Your wedding day may well have been the happiest and most significant day of your life so far. After all, you’re settling down. You’re building a future with the person you love. You’re creating a new identity as a married couple, a new family.

There’s a lot to look forward to. However, if you want to make your dreams for your future together a reality, then you’re going to need to do more than just focus on your romantic relationship. You’re also going to need to focus on your financial future.

Financial planning when you’re newly married, though, can look a lot different than when you were single. This article explores the importance of financial planning for newlyweds and provides tips for helping you and your new spouse get your financial house in order.

Talk About It–A Lot

Money is often something that people just don’t like to talk about, even with their significant other. However, having frank and frequent conversations about finances is essential, especially for young couples who are just starting out.

The key is to be transparent about both your financial past and your present. Talk about your current income, your credit score, and your debt load, but don’t stop there. You and your partner also need to discuss your habits and your values when it comes to money.

Are you a spender or a saver? What about your spouse? When it comes to planning, do you prefer to wing it or do you need every detail nailed down well in advance? And what about your attitude toward money in general? Do you see it as something fun that’s to be enjoyed in the moment or do you look at it more as security for a rainy day?

Discussing all of these questions with your new spouse will help you determine where your financial styles mesh and where negotiation and compromise will likely be needed.

Separate, Joint, or Hybrid Accounts

When you’re getting your money plan together as a new family, one of the first and most important decisions you will make is how you are going to handle your financial accounts.

For example, maintaining separate bank accounts can help minimize conflict in the short term, but it may lead to some confusion and hassle in the long run. Even though you are legally married, for instance, your spouse may not have access to your accounts in an emergency (and vice versa) unless both your names are on the account.

It is for this reason that many newlyweds are opting for a hybrid approach, maintaining their separate accounts while also opening up a joint account for the household. This helps protect each partner’s financial autonomy while also ensuring that both spouses contribute and have access to the household funds.

In addition to joint bank accounts, newlyweds can also open joint credit accounts or they may add one another to existing credit accounts or loans. This can be especially important not only in an emergency, when extra cash is needed, but also when one spouse needs to build or rebuild their credit.

Consider the Future

In addition to planning for the financial needs of the present, it’s also important for young couples to look ahead to the future they want to share. Understanding your long-term goals will help you devise the budgeting and investment strategy that is most likely to get you there.

For example, the two of you may dream of traveling the world together long before retirement. Sitting down and crafting a budget that accommodates your shared wanderlust may well mean the difference between making those travel dreams a reality versus having to perpetually postpone them for another, more prosperous day.

On the other hand, if you’re cherishing loftier and more distant dreams, such as a dream to relocate to the south of France after you retire and live your golden years out on the shores of the Mediterranean, then you may opt for a long-term investment strategy.

Certificates of deposit (CD) and government bonds, for instance, can be a great choice if you’re looking for a low-risk investment. These investments guarantee a return, but in exchange for the security they provide, you’re going to have to exercise patience. Investments such as these can take years, even decades, to mature. What that means is that, while you can pretty much count on a solid return in time, it’s going to take a while to get that cash in your hands.

Other options don’t require as much of a time investment, but they may come with higher risk and/or lower returns on investment. A high yield savings account will produce better returns than a traditional savings account and the money can be accessed whenever you need it. However, your yields are not assured but depend principally on the state of the economy in general and interest rates in particular.

Conversely, other forms of investment, such as stocks or even crypto, can produce generous returns in short periods. However, they can also carry a great deal of risk, meaning that you may lose all that you’ve invested or accrued.

What this all boils down to, fundamentally, is that when it comes to budgeting and investing, you have to understand clearly both what your present needs and your future goals are.

The Takeaway

The first months and years of your marriage are often among the most exciting times in a young couple’s life. However, it takes keen and careful financial planning to keep those happy times rolling. The key lies in having open and frequent discussions about finances, establishing accounts with present needs and future goals in mind, and defining budgeting and investment strategies to ensure your family’s financial well-being for all the years to come.

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