Newylweds often live in bliss and honeymoon for several months after their marriage. It takes some time to ease into the transition that their finances become whole and that they have financial responsibilities aside from their own. If they forget or consciously put off talking about their financial situation they will be in a lot of pain when the moment is thrust in front of them. This could be in the form of a missed bill, late credit card payment, overdraft or a necessity that they failed to plan for. Don’t be in that position. Talk to your partner or spouse about the budget.
There is some debate as to whether or not budgets are appropriate. Some consider them a constricting device and other a necessary evil to success. I prefer the word financial plan. But I’ll go a head with budget because it is more commonly used. Regardless, the two of you just need to talk about it. Talking about it, although frustrating and embarrassing at first is going to be far easier than doing it 3 months down the road when you can honestly be mad at the other for making a critical financial mistake.
How do Newlyweds Put Together a Budget?
It’s as easy as starting out with some scratch paper and a pen with your financial information handy. Write down how much each person has in their bank account. This is eye opening because it’s almost never what the other expected. Then write down all debts owed. These include student loans, car payments, credit cards, etc. Now you can figure out if you’re in the plus or minus (most likely minus). This is a great way to get acquainted with reality.
Next you’ll put together a snap shot of what your monthly expenses look like versus your income. If you don’t have any income, why did you get married? In all seriousness though, that can be incredibly irresponsible and is not advised. Any job in that context is better than none. Look at the essentials and always plan to go over, cause it can and will happen. Look at groceries and car insurance but also luxuries you’re on the hook for with long contracts that cannot be broken like cell phones and internet.
My wife and I had a great time with a dry erase board. This was an excellent visualization tool. Plus it was big enough not to miss it. We saw it everyday in our extra bedroom.
What about the Envelope System? I like the Debit Card System
I applaud whoever came up with this idea and Dave Ramsey for inspiring young people in debt to do this but it is hardly practical in the 21st century. At least where I live, it would be downright foolish to keep stacks of envelopes in the house full of cash. Even if we withdrew it as we needed it, the nearest bank is too far a drive to make it worthwhile.
My wife and I use debit cards attached to different accounts at the same banks. One debit card goes towards our daily expenses, gas, groceries, cleaning supplies, etc. Another is our emergency fund. It gets loaded with each paycheck and is ready to go in case an emergency arises. It is liquid. Finally, there is a last account that is a long term savings, this one goes towards big things in the future like cars, homes, children, etc. Our subscriptions and contracts are taken care of with our credit card all online. We get the points for paying with the card and have budgeted for these expenses. As a result as soon as the bill comes, the balance is paid in full and in the budget.
Be Smart and Just Remember to Talk to Eachother
There are going to be things you’ll miss and assume that will lead to some mistakes. Correct it, make note of it so it doesn’t happen again and move on. The most important thing in all of this is to know where your money is going and how much needs to go where. With that in mind, you should do just fine.