Marriage can become one of the best things that have ever happened to you so long you have guarded yourself with the knowledge of key financial mistakes to avoid as a newlywed.
When you get married, you’re bringing in the life of your partner and their finances together with yours. But then, merging the financial lives of two individuals is often one of the hardest parts of any marriage. Unfortunately, many intending couples are too driven by emotions and do not consider financial compatibility before settling together.
In the United States, studies have shown that financial issues are the leading cause of unsuccessful marriages. It is only wise that you critically look at how you can make your marriage and finances work together. So, after saying “I do” to your sweetheart, avoid these financial mistakes to make your relationship a perfect union.
1. Lack Of Long-Term Financial Plan
You may have been doing your own things with your money before getting entangled in marriage, but with your new status, the lack of a long-term financial plan can be a grave error to the life of your union.
The plans that you’ll be having should include starting a family, homeownership, and goals for retirement. These discussions should best come before getting married. Put your budget, your timeline, financial goals, and other money-related issues into consideration.
Letting these discussions happen before your marriage will help you understand who you are tying the knot with better, and also keep you focused.
2. Avoiding the Big Financial Talks
Most couples never got their partners talking at all about their finances before getting married to them. It is important to talk about your partner’s income, financial goals, and debt before getting all tied with them. This will especially save you from getting into shocking money situations in your marriage.
The good thing is that you can still get in the big talks now. Be open as much as possible over your money. Talk about your savings, debts, delinquent debts, bankruptcies, and other financial commitments. These talks will definitely put your relationship on the edge, but it is very important to address issues regarding your money before combining it.
3. Being Dishonest About Your Finances
Some married people joke about hiding shopping bags before their partner arrives home, but it can turn out to be a hard nut to crack in your relationship. Lying to your spouse about your money is a huge financial mistake to avoid as a newlywed.
Be sure to be transparent to your spouse about your current financial situation, otherwise, you may want to reconsider the relationship before saying “I do.” It is even important especially if it appears that something doesn’t feel right while having the money talks – you may want to seek professional help quickly.
4. Not Talking About Your Retirement Savings
Newlywed couples are often entrenched in talks about vacation, clothing, food, family, and others, but not in their retirement savings plan. Unfortunately, the sooner you get into this discussion, the better it is for you and your spouse.
Retirement requires adequate planning. Retirement planning doesn’t just happen as you advance in age. And the longer you continue to sidestep the plans, the more difficult it becomes to save up retirement funds. So, get started with your retirement savings today!
5. Delaying On Budgeting
It doesn’t matter if you’re raking in millions of dollars each month. If you refuse to budget, sit down together and create a budget that typically entails reviewing your monthly income and expenses, and your spending habits, you are setting yourself up for a financial downturn.
The two of you will have financial priorities that are not going to be exactly the same. It is important that both of you can compromise to bring a balance. You may want to cut down expenses, especially if you have some saving goals in mind. Essential expenses such as groceries might be difficult to take out, but you can be more efficient with budgeting by reducing your overall expenses. You may want to consider budgeting apps for couples to streamline the process.
Consider working together to make a budget that really works for the family. If you are having a difficult time with this, then a financial planning class might be of help.
6. Putting Your Honeymoon Or Wedding On A Credit Card
Putting your wedding or honeymoon bills on a credit card is a terrible financial mistake you really must avoid – you do not want to start creating huge debt on your new marriage. In essence, you have to properly plan, save, and pay cash for your wedding and honeymoon expenses.
Doing this might require that you reduce some of the things you want, but it will be a perfect decision for your new life as a couple.
You can help yourself by taking advantage of advanced shopping, coupons, and savings to create that beautiful wedding within your budget.
7. Not Setting Up An Emergency Fund
If you fail to set up an emergency fund to take care of unexpected occurrences, you might be setting yourself up for terrible shocks in your marriage. Life is full of surprises, and unfortunately, some of them might come at a huge cost.
When you have an emergency fund in place, you may not be absolutely in control of certain situations, but you’ll very likely be able to reduce the negative effect of those occurrences on your marriage. It is crucial that the two of you sit down together to put some money aside to achieve this.
8. Ignoring Red Flags
Emotions can becloud you from giving attention to the main things. And even if you love your spouse so much, you must not neglect important signs in your relationship. For instance, if you have a partner that sees nothing wrong with overspending and is also not willing to sit down and talk about a poor credit score or other financial issues, you might want to take this really seriously and put your feelings on the back seat.
However, if your partner has shown commitment in fixing past financial errors, do not hold it against them – after all, we all make mistakes. Rather, be supportive, vigilant, and proactive in getting them through the situation.
9. Not Taking Care Of Your Debt
A financial mistake to avoid as a newlywed is not to tackle your debt on time. When you get married, deal with your debts before you start having kids and adding up more financial burden on yourselves. It is very likely that you’ll have more disposable income at the start of your marriage, use this money in addressing debt issues.
It may be a party that brings a pre-existing debt into the marriage, however, both of you should work together to erase the debt. Your marriage vows should extend to your financial situation. And if you don’t provide support, your attitude towards them will not foster a feeling of love and mutual understanding. Besides, it could be your turn tomorrow!
There is no limit to how successful you can become financially once the debt is out of the way. You can start planning towards your own home, kids, and other financial goals. Bear in mind that the more you ignore your debts, the harder it becomes
10. Keeping Separate Finances
You may have your own valid reasons for keeping separate finances from your spouse. You may be having an unrepentant money-water or gambler as a spouse and therefore need to keep things separate. But generally speaking, combining your finances help to keep a focus and budgeting together towards unified goals.
If both of you have built good trust together, then everything should be kept open as regards credit cards, savings accounts, and financial habits. Review your goals together often and ensure that you are on the same path to reaching your goals. If your spouse is hesitant about keeping a combined financial status, then there may be something big you need to find out!