My husband and I were married 10 years ago, and I vividly remember that first year of our togetherness. We had moved to a new city, had found new jobs, and we were excited! For the first time we felt the liberation of “well-settled” adults in a comfortable life.
Our way of discovering our new life and the new city involved incessant shopping and eating out! Our combined incomes, more than ample for two people, would soon run out at the end of the month. Strangely enough, we cared nothing about it, because we were in love and we were happy!
We look back today and wish that someone had told us that saving was more important than spending. If only we knew how expensive child care, medical expenses, baby food, education, insurance, and life in general could become!
So, here are a few pointers to start you thinking along the path of responsible money-management as a couple:
First Things First:
When you are in the first few months of your marriage, everything is new, exciting and (dare I say), rosy. Your natural instinct is to not rock the boat too much. Nevertheless, it is important to start talking about finances and money management from a very early time in your marriage. Talk about what accounts you have and how much debt each of you might be carrying. Full disclose is always best in matters of money. Share your preferred money-management and savings methods, and how you would like to include your spouse in them. Ensure that both of you have a good understanding of how money should be managed in your family, moving forward.
The Honeymoon is Over:
Some couples tend to remain in the “honeymoon” mood long after the bags have been unpacked, and the souvenirs have been distributed. Yes, the love should remain but the buying habits are best disposed with! While shopping is part of the daily agenda when you’re on a honeymoon, once you’re home, saving should become the order of the day.
Set and Evaluate Financial Goals:
Once you know what your current status is, discuss the long-term financial goals that each of you may have. Talk about where you would like to be financially ten or twenty years down the line, whether you wish to change your career path or set up a business, and what you plan to do once you retire. Especially talk about how you plan to clear all the debts, if any. Write these plans and goals down and review them regularly to ensure both of you are sticking to the plan.
Once you have discussed your long-term goals, it would be advisable to talk about how you plan to clear your debts, if any. If you have no debts starting out, then you are part of the lucky few! If you are like the rest of the population, you know that debts accumulate the more you ignore them, till one day you are suddenly left with an amount so large that paying it off will upturn your life for the worse. For this reason, it is better to pay off debts as soon as possible. Try not to make any large investments or acquire anything major for the family or house, unless all your debts are cleared.
Sharing the Money:
This would be good time to talk about setting up a joint bank account, and even whether you need one. Maintaining individual accounts is good, if you want to set aside a part of your income for achieving your separate goals. However, a joint account is good to put aside money for family expenses. Also, if per chance one of you should stop working for a period of time, a joint account feels like a middle-ground that the non-employed spouse may feel free to use.
At some point in our marriage, my husband and I realized that our method for saving money was flawed in some way. When we tried to spend wisely throughout the month, and save whatever was left at the end of the month, we found that, more often than not, we were left with… nothing! We figured we needed to deprive ourselves of a certain amount at the beginning of the month, as soon as the pay checks were in, and make do with what was left!
We set up a savings account wherein a part of our salary would automatically be moved to, as soon as it was credited in our work account. We also put aside the money for our fixed expenses like rent, groceries, education, transportation, cooking gas, electricity, church etc. This way, at the end of the month, we were left with only a small amount that we could spend on unexpected expenditures.
If you are a newly married couple, you are reading this at the right moment in your life and don’t stop here, please continue on the part 2 of this article.