Money troubles are one of the most commonly cited reasons for divorce. As a result, it’s wise for all newlyweds to take some time to look at their new financial picture. That way, they can start the marriage off on the right track, reducing the likelihood of hardships later. If you want to make sure you’re moving in the best direction possible, here’s a look at four budgeting mistakes as newlyweds you don’t want to make as a newlywed.
1. Skipping a Budget Entirely
When you get married, two financial lives come together, at least to a degree. You may each have bills you’re bringing into the equation, as well as goals for the future.
If you don’t create a budget, you don’t have full visibility into your financial situation. That can be problematic, as you may begin to miss debt payments, overspend, or take other actions that lead to financial troubles.
Additionally, you won’t know if you’re both on different pages when it comes to goals and priorities. That could lead to conflict later, especially if both spouses disagree about how money should be saved or spent.
After getting married, sit down together to create a budget. That way, you can address your new joint expenses, bills you’re both bringing in with you, and whether you’re focused on the same broader goals.
2. Not Saving for Your Future Family
If you’re planning on having children – even if it won’t happen for several years – it’s best to start saving early. Having a child can be incredibly expensive. If you aren’t prepared, you may have to make some difficult choices with very little notice.
By starting to save for your future family as soon as possible, you give yourself a critical cushion. You’ll be able to shoulder the costs of having a child with greater ease and ensure you have time to adjust your budget to your new paradigm before you have to make hard choices.
3. Waiting to Save for Retirement
As a newlywed, particularly if you’re on the younger side, you may not have your sights set on retirement yet. You might assume you have all of the time in the world to save for your golden years.
The issue is, if you wait, you’ll have a much harder time building a solid nest egg. By starting now, you can take advantage of time and the magic of compound interest. Smaller monthly deposits have time to grow, making retirement savings less of a budget buster.
4. Not Setting Money Aside in Emergency Fund
An emergency fund is critical for maintaining financial stability. It gives you access to cash to handle the unexpected, like car trouble, medical bills, and more.
Without an emergency fund, you may find yourself in some tough binds. If you have an unanticipated expense, you might feel you have little choice but to turn to debt to handle the situation, and that can create long-term financial trouble.
As newlyweds, it’s best to start putting money aside in an emergency fund immediately. Even if you can only afford a little bit, it will add up.
Can you think of any other budgeting mistakes newlyweds need to avoid? Share your thoughts in the comments below.
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