Managing Money as a Newlywed

While you may be an expert at handling your own money, incorporating your spouse’s finances into your life can be an entirely different situation. Managing money as a newlywed couple can sometimes be overwhelming and can cause friction.

Do you manage your finances together or does your spouse take on all the responsibility? How do you deal with your spouse spending on things you don’t agree with? Are you uncertain about your spouse’s investment plans? These are all situations you may come across as a newlywed couple. Mastering this will take time, but working together and setting a strong foundation at the onset can be a bonding experience that will nourish your relationship for years to come.

Here are some tips to get you started:

Get Talking

Starting a conversation with your spouse is always a great place to begin. Before you progress on your financial journey, it is important to sit down and understand your financial situation as a couple. No matter what the numbers may be – good or bad – it is important to know how much each person brings to the table and the level of debt that they carry. Once there is clarity around this, you can then discuss your spending habits and perspectives towards how money should be managed.

Set goals and execute with a sound plan

Your goals as a couple can vary significantly based on your circumstance – but having something to work towards is of utmost importance. These goals can range from saving up for the initial deposit of your first home, to building a university fund for your future kids or even just erasing the debt that you both carry.

Once you have clearly defined goals, create a plan to achieve them. You may find that sticking to a budget is difficult at first; but you will soon learn to appreciate its rewards when you have enough money for the initial deposit for your first home!

Create an emergency fund

It is always good to save for a rainy day – and COVID-19 is a great example of how an emergency fund can come in handy. Ideally, you want to have at least 3-6 months of your household expenses stored in a place that is easily accessible in case you are faced with layoffs, struck by a natural disaster or have sudden medical bills that need to be paid out of pocket.  An emergency fund will provide you with a sense of security as you know that you are prepared for tough times, should they arise.

Balance your level of risk

It is very possible that you are not on the same page as your spouse when it comes to investing. You may want to invest primarily in equities to benefit from the higher returns, while your spouse would rather play it safe in easily accessible cash. Despite this, it is important to find middle ground and settle on a level of risk and return with which you are both comfortable. Remember, opposites attract! – and by putting your minds together, you might create a stronger portfolio than if you invested based on your individual preferences.

Fully commit to your financial responsibility

Operating as a cohesive unit is the most important thing to keep in mind as you begin your financial journey together. Stick to the rules that you have created with your spouse and don’t jeopardise the goals that you have created. Find the time to sit down and monitor whether you are on track to achieve what you want to – and you will soon find that working together on your aspirations is a very rewarding experience.

While these are just a few general tips to get you started, your situation will vary based on your circumstance – especially as you combine your financial situation with that of your spouse. If you feel overwhelmed by this, consider speaking to a professional who will work with you to map out your financial journey – helping you to get cracking on achieving those goals!