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Financial Planning For Young Couples
What do you mean by financial planning?
So you guys are about to get married or have you just got married? First of all congratulations, but now is the time to roll up your sleeves and dive head first into planning your finances. Trust me when I say it's work, and my wife has been the main reason our finances have stayed afloat. Now there is no reason that with a little work and some self control, that any new couple can't start out with a low debt and be happy. This is how our financial planning has worked out and I hope it helps you.
Live With-in Your Means:
When you start on this journey, many people want it all and they want it now. Believe me I am the same way, but the first step to financial freedom is knowing your limitations. My wife makes sure I stay grounded in this area and in the long run I know we are better off. Sit down with each other and decide how much you both make together and then figure up what you both owe. If what your wanting or what your wanting to do puts you in the red, don't do it. Trust me you will thank me for that advise later.
Just Say No... To Credit Cards!!!
Some love 'em I think they are the devil. They tempt you into buying things that you don't have the money for half the time. We use only the bank debit card to do our transactions, this way if we don't have the money we don't spend the money. I know that's crazy...I can hear you screaming at the monitor now, but I promise you it's true and it works. If you remove the temptation, it is far easier to resist giving in.
Eat In Not Out
When I first started dating my wife it was nothing for us to eat out at least 2 meals a day 6 days a week and while it didn't seem that bad at first it quickly added up to where we were paying between $140 and $180 on food a week, which in a month put us at $560 to $720 a month. When I saw these figures it about floored me. After we got married, my wife took over in the food department and we started eating at home and used leftovers for lunch the next day. Suddenly our food bill was slashed in half. These days we only spend between $250 and $300 a month on food. So remember love birds it will pay off in the long run if one or both of you know how to cook.
Since the time I wrote this my wife has really got into couponing and it has significantly cut down on our food expenses as well we have began searching for the lowest prices in our area these two tasks alone have cut our food expense for our family of 3 to $200 or less a month and she is now working on monthly meal plans to cut this cost even more.
Square Your Bills Away:
If at all possible enter this bond with as few bills as possible. In the grand scheme of financial planning you really should try to take care of any prior debt before you get married, because once you are married your debt becomes that other persons debt, whether they like it or not. I know this is not always possible but you both should discuss how you will handle getting rid of that excess as quickly as possible. I came into my marriage with a large car payment. We were able to get a better rate at the bank and are now well on our way to getting this thing knocked out. This was done by my wife once again coming to the rescue and number crunching and placing our bills on a priority list. Once we pay all we have due, she will put a little extra toward the debt we have, in return knocking off part of our interest.
Since writing this hub we have paid off all debt except our house. That will be our next big victory but for now we are working on baby victories along the way.
Budget, Budget, Budget:
Set a budget and stick to it. Sit down and discuss where you stand financially and what you can afford to do each paycheck. If you have a recurring bill that is a little on the high side, put a little back each check so the blow doesn't come quite as hard when the bill comes due. If you plan your budget right you will occasionally have some extra left over. Take any extra income you have and invest it in a savings account or some other account that will draw some interest. Always remember don't spend more than you can afford and you will be golden. If you need help getting started with a budget, there is a sample budget worksheet that I have added to the right of this section and the link at the top of this section has some excellent information about free budget worksheets. Give them all a look and see which one might work best for you. If you are more of the electronic budget kind of person there are some good free alternatives out there like Mint and my personal favorite Dave Ramsey's Every Dollar.
Link to the Compass Website
Compass Finances God's Way
Recommended Reading For Couples
A Wealth of Great Resources
If you are looking for a great place to start on your road to financial freedom, I would suggest looking no further than the guy at compass1 ministries. They take a biblical approach to handling finances and share a true wealth of information from borrowing and lending to getting out of debt and investing. Howard Dayton and Steve Moore have a true heart for this ministry and my wife and I have just recently began our journey along their Money Map to Financial Freedom. You can find an introduction to the website below and to the right is a link to the compass website. I also suggest new couples check out their book Money and Marriage God's Way.
So What Your Saying Is?
Its difficult for any couple starting out, but keep your head up and work at it. It is a game of checks and balances and if your figures don't come out at first, figure again. Financial planning is an important part of any young couples life, but if you play it smart your future can be as bright and fruitful as you want it to be. Best Wishes and Financial Blessings!!!