My wife and I got married shortly after we finished college. Needless to say, we didn’t have much to write home about regarding our income.
During those early years, we bought a lot of two-buck chuck from Trader Joe’s, chose not to have cable, and lived frugally. Being newly married brings a lot of excitement and a lot of change. It’s important to discuss and be aligned on your finances as a couple, particularly because finances are one of the most common sources of conflict in marriages.
Even with the excitement of being newly married, our finances were never an easy topic of conversation. Thankfully, we received some incredibly good advice during our second year of marriage from a wise friend about finances – below are the five things he told us that we had to do to be successful financially and in our marriage.
Hopefully you already know each other’s financial history, including current debts, assets, and income — if you don’t, set aside some time to talk through these things. It’s important to know your current financial situation as a new couple (whether or not you decide to combine bank accounts).
If you’re having a hard time starting this conversation, a great way to kick it off is to sign up for a finance class together. These classes will walk with you step-by-step through your finances and will bring you closer as a couple. There are online classes or in-person classes like Financial Peace University.
It’s also a good idea to review your credit reports to make sure everything is up to date and there are not any errors. You can get your free credit report once a year from AnnualCreditReport.com.
2. Discuss your financial goals and create a budget
Setting expectations and goals together for your finances is an essential part of a happy marriage. In every couple there is someone who is more of a natural saver and someone who is more of a natural spender. Neither is right or wrong, try to acknowledge these differences and be open to your spouse’s ideas on how they think your money should be used.
You should work together to define your priorities as a couple – be it travel, setting aside money for a house, buying a car, or saving money to start a family. Mint is a great free tool that helps you manage your money and set budgets.
3. Build a rainy day fund
This advice is brought to you straight from your grandmother who always wrote in your birthday cards to save a bit of that money for a “rainy day.” An unfortunate part of life is that the unexpected sometimes happens, but it’s much easier to handle those situations when you’re prepared. Emergencies come up at the most inopportune times – the car needs a new transmission, the roof starts leaking, or the furnace goes out.
A good rule of thumb is to set aside three to six months of living expenses in a savings account or simple money market account (be sure that this money is easily accessible in a pinch).
4. Protect the life you built with life insurance
Life insurance is a very important part of your family’s financial security. Death is not a fun topic to talk about, but it’s important to make sure that if one of you were to pass away unexpectedly your family’s future would be protected. If you don’t know where to begin with life insurance, Sureify is a good place to start.
Sureify has free tools to help you learn about your life insurance options, estimate the amount of coverage that you need, compare different policy types, and download a personalized plan that’s best for your unique situation.
5. Enjoy your money together
Don’t forget to have fun with your money! It’s not all about rules and savings so be sure to build entertainment and vacations into your budget, and be spontaneous.
Another great way to spend quality time together is to pick up a new hobby that neither of you have done before. My wife and I joined a dodgeball league with our friends last year and recently started training for a triathlon, which we’re really enjoying.
While money is rarely an easy thing to bring up, the most successful couples are on the same page about their finances. Communication in marriage is key – it’s important to know where you’ve been, where you are currently, and where you want to go together.
What are your favorite activities to do as a couple?
What financial tips do you have to share?
Author bio: Dustin is the CEO and head of product of Sureify. Sureify is a life insurance education platform for Millennials where consumers can learn about their life insurance options, estimate their coverage needs, compare policy types and download a free, personalized life insurance plan so that they’re equipped to buy with confidence. Sureify is devoted to providing consumers with unbiased, third-party education and resources on life insurance before they buy.