Summer is a popular time for weddings. However, even before the ceremony, the couple should take time to sit down and get serious about finances. Newlyweds need to take control of their finances or else the walk down the aisle will only lead to a rocky financial future.
In a marriage it’s important for newlyweds to realize that they are making a financial commitment, as well as an emotional commitment. Couples need to have the conversation sooner rather than later, so they can develop healthy personal financial habits together.
BBB offers the following advice for newlyweds planning their financial future together:
• Let Financial Skeletons out of the Closet. After marriage, any personal debt becomes “our debt.” It is important to sit down early when marriage is being discussed to discover what outstanding obligations exist on both sides. These could include car loans, school loans and credit card debt. Review your credit reports to get a better idea what both people are bringing to the marriage.
• Build a Budget. After you’ve gotten a grasp on your debt, it’s time to build a monthly budget. Look at your monthly bills to create a realistic picture of how you spend. Discuss your long term goals—such as buying a house or car and having kids. Figure out how much money to set aside each month to reach those goals.
• Designate a Driver but Travel Together. In order to avoid confusion, one person should be assigned to pay the bills every month. This doesn’t mean that the other person takes a back seat role in managing the finances. Have a discussion at least every month about your financial progress in order map your path and nip in the bud any bad spending habits.
• Plan for Emergencies. Many young couples fail to save money to get them through hard times such as health problems and unexpected unemployment. Experts recommend you set aside three to six months of salary in a rainy day fund—ideally an interest-bearing account that can be easily accessed.
• Save for the Future. Retirement may seem like a long way off to newlyweds, but setting aside money now means reaping big rewards later on. Take advantage of both employers’ retirement matching programs—if available—or set up individual retirement accounts.
• Make a Vow to Be Savvy Consumers. Many families have had their life savings decimated after becoming a victim to fraud or identity theft. Check out BBB’s website to find trustworthy businesses, get educated on the red flags of fraud and learn how to protect your identity.