We’re coming into wedding season and if you’re tying the knot this summer here are 8 money rules to get you started off on the right foot as you begin your new life together.
Pool the money – You’re married now. The money is “ours” not “mine”. You’re on the same team and teammates work together. The money belongs to both of you. If you go into it with this mindset you should do well.
Use a joint account – Do not have separate accounts. Have your paychecks deposited to your joint account and pay your bills and do your spending from this account. The money you earn is for the household, not just for you.
Create a budget – Spend your money on paper first so you know where it is going. If you make a budget that you both agree on this can minimize arguments over money.
Communicate a lot – Talk about your budget. Talk about the money and where it’s being spent and what your plans are with your money. Discuss your short term goals like next year’s vacation and your long term goals like retirement. The more you keep the lines of communication open, the less likely you are to fight about money.
Compare benefits at work – You both came into the marriage with benefits your employer provides like life insurance, health insurance, 401(k) and more. Make the most of those benefits as a couple. Compare what each of you has and see how it’s best to use the benefits. For example, one spouse’s employer may have much better health insurance than the other’s or maybe one 401(k) has much better investment options or a better match than the other.
Plan for the unexpected – Have an emergency fund so that if you have an expensive car repair or the furnace needs replaced or one person loses their job you have money to cover it.
Pay yourself first – Get into this habit early on. Save money in your retirement plan at work for retirement and in your savings account for your emergency fund and other short term goals before you pay your bills and spend your money. If you try to save what’s left after paying bills you won’t save enough.
Realize the difference between wants and needs – You don’t “need” brand new furniture to set up your newly formed household. You want it. But you do need to save for an emergency fund and pay off any credit card or student loan debts you have.
Do these things from the beginning of your marriage and you’ll establish good money habits and a strong financial foundation for your family.