One of the common fights that young married couples have is over money. What is the best approach in managing those greenbacks that have become such an essential part of our lives yet the cause of frustration and arguments? Here are some immediate steps you can take to organize your finances as a new couple.
It is wise to have a joint checking account for shared expenses like rent and utilities. Keep separate individual checking accounts for personal spends – this can go a long way to prevent arguments about spending and finances.
Managing your finances together means not just covering all your expenses but also putting away something for the future – saving for a new home, your kid’s education, and other priority areas. Start a savings account. One of the most important things about managing money is understanding compound interest. Use it to the benefit of your family’s financial future.
A budget is an absolute necessity. Start by creating a list of recurring expenses you will have every month. Subtract the total from your monthly income. Ideally, there should be quite a bit of balance left over. If there is, you can go ahead and invest a portion of that amount into various financial instruments of your choice. Also make sure you set aside some of the balance for a separate emergency fund to prepare for any unforeseen events.
If you don’t have a balance or have a negative balance, then it is the time to cut down on spending. Have a relook at the items on your expenses list and see where you can cut down. Here are some suggestions on how to keep costs low.
Start by eliminating unnecessary entertainment costs like getting your cable television package reduced. Keep appliances that are not in use switched off and unplugged. Switch off lights, air conditioners and fans that are not being used. This will help you lower your monthly utility bills.
Save on fuel costs. Walk or cycle to nearby supermarkets and restaurants instead of taking the car. Instead of buying books and magazines off the stand or book stores, borrow them from your local library.
Cutting down on junk food is a great way to save money and also good for health. Junk food like candy and soda pop can make a large dent in your pocket if you are in the habit of buying them regularly.
A judicious approach to spending, some careful budget planning and a sense of financial responsibility will go a long way in ensuring a financially secure and happy future.