Financial Tips for Newly Weds
Newly weds have a lot to work through after the big day. Perhaps the most important of these their now shared finances. Financial decision making varies from one person to the next and this is no different in a marriage. Learning to compromise and come up with a financial plan that both parties can agree to is invaluable. Money management can actually be a rewarding way to bond with your loved one. By employing some of these tactics, the path to merging your finances will hopefully be successful.
Open and Frequent Communication
The best course of action is to have open communication before marriage. If is never too late to get to know your partner’s spending habits, financial status, and future goals. Working out the details of how your finances will be shared is also crucial. Delegating tasks as well as discussing budgets is crucial. This may be a lengthy and potentially frustrating conversation, but it is one that needs to be had.
Build An Emergency Fund
Building an emergency fund for your new marriage is also recommended. This is especially important if you are going to do things that most newly weds do such as buy a new home, start a family, travel. It is recommended to save at least three months of your household expenses in the event of an emergency. Not only is this a great source of extra security but it can alleviate the stress that emergency can put on a relationship.
Create A Budget
In order to create a budget, you must first have a general idea of what your joint and individual expenses will be. It is best to have at least three months of history to review in order to determine patterns in spending. A budget is not just for expenses but should also consider savings and goals. The best part about a budget is that it is a work in progress and can be tweaked.
The most important thing to remember is that teamwork is key. There should be a level of compromise as well as constant communication. Learning each other’s strengths and weaknesses is perhaps the most important piece of this.
Save For Your Goals & Retirement
Whether you’re married or not, you need to make sure you are set financially for the long haul. This means you need to save for retirement now. Opening up a joint RRSP contribution, and a joint Tax Free Savings Account would be the ideal two ways to go. This way you’re saving for the long-haul, and you have the option to save for your investments/short term, while having the ability to take the money out without penalty from your TFSA.
Although finances are probably not the most exciting part of marriage, they are probably one of the most impactful. Money can be a major strain on any relationship so it is important to iron out the details as soon as possible. As is the case with most things in life, preparation is key.