Attention Newlyweds: Money is the number one cause of fights in marriage. – Forbes
After all the planning and your big day, you probably want the honeymoon phase to last forever. Well, it will – as long as you do something decidedly unsexy: talk about money. Today, newlyweds face a variety of challenges and many of which stem from the financial decisions the couple must make.
To be able to have a good start, it’s time to get serious about your family’s finances and listen to the advices of financial experts.
Newlyweds Guide to Finance:
1. Be honest with one another.
Don’t hide any assets, income or debt. Hiding those to your spouse would lead to financial infidelity. You wouldn’t want that early in your married life.
Know your Net worth as a couple: ASSETS – LIABILITY = NET WORTH
If you are married after 1988, according to the Family Code of the Philippines, you are now under the “Absolute Community of Marriage” which makes all your properties conjugal unless you both execute a prenuptial agreement.
All of his (assets, share in family business, money and debts) + All of her (assets, share in family business, money and debts) = Conjugal Property
2. Create and Follow a Household budget.
This may be difficult at first, especially for those couples who will live together the first time. If you have not yet established your household budget. Do this first: list and track all your expenses and income for 3 months using this:
Free Monthly Budget Planner and Expense Tracker for 2015
Or you can download: Toshl Finance (App) both available for android and -iPhone users.
Once you have a pretty much idea on where your money goes each month. You can now set up your household budget you want to stick to every month.
Please remember, this activity is tough at first, but this is very important and you have to do this no matter what (even if you are not newlywed couple, this is nonetheless really significant).
The most important thing after creating the budget is to help each other stick to the budget. I suggest you create ground rules to keep yourselves accountable to each other.
3. Set up an Emergency fund.
If you still do not know how to compute how much you need to set up. Read here:
How to Compute your Emergency Fund? How much Exactly do you Need?
You only have each other now. Getting help from your parents should be the last thing on your list. This will also mean that you are now responsible adults.
I advise that this emergency fund, be put in a Joint account separate from your Savings Joint account, where each one of you has an access. Both of you can get an ATM for this. Discipline yourselves that you only dipped into this fund in case of real emergencies.
The red dress on sale you just saw is not an emergency, Ladies!
4. Talk about how you’ll deal with friends and family in need of money
Many couples support not only their own families, but also their parents or relatives. It is important to talk about this earlier on the marriage since this may be a reason for future marriage fights. Set the rules on how much you can give to your parents or relatives. Be honest with each other.
5. Update all your beneficiaries and financial documents
Update all your beneficiaries in your SSS, Philhealth, HMO, your Will, and all other important financial documents.
For ladies who will need to change their names, have your NSO Marriage Certificate with you at all times then update all that you need to update. Your I.D.s, passports, bank accounts, credit cards, PRC license and other documents.
I advise that you keep a copy of your marriage certificate in your wallet, this may come handy if you have not yet changed all your documents to your present name.
6. Update and re-evaluate your insurance policies
If you’re newlyweds, you’re probably don’t think about death. But the truth is, you never know when disaster could strike.
If you already have insurance policies, you may want to update your beneficiaries. If you both still have no life insurance policies, it’s a best time to start. Life insurance is a symbol of your love to your spouse and would be children. It is making sure that their lives can still continue even if you are no longer around.
Evaluate your insurance coverage if the face amounts are still enough.
Read here:
How much life insurance Do You EXACTLY need? Here is How to Compute
7. Talk about your financial goals, dreams and visions for future.
Being a couple means having to marry your partner as well as his/her financial goals and dreams.
Set your financial goals.
How many kids do you want?
What school do you want for them?
How old do you both want to retire?
Seek help from financial consultants who can help you maximize your money and turn it to investments that can help you. If you don’t know anyone, ask me.
If you receive a sizeable estate. Read in this series on Estate Tax. Start with the basics:
What is Estate Tax and How it can hurt you even After Death? Part 1 of Estate Planning 101
8. Seek help from financial professionals.
This may vary depending upon how complex your financial needs are.
Accountants – you might need them in helping you deal with your taxes and if you have a business. Should you file tax returns separately or joint?
Lawyers – you might need them in merging of your assets, business, and dealing with other financial legalities in your marriage.
Financial Advisors/Investment consultants – you need them in helping you in your life insurance and to address the different financial goals in life.
9. Work together.
This is the most important tip that will tie everything else. You are now no longer doing and deciding things on your own. Remember, you are married now. You both must have the attitude of working together.
Experts suggest that couples need to talk about money issues early to prevent fights in the future.
In one study done by Kansas State University, they found that:
if couples argued about money in the beginning of their marriage, they were more likely to report poor relationship satisfaction in the long term.
So, talk with each other, be honest and learn to get help in fulfilling your family’s dreams.
December is the new marrying month. It surpassed June from having the most number of weddings held in the Philippines, I myself was married in December. Since a lot of couples marry in December, I hope this post can be able help the young couples start their young family life the right way, don’t forget to share with your newly married friends.
For richer or poorer,
Read More:
- The First Key to a Meaningful Wealth—If you don’t have this, You will never be Wealthy!
- Hurdles of Financial Freedom (Mga Balakid sa Iyong Pag-Yaman!)
- 5 things you MUST KNOW in planning your Family’s Perfect Vacation while on a Budget
- How to get more than 50% discount for your child’s College Tuition fee
Want to know how to start your marriage right? Ask me here!
Sources:
Forbes
Newlywedfinances.com
Learninvest.com
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