With money issues being one of the leading causes of divorce in the US, it's safe to say that how you handle your finances as newlyweds is critical to the long-term success of your marriage. So why not get things started off on the right foot in the financial department? Put your money where your mouth is and beat the odds by not falling victim to these all too common money mistakes.
1. Fighting about finances
If you're a spender and he's a saver, chances are, you're going to butt heads when it comes to finances. Since money is the biggest source of marital tension and often results in major blowouts and even break ups, it's important to have the money talk right away, advises nationally recognized money-saving expert Andrea Woroch. "Don't let issues build up, nor bring up money in the heat of the moment. Instead, set a dinner date if something is bothering you or you want to talk at length." For couples that share drastically different views on spending and saving, she says it's best to keep your funds separate for the time being. "This will give you the space and time you need to get on the same page while avoiding meltdown moments. Open a shared account for rent/mortgage, utilities, groceries, etc. and then teach each other how to stretch your dollars."
2. Getting in over your head on a new house
According to certified financial planner Andrew McFadden, the only commitment that will potentially last longer than your mortgage is your marriage (here's hoping anyway!). For the best shot at your happily ever after, he recommends buying a home well within your budget and not simply the highest amount the bank will approve you for. "Coming fresh off of the housing market crash, I have seen many couples regret their home purchase because they couldn't afford the payments and owed more than the house was worth," he explains. "Put 20 percent down and try to keep your payment to less than 25 percent of the gross income that you are confident you can earn during both good and bad times of employment."
See More: 6 Tax Tips for Brides-to-Be
3. Failing to set a budget or financial goals
Sharing both your short-term and long-term financial goals will help you set a budget that meets your current lifestyle needs while working toward those goals together (think buying a house, saving for retirement, having kids, etc.), points out Woroch. "Track a few months of your spending to determine a baseline then come up with a few ways you can cut back in certain areas, like dining out and groceries or monthly bills. For example, instead of going out to dinner or happy hour with friends every weekend, start a new trend of at-home dinner parties."
4. Not having an emergency fund
Unfortunately, no marriage is perfect and there will be bumps along the way, including financial ones, informs McFadden: "Your car might need a major repair. Or worse, you might lose your job and have to make ends meet for a few months until you land a new one." Either way, preparing for the unexpected and having a little reserve in the bank is always wise and will relieve loads of stress if and when those circumstances do arise, he says.
5. Letting wedding debt revolve
Sure, credit cards can help engaged couples in a pinch, but too many newlyweds carry revolving debt after they tie the knot, notes Woroch. "Just think about how much money is lost each month on interest!" Her advice? "Make it a top priority to pay off that debt by moving into a modest house, sharing a car if possible, keeping monthly spending low, or cutting cable and streaming movies via Netflix or Amazon Prime while digging yourselves out of debt."