How to Start Marriage Financially Smart

Many marriages struggle because of poor financial decisions and poor communication about money. Set a loving and wise tone to your relationship early on by following these financial tips. Some of these suggestions on money may see like radical financial steps, but they work. We have used them in our marriage, counseled young couples who used them, and watched friends marriages improve when they applied them. Money matters to your marriage more than you may think.



Instructions

1. START WITH AN ENVELOPE BUDGET AND WEEKLY COMMUNICATION ON MONEY.
An envelope budget is the best way to make sure you start out knowing where all the money goes and why. There are two functions for budgets: tracking and controlling. Most people use them really only to track where the money goes. Early on in your marriage you want to control where the money goes. So carry cash in hand in envelopes that are labeled: groceries, entertainment/eating out, clothes, miscellaneous, etc. When the cash is gone, you can't spend in that area until the end of the month. If a month seems too long, do a weekly budget.
Here is why: you buy less when you pay with cash because you FEEL the money leaving. This keeps you from running up credit card debt early on in your marriage.
2. SAVE AN ENTIRE SALARY FOR THE FIRST YEAR OF MARRIAGE.
Most people do not have children or major financial responsibilities when they first get married. Even if you do have children you may be able to take this step. It takes frugal living for the first year of marriage. But it pays huge dividends. If you have significant debt you can get out from under it often in one year of two incomes without kids. There will never be an easier time to save in your life. This gives you the emergency fund that you absolutely need to avert financial crisis in the future. It also helps cover a down payment, or a car purchase, so that you save money over the long haul.
I know a couple who paid off 15,000 dollars of school debt and loans in the first year of their marriage and still saved money on top of that to pay for a masters degree. Another couple saved 24k their first year and still has that same amount in cash savings ten years later. They leveraged it to buy four different houses and are building wealth in real estate.
3. START SAVING FOR RETIREMENT AS EARLY AS POSSIBLE IN YOUR MARRIAGE.
If you have a 401k matching plan at work, contribute there. Otherwise choose a reasonable amount and have it automatically deducted every month from your pay to go to a Roth IRA. You pay taxes on that money on the front end, but all of its growth is tax free. One thousand dollars toward retirement in your second year of marriage will likely be worth 64,000 at retirement.
4. STAY OUT OF DEBT TO STRENGTHEN YOUR MARRIAGE.
Debt places a huge strain on a marriage and can lead to a lot of conflict conversations. If you want something, discipline yourselves to save up for it. The only debt that is helpful is a good home mortgage with a fixed low interest rate that builds equity. Otherwise, do your best to get rid of it. Pay off credit cards (if you use them) every month or stop using them.
5. SET YOUR MARRIAGE'S MONEY GROUND RULES TOGETHER AND STICK WITH THEM.
Early on discuss what your financial goals and strategies will be. One of you will be more likely to spend, the other to save. Recognize that these are benefits to each other and balance you out. One will be a detail person and good at handling the bills. Let them do it. Talk early and often about money and keep anger and bitterness out of the conversation. Avoid blaming, criticizing, or sarcastic remarks when you talk about money, or anything for that matter.
Remember you married each other because you love and respect each other. Don't let money get in the way.