THE NEWLYWED'S FIVE STEP GUIDE TO MONEY MANAGEMENT
With the increasing number of couples getting married, this is an
excellent time to review the financial aspects of a new marriage. While
most soon-to-be newlyweds are concentrating on the wedding night, it is
not uncommon to find that most couples have not discussed the financial
stuff. There are five simple steps every newly married couple can use to
build a successful financial future.
CREATE A HOUSEHOLD BUDGET
A budget determines how much income will be allocated to pay for
household expenses. At first, it may be difficult for newlyweds to
determine how much money they spend and where they spend it. An ideal
way to determine how and where money is spent is use a daily
transaction record sheet. This is similar to a daily diary. Write down
a description of the transaction and the amount, then indicate how it
was paid for. By recording how the transaction was paid for and what
was purchased, this will determine how and where money is spent. To
get a true indication of spending habits, use this method for two or
A cash flow statement is next part of creating a budget. Compile
the information from the daily transactions sheets into a cash flow
statement. This will show where money is coming from and where it is
going. After a couple of months history together, the couple will be
able to allocate their resources appropriately and create a household
If you and your spouse-to-be would like to learn about creating a
Here to learn about a retirement planning book that can help.
THE DEFINITION OF INVESTING
Since everyone has a different definition of investing, each spouse
should write down what they want from their investments. For example,
one spouse may be willing to accept large short-term fluctuations for
long-term gain, while the other wants little fluctuation of principal.
By doing this the household portfolio will be properly allocated.
PAY YOURSELF FIRST
The new couple should pay themselves first before they pay their
monthly bills. It doesn't matter if they put $5 or $75 a week into an
investment plan. By doing this they will be forming the vital habit of
investing for their future. For example, if an individual invests
approximately $65 a week for 35 years into an investment with an
annualized return of 10%, the investment could be worth approximately
$1 million dollars!