As a newlywed myself and fresh out of living at home, I must say I had pretty much NO clue as to what to do with your money once you were married. I was Cher in Clueless (but without the endless dosh and cutesy hairclips!)
Having studied English Lit, Media, Film & Marketing at varsity, I also wasn’t particularly experienced in the ways of the wily financial planning student (hell, any commerce kid probably knew more than I did).
All I knew was get a savings account, make sure you have some sort of a budget and don’t live above your means. And you know what – while that’s pretty basic – it’s a bloody good start.
When we got married, we had to decide what we were going to do with our [now] joint money – since ‘what’s yours is mine, honey’! So after meeting with two financial advisors, listening to friends & family and eventually making headway into what we thought was right for us, I now feel more educated about the whole ‘Money Question’.
Here are some basic tips as to what to do when you get hitched:
Seriously, draw one up. You don’t have to have done accounting at school, just a basic understanding of income & expenses. This can be done by looking at both of your incomes, and looking at what HAS to come off each month (rent, bond repayments, telephone, rates etc), and what TENDS to come off (Internet, DSTV, groceries, eating out etc) – do this and then you’ll see how much you HAVE LEFT at the end of the month.
This is your ‘Play or Save’ money.
You need to start saving. If you have already (a RA, savings account, investment) – good for you. If not, now’s a good time. Decide if you’re sharing an account, having linked accounts or separate accounts. A major saving account would be a Bond, but other types of savings include retirement annuities, short, mid and long term saving investments. Once you’ve decided how much a month you can save, or NEED to save (ie: bond repayments), then it’s time to chat to an expert.
3.) FINANCIAL ADVICE
This is so important. Each couple is vastly different – earn so differently and have a unique set of factors that will contribute to their money situation. After getting a good understanding of where you are at (eg: renting, but own both your cars –paid off-, each have an RA, no disability or life insurance cover, one of you have a normal savings account) – they are BEST positioned to give you advice.
A tip: go with someone who can be recommended. A friend or family member who can expressly recommend a financial consultant is a great idea – you know they are reputable and are concerned about you and your situation.
4.) PLAY MONEY
I find that you need to set aside money each month for ‘playtime’. This is NOT frivolous expense willy-nilly (no, no). This is money that you keep for fun, for the odd spoiling yourself, for preventing the ‘I have no money, it all disappears after the 25th!’ debacle whinge. A dinner out on Friday night, tickets to Coldplay, a new bookshelf, a pair of cycling shoes, a case of great wine, a present to spoil your mom in law… that’s your PLAY MONEY. And be careful with it!
5.) LISTEN TO YOURSELVES
This is about YOU and your husband. Yes, financial advisors are great and can give you sound advice, so can friends or family. But at the end of the day the two of you need to be happy with the decision you come to with regards to your money. If it’s saving for your child’s education, putting some away for a special overseas holiday or deciding to pool all your resources into your bond and paying it off quickly – then that’s great – it’s up to you.
But remember to be wise, be smart and NEVER live beyond your means.
Also, get rid of your debt and don’t let it get away from you!
Best of luck with your endeavors girls.
Making Good Decisions | source here.