When it comes to money management, not every newly married couples think about discussing how they’ll handle their finances.
As money management is important in business, so is it in marriage. Having a plan for handling money and finances in every home pays a huge benefit on the long term.
If you’re a young couple or still dating with the hope to marry very soon, this article gives you 6 superhero money management tips that works.
6 Money Management tips for Young Couples
Discuss these tips with your partner, adopt a financial plan for your marriage and avoid financial warfare in your home.
1Change your mindset – It’s not “My Money” but “Our Money”
The first and most important step to having a solid financial plan is a powerful mind shift of agreeing to be a team in your marriage.
To work as a team after marriage, you must agree that it will no longer be “my money” but our “money”. This implies that:
- It will no longer be his/her savings but our savings.
- It will no longer be his/her expenses but our expenses.
Also, in order to survive and get out of debts it will no longer be his/her debts but our debts. (Don’t forget your’e a team).
Having this mind shift sets you both as partners in a marriage, on the right part to having a firm money management in your home.
2Decide on allocating your income & the percentage of spending
As young couples, you should decide on how you’ll allocate your earnings as this is an important step in your financial planning. There are quite a few ways to spend money. Save it, invest it, give it away or spend it.
Pay yourselves first
A major money mistake people make is paying themselves last. They pay for rent, electricity, water, school fees, repairs etc. first and have little or nothing left.
A part of what you earn is what yours to keep and this calls for deciding what percentage of your earnings will go into spending.
I read a book on cash flow by Robert Kiyosaki and I realized that having a plan on a percentage of earnings that will go into spending will help avoid financial problems.
For example, having a “15-15-70 plan can help young couples. 15% of your income can go into saving with a purpose of investing later. Another 15% for emergency situations (sickness, loss of job, etc) or paying up debts.
The remaining 70% of the income can be divided into giving away (helping others, buying gifts etc.), paying rent and other utilities, food, clothe, transportation, medicine, recreation etc. How this is distributed is your decision.
The whole idea here is to decide on how your income will be allocated to different categories of spending. Though it can be difficult to know the exact cost of housing utilities before marriage but it is one of the first things to discuss with your partner after marriage.
3Decide on credit buying
One of the easiest ways to get into huge debts is always buying things on credit. Merchants screams from every corner “buy now pay later”. The fact is credit transaction comes with interest so if you buy now without cash, you’ll pay much later.
Though there are situations where you’ll definitely need to buy on credit, you must always remember that credit is a privilege for which you must pay later but you’ll pay more.
So, decide on credit buying as stretching payments longer than necessary is in most cases weakens your money management plan.
4Live the present and enjoy the process of achieving the future
Most young couples are always desperate to obtain in their first year of marriage what it took their parents over twenty years to accumulate.
Having the biggest house and the best car may trigger jumping into making unwise financial decisions without paying attention to how this will affect other spending.
Why not live the present with satisfaction and stick to the solid plans to get to where you want to be in the future?
Remember that getting material things won’t make you happy but spending time on memorable experiences will.
Related: Can money buy happiness?
5Don’t make a major purchase without consulting your partner
Another practical idea that can help avoid financial tragedy is to agree on consulting your partner before making a major purchase.
A major purchase here has a set amount. For example items above N30,000 could require consulting your partner before getting it.
Since you’ve decided to be a team in your marriage, how would it feel if the wife brings more to the table than the husband and the husband spends as he likes without consulting the wife and vice versa?
6Decide on who will keeps financial records
Record keeping is one key element in business but it also helps you determine the financial position of your home (earnings and spending).
Deciding before or after marriage who will keep financial records is important. Most times it’s the husband.
This implies he pays the monthly bills (rent, electricity, tv subscriptions etc). He keeps two of you on track with the spending plan upon which you have agreed.
This does not mean that the the husband is in charge of making the financial decisions (remember you’re a team), and also it does not mean he’ll be the book keeper forever.
As a wife you can be the financial records keeper of your home and present full details to the husband.
With both partners having a full knowledge of the financial position of their home, unnecessary spending will be avoided as they stick to plan to achieving important financial goals set.
There you have it, 6 effective money management tips that works for young couples. Find it helpful? Like, share, and use the comment box below to share your thought.