7 Financial Mistakes To Avoid As You Start Your New Life Together
Congratulations for reading this article. It shows that you have the maturity to tackle the financial rigors that come with being married. Whether you like it or not, financial challenges will come your way sooner or later. It’s good to know the financial mistakes you need to avoid so that your marriage will both be happy and profitable.
This is he list of 7 money-matter mistakes newlyweds usually make:
Not Talking About Finances
A lot of newlyweds don’t want to ruin the honeymoon mood by talking about a heated subject like finances. But this topic should have been covered even before they said “I do” to each other. It’s important to know how much each is worth (i.e. income and investments) and how much money they owe (i.e. credit card debt and student loans).
Married couples, especially newlyweds, should not be afraid to broach the topic of money and finances. The more open they are about it, the better they can plan for their future. A successful marriage does not only depend on the couple’s love for each other, but it also hinges on their ability to provide a good life for their family.
Not Being Honest About Finances
Some people are deeply ashamed to admit they are under huge debt. On the flip side, there are also those who under-declare their true net worth. These forms of dishonesty are akin to cheating and do not bode well for any marriage. A successful marriage also depends on each spouse being honest about money matters. It’s important that the couple knows how much money they have in the bank, how much debt they have, and what their assets are. This information is vital to the financial decisions they will be making for the rest of their lives.
Not Sticking to the Agreed Budget
Not to overspend is perhaps the biggest challenge of any newlywed couple. With their incomes combined, they suddenly have a bigger purchasing power. They are then misled to believe that they can continue to buy more needless things. Pretty soon, their spending will spiral out of control and they will have no choice but to take on more debt.
Couples who are money-savvy make sure they don’t live beyond their means. They need to come up with a realistic and achievable budget so that they can take care of their needs and wants while making sure they have something left behind as savings.
Not Taking Care of Debt
This relates to Mistake #3. Couples who overspend take on more and more debt. They will soon find themselves in a sea of credit, which will cause them a lot of stress. It’s not easy to get out of debt, especially with the very high interest rates. To make things worse, there’s a good chance that each spouse will have previous debts before getting married (like student loans and credit card debts). Couples who are under debt should make sure they come up with a sound plan on how to pay these off at the soonest possible time. They can start with the debt that charges the highest interest rate.
Not Planning for Emergencies or Retirement Early Enough
Newlyweds don’t look far beyond the present, but they should. As early as their first day of being husband and wife, they should already come up with a savings plan for their retirement. It might be decades away, but the sooner they start, the sooner they can reap the rewards. The couple should also set aside an amount to serve as their emergency fund. There’s no telling what will happen in the future. It’s good to always be prepared for anything.
Not Doing Taxes Properly
Newlyweds who are ignorant about taxes end up paying penalty fees and other charges just because they did their taxes wrong. They can enlist the help of a Certified Public Accountant to help them file their taxes. The investment in getting a CPA far outweighs the possible charges they will incur for filing their tax returns wrongly.
Not Investing Wisely
A lot of new couples take on heavy investments without first weighing their true costs. These investments can come in the form of a mortgage, a car, or they can have their savings tied up in an equity investment. The field of investments can be treacherous for those new to it. Newlyweds will do well by asking the help of a financial advisor. These professionals can offer them advice on where they can safely invest their money.
Don’t make these mistakes. Make sure you’re honest and open to your spouse. More importantly, don’t overspend, but make sure to pay off your debt. Loving each other is easier when both of you are financially free.
Maria Aubrey is a work at home mom and a blogger for BestBride101. She lives with her daughter and her dog named Trixie.
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Category: Family Finances
