Money Management for Newlyweds

The beginning of a marriage is a new life and new beginning for two people. That means adjustments. How to budget the family income is one of those adjustments and, if not handled correctly, it can be a major sore spot for newlyweds.

Communication is a key to every marriage and the place to start with financial matters. It's a good idea to start talking about money even before the wedding. Discuss your saving and spending styles honestly. Realize that you are both coming from different backgrounds and that affects your views. If you grew up in a family that took yearly vacations, you may naturally expect that to continue. However, your spouse may consider a yearly vacation an extravagance. Even if you vowed you'd never be like your father or mother, you may find their financial habits creeping into yours.

What about financial comfort levels? One person may be satisfied with $10 in a checking account; the other may panic if the balance falls below $200. Let the more conservative person decide the minimum balance and decide on your spending limits together. You each need to be able to spend money independently, but how much? A sweater is a different price range than a mountain bike. It's not that you can't spend money, but you don't want to surprise each other with gifts that can destroy the monthly budget.

Think about savings and investment styles. One person may be an aggressive investor, taking a great risk in the stock market to get a higher interest rate. The other may have always kept their money in a federally-insured credit union. If the aggressive investor acts against a more conservative spouse's wishes and ends up losing a risky investment in the stocky market, there's going to be conflict. Seek to find a balance of conservative and aggressive investments that make you both comfortable.

As you begin your new life together, look to the future. Where do you want to be in 10 or 15 years? You may want to start your own business or buy a home or boat. You must plan for these future goals and dreams. Children may be years away, but what are your hopes for a future family? If you decided to live on one income once you have your first child, then that will affect how you spend money now. You can't buy a house with a mortgage that requires two incomes if you don't intend to always have two incomes. Your goals may change as time and other factors, such as job promotions, change your direction.

Couples also need to be honest and upfront about any debt they owe from the beginning. Your spouse needs to know about any outstanding loans (for example, from college) that will affect the family budget. Also, you may have some debt from the wedding; this debt will be part of your expenses as a married couple.

What about setting up the budget? Do this together and be aware of each other's needs. Pay off your debt first and save a portion of your income. Start with saving 10 percent, but if that's too difficult, save less and gradually increase the percentage as your debt decreases. You both need to know what your income and expenses are, but one person needs to be responsible for making sure the check is signed and mailed. Develop a system that works for your lifestyle. If one person travels regularly, the other person may be the best one to keep track of the bills.

There's a lot to learn in marriage and how to handle your money is only one of them. Many older couples look back at their first few years with wonderful memories even though they barely made ends meet. Make that true of your marriage so that the vow of "for richer or poorer" is lived out. After all the wedding gifts have been unwrapped and the honeymoon is over, it's time to begin compromising and developing a new budget.

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