Secured Your Future: Managing Finances as a Newlywed Couple
Getting married is the start of an exciting chapter of life filled with happiness and new experiences. But, along with all the excitement, there are a host of responsibilities that newlyweds need to manage together. One of the prominent responsibilities is managing finances. Managing money as a couple is different compared to being single. as financial decisions need to be made collectively If you’re not sure where to start, don’t fret, as this article by Paige Bond has got you covered with a host of useful tips to manage finances as a newlywed couple.
1. Openly Discuss Finances
Money is often considered a personal topic and not discussed at length with others. But, as a newlywed couple, it is important to have this discussion early and at length. Only after understanding each other’s finances will you be able to make collective decisions regarding the future, whether it be for buying a home, a car, or starting a family.
During the conversation, discuss the following questions:
● What are your monthly income and spending habits?
● Do you have any debt, and when does it need to be repaid?
● Are there any assets or liabilities your partner should know about?
● What are your 5 and 10-year financial plans?
2. Combining Your Finances
While each individual is ultimately responsible for paying their debt, in some cases, the burden of repayment can affect your partner as well. For instance, in the unforeseen event that you/your partner is unable to pay a debt, the lender could make a claim for jointly held assets, such as a house, car, etc., for repayment. Hence, newlyweds need to be honest regarding their repayment commitments and terms.
On the flip side, helping your partner repay their debt early can prove beneficial. Timely repayment will boost their credit score, making it easier to purchase a home or undertake future debt.
3. Choose Whether to Rent or Buy
Purchasing a home is a common aspiration among newlyweds but is not always the best option, especially when renting is a cheaper and more sustainable alternative. Here are the pros and cons for each:
Buying: If you’re certain about settling in one location, buying is the way to go. But, it will require you to save up for at least a 20% down payment, have strong credit scores, and have a sound financial plan to pay off the mortgage for the next 1-2 decades, as reported by Investopedia.
Renting: For couples interested in moving from one place to another, renting is the best choice. Additionally, you won’t allocate large sums of money towards a property, as paying monthly rent will be the only expense, as reported by Lamudi. However, finding new properties is tedious, and rent prices can fluctuate without notice, creating undue strain on your finances.
The answer between rent vs. buy will ultimately come down to personal preference and financial goals.
And make sure to review this handy checklist to see what you need for your new humble abode.
4. Increase Your Collective Earning Power
One of the best ways to achieve financial independence as a couple is to increase your earning capacity. While starting a side hustle or business is one way to do it, another option is to further your education and increase the chances of landing a higher-paying job.
The common option is to pursue an online degree in your field and apply for managerial positions. For instance, to be hired as a marketing manager, not only will you need at least a couple of years of experience in the field, but good knowledge regarding the latest software and strategies as well, which is exactly what the degree will provide you.
Another option is to use the degree as a tool to make a career change. For example, if you’ve always been interested in being an educator, start networking with your connections in the field, research what employers look for when hiring educators, and get an online bachelor of education degree.