Getting married is an exciting milestone. As you start this new journey with your spouse, it's important to remember that financial planning is a crucial aspect of marital harmony. By establishing healthy financial habits early on, you can pave the way for a lifetime of financial stability and shared goals.
7 financial planning tips for newlyweds
1. Establish open and honest communication
It’s important to discuss your individual financial situations, including income, debts, and financial goals prior to getting married. Be transparent about any outstanding student loans, credit card debt, or other financial commitments. This sets the stage for creating a joint financial strategy that works for both of you. Once you’re married, it’s vital to continue practicing good communication about finances.
2. Set clear financial goals
Before diving into budgeting and saving, take some time to define your short-term and long-term financial goals as a couple. These may include saving for a down payment on a home, building an emergency fund, paying off debt, or planning for a dream vacation. Having clear goals gives your financial plan direction and motivation.
3. Create a joint budget
A budget is a powerful tool that helps you manage your finances and track your spending. Sit down together to create a joint budget that reflects your combined income, expenses, and savings goals. Be realistic and flexible in your budgeting approach, allowing for adjustments as needed.
- Use Money Management, available in Online Banking or the General Electric Credit Union (GECU) mobile app,1 to build a budget in minutes!
Keep in mind that financial planning is not a one-time task – it's an ongoing process. Schedule regular meetings to review your budget, track progress toward your goals, and make necessary adjustments. Life circumstances change, so your financial plan should adapt accordingly.
4. Merge or keep separate finances
Decide whether you want to merge your finances completely, keep them separate, or find a middle ground. Many couples choose to maintain a joint account for shared expenses while also maintaining separate accounts for personal spending. The key is to find a system that works best for both of you and supports your financial goals.
5. Pad your emergency fund
Aim to save at least three to six months' worth of living expenses in an easily accessible account. This safety net will provide peace of mind in case unexpected expenses arise.
- Saving with a Thrive Money Market account allows you to earn more in interest than you would from a traditional savings account. Open one online and accelerate the growth of your emergency fund today!
6. Tackle debt together
If either or both of you have existing debt, such as credit card balances or student loans, create a plan to pay it off. Prioritize high-interest debts first and allocate a portion of your budget to debt repayment.
7. Plan for retirement
It's never too early to start planning for retirement. Consider contributing to employer-sponsored retirement accounts, like 401(k)s, and individual retirement accounts (IRAs). Take advantage of any employer matches, as this can significantly boost your retirement savings over time.
If you're unsure where to begin or have complex financial situations, consider consulting a financial advisor. They can provide personalized advice and help you create a comprehensive financial plan tailored to your specific needs and goals.
The steps you take in the first few months of marriage can help you form a solid foundation based on openness, collaboration, and a shared vision. GECU members can use tools like Money Management to align their budgets and track financial goals, take advantage of competitive saving rates, and much more.