Are You Newly Married? Here’s How to Live Happily Ever After Financially
Marriage is a significant landmark in anyone’s life. But it is after the initial ecstasy you realize that you have to adjust to a whole new way of life. Changes that come your way include managing your finances. Both of you may have been intimate in many ways even before marriage. But the money issues usually remains off the table.
As unromantic as money sounds, it plays a vital role in how happy and successful your marriage can be. With the cost of living rising continually in Singapore over the years, the financial issue requires a quick address. To live happily ever after, financially, you must be on the same page. This is according to Kansas State University research.
To be financially on the same table doesn’t mean to earn the same salary. It rather means to have a common financial plan. Your philosophies about spending money, debt and savings should be the same. Here are smart financial tips to help you live happily ever after.
1. Embrace a Budget
One crucial aspect of financial discipline is living within your means. Budgeting will help you to achieve that. Starting by discussing what makes both of you comfortable will help you manage your daily finances. Gear your budget plan towards fulfilling your essentials and necessities, building wealth and fun. When you both focus on these areas, you can reduce a lot of stress before and after retirement.
You need to determine and agree on household needs such as rent, groceries, utility payments, debts among others. Never underrate yourself when you save money by buying a cheaper car or renting a smaller space. It is better to save and have a consistent lifestyle than to fight with poverty in old age.
Also, create long-term goals that you can achieve together. Such plans include determining how and when to buy a house, your retirement and dream vacation. Long-term goals are a great motivator in sticking to a budget every month since you know what you aim. Therefore, the earlier you set your long-term goals, the better.
How you contribute towards your spending and savings should be agreed upon. The husband may take up paying house rent and other bills whereas the wife handles groceries and clothing. Your sharing should be proportional to your incomes. You may also agree upon opening a joint account to hold your savings for long-term goals.
2. Assess Your Compatibility as Investors
Your attitudes about investment may be different, and so you need to sort out things first before any investment action. May you prefer to stick to low-risk steady return approach. On the other hand, your partner wants to take more risks with potentially high returns. There is no problem; you are meant to complement each other. You only need to evaluate the merits and demerits of investment proposals to be upfront about them.
Consider how every investment will affect your future financial security. Don’t be sure you will perfect here; everything is a learning process. Anticipate mistakes but learn from them. What you must avoid is quarrels and blame games but accept every error as an opportunity to learn.
If you feel your risk gap is too wide, try to seek a middle ground before you embark on any investment option. Each of you needs to leave your comfort zone as the risk-taking need to be a compromise. Where it becomes hard to break the ground, consult a financial adviser to help mediate the issue. You should consider this direction if you find you have the same conversation over and over again.
3. Agree and Identify Investment Options
After harmonizing your differing investment philosophies, you should then pick out some investment options. I suggest you should bring in your differences somehow in investing. A mix of your preferences could help you in portfolio diversification. One person’s conservativeness could assist in settling in a portfolio that provides stability during market downturns.
Thus, one partner should not push away the other person’s beliefs to settle in yours. Instead, you should build a mix that will help you derive better growth and stability. Through joint investing, you will be able to create wealth.
4. Maintain Financial Openness
You haven’t traded your financial statements with your partner, have you? It means sharing everything from income to debts. Each of you should learn about your partner’s ownership and Owings. Through knowing each others savings accounts and retirements accounts, you will see the need for consolidation to achieve a bigger target.
This will help you to deviate from the habit of becoming a spendthrift because you feel your spouse should take care of everything. Openness helps accept responsibility. Living as a couple means combining your assets and also owning each other’s debts. No one’s shoulders should break from a heavy burden whereas the other is merrymaking.
It is only after financial disclosure that you will be able to fulfill commitments such as:
- Moving to a better house
- Advance your education
- Meeting your kids or siblings education costs
- Get an insurance cover
- Secure support for your aging parents among others.
Without disclosure, everyone will be living in a cocoon of dilemma without any financial direction or achievement. Thus, it very healthy to share as every party lives feeling empowered and accepted.
5. Create an Emergency Fund
If not well planned, emergencies can break a family apart. Emergencies can arise within your nuclear family or outside in the extended family. Consider a situation whereby your spouse loses a job, or your mother falls suddenly very ill. Both of these occurrences can interfere with your financial plans and lives. Such emergencies cause financial tremors and have in several instances made couples to part ways.
However, if a solid plan is in place, it will cushion you against financial disruptions. As a family, you can still achieve your goals regardless of an unexpected occurrence. You should both agree on how to set aside an emergency fund. You could agree on using a quarter of your saving towards an emergency fund and three-quarter towards investment.
Consideration like opening an account with money lenders to be making savings can take you a long way when an emergency strikes. Several money lenders are available in Singapore, and you only need to fulfill requirements to qualify for emergency loans.
Allowing the space to make financial decisions together works for many newly married couples. When you agree on budgeting, spending and investing, you will be on right foot about money management. By forming good money management habits, you will be able to walk together. In spite of what life throws at you, you can team through and overcome
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