You may have heard that financial compatibility is one of the most important aspects of a marriage. But how do you know if your partner’s values and financial education are aligned with yours? Here, we’ll discuss some common money mistakes newlyweds make when it comes to money and their respective viewpoints on spending or saving.
1. Not having joint and separate bank accounts
It’s important to have both joint and separate bank accounts as a newlywed couple. This way, you can maintain your own individual identities while also working together as a team financially. Also, should one of you have misfortune with money (e.g., losing your job), the other account can help you get by until things improve.
2. Not creating a budget
One of the biggest mistakes couples make is not creating a budget. Without a budget in place, it’s easy to overspend and rack up debt. A budget will help you track your spending and make sure you’re both on the same page financially. Remember, a budget is not a prison it’s a tool to help you achieve your financial goals.
3. Failing to discuss financial goals
Don’t assume that just because you’re married, you automatically have the same financial goals. Make sure to discuss your individual goals and work together to create a plan that will help you achieve them. Two heads are better than one, after all!
4. Not having an emergency fund
One of the best ways to avoid financial stress is by having an emergency fund. This will help you cover unexpected costs in the event of a job loss, medical emergency, or other unexpected expense. The advisable amount to have in your emergency fund is three to six months’ worth of expenses.
5. Not paying off debt in time
Debt can quickly become a burden, especially if you’re not making any progress in paying it off. To avoid this, work together to create a plan to pay off your debt as quickly as possible. Pay off high-interest-rate debt first, and make sure you’re both on the same page about what debts to pay off.
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6. Overspending
One of the biggest threats to your financial stability is overspending. When you overspend, it can quickly lead to debt and other financial troubles. To avoid this, make sure you stick to your budget and only spend what you can afford. Allocate a portion in your original budget for entertainment, but be sure to stick to it!
7. Not saving for retirement
It’s never too early to start saving for retirement. If you don’t start saving now, you’ll likely have to save a larger percentage of your income later on, which can be difficult. Start saving for retirement as soon as you can.
8. Not taking advantage of tax breaks
There are a number of tax breaks available to married couples. Make sure to take advantage of these tax breaks and reduce your taxable income as much as possible. Income tax is a certainty, but you can at least reduce how much you have to pay.
9. Not insuring your belongings
If something happens to your belongings, you’ll likely want to be reimbursed for the value of those items. Insurance can help protect you in case of theft, fire, or other disasters. Think of it as a safety net for your belongings.
10. Not planning for the future
One of the biggest mistakes newlyweds make is not planning for the future. This can include things like saving for a down payment on a home or investing for retirement. Planning for the future is essential to ensuring a stable financial future. Remember that a goal is like a magnet; it will attract you to it!
There You Have It
By avoiding these ten money mistakes, you’ll be on your way to a healthy financial future as a newlywed couple. Make sure to work together to create a budget and financial plan that fits your needs and goals, this way you can avoid the money mistakes newlyweds make. Good luck!
