June is a traditional month of weddings. I recently attended a friend’s daughter’s wedding. So so I started to think about what newlyweds would want to know about money and finances. In fact, someone asked me if I had given the couple any advice. Of course I had not because the father of the bride is a financial advisor!
If I had given some fatherly financial advice, it would be this:
1. Live within your means. Don’t go out and purchase stuff you need right away. My advice is leave your spending as it is. If you have saved money from combining rent or food, use that money to pay down existing debt like those credit cards or student loans. Oh, and save more money now if you can. When you start a family it will be even more of challenge.
2. Live on one salary. If you can save the other salary. This sounds aggressive at first, but keep in mind you may not always have the same salary levels you do now. If one spouse is staying home with the new family, there will be an income drop. If you can live on one salary it’s a great jump-start to retirement, college or home down payment savings. If you are living on one salary, perhaps one of you would like to go back to school or start a business. It gives you more options.
3. Max out on retirement savings. I know retirement seems so far off and as newlyweds you need just about everything, but nobody will help you in this area. While you are young you have the advantage a lot of savers don’t…time. Use it to your advantage. It will take less savings and will compound longer. Your goal should be to save at least 10% of your pre-tax income.
4 Buy insurance. If you are sick you’ll need medical insurance to protect you from a catastrophe. If you get hurt you may need disability income insurance when you can’t work, so that you can continue paying your bills. I have seen many investors that have saved money only to watch it wither away due to a disability or medical bills. If you depend on the other spouse’s income, consider some good term life insurance too. You’ll need the life insurance when you start a family too.
5. Talk to each other. This is the best money marital advice I think I can give. Money can destroy a marriage. So talk about money openly, and don’t hide money or debt from your new spouse. Agree on amounts that you will discuss before spending it. Plus, agree that you both will have personal money that you don’t have to explain every expenditure.
So that’s my advice for newlyweds. You have your whole life ahead of you, enjoy it. Live within your means, limit debt, protect yourselves and communicate. Good luck! If you liked this article and want more, you can click here to subscribe free. You’ll get an email every week with my articles!