Getting married is exciting, as it signals the beginning of your new journey with your spouse. Often, couples have specific visions for their future. The issue is that reaching those targets isn’t always easy, especially without a plan. Fortunately, budgeting for newlyweds doesn’t have to be a challenge. If you want to build your dream life with your new spouse without breaking the bank, here’s how to get started.
Talk About Your Goals
Before you start working on the numbers side of the equation, sit down with your spouse, talk about your dream life, and have them do the same. Not only can this be a fun exercise, but it’s also a critical chance to get to learn about what you each want to achieve.
The idea here is to have an open and honest conversation about your goals, both for the short-term and the long-term. By doing so, you can start to determine precisely what your dream life looks like, accounting for both partner’s perspectives. Once you have this conversation, you’ll have what you need to move on to the next step.
Identify Key Priorities
After discussing your goals, it’s time to outline genuine priorities. Essentially, you want to look at your financial life holistically. Identify any obligations you need to meet and expenses you have to cover, as those are typically priorities. Then, decide which goals take precedence over others.
During this conversation, the goal is to get on the same page with your new spouse. If you both agree that specific savings targets are more important than others, it’s easier to adhere to a plan once one is created. If there’s a disconnect, then that should prompt further discussions and some compromises. That way, both you and your spouse have something to gain while also ensuring the other feels supported.
Make a Budget
Once you know your financial priorities, it’s time to create a budget. Generally, you’ll focus on three main categories: income, expenses and debt, and saving for goals.
Calculate how much income is coming into the household. Next, allocate it to ensure your expenses and debt payments are covered. In many cases, it’s best to treat an emergency fund as an expense and not a saving goal, as it’s a critical safety net that can help you avoid financial hardship in the future. Foundational retirement savings can also fall into that category, as it plays a big role in ensuring you’re able to remain comfortable after you leave the workforce.
After that, it’s time to dedicate some remaining funds to the goals that lead to your dream life together. Work together to determine how much you want to commit to each objective. Then, create a tracking mechanism that helps you monitor your progress. That could involve anything from a simple spreadsheet to dedicated savings accounts for each target.
Have Your Savings in the Right Places
Where you place any money you’re setting aside for specific goals matters, as certain accounts can offer higher earnings potential or other benefits. For example, having an emergency fund in a high-yield savings account is often wise, as you get a higher interest rate while maintaining a reasonable degree of liquidity.
For short-term goals, you may find a high-yield savings account also works well. Money market accounts, certificates of deposit, or short-term bonds are also worth exploring in many cases. Those options offer more security but come with higher earnings potential, limiting your risk while securing some level of growth.
With long-term goals, investing could make sense. Index funds and ETFs may help you capture more earnings potential while also providing an inherent degree of diversification. Plus, since the timeline is long-range, you can usually weather any market ups and downs that can occur. Just make sure any investments you choose align with your timeline and risk tolerance.
Revisit Your Plan Regularly
When you’re part of a newlywed couple, your life looks one way, but in the years to come, it may take a different shape. As it unfolds, you might discover that your priorities are changing. Similarly, what you picture for your dream life may shift.
Ultimately, that means it’s best to revisit your plan regularly. Along with checking your overall progress, talk with your spouse to see if it’s still serving you well. If not, update your plan to align it with your new joint vision. That way, you can keep moving toward your ideal life.
Do you have any tips that can make budgeting for newlyweds easier? Share your thoughts in the comments below.
Read More:
- From ‘I Do’ to Financial Savvy: 7 Smart Money Moves for Newlywed Bliss
- Read These Top 4 Financial Literacy Books to Improve Your Relationship with Money
