7 Money Tips for Newlyweds
Article by Rachel Cruze, Ramsey Solutions
Have you thought about what life looks like after you get married?
It’s easy to get so caught up in being engaged, booking your honeymoon, and planning for the big day that you forget all about life on the other side. But today, I want you to stop for a minute, take a breath, and think about this important topic: money and marriage.
One of the quickest ways to put a strain on your new marriage is to not be on the same page with your spouse about money. It doesn’t matter whether you earn $10,000 or $1 million, if you and your spouse aren’t seeing eye to eye on handling your money, you will eventually have problems.
A leading cause of divorce in America is money fights and money problems. I don’t say that as a scare tactic, but I do want to remind you that you can’t avoid this topic.
So, when you return from your honeymoon and embark on that first year of marriage, what can you do to make sure you handle money the right way?
- Communicate
Talk about your money goals with your spouse. Where do you want to be financially in a month? Next year? Five years? Talk about your strengths and weaknesses when it comes to spending and saving money. Set an amount—say, $100—and agree that all purchases above that amount need to be talked about and agreed upon.
To really win in your finances and your marriage, you must be on the same page and communicate.
- Make a budget
The budget gets a bad rap, but all the budget does is tell your money where to go each month so you aren’t left wondering where it went. You’re simply sitting down with your spouse and deciding how you will spend your income that month. Give every dollar a name. It will take a few months to get this down, so don’t expect perfection right away. But if you want to get on the same page with your spouse about money, creating a budget together is the best way to do that. My husband and I use the free app EveryDollar for our budget.
- Get rid of debt
The first step toward improving your money situation in the long run is getting out of debt. It’s hard to save and make a difference with your income when half of it is going to pay car loans, student loans and credit cards every month.
To get out of debt, I recommend the debt snowball. Simply list all of your debt from smallest to largest, regardless of interest rate. Attack the smallest debt with everything you can and make minimum payments on the rest. Once you pay off the smallest debt, roll the money you were paying on that debt to the next smallest balance. Rinse and repeat until you are debt-free!
- Combine bank accounts
Many people go into marriage thinking, “That’s your money, and this is my money.” They draw a line in the sand. But remember what your pastor said when you got married: “Now, you are ONE.” The same goes for your money.
Combine your checking accounts once you get married. This is another way to improve your communication and stay on the same page about your money.
- Recognize your differences
In most marriages, there is a free spirit and a nerd. Generally, the free spirit isn’t so crazy about details and making a plan. And the nerd loves to run the numbers and create lists of goals and priorities. No matter who is the nerd and who is the free spirit, both are unique.
You both need each other. The free spirit helps the nerd lighten up every now and then. And the nerd helps the free spirit learn to focus and make a plan. Embrace those differences!
- Don’t buy a house…yet
Telling a newly married couple not to buy a house isn’t popular advice. But it’s okay to rent during the first year to make sure both you and your spouse are exactly where you want to be and to get your finances in order.
Get settled in. Enjoy being married without a mortgage payment and all the maintenance headaches. This time next year, as long as you are out of debt and have at least a 10-20% down payment (I really want you to have 20% to avoid PMI!), then house hunt to your heart’s content.
- Don’t copy your parents’ lifestyle
Most of us want to live the same lifestyle we did with our parents. But it took them 20 years to get there, and you’re just getting started. One of the worst mistakes you can make is to overstretch yourself by getting into a mortgage you can’t afford and a couple of car loans that are weighing you down.
The BMW and the white picket fence can wait. Be patient. Make smart decisions with your money. Avoid debt and save, save, save. You’ll get there soon enough!
I can promise that how you manage your money will be one of the most important factors in determining the quality of your marriage. Don’t get so caught up in the romance that you forget the practical stuff. Take the time to sit down with your spouse and talk about money issues.
By discussing these issues now, you’ll set yourself up for an amazing first year of marriage!
About Rachel Cruze As a #1 New York Times best-selling author, host of The Rachel Cruze Show, and The Rachel Cruze Show podcast, Rachel helps people learn the proper ways to handle money and stay out of debt. She’s authored three best-selling books, including Love Your Life, Not Theirs and Smart Money Smart Kids, which she co-wrote with her father, Dave Ramsey. You can follow Cruze on Twitter and Instagram at @RachelCruze and online at rachelcruze.com, youtube.com/rachelcruze or facebook.com/rachelramseycruze.