Who cares about money when you have true love, right?
Wrong! Money woes can put serious strain on any relationship, especially those that are just getting started. Don’t start your marriage off on the wrong foot by steering clear of these blunders that naive newlyweds often make.
1. Spending too much money on the wedding: Rookie money mistake #1 is a big one, especially when the average wedding costs $19,000 these days. Newlyweds-to-be take on too much debt to finance a wedding extravaganza when punch and cake may be more appropriate for their financial situation. I know – no one wants a merely “average” wedding these days, so when it takes $19,000 to be just like everyone else, it’s just to easy to spend too much in an attempt to keep up with the Joneses (or Clintons!). Take the emotion out of it and focus on what really matters: getting ready for your new life together while celebrating in a way that you can afford.
2. Keeping it separated: Some newlyweds prefer to keep separate bank accounts to maintain a level of independence, and depending on your relationship, that may work fine for you. But, in order to successfully begin your new life together, you’ve got to look at your complete finance picture, including credit card debt, student loans, and investments. Even though you’ve created this debt separately, you’ve got to figure out how to tackle it together. Looking at the big picture can save you lots of money too; for example, consolidating car insurance policies can gain some quick savings.
3. Forgetting about tomorrow: Sure, it may be fun to plan an exotic trip to Mexico for your first wedding anniversary, but can you afford it? Think about what your future goals are and make detailed plans for how you would like to get there. Are you hoping to have kids? If so, will you both work, and if not, how do you plan to change your life when you transition into a single-income family? Do you want to buy a house soon? How much debt are you willing to take on? When are you hoping to retire and how much are you willing to save to make that happen? Thinking about these future goals can not only help you to paint a better financial picture, but will also help you to grow your overall relationship.
You don’t have to create a miserly budget or save tons of cash for retirement to be a financially-successful newlywed. Setting clear plans, putting your financial lives together, and keeping a real budget on the wedding are three easy steps to creating a great life together for the short and long term.