Financial Planning for newly married couple

If you already married and now you start to worry about how to manage the finances of the new home, there might be a problem. The best way of putting it would be to say that you're coming to the battlefield without having a prepared for the fight. This we say because numerous studies have shown that one of the leading causes of divorce is the problems that arise because of disagreements between couples on how to manage household finances.

Therefore, take some time to discuss these issues and to establish criteria that will govern the financial decisions of this new family. Undoubtedly, it is essential that, prior to marriage, each person can argue with the other all the details of your financial situation, i.e., debt levels, savings, investments, commitments to his family, among others.

When the couple is married, the financial position of this new family should be approached on a joint approach, i.e., without regard to who did what or who brought what to the table.

The importance of planning

Ideally, start with an exercise in long-term planning. This is about setting goals and objectives for which work should start now but it will be done throughout our lives. This includes things like: When did you have children?, buying a home, buying a car, saving for old age and retirement, among other things. It should be as specific as possible and to establish approximate dates and amounts.

Based on long-term goals, we can then make a short-term financial planning and creating the tools that will allow the couple to efficiently manage their finances.

Budget

The primary tool is the family or household budget. It is extremely important that both people involved in the implementation of this budget and the final result is based on consensus decisions. Every process involves preparation of a budget prioritization among different expenditure to which we want to allocate our money available.

In marriage, this prioritization is complicated because, as we all know, the priority for a man is not necessarily considered a priority for women and vice versa. Ultimately, it is very likely to need a lot of mutual understanding and to a certain level of sacrifice to achieve a budget that also cover the common costs of the family, served appropriately the individual needs of each.

Monitoring

When you have developed a household budget (preferably monthly), it is necessary to establish a system for tracking and cost control that allows us to compare the amount spent monthly against budget. This is perhaps the most tedious and difficult to implement in this process.

There are many tools that can help: from saving expense receipts in a shoe box, to electronic tools for computer or hand-held device. The key is to balance the added value of the level of detail you want to take this control and the level of effort and time that is required to do so.

After all, what we want is to have a monthly estimate of how much was spent and what was spent in a format that is comparable with the budget previously made. If partners have different personality profiles in this regard, here comes another opportunity for consensus, understanding and / or sacrifice (after all this is about marriage ... right?).

For those who regularly use the credit card and the "internet banking", some banks are offering online tools to classify the costs of your credit cards default on certain items depending on the type of consumption. Otherwise just use the bank statements and make a space of time every month to classify expenditures. Must have slope, for this to work, you must identify themselves each time consumption to do so.

When you are beginning to implement the system of expenditure control and tracking, it is recommended to make an effort and try to take in as much detail as possible.

In fact, this process helps to better understand what specific items we spend our money and allows us to further improve the budget structure. From 3 to 4 months, is likely to already feel comfortable enough with the process or have learned some spontaneous alternatives to simplify the level of detail with which have been wearing.

The key

In conclusion, the key to good financial management of a household is joint planning and consensus (long and short term). Humans, by nature, do not give enough importance to the planning and we feel more comfortable acting freely and spontaneously, without adjusting to structures and procedures that we generate recurring responsibilities. However, in many aspects of life, it has been proved that “fails to plan, is planning to fail".

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