5 Questions Newlyweds Should Answer About Their Finances

How Do We Stay Within Budget?
Having one joint household budget makes it easier to monitor spending and stay on track. First, create a monthly and annual budget, taking into consideration your income, monthly fixed expenses such as rent or mortgage, utilities, insurance, groceries, credit cards, and your savings goals. Then determine how much you can afford for discretionary expenses such as extra clothing, travel, and those concert tickets. If one person is “in charge” of the budget or finances, it is important for the other person to communicate about his or her unplanned purchases. But, even the best laid plans can go astray – be sure to have overdraft protection in place to cover any purchases that fall through the cracks. Apps like BillGuard, Level Money, and Mint Personal Finance allow you to track, budget, and manage your money in one place so you can see where you’re spending and where you can save.

Will you maintain individual accounts, joint accounts, or both?
Whatever you decide, you will need to decide and arrange the logistics and paperwork. Will one partner assume larger financial responsibilities if the other becomes ill or incapacitated? When amending your documents and account registrations to reflect a potential name change and updating your beneficiary forms, the question then becomes, how will you hold your assets? One strategy is to keep your individual bank accounts for personal spending, but automatically funnel the majority of your respective paychecks into a joint bank account for household bills. For instance, you may opt for directing 90 percent of your combined salary into a joint account to cover all your bills and savings plans for your future, and keep 10 percent for individual spending. This strategy allows both individuals to maintain personal autonomy, while being responsible.

What are your financial goals?
Goals often include the purchase of a first home, saving for your children’s college education, paying down debt, building an emergency fund, starting a business, saving for vacation, and retirement. While it’s common for spouses to differ on their individual financial goals, it’s important to have a candid conversation about each of your objectives and share your “why.” Be sure you’re rowing in the same direction and have a plan to get there. Communicating your reasons for your financial priorities is the first step in transforming your individual objectives into your financial goals as a couple. You may want to start by independently ranking, in order of priority, the three financial goals that are most important to you. Consider creating your combined investment policy statement and prepare a written financial plan.