Whatever your future plans might be – be it kids, a new house, higher education, or setting up a business – you could achieve them at an age when you can still enjoy the benefits, without sacrificing your happiness or freedom, if only you would take the time to manage and make plans for your finances as a couple.
Too many marriages are broken up because one or both spouses are irresponsible about money, and become a burden that finally takes a toll on the relationship.
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Love may have been enough to get married, but it takes more than that to stay married! Here are a few pointers to start you thinking along the path of responsible money-management as a couple:
Budgeting is Everything:
That brings us to the most important part of your money management plans – budgeting. Start with putting allocating money for your fixed expenses each month, whatever they may be. There are some that are pretty standard for everyone, like rent, paying off loans, etc. And there may be some that are unique for your family, like sending money to your aged parents, fixed medical expenses, church etc. After you have set money aside for these items, put down a limit for how much you will spend on groceries, gas, and other amenities. This way you can ensure that you never spend more than you make. At the end of this you will actually be surprised to find that you may have a small amount of money left over!
Planning for Retirement:
Often people reach their late 30s or their early 40s by the time they realize that the major part of their employable life-span is behind them. At 40 they realize that they have only a couple of decades to put their kids through school, buy the house they want, do all the other things they wanted to do, and also save for their retirement! And suddenly it will all start looking bleak! To be honest, it is never too early to start planning for your retirement! Decide at what age you would like to go into retirement from mainstream employment and into a more comfortable life, and work backwards from there. You will be surprised to see that now is the best time to start. The earlier you start, the lesser the sacrifices you will end up making for your retirement funds.
Apart from your retirement savings, it is always wise to put aside a small amount as ‘emergency funds’ or ‘rain money’. It does not have to be a huge amount. However, when you put aside a small amount every month, when you have an emergency of any kind (like an accident, or a sick child or parent) the money would be there ready to be used, as opposed to having to borrow, or cut down expenses for that particular month, in order to spend on the emergency situation.
Taxes and Investments:
Some people prefer to hold their savings in the form of investments, insurances plans, education plan and other money-return plans that would assist their children’s education, construction of a house etc. As these funds mature only after a certain period of time, it would be harder for one to withdraw the money for any purpose other than the original intention. If this is a suitable way for you to save money, then definitely should try to incorporate that into your money management plans.
These kinds of savings have the added advantage of mostly being tax-deductible. All these savings profiles are considered as pre-tax expense from your income and at the end of the month you will have fewer taxes to pay, and more of your money will be used directly for your future. That being said, always ensure you pay your taxes as and when required, as leaving it till the last minute or letting backlog accumulate will only prove detrimental to your financial position in the long run.
After you have set up your customized money-management plans and budgets, go back every month, or initially every week, and determine the efficiency of the system and whether you have managed to abide by the rules you have laid down for yourselves. Doing this will help you check unhelpful habits, and steer your expenditures back to the set path.
Pass and Play:
Remember always that you and your spouse are in this together. Share equal responsibilities in the budgeting and saving up of money, as per the income of each person. Make sure that no one person feels overly burdened by the system so that the family as a whole can enjoy the benefits of your joint income.
Do It With Love:
No matter how you decide to save or manage your money as a family, always do it with love and with regard for the welfare of your spouse and your family as one unit. Money management can be hard, and there can be a lot of difference in opinions, and feelings of being unfairly burdened. But “for richer, for poorer, in sickness and in health” was the promise you both made to each other, and that should remind you that your relationship comes first, ahead of money.
Research and Learning:
The methods mentioned in this post are simply suggestions to set you thinking about money management. It is not the be-all and end-all list. Try to research in-depth on how to better manage and save your money. There is no ‘one-size-fits-all’ solution for managing your money. Talk to a financial adviser or a friend who has been doing this a lot longer than you have, and go into this with enough information to set you off on the right foot. Having the know-how will reduce the ‘daunting’ quality of money saving and management.
Give it Everything You Got!:
Once you have decided on a money-management plan, stick to the plan no matter how hard it gets. Make up your mind to do it for your future and for the future of your family. It may seem hard for the first few months, but you will get more efficient at it as time goes on. You will find that as your income increases, you are able to save more or channel more money into new needs that rise up with time, like kids, education etc.
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Hope this article has been an eye-opener for newly-weds, as far as money management is concerned. If you have more helpful tips and ideas, please write to us in the comment section.