Managing finance is the most important part for married couples. It is stressful and time-consuming. Tackling finances after marriage will require you to communicate. You don’t want money to come between you and your better half. Sharing more will help with the finances.
There are many factors that can influence your financial views. You cannot expect that your spouse will have a similar view. You guys weren’t raised in the same environment. That’s why you need to discuss openly money for a mutual solution.
Managing finance can be challenging but with these eight tips, it will be much easier to handle.
1. Keep It Separate or Together?
You cannot apply the “one-size-fits-all” theory when it comes to managing finance for married couples. Some married couples merge their finances and some don’t. You guys need to talk openly to keep things straight.
Before coming up with a solution, you should set your values and goals. Getting a prenuptial agreement before marriage is the best choice to keep everything separate. If you want more information about the prenuptial agreement and how to get one, click here.
There is no shame in getting this agreement. You can get a post-nuptial agreement if you are already married.
Check if your spouse has any debts before joining your finances together. You guys need to come down to an agreement on who handles what. Unlike nuptial agreements, you guys will decide who gets the rights to what. Trust and responsibility are the keys to keeping it together.
2. Identifying the Basic Needs
Married couples often struggle to maintain a healthy flow of finances for their basic needs. You might say you need a specific subscription to a service to survive through the boring evening. It’s not your basic need.
Medicine, food, college tuition, utility bills, taxes, and clothes are your basic needs. You should prioritize the basics first. Luxury and expensive items should sit at the bottom of the list.
The majority of the spending should never revolve around expensive commodities. If it does, you should start managing your finances immediately. Focus on the future, not luxury.
3. Form a Budget
As a married couple, never spend more money than you earn. Streamline your income and you will get the answer. Don’t let the money come between your marriage, form a budget to manage your financial struggles.
There is a popular formula for budgeting called Fifty-thirty-twenty. Fifty percent of your income goes to your basic needs.
Thirty percent of the income goes to the things you want. Shopping, eating outside, expensive clothes, etc are lux-needs. Twenty percent goes to your savings (Set up an emergency fund).
Your budget doesn’t have to be complicated. Go for a night out with your spouse, sit and talk comfortably about spending and saving. That’s the rule for a solid marriage.
4. Save-up For the Uncalled Event
Expect the unexpected, and create a solid plan for the uncalled events. A health emergency can appear out of nowhere.
Maybe you need to fix the roof. Is water leaking through the kitchen? Did the car break down? That’s why you need to keep that emergency fund ready.
Put your twenty percent income on the emergency funds. Also, consider getting insurance, as it will protect you in the future. There are a lot of insurance companies offering a hybrid investment service. The money will grow and you will stay protected at the same time.
5. Use Bank Services
Keeping a large portion of money in the house is a big mistake for married couples. Your money won’t grow nor will it have any security. The biggest obstacle to saving is the intense human urge to shop. About fifty-four percent of American couples overspend while shopping.
Manage your finances through bank accounts and, also set up a spending plan on the account. Consider putting a spending limit on it. This way the money will stay safe and will continue to grow.
Using bank services can save you from impulse purchases. It protects you from certain money-related temptations. Utilize the interest from the money instead.
6. Grow Your Money Through Investments
You should invest some of the saved-up money. This will help bring in financial stability. Talk to your spouse, as you need to discuss how much money you want to invest. If breaking the emergency fund is inevitable, talk to a financial advisor. They can map out a safe plan for the investment.
You can invest your money in many sectors. Real-estate, stock, and commodity industries can be the sweet spot for an investment. Mutual-fund is a good investment idea also.
You need to take risks, but the decision should not come from one person. Make decisions together and decide how much you guys can afford to risk.
7. Joint-savings is a Good Idea
Married couples need to open joint-savings accounts. You guys have already planned for emergency funds and family savings. But, it’s risky since it needs only one of you to withdraw the money.
If anyone has a bad spending habit, that can be bad news. Managing finance is also regarded as personal finance. Get a joint-savings account, as it needs both of your consent to withdraw money. This helps with the security of your savings and the future of your finances.
8. Take Help From the Right People
We know managing finances can be tricky and stressful. Since it is confusing, don’t rush if you and your spouse can not come up with a proper plan. Rushing can lead to a new financial problem.
Consider asking for help instead. Maybe you have a good friend who can deal well with finance. Ask others for advice, but analyze the advice deeply before making a decision
You can always go for a professional advisor if you have trust issues. You might have to pay them hourly for a solid plan. Take it as a small investment for your future.
Marriage and money are a match made in heaven. With a little trust, solid planning, and communication, it will stay as “Until death do us part”. Use this guide to help you get a deeper understanding of finances after marriage.
Don’t forget to speak with a professional financial advisor before taking any decision, as it is crucial for having a safe financial future.