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How to Overcome 5 Newlywed Financial Challenges

When you marry [3], even if you lived together prior to tying the knot, it seems as though things get real in your relationship. Now, you have joint ownership of some (and maybe all) assets, and you have to think about how your spending is going to impact your joint situation.

Figuring out schedules and dealing with towels on the floor, or deciding that a habit is really an annoyance and a not a cute quirk, are just some of the few minor issues to deal with when you marry. Figuring out your newlywed finances, and avoiding marriage killing money mistakes [4], is the real stressor.

Andrew Housser, the CEO of Freedom Financial Network, points out that there are 5 main financial challenges newlyweds face, and he has some ideas on how to avoid them:

1. Denial

“Many couples choose to ignore discussion on finances, or deny that it could an it could be an issue in the relationship,” Housser says. Instead of running from your problems, Housser says that couples need to face facts. “Money is one of the top reasons that married couples fight,” he points out.

He suggests regular discussions about money, and full financial disclosure. “Couples who have weekly money disagreements are nearly 30% more likely to divorce than couples who argue about finances less often,” Housser says. “Getting the financial house in order takes time and trust, but pays of in spades.”

2. What to Talk About When Discussing Money

So, you’ve decided to talk about money. What do you talk about? Housser has a list of items that married couples should discuss, including:

“Hopefully, a couple will have had some good conversations about their individual and combined debts and assets before tying the knot [4],” Housser says. But, if not, now is a good time to get started.

He also says that newlyweds “need to prioritize a discussion on financial roles. Paying bills and staying on budget take time and require responsibility. [Partners] need to decide up front who will do what.”

Housser suggests a monthly “money date” to review and adjust the budget and financial responsibilities as needed.

Fidelity also offers a “Getting Married Checklist” [5] that can provide you with financial insight.

3. Debt

It’s no surprise that this is on the list. With more couples tying the knot with their own debt and with joint debt, Housser points out that newlyweds need to make a plan to pay off their debt.

Relationship expert April Masini, from AskApril.com, also weighs in on the debt issue. She says that rather than blaming each other for the debt, it’s time to pull together — especially if you are in debt over your wedding and/or honeymoon. “Accept the fact that you overspent and made a mistake,” she suggests. “It’s a lot easier for couples to point fingers at each other, at each others’ families, at each others’ friends, and try to shirk blame.”

Instead, create a workable plan that you can both agree on to get out of debt. Remember: You’re a team now.

4. Joint or Solo Accounts?

“This decision seems to be a particularly major one for many newlyweds,” Housser says. “It may be made more difficult because there are no hard and fast rules.”

Each couple needs to decide what will work for them [6]. “It is common these days for couples to have joint checking accounts for shared expenses such as rent or mortgage, utilities, and groceries,” Housser says. “If using a joint account to pay shared bills, newlyweds should decide what percentage of each paycheck to put into the account so that expenses are covered and contributions are fair.”

He says that individual accounts can provide for some financial independence, and points out that in some cases — such as when one spouse has poort credit — it makes sense to keep finances entirely separate [7].

5. Saving

“It can be far too easy for newlyweds to bypass savings in favor of taking vacations, furnishing their home, or funding other endeavors,” Housser says, “but an emergency fund is critically important [8].”

“It is critical first and foremost to create an emergency fund,” he continues. “This fund will help to see the couple through an unexpected and potentially costly life event.”

Housser suggests that couples start small. “If the newlyweds agree to set aside just $50 a week between them, they will have save $2,600 at the end of the year. If each can save $50, that’s more than $5,000.”

And, of course, it’s important to increase the amount set aside when possible, and remember to save for retirement and other long-term goals.

What do you think are the biggest financial challenges newlyweds face?

Photo: Katsu Nojiri [9]