Going from Single to Married: How to Budget as a Newlywed
Thursday, May 9, 2019, 6:00 AM | Leave Comment
Creating a budget is one of the first things you should consider doing after settling into your marriage.
It will help you get on the same page with your spouse financially and set goals for the future.
Knowing how much you’ll be spending on food, utilities, mortgage payments, and investments will also help you get financially disciplined and avoid financial mistakes.
Here are some tips for making small and big decisions together as a couple.
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Debt and Insurance
Begin talking about money by informing each other about how much you owe—student debt, credit card debt, the whole thing. While money may not be the first thing on your mind at this stage of your marriage, it can be a major cause of friction afterwards. Discuss in detail how much debt you want to take on as a couple. Are you ready to pay for a home mortgage? Even if you are ready, will it be a better decision in the long term?
Another thing to consider is how your partner (and children) will cope in your absence or inability to work. A good life insurance plan and disability plan can be useful, especially if there’s a big difference in your and your spouse’s income.
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Financial Accounts
From the beginning, work on what decisions should be joint decisions. If both of you are dedicating a portion of your income to the budget, then having a joint account makes sense. The account will also help you apply for loans and mortgages together. However, it will mean that you’re responsible for all the money that’s owed. So, consider your and your spouse’s financial habits before deciding how you will take on debt.
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Current and Future Spending
Budgeting will require you to discuss the small and big items in detail and compromise on some expenses as well. Creating a budget might seem like a big task right now, but it will definitely be the easier action to tackle—following the budget will be the harder bit. House Method recommends taking each bill and thinking of ways how you can optimize it for money savings.
Communicate constantly with your partner and create a collective plan of action. Also, remember just as important as creating the budget will be to track your expenses. Understand how your budget is changing from month-to-month and anticipate future needs today. If you plan on having a child, consider how much you will need to support the expansion of your family. Here are some apps that help you keep track of expenses.
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Emergency Account
Talk with your spouse about how much you should keep aside for emergencies. Research suggests that 20% of US families have enough emergency funds for three months, while 17% have enough for six months. If things aren’t clear after discussing with each other, consider hiring a financial expert to help you get started on the right foot.
