Congratulations, newlyweds (or soon to be newlyweds)! As you and your spouse join your lives and your love, it’s important to remember that your marriage is also a financial partnership. It will take time, communication and effort for you to better understand your spouse’s attitudes toward money as well as his or her financial hopes.

To help you in your journey, we’ve developed some tips to help you get your marriage off to a sound financial start.

While we all prefer “instant” success, achieving financial goals most often requires discipline, commitment and perseverance. Know that the financial foundation you are building today during the early years of your marriage is essential to both your short-term and long-term financial success.

Again, congratulations on your marriage. We at Thrivent Financial for Lutherans wish you the best of success in your life together as husband and wife.

10 Tips for Newlyweds to Build a Strong Financial Foundation

1. Know your mate’s financial personality. Are you married to a saver or a spender? Is your mate willing to take risks with money or is safety of primary concern? By knowing (and respecting) your mate’s financial personality, you’ll be better prepared to chart a mutually satisfying course of financial action.
2. Manage the fundamentals. Determine with your spouse who is going to take the lead in performing various money management tasks and how you plan to complete those tasks. For example, who is going to pay the bills? Balance the checkbook? Make investment decisions? Will the bills be paid electronically or by cash/check? Will you utilize financial management software to track your finances? There truly is no one “right” way to do this, but it is very important that you and your spouse mutually agree how you will manage the fundamentals of your finances.
3. Track your cash. Without understanding the flow of your cash—both “in” and “out”—you cannot effectively manage your finances. By monitoring your cashflow over a two-month period, you should get a good idea if your dollars are aligned with your priorities.
4. Spend less than you earn. Living within your means will eliminate many future financial troubles. Make spending discipline a priority and your marriage is sure to benefit. Debt can be one of the greatest sources of marital conflict and stress. To maintain an even keel, use credit sparingly, and pay off high-interest debt as soon as you can.
5. Build your emergency fund. Having a cash reserve equal to three- to six-months’ living expenses can protect you from temporary financial setbacks, such as the loss of a job, an unexpected repair bill (auto, home, appliance) and other financial crises. If you need to both build your emergency fund AND pay off high-interest debt simultaneously, you may need prioritize which is the greater need in your current circumstances.
6. Set the parameters for mutual decisions. Agree—in advance—about the financial decisions and/or dollar amounts over which you need to consult. Establish the framework for financial decisions that requires your collective consideration.
7. Establish percentage guidelines. Many couples find great freedom in basing their financial decisions on specific percentages for giving, saving and spending (e.g., 10%—giving, 10%—saving, 80%—spending, etc.). By establishing mutually agreed upon guidelines early in marriage, newlyweds can maintain balance in their lives regardless of increases or decreases to their income. These percentage guidelines are particularly helpful if your spending (or saving or giving) tends to be too aggressive.
8. Protect your finances through insurance—medical, auto, property, disability and life. Young couples often overlook the importance of protecting themselves against unexpected loss. Insurance of all kinds plays a critical role in protecting yourself and your spouse against loss caused by illness, accidents, disability and death. A financial professional can assist you in determining the plans that best fit your individual circumstances and needs.
9. Invest for the future (education, housing, kids, retirement). By setting aside a portion of your income today, you’ll be better prepared to address your future needs, such as college funding, the purchase of a house, retirement and more. The earlier you start investing for your long-term goals, the more likely you will be to achieve your goals.
10. Unite through paperwork. While marriage may unite a couple’s hearts and lives, it takes old-fashioned paperwork to unite their finances. Remember to make beneficiary changes to your 401(k) accounts, individual retirement accounts (IRAs), mutual fund accounts, and life insurance policies, among others. It may be wise to create or update your wills as well. By carefully updating your financial paperwork, you can ensure that your finances are in sync with your new status as husband and wife.

     

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