Five Steps for Newlyweds When Handling Finances

Disagreements about money are one of the leading causes of divorce. So, if you’ve recently wed, here are five steps you can take to help give your relationship a solid financial start:

• Be upfront and honest. Ideally, you and your spouse began discussing your respective financial situations well before you said, “I do.” But if there are things you haven’t already disclosed about your finances, do so now to help minimize or avoid future strife.
• Set a budget. Establishing what you are going to save and spend each month is essential for your short and long-term financial stability and peace of mind. To help you get started, make a list of your: 
  • Fixed expenses, such as your rent or mortgage, car payments, insurance premiums, utility bills, phone, Internet, cable and any student or other loans you may have.
  • Flexible expenses, such as transportation costs, medical and dental expenses, groceries and entertainment expenses.
  • Savings, such as 401(k) contributions.

If you don’t already have these numbers, gather the data you need by recording the amount you save and all your expenses for two months.

• Determine financial roles. To help avoid arguments and missteps, decide who is going to handle paying the bills, monitoring your investments and doing the taxes. Whether or not you decide to share these responsibilities, make time to meet regularly to review your financial situation so that both of you are up to date and can make decisions together.
• Save for emergencies. Most experts recommend saving an amount equivalent to three to six months of living expenses in an easy-to-access account, such as a money market account. This money can help you cover the costs of emergencies—for example unexpected medical expenses or an appliance that breaks down—or your day-to-day cost of living expenses if one of you becomes unemployed.
• Create a financial strategy. To help make sure you have adequate financial resources throughout all the stages of your life, from starting a family, to helping pay for your children’s education, to living out your retirement, you’ll need a financial plan. If you are unsure about how to identify your goals or how to create a financial strategy to help reach them, consult a qualified financial advisor for help.