A newlywed’s guide to budgeting finances in marriage

A newlywed’s guide to budgeting finances in marriage

4 minute read

As you and your spouse bring your lives together, your finances will play a key role in how you plan your shared future. Starting to discuss finances early in a marriage helps form good habits of communication and facilitates shared budgeting for the future. While you may have a grasp on how to manage your finances alone, knowing how to manage finances in a marriage can help eliminate conflicts and set both of you up for a more stress-free life together.
To help you start off on the right foot, here are some money and marriage tips for newlyweds that can help you successfully manage your money and prepare for the future.

1. Honesty is the best policy

The first step to managing finances in a marriage is to be honest with each other about your financial situations. This means being transparent about your income, debt, spending habits, and financial goals. Make it part of your routine to sit down together and discuss your shared finances. Talk about the state of your joint assets and any unforeseen expenses (or windfalls) that have come up recently. Make a point of doing this regularly, so both of you are fully informed and can avoid any surprises down the road.

2. Set marriage milestones

Once you understand each other's finances, set financial goals (and limits) together. This could include short-term goals like saving for a new living room set or long-term goals like buying a house or planning for retirement. Setting financial goals together will help you work toward a common objective and keep you both motivated to achieve those goals.

3. Create a budget for newlyweds

It’s important to know where your money’s coming from and where it’s going every month, especially if you’re new to working with a combined income. Creating a budget can help and is a critical part of managing finances in a marriage. It not only helps you avoid going into debt, but if you are in debt, it can be a great help in getting out of it.
Make a list of your combined monthly income and expenses, including bills, groceries, entertainment, student loans, and any other debt payments. A budget will help you track your income and expenses, identify areas where you can cut back, and plan for future expenses. Just don’t forget to designate a portion of your combined income toward savings and emergency funds. In case one (or both of you) is ever laid off or is faced with unforeseen medical expenses, experts suggest having at least three to six months’ worth of living expenses set aside.1
Once you set your budget, it’s important to stick to it. However, it isn’t set in stone. Review your budget regularly and adjust it as needed.

4. Establish individual checking accounts

While joint bank accounts are common in marriages, it's also important to maintain separate bank accounts. This is called the “yours, mine, ours” approach, in which you each have some autonomy over an agreed-upon portion. Buying your spouse a birthday gift with money from your joint account would give away the surprise. Keeping an account for yourself allows you a bit of financial freedom and helps organize your spending.

5. Set a ‘let’s talk’ spending threshold

You don’t need to have a conversation before one of you spends $20 on lunch. But $500? Or $1,000? It would probably be best to discuss that first. Figure out what the “let’s talk” amount is for you as a couple, and agree that neither of you will ever be left out if the other makes a big purchase.
Learn to save money as a married couple by setting goals with your spouse to meet financial milestones, like repaying student loans and saving for retirement.

6. Be aware of your spouse’s debt

When you apply for a loan as a married couple, banks assess both of your credit scores. If one person is carrying significant debt, your application could be denied. Be aware of both your credit scores, and think through how you can look your best on an application.
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