Make sure you’re both on the same financial page….

Since finances are always a bone of contention at some point during a marriage, before you tie the knot is when you should seriously discuss finances to make sure you’re both on the same page.

If one is a spender and the other a saver, it is a bad idea to move forward with plans until you each put all your debts, accounts, and how you handle them out in the open.  Don’t hold anything back…. no secrets…. or you will be found out sometime down the road.  Better to tell all now, and if you spend /or save differently, budget differently, pay bills differently, now is the time to bare all.

You both need to be on the same page with finances.  If one has no debt and the other has a lot (or staggering debt), now is the time to find out and hold off on the big day until, and if, the debt is paid off.

After all, once you say ‘I do”, their debt automatically becomes yours!  And, would of course, bring down your credit score.

Also, if one can handle money and budgets better than the other, then that one can oversee bill paying, but the other should always be included so that he/she will also know where the money goes (and hopefully learn how to handle money and bill paying properly.

The idea is to know about the other persons finances before any wedding day plans are made.

Living within your income is a must!

Back in the day there were no credit cards, no debit cards, just cash.  That meant that if you didn’t have the cash to buy something, you walked out of the store without the item.  Easy.

Then along came credit cards.  If you learned how to use them properly right from the start, they could be an asset to you.

But……

If you used them the wrong way…… that is, buying an item then paying for it over several months….. that’s the wrong way…… because it cost you not only for the item, but for the finance charges as well, and, if you were late with the payment(s), there were also late fees.

All substantial costly charges to you. So, in fact, you might pay two, three or more times the cost of the item you ‘wanted’.

Using a credit card in this manner will get you into a financial hole you could take years to get out of, all the while paying staggering financial fees to do so.

This method of paying is not the way to use a credit card.Use your credit card….only…..if you know you have the money to pay for the item(s) ready and waiting when the bill comes in.

This is the ONLY way to use a credit card!

If you don’t have the money to pay for it, don’t buy it!

Make a list of things you do need….. rent/mortgage, utilities, food, medical insurance, car payments etc.  Notice that the list doesn’t include incidentals….. eating out, entertainment, gift giving etc

Using the figures needed for each item listed, add the figures….. does your income allow for payment of these essentials?

With the remaining figure, save half…. start or add to an ’emergency fund’, or a 6-9 month ‘loss of income account, or a retirement account.  These are essential so that should you need new tires, or a dentist visit, or a plumbing emergency, the money is there to cover it.

The 6-9 month loss of income account is just that….. should you lose your job, or be out of work for a time, the money is set aside for the necessities, (rent, utilities, etc)…. not…. eating out, or entertainment.  Just. The. Necessities.

Being able to stay within your budget…… (No debt)…… is your goal…

It takes discipline, but it can be done.

Get started.

Remember….. PAY YOURSELF FIRST !!

Paying yourself first is a must….. it means you think enough of yourself to save for your future.

If you think that Social Security will be there for you…..think again…..  as it stands now, by 2034 those receiving Social Security will have their benefit lowered by approximately 25%.  And with so many people not working (and not putting into the Social Security System, that figure is sure to be more than a 25% cut or happen much sooner than 2034….. it’s common sense.

That said, it’s imperative you pay yourself first.

And, you need to get rid of your outstanding debt.  Pay it all off so that you are debt free with only the monthly bills to pay.  Doing this means you’re not paying any finance charges, thus saving money there…… a no brainer.

Being debt free is a great feeling…… it leaves you financially stress free.

Buying only what you know you can pay for – in full – when the bill comes due is the only way to handle purchases.  So, if you can’t pay for it, don’t buy it.

You may need to squander a bit until you get it all paid off, but in the end, you’ll be so much happier.

Pay Yourself First !!!!

This is a must if you are (or want to be) a serious saver!

Try for 10% of your pay, but if that’s not possible yet then try for 9%.

The idea is to save as much as you possibly can from your paycheck before you start to pay your expenses.  This will mean that while your savings is growing, you are being more careful with what you have left to spend on essentials.

Keeping your savings accounts separate is essential too.  It will keep you focused on what you have saved in each (as they all will need to be at different levels).

You’ll have to decide what your plans are for the future (at least the next 5 years), and what you’d need in money to get to those goals.

You may want to save for college or a home or car…. and don’t forget a retirement account (that time of your life creeps up much quicker than you think)!

Whatever your goals, start saving…… seriously saving.  You have only you to depend on to do this.

It is why you need to think ahead…. set goals….. and start saving to make those goals reality.

Checks and Balances…..

Hopefully, you were able to eliminate all (or at least some) of your outstanding debt. Doing so will bring your Credit Score up, which means that you are more likely to qualify for a car loan or mortgage, or secure that apartment before someone with a lower score does.

And, of course, …… you have peace of mind knowing that your bills are caught up and you don’t have those dreaded balances and finance charges to deal with any longer.  A good feeling.

Kudos to you if you’re all caught up…. with zero outstanding debt on your credit cards. And if you’re still whittling them down, keep doing that…. they too will be a zero balance.

Now is a good time to skim over your budget. Tweak anything you can so that you can put more into your savings…..

Remember to keep your savings accounts separate so you can easily check to see what is in each and where you could add more.

You need that Emergency Account…… at least $1,000.  But preferably $2,000. or $3,000. to cover any emergency that may arise (and they do)…… If it’s there, you don’t have the added worry of “How am I going to pay for that???”  If you do have to use it for an emergency, remember to replace it as soon as possible so it’s always available.

The 6 – 9 month Income Reserve Account……  It may sound ominous, but it can be done….. because if you are suddenly out of work with no income, this is the account that will see you through until you can get back to work.  It will cover only the absolute necessities…. rent/mortgage, utilities, medical, car loan, food…..   no take out, or eating out, no entertaining, live on what you have and live frugally.  You will be glad you did. And this would have to be replaced if it were needed…… so replace any portion of it that was needed as soon as possible.

The Retirement Account….. put as much as you possibly can ….. maybe 5% of your income into an IRA, a Roth, or some other type of Retirement account so it can stay there and gain interest until you retire, or at least age 59 1/2.  This is crucial as you can only depend upon yourself for your retirement income as Social Security may not be available for you.

How well you budget will show up on the totals of these accounts.  You work hard for your money, so don’t waste it spending frivolously.