and non-verbally. Tell your partner what emotions money gives you.
What have you done with your money up until this point? Do you tend to save money or spend money? Do you have any debts? What does money mean to you?
It’s so important, for your upcoming marriage, to know where each other is coming from with money. If you know each other’s background, you can craft a vision together while growing together.
This is the awesome part: you don’t have to have your past with money dictate your future. You two get to choose how you’re going to win with money.
2. Agree on combining your finances
Should you combine your finances in marriage? You can find people who will make the argument that you should not combine your money, and those arguments might be partly reasonable.
However, I would HIGHLY suggest you think long and hard before you decide to have separate finances.
Actually, I wrote a post on why couples combine finances in marriage, so read that, and then agree with your partner that it is the only way to go! Ride or die baby. I’m putting ALL my eggs in this marriage basket. What’s mine is yours.
If either of you has hesitations, please seek out advice from other married couples you respect. However, be careful to only take financial advice to heart if you KNOW the people you are talking to are super good at managing money. A shiny new car does not mean the driver is wise with money. Mini rant done.
After you two agree that combining finances is the way to go, I’ll tell you how to combine finances practically in another post.
3. Track your spending
The foundation of saving money is knowing how much you spend. Since I’m sure that you two would generally like to “save money” (because you’re smart), the first tip is to track your spending.
Take the first month or two in your new marriage (if you’re already married, just do this right now) to track every penny you spend. Make a little spreadsheet and group all of the purchases.
How much do you spend on housing? How much do you spend on food? How about discretionary items?
These are all important things to know.
After one or two months of marriage, you should be able to guess how much you will spend the next month. The more you do this, the closer you’ll get to being accurate!
4. Dream together and make money goals
One of the most important parts of managing finances together in marriage is seeing a common vision for your lives.
It’s like a boat race. A boat with one paddler is racing against a boat with two paddlers. Who do you think is going to win?
Clearly, the boat with two paddlers is going to be faster. If they coordinates their strokes, they'll win.
That’s exactly how it is with you two in marriage. If you’re both rowing in the same direction, you’ll get there so much faster. But you'll want to both be looking at the same finish line.
So what are your dreams? Do you want to own a boat someday? Is a house in a certain area important to you? Do you just want to get out of credit card debt?
It’s so powerful to share your dreams with each other.
Then, take hold of your common dreams and form inspirational money goals that will make you both excited to sacrifice some short-term pleasures along the way.
P.S. Write these down.
5. Stick to a budget
Here comes the marriage and money magic-maker: a budget.
If you just cringed, take that cringe back. Seriously, take it back right now!
You can live your life without a budget, and you can blissfully “trust” that you have enough money in your account, and you’ll be saving barely enough to say you’re “doing okay”.
Or, you can maximize your life, your marriage, and your future, by creating and sticking to a monthly budget with your spouse.
Guess what? The hard part is already over. You tracked your spending for a month or two. Now that you know about what you spend, all you have to do is create a budget for next month and guess how much you’ll spend.
Then, continue to track your spending, and fill in what you ACTUALLY spent in the budget.
That's it. Rinse and repeat each month.
Using a budget is the basis of financial success. Do you think large companies use budgets? Or do they just hope that they don’t spend more than they make?
I’ll answer for you: They use budgets.
Why? Because if you PLAN to spend your money on the things you need and really want, then you can save SO much more money.
If you stick to a budget in your marriage, you will soon see how spending your money on purpose as opposed to on accident will get you on the fast track to saving a ton and reaching your goals quickly.
6. Live below your means
You’ve heard this piece of advice before. But what does it really mean?
In order to truly live below your means, you need to spend less than you make. That’s the bare minimum.
The goal for you two should be to live WELL below your means.
Make as much money as you can and spend as little as you can. The “gap” between your income and expenses each month is what you can save and invest.
Go ahead, work together to make this “gap” as large as you possibly can. You will need to budget monthly to do this efficiently.
The percentage of your combined income that you save each month will directly impact your future wealth and your ability to retire some day.
Remember the goals and dreams you two have talked about? Saving a bunch of money each month will likely be your strategy to GET to those goals and dreams someday. That’s called building wealth, and it’s really fun to do with your spouse.
Practical tip: Get to a "gap" of at least 10% of your monthly income. Then push it higher and higher.
7. Talk about money often, without so much emotion
Lastly, one of the greatest points of emphasis is this: get comfortable talking about money with your spouse.
Now that you know each other’s backgrounds, you’ve accepted them, and you’ve built a dream together and a plan to get there, you’re going to need to revisit the plan and the dream often.
After all, you won’t see positive results in something you never focus on.
So go ahead, talk about money over dinner, talk about money before bed. Make it a normal part of life.
Clearly, you need to respect each other’s boundaries and wishes, but money should not be a taboo topic in your home.
In your home money will be an exciting topic. When it comes up, you’ll both be able to envision the future you have planned for yourselves.
Besides talking about money with random and frequent consistency, we would highly suggest at least one or two scheduled money talks.
These can be “money meetings” or “money dates”. Go ahead and make it a date! If you add good food or wine, maybe one of the two spouses will feel like they can enjoy it more.
If you two are making a monthly budget and reviewing it together, you’ll need to meet at least once a month.
Remember - money doesn’t have to be an overly emotional topic. Share your fears and excitements with each other, but also talk strategy. You’re on the same team! Confide in one another and build a solid money foundation together. You’ll be leaving a legacy without even knowing it.