Sure, money and marriage make an unromantic mix. But when disagreements over finances can lead to divorce, this topic should not be avoided. Let’s be honest. Managing your own money is already difficult and incorporating your spouse’s finances can be overwhelming. Both of you could have taken personal loan for marriage and that debt you may be carrying into your marriage. That’s why it is crucial that the two of you discuss money matters however unromantic it may seem – because it is essential.
Research says couples who discuss and trust their partners with money matters are more secure with each other and more confident about their relationship. Following are some healthy financial habits you and your spouse can incorporate to have a healthy married life.
1. Talk about Money Matters
That’s the first step of marriage financial planning. Go over with you and your spouse’s accounts and debts. This helps you to have a good understanding of where you stand financially and create a plan to make your financial position strong.
2. Write down Long-term and Short-term Financial Goals
Now that you know your financial status, it’s time to discuss short-term and long-term financial goals. Some examples of financial goals are:
- Buy a Car in 2 years (Short-term)
- Save for Retirement (Long-term)
3. Talk about bank Accounts
You can open a joint account, have a separate account or have both. A joint account can simplify your finances while a separate account gives a level of independence. Discuss this at length and make sure that your spouse is comfortable with whatever you both decide.
4. Put aside Money for Emergencies
This should be your top priority. An emergency fund is essential to cover the expenses incurred in case of an unexpected event like a job loss, natural disaster, or a medical emergency.
Your emergency fund should have at least 6 months’ worth of your living expense with no income coming in. If with your current ongoing expenses and low income, it may not be possible to have an emergency fund set up so early in your marriage. If that’s the case, it’s always a good idea to apply for a personal loan from online lenders (they are quick and convenient) if at all you come across an emergency and you don’t have the money to meet the financial obligation.
5. Create a Budget Plan
A budget is crucial to ensure that you are spending within limits and don’t go into debt. Review your joint expenses in the last few months. Spend some time together to design a plan to bring the total expense amount down.
Establish a spending limit for each category. For example, set a spending limit for eating out or splurging. Keep aside some money for an unexpected expense like a doctor’s appointment or routine car service. Your budget is always going to be a work in progress because you have to make adjustments in it every now and then.
6. Track your Budget Plan
Making a budget is just not enough; tracking it is essential to help you stay within your spending limit. Create a spreadsheet that tracks your income inflow and outflow.
7. Reduce your Debts together
Your marriage may possibly bring together more financial responsibility and more debt into the relationship. Reducing the debt together as a team is an important aspect of financial planning for newly married couples. If you have multiple loans, clear off the loan with the highest interest first and then tackle the rest.