In fact, money is the most common reason for arguments in the first three years of marriage, according to one study. It easily beats out religion, fights about kids, and even how many hours one spouse spent in front of the television. So, what can newly-married couples do to prevent money from impacting their relationship?
Here are five financial vows that all newlyweds should make. These will not only set the foundation for financial success, but they’ll also help keep the peace over the years.
Table of Contents:
I Vow to Be Honest About Money… Always
The easiest way to break your partner’s trust and ensure that money is a constant source of contention is to lie about it. Whether you’re fibbing about how much those new shoes cost or hiding a secret savings account, the result is the same. And it’s not good.
According to a recent study, 31% of respondents said that financial infidelity–the act of hiding credit cards, debt, or savings–was worse than physical infidelity! While it can feel like no big deal to tuck money aside or keep an account to yourself, this deceit has the potential to do some serious damage.
Never lie to your spouse about money. Even if it’s uncomfortable to admit that you blew the budget or need to rein in your spending. It’s better than the alternative: betraying your loved one’s trust. And failing to be honest about your entire financial situation prevents you and your spouse from setting accurate, realistic money goals.
I Vow to Have SMART Goals
There are few financial success stories that didn’t first start with good goals. Whether your plans involve saving more, spending less, earning more, or better managing what you have, it’s important to determine what you want to achieve.
By setting SMART financial goals–Specific, Measurable, Actionable, Results-driven, and Time-bound–you will accomplish a few important things.
First, you’ll ensure that the goals you set are realistic and able to be achieved in the first place. “I want to be rich soon!” isn’t a goal worth setting–what is “rich”, when is “soon”, and how will you know when you get there? Saying that you want to be debt-free and have $XX in a retirement account by the time you’re 50, however? Now that is a goal you can measure, has a time-constraint, and is specific.
Second, you will be able to ensure that both you and your spouse are on the same page as far as your financial future. It gives you the opportunity to talk through differences in plans and ideals, determine how you’ll reach your goals and what changes you need to make to get there, and you can keep one another accountable.
I Vow to Make Our Future a Priority
Starting a new life together is fun and exciting. You might think about buying your first home, planning exciting adventures, or starting a family. Unfortunately, all of those things cost money.
When you’re a newlywed, it’s important to think about the future, and that includes thinking about how your choices now will impact your finances down the road. If you spend more than you can afford (or more than you truly need) today on a big home, fancy car, expensive trips, or even just flashy purchases, you’re affecting your future… and your new spouse’s future, too.
It’s not nearly as fun to live modestly, especially when you are young and don’t have kids to think about yet. The money you could start putting into retirement today would lay a wonderful foundation for a long, prosperous future with your loved one.
I Vow to Plan for the Worst
We can’t control what the future holds. Whether we will encounter tough times, emergency situations, illness, or even death is uncertain. What is certain, though, is that we can prepare our finances so that our loved ones are always protected… even in the worst situations.
This begins with establishing an emergency fund. Aim to set aside at least 6 months’ worth of expenses in a savings account, which can be utilized if either of you ever loses a job, gets sick, etc. Building up that big of a cushion will take time, so start off with $1,000 in a high-yield savings account, and add to the fund each month.
You should also consider buying a life insurance policy, both for you and your spouse. This is especially important if you get a mortgage, have children, or if either of you depend on the other financially. Even if you or your spouse would do just fine financially if something happened to the other, a life insurance policy could cover final expenses and maybe even make life a bit more comfortable for the one left behind.
Creating a will and a financial binder are just as important. This way, your loved ones won’t be forced to scramble to find accounts, align finances, or wonder about your wishes.
No one likes to think about the worst happening. Failing to at least plan for it, though, is unfair to those you love.
I Vow to Make Us Just as Important
You already know that maintaining a healthy, happy marriage is hard work. Nothing good in life comes easy, and a lasting union certainly isn’t the exception.
As important as it is to iron out the financial logistics, it’s just as (if not more) important to make your new relationship a priority. This will not only spare you many of the money-related fights that could occur, but could also potentially save you a ton of money in the end.
Half of it, to be exact.
By being open and honest with your significant other, you will avoid the feelings of betrayal that come with financial infidelity. By spending wisely and planning for the future (even worst-case scenarios), you show your spouse that they, and your future together, are your first priority.
Make sure to put your relationship and your connection with your spouse above the daily grind if you truly want to save yourself some heartache–financial and otherwise. Couples that make time for one another, even if that means free activities like a walk through the park or eating dinner (sans cell phones) on the back deck, often find success in their relationship as a whole.
The more respect you have for your spouse and your relationship, the more you’ll make it (and its future) a priority. Plus, by putting daily emphasis on maintaining a healthy relationship, you can hopefully avoid one of the biggest financial impacts of all: a divorce.
Marriage is an exciting adventure, filled with challenges and achievements along the way, and the joining of finances along with your lives brings with it unique challenges. By making these five money vows from the very beginning, you can hopefully avoid many of the financial problems that plague couples today.
What’s your biggest piece of advice for a newlywed couple?