5 Personal Financial Tips for Newlyweds in 2022
Getting married is an unforgettable and exciting milestone in life that leads to many changes.You gain a new last name, a new emergency contact, and you must learn to responsibly manage your finances as a couple. The joint money habits you create together will affect the house you can afford, the loans and interest rates you get approved for, the age you can retire at, and even whether you can have recreational vehicles (like boats and RVs) that make life a little more fun.
To help kick-start your strategic planning for achieving financial success as a couple, here’s a look at four personal financial tips for newlyweds from Brian Moon, branch manager of the Tucker location.
Discuss your financial goalsAfter the wedding bells ring, “you” become an “us.” Outlining your financial goals as a couple can give you both a sense of shared purpose when it comes to managing your money. Think about short-term goals and long-term goals, as achieving financial goals along your marriage journey can make managing money more fun.
“It’s easy to get carried away and think about what age you want to retire at, where you might want to retire to, how much to save for your children’s college fund, etc. But some of those goals might not come to fruition for forty or fifty years,” says Moon. “Laying out short-term goals like annual vacation trips, purchasing a home, or saving to buy an RV can make you feel like you’re making progress and allows you to celebrate wins along the way.”
It's no secret money can cause conflict in marriages; by starting early and discussing goals and thoughts about the future, you can establish a shared commitment and establish a plan to make both partners happy.
Assess your current financial situationWhen two individuals come together in marriage, it’s likely they each bring their own set of assets and debts. Assets may include cars, homes, real estate property, investment accounts, personally owned businesses, or any item(s) of value. Debt may include student loans, mortgages, and credit card debt. It’s important to lay it all out there so you and your spouse can determine who will own the assets and the best way repay the debt. Even if one spouse is entering the marriage with more debt, you should make a plan to tackle the debt together.
“In addition to the assets and outstanding debt you and your partner bring to your marriage, I would encourage you to discuss spending habits and current credit standings too,” says Moon. Being honest about your spending habits and credit standing can help the two of you become confident in your decision to combine your finances or keep them separate and provide you with areas to improve, if necessary. Do you prefer to spend money or save it? What are your thoughts on investments? How do you prepare for unexpected expenses? Some couples prefer a “yours, mine, and ours” approach to finances, while others prefer to manage everything jointly. There’s no “right” answer; open and honest communication can help you determine what will work best for your marriage.
Contribute to an emergency fundUnfortunately, when unexpected emergencies happen, they can be disastrous for your finances. You never know when you or your spouse could be laid off from your job, discover a leak in your roof, or need to take time off work to care for a loved one. By prioritizing an emergency fund, you might save yourself and your spouse quite a bit of stress. A good rule of thumb is to have at least 3-6 months of living expenses saved up should you need a safety net for unexpected emergencies. By setting up an automatic transfer to a savings account each time you get paid, you can steadily increase your savings prior to having the opportunity to spend the money – and you’ll thank yourself later.
Don’t take on more debt than you can comfortably affordMarriage is an exciting time for both of you. This is the time to start building your dream life with one another. You might be making decisions on building or buying a home, relocating to another city, or starting a family. Whatever your next step is, try to live within your means and not take on more debt than you can comfortably repay.
Try the 50/30/20 budget. This budget allocates 50 percent of your income to necessities, 30 percent for wants, and 20 percent for savings and financial goals. Necessities include your housing payment, transportation (gas and car payment), insurance, groceries, utilities, and any other necessary items you need for day-to-day life. Up to 30 percent of your income can go towards your wants – things you desire but don’t necessarily need. Items in this category include dining out, entertainment, vacations, shopping, hobbies, etc. Lastly, ensure you keep at least 20 percent to contribute to your financial goals including your emergency fund, retirement accounts, and anything else you’re saving for.
Don’t let the stress of finances dull your newlywed bliss. After all, you’ve got a lifetime to figure it out together. Starting early can help set you up for success later on. As always, our SouthState bankers are here to answer your financial questions that may come up along the way.
About the Author, Brian Moon: Brian has worked in the banking industry for nearly 20 years. Throughout his career, he developed a passion for helping clients reach their financial goals and dreams. Brian is currently a Vice President Branch Manager at our location in Tucker, Georgia.