Getting married can be one of the most beautiful experiences of your life, but with that comes a lot more responsibility, especially when it comes to money. Many newlyweds are often left confused and stressed about how they should manage their finances. As a newlywed, you will have to start paying for significant expenses. Hence you must be aware of the mistakes people make when managing their finances as a married couple to ensure that you and your spouse are on the same wavelength.
NOT TALKING ABOUT FINANCES
The first mistake most couples make is failing to talk about money before they tie the knot. This does not mean you sit with your spouse and compare salaries, bank accounts or discuss monthly expenses. But it does mean that you share your financial goals and decide how you can work towards them together. This is especially important if one of you is a spender and the other a saver. By discussing your goals, you can work together to make them a reality.
NOT HAVING A BUDGET IN PLACE
Another mistake people make is to fail to create a budget. It does not take a financial whiz to work out that if you want your marriage to last, you need to have a healthy financial system in place from the beginning. The biggest problem with not having a budget is this: You won’t know where or how much money went out and came in. So you won’t know if there is money left over for those little luxuries like a dinner out with your spouse – or if you need to cut back on spending as soon as the next paycheck comes in.
NOT SETTING UP AN EMERGENCY FUND
One of your most critical financial goals should be to save up at least six months’ worth of living expenses for times when money becomes tight. A lack of an emergency fund is one of the biggest reasons marriages fail. If there is no cash in the bank, it becomes hard to avoid arguments about money that can eventually ruin a marriage. It would help if you were ready for the unexpected.
NOT ESTABLISHING TRUST
A lack of financial trust is one of the biggest relationship killers, especially when it comes to newlyweds. There are some things you cannot discuss without trust – like money. To avoid arguments about who spent how much on what, you must establish trust at the very start of your marriage. You need to know that you can rely on the other to make good financial decisions for the family and discuss and share your financial goals openly.
LACK OF TRANSPARENCY
When both spouses are transparent about their income, debts, spending habits, and goals is the best way to avoid arguments about money. No matter how much you trust your spouse, you will always need to know what the other person is doing with their money. Therefore, you must share as much as possible about your finances to ensure there are no unpleasant surprises. It will also help avoid problems down the line.
NOT HAVING A JOINT ACCOUNT
It is easy to feel that you do not need a joint account after you get married, but you must have a joint account for shared household expenses and financial responsibilities. However, make sure you also keep separate accounts for your personal spending. That way, if you are saving up for something significant like a family holiday or new car, you stay motivated and don’t feel deprived of the money that is meant to be yours.
NOT INVESTING IN INSURANCE
A lack of insurance is one of the most common mistakes newlyweds make. Insurance protects you in an unfortunate event, so you should have life insurance cover to protect your family if anything happens to you, health insurance for general health care needs, and property insurance if something is damaged or stolen. You also need auto insurance for at least one car you own. It would be best to take out all the required insurance policies for your family to be adequately protected.
NOT PLANNING RETIREMENT EARLY ON
Many couples neglect to plan for their old age and retirement. However, without a proper pension or retirement plan in place, you will find yourself struggling to make ends meet once you reach your golden years. If you start saving for near the beginning of your marriage, there should be no problem when it comes time to retire. You can save up a lot of money very quickly by putting away a little from each paycheck.
There are many mistakes couples make when it comes to their finances. To avoid problems in the future, establish a budget from the start and make sure you have an emergency fund. Also, be aware of your spouse’s income, expenses, and goals so that you can plan for shared expenses. It is also essential to have insurance policies in place to prepare and protect your family and property, even if that means paying more. Finally, you need to work together as a team if you want your marriage to be successful. Establishing healthy financial habits from the start will help you avoid many relationship issues down the line!