Six Good Financial Habits for Newly Weds to Adopt to Start Their Futures Together
There are very few lessons on being financially responsible in the school systems. Some people are fortunate enough to learn it from their parents, or in college, meanwhile others have to learn it the hard way… through experience.
For newly weds, being financially responsible as a couple can be doubly difficult. You either have one partner fiscally sound and the other ignorant to proper spending habits, both partners never learned to handle their money efficiently, or both couple are strong in saving and spending. Hopefully, you are the latter of the three. If not, do not worry. Everyone has to learn sometime, and if you learn some good financial habits together, then you will be able to decide your financial goals as a couple.
Learn the Art Of Saving
Financially responsible people know the importance of saving. Saving early on is financially rewarding in many aspects. Not only do you have something to look forward to in the future, but you also get a layer of protection from any economic uncertainty the two of you may face.
Saving may be the most basic financial practice there is, but it is proven to also be one of the most important. If you want to effectively save, you need to set goals for what you are saving for. It can be your retirement, a vacation, or your first home. You need to save around 10 to 20 percent of your income.
Live Within Your Means
Before making any big purchases, the two fo you should take a step back and think whether this particular item or service is a want or a need. Figuring that out can prevent impulse buying. Impulse buying can become a highway to financial disaster.
It breaks your self-control and leads you to live a lifestyle way beyond your means. Financially responsible people live within, if not below, their means. Learning to budget will keep you on track in the right financial direction. When you have full control of your finances, you can prevent many monetary problems from occurring.
Be Aware of Your Cash Flow
Tracking your spending, and being fully aware of your cash flow is a sign that you are a financially responsible couple. Apart from budgeting, you need to know how money flows in your life. How much you earn and how much the two of you spend. This allows you to budget wisely and preemptively act before a foreseen issue suddenly hits.
Build Good Credit
Knowing the ropes of credit and how to properly use it is financially rewarding. Every time you use your credit card and take out a loan, like a student loan, auto loan, or a mortgage, you are directly impacting your credit score. Knowing and understanding your credit score, and that each of you have your own score rather than a combined one, is an important factor when considering applying for money at a financial institution. Lenders have to consider your creditworthiness, as well as the risk they would be accepting by granting you money.
Saving is a smart way to have money in the future, but if you want to reach financial freedom as a couple then you need to invest and compound your money. Financially responsible individuals understand how investing can rapidly increase their wealth. Not everyone can become financially sound by relying on a monthly salary. Investing and diversifying your income can multiply your earnings in no time.
Know How to Play With Debt
Financially responsible people learn the good and the bad of incurring debt. Not all debt is bad, it just depends on how you use it. If you have taken out a loan, solely dedicated to expanding your business or covering all other debts in the form of consolidation, then you are probably in a good position. If you and your spouse are accumulating debt from trying to live a lavish lifestyle that you can’t afford, then you are in for a headache. Nonetheless, financially responsible people know that getting rid of debt as early as possible is a top priority.