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Financial Tips for Newlyweds

by Kim GreeneJuly 23, 2021
Financial Tips for Newlyweds

Financial issues are at the forefront of marital problems and cannot be ignored or veiled. On the contrary, they should be addressed directly to ensure you start off on the right footing. 

According to experts, here are the top financial tips for newlyweds.

Review Life Insurance

“One of the most important financial guidance I can provide to newlyweds is to begin having the conversation on life insurance. If you've never been married before, it'll make sense to review your new family's financial situation and discuss how much coverage you need per spouse. Or if you're remarrying, and have a life insurance policy in force, please make sure beneficiaries are changed to match your current situation. You'd be surprised at the number of death benefits life insurance companies pay out to ex-spouses annually.”

Matt Schmidt, Co-Founder Diabetes Life Solutions

Plan Household Expenses

“From my own experience, and that of many friends, the most important issue to pin down is how you'll handle household expenses, from the mortgage to the grocery bills and anything else life throws at you. You might choose a joint bank account into which all income is deposited. Alternatively, you can set up a separate account for living expenses that you and your spouse pay into. Whatever's leftover is part of lifestyle spending. It's one of those topics that doesn't always come up pre-marriage, yet people tend to have very strong feelings about how household income should be managed. Whatever approach you both choose it's a decision that's best made decisively and early on.”

John Bedford is the founder of Viva Flavor

Don’t Forget About Protection Planning

Now you aren’t just planning for yourself, but for your newlywed family. You should take another look at things like disability insurance or even life insurance. While we obviously hope nothing bad happens to either of you, we want to ensure that your financial futures are not wrecked if something bad happens to you.”

Chris Nutbeen, Founder & CEO of Nuttifox

Set Up Household Financial Systems That Will Run Themselves

“These include a household banking system that pays bills automatically, transfers set amounts to savings accounts on a set schedule, and contributes to an emergency savings fund without requiring additional decisions and discussions.” (Todd Christensen)

Combine Insurance

“Look into combining your vehicle and renter's insurance policies to qualify for multiple-account discounts.” (Todd Christensen)

Discretionary Fun Money

“Be sure to give each other your own discretionary fun money account with a set amount of spending money you can do whatever you want with during the month without having to account for it.” (Todd Christensen)

Review Your Goals

“Set aside 15 minutes a week on the same day at the same time to review your goals, your checking balance, and your upcoming bills/payments.” (Todd Christensen)

Work on Your Credit Score

“Pull your free credit reports at AnnualCreditReport.com (no effect on your credit rating), and get on the same page for why you want to build and/or protect it in the future. Do you have a goal to purchase a home in the next few years? Don't blame or ridicule when the other's credit is not as good as yours. It's not a competition. It's a team challenge to work together.”

Todd Christensen, Author of ‘Everyday Money for Everyday People’ and AFCPE-Accredited Financial Counselor (r)

Talk Openly and Set Ground Rules

“If you're like most couples, one in three arguments are going to be about money. So, you can save yourself a whole lot of grief by speaking openly about your finances and setting clear ground rules from day one. It doesn't really matter what the rules are as long as you both agree to them and they are clear.

“For example, I recommend setting a maximum amount, such as $100, you can spend on any single purchase without letting your spouse know. If $100 is chump change for you, use 0.1% of your net worth instead. If your net worth is $500K net worth, set it at $500. If you're worth $10 million, it would be $10,000. This doesn't mean your spouse has veto power on all purchases. It just means you need to keep each other in the loop when making purchases that could wreck the family budget. Having to let another person know before you splurge is a great way to rein in impulse purchases. 

“Most newlyweds should also consider getting life insurance. Making plans about death when you just got married may not sound very romantic, but it is one of the best gifts you can give each other. A suitable life insurance policy would give both of you the peace of mind of knowing you will have enough to cover the mortgage, final expenses and take care of the children if you were no longer around. Of course, the right death benefit amount for you will depend on your debts and expenses, but getting 10 to 15 times your current income is a good rule of thumb.”

Andrew Latham, Managing Editor supermoney.com

Set Goals- Individually and Together

“These will translate to financial priorities. For example, one person may want to focus on training for a major athletic event each year, with work and time off planned around that. If the other spouse believes the focus should be on working hard and increasing savings to buy a house and start a family, issues may ensue. Write all goals down- from taking a vacation or buying a TV to retirement- and build a budget together around those goals.”

Discuss The Specifics Of Each Other’s Finances

What You Really Need To Know:

  • How much each person earns
  • How much debt each carries, what type and at what interest rates
  • Total Assets
  • Credit Scores
  • Any child or spousal support payments from previous relationships
  • Possibilities of returning to school, obtaining other employment, etc.
  • Backgrounds and attitudes on money: Are you a saver? Is he a spender? What are your priorities? How did his/her parents and grandparents handle money? You’ll learn a lot from this discussion.” (Sean Fox)

Determine How To Handle Day-to-day Finances 

“Some spouses maintain a joint account as well as accounts for each person. They pay household bills from the joint account but keep some individual funds, too. No one system is right or wrong. Just make sure to decide together, and know exactly what each person will do.” (Sean Fox)

Share Sensitive Financial Information

“Once married, couples have a responsibility to safeguard their own and their spouse’s private information and should set up systems to ensure they can access each other’s information (and passwords) without making it public.” (Sean Fox)

Check Credit Reports

“Each person has their own credit reports and scores, so each one must review his/her reports for accuracy.”

Sean Fox, Debt and Consumer Finance Expert, President of Freedom Debt Relief

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