Five Smart Money Moves for Engaged and Newlywed Couples

Money talk is never romantic and sexy for couples starting out their lives together. But it is essential. Most marital arguments will find their root in how money is managed. So while it’s quite OK to get all dreamy about choosing the color for the bedroom, take some time to sit down and face some hard facts about how you view money and how you plan to use it together.

Here are some tips to consider:

1. DON’T borrow money for your wedding. Neither should you use a credit card for wedding expenses, since the plastic is just another kind of debt. It’s a sad sight to find yourself in debt the first day after the wedding. Starting your life together should not mean being beholden to friends and family, as well as a huge credit card bill.

   Set up a wedding fund early in your engagement. If people offer to help financially, clarify if this is a gift or a loan. Stick to your budget. Chances are, you will have to trim down on the party frills. However, you can be sure that this one party was without financial regrets and creditors. [See here for 15 ways to save on your wedding].

2. DO learn to budget together. There are seminars around town, marriage counselors and online sources that provide tools on how to manage money as a couple. Managing finances together will show how each one views money. This will teach you to find the middle ground and work as a team.
3. DO invest in life insurance. Or update any existing insurance to have your spouse as the beneficiary. It’s never too early to prepare for worst-case scenarios. Also, premiums tend to be lower for younger people with less health risks. You will also have more disposable income for this instrument now.
4. DON’T buy a house just yet - not until you’ve worked out your budget and decided that renting would be more feasible. The initial payout for purchasing a home is quite huge. Use your early years as a couple to save up for a down payment.
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   The same goes when purchasing a car. Go back to your budget and see if there’s room for buying and maintaining an automobile. Unlike homes built on a separate lot, a car’s resale value depreciates over time, while its maintenance costs increase.

5. DON’T have kids immediately, no matter how much your parents and relatives pressure you. Having children costs. Use your first couple of years to build a solid foundation as a couple, as well as a small fund to eventually cover for hospital bills, the baby room, and perhaps a schooling fund.