Editor's note: A version of this article originally ran on the blog Debt-Free Mormon. It has been reprinted here with permission.
A marriage has a higher likelihood for success if a couple can agree on these four things: children, religion, in-laws and money. I didn't make that up. I just read it somewhere and I think it makes sense.
But what I would like to focus on is the money part. Here are eight money management tips for newlyweds.
1. Agree on the basics
Hopefully the discussion of money comes up before you are actually married.
At some point during the dating game, how one or the other tends to feel about money and debt usually reveals itself. Whether or not someone is good at handling their money becomes pretty clear if you spend enough time together.
The question is if you disagree with how your spouse or future spouse handles money, what are you going to do?
Whether or not someone is good at managing money is not a deal breaker, but how partners want to go about managing their money in the future and refusing to admit if they have a problem managing it could be. If he loves debt (loves credit cards and borrows money for everything) while she hates debt (budgets her money and puts money in savings to buy the things she needs), there could be a problem.
Couples must decide how they are going to handle their money and agree on how they feel about debt, savings, spending, etc. Remember, just because someone isn't good with their money doesn't disqualify them from being a good spouse, but the attitude about it going forward probably does.
2. Have a household budget
A new household budget should be set monthly. Every month you and your spouse should sit down together — with the TV turned off, cell phones down and without the iPad (unless you are using it to make the budget) — to discuss what the upcoming month will look like. As The Huffington Post reported last year, financial problems are one of the leading causes of divorce, especially if the problems begin early in the marriage. Having a family budget meeting monthly will help you avoid this unnecessary tension.
In this meeting you should both agree on how much money will be spent, how it will be spent and where it will be spent. If you must fight and argue about money, this is the place to make your case; but do it graciously and lovingly. Whatever you work out, put it in writing, agree on it and then stick to it. You each should get equal say on what goes into the budget. This is a team effort, not a tyranny. The budget should be a contract, a commitment to each other. Don't mess it up. You promised.
A budget should be zero based — meaning income minus all the household expenses (expenses, debts, savings, investing, etc.) should equal zero. Every dollar should be accounted for and put somewhere, even if it means you put some in a cookie jar. Whatever you decide to do, do it together and stick to your plan.
Both of you should have equal access to all accounts, passwords, usernames, etc,. Your accounts should be joint accounts — one checking account, two debit cards. None of this separate accounts stuff. It opens the door for dishonesty. You should both be able to know what's going on with the household finances.
You're married now. No longer is it my money or my checking account or my credit card or my car loan. It's our money, our income, our debt, our checking account. We are married now. We work together. We tell the truth. We.
4. Have an emergency fund
Every household should have an emergency fund. Of course, depending on your current financial situation, the amount of money in your emergency fund will vary.
If you are in debt, I would recommend a smaller, starter emergency fund. Somewhere around $1,000 to $1,500. If you are out of debt (not including the mortgage), then I'd recommend putting about six months of household expenses into your emergency fund.
Having an emergency fund in place will give your relationship the security it needs to make it through those difficult down times. You will have enough money to manage those unexpected events that were not included in the budget. It will help you avoid having to borrow money to cover those unexpected costs. But remember: The emergency fund is for emergencies only!
Guys, your girl will love the security of having emergency savings in place. Protect your household. Protect your wife. Make it a priority to save for a rainy day. She will appreciate it.
5. Have a plan to get rid of debt
Like I said earlier, if one of you has debt going into the marriage, it is not a deal-breaker. But you have to understand that as a couple, this is now our debt. Being on the same page as to how you are going to deal with the debt is critical.
If you both decide that you like debt and using credit cards and spending more money than you make — while I don't recommend it and strongly discourage it — at least you are in agreement. You need to agree how you're going to handle debt.
Nobody really wants to be in debt forever. So if your spouse brought debt into the marriage, work together and pay it off. Using the budget, squeeze every extra dollar out of your income possible and apply it to debt reduction.
Use the snowball method to eliminate your debt. Make minimum payments on all your debts except for the one with the smallest balance and attack it with intensity. Once you pay off that debt, roll its minimum payment and all extra money you can find onto the next debt. Continue this process until it is all gone. It'll happen sooner than you think.
Working together using the budget to eliminate debt is going to take some real commitment as a couple. You're going to have to say no to each other a lot. You might have to eat in more, choose Redbox over a multiplex and go out less. But it's only for a short time. Sacrifice now so you can enjoy yourselves more later. You'll be married for a long time. It will be worth it.
6. Have personal spending money and be willing to compromise
When creating a budget, make sure you each have some personal spending money to do the things you enjoy. If your wife likes to shop — and you can afford it — make sure she has some money to do so. Likewise ladies, if your husband has a hobby he enjoys — and you can afford it — allow him some money to enjoy it.
The budget isn't an excuse to control each other. Yes, we use the budget to control and manage our household expenses, but not to restrict and abuse each other. We want to be able to enjoy our money, our lives, our marriages and each other. Give yourself permission to do so. Also be willing to compromise; be willing to give a little ground in one area in order to gain something in another.
7. Set limits on big purchases
If you're setting aside money to make a big purchase, whether it be an individual purchase or a purchase made as a couple, set a limit at which a discussion is required before making the purchase. It doesn't matter what that number is. Anytime either of you is about to spend more than that limit on any particular item, talk about it first. Make sure you both understand what your money is being spent on. This will help with the transparency in your marriage and the overall spirit of how your household money is managed.
If you are going to make a big purchase as a couple — let's say for a new couch — set a limit at which you must discuss it first and wait at least a day before making that purchase. This will help open opportunities to discuss your finances and your budget and the things you really need. It will help keep you both on the same page financially and avoid potential money fights. Sometimes by giving ourselves a grace period before making bigger purchases, it allows the I-gotta-have-it fever to subside, and we avoid buying things we didn't actually need or want.
Even if you aren't a church-goer or tithe payer, make some room in your budget for giving. Obviously your particular financial situation will determine how much you can give or if you can give at all. Being a giver and having a selfless attitude and spirit about money will bring more opportunities into your life.
If you are a tithe-payer, I recommend always paying your tithing before anything else. It should be the No. 1 priority in your budget. Being faithful to that principle will bring blessings into your life and blessings into your marriage.
Always remember: When entering a marriage, you have made a commitment to love, support, encourage and serve one another. For richer or poorer, in sickness and health … You know how it goes. Do it together.
No longer is it I, me or mine. It's we, us and ours.
Mark Helgesen is a financial counselor in Layton, Utah, and a runs a personal finance blog at debtfreemormon.org. Contact Mark at firstname.lastname@example.org.
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