6 Money Mistakes Newlyweds Should Avoid

A happy young couple in their home.

If you recently said “I do,” you’ve probably been very busy! Between planning your wedding, setting up your honeymoon, and possibly moving to a new home, couples often don’t have much time to spare. However, as you settle into married life, it’s important to make sure that your financial household is in order. There are a number of potential pitfalls that newlyweds sometimes encounter as they adjust to managing their finances as a team. To help you keep your marital bliss going strong, Tennessee State Bank has put together a guide to six common money mistakes and how to avoid them.

1. Skirting the Topic of Money

One of the biggest mistakes couples make is not talking about money. Of course, discussing finances is sometimes awkward and can occasionally lead to arguments, but chatting about money early and often will save you a lot of headaches down the road. It is important for spouses to know each other’s spending habits and financial goals. If you find that you are not completely aligned in these areas, you should try to work out a strategy for spending and saving that you both feel comfortable with.

2. Not Coming Up with a BudgetA young couple looking over their finances.

Having a budget makes it easy for couples to make sure that their finances stay on track. To draft a budget, figure out how much income both of you bring in, calculate your expenses, and decided how much money you should be spending each month. Try to come to consensus about any expenses that you should be cutting back on and any long-term goals you should be saving up for.

3. Not Having a Plan for Your Bank Accounts

Now that you’ve tied the knot, you and your spouse will need to decide how to manage your bank accounts. Do you want to use exclusively joint accounts? Would you be more comfortable sharing a joint account but maintaining separate accounts for personal spending and savings? Or would you rather keep your accounts completely separate? Every marriage is different, so you need to find the system that works best for the two of you.

A woman budgeting with her calculator.4. Failing to Establish an Emergency Fund

Having an emergency fund will provide you and your spouse with peace of mind. When you have three to six months of living expenses saved up, you’ll be prepared for the unexpected. Couples will definitely want to talk about who will contribute to the fund and how often.

5. Not Having a Rule for Discussing Big Expenses

When you or your spouse want to make a big purchase, it is wise to have a conversation before buying anything. The problem is that everyone’s opinion of what is discussion-worthy can be a little different. In order to avoid any surprises, couples should set a threshold for what constitutes a “big purchase,” whether it’s $300 or $1,000. Both of you should be in agreement about any expenses that cost more than this amount.

6. Forgetting to Update Your BeneficiariesA happy couple meeting with a banker.

If you haven’t done so already, make sure that your spouse is listed as the beneficiary for your will, life insurance policy, and financial accounts like your 401(k), checking, and savings. It is best to take care of this as soon as possible so you don’t have to worry about updating all of these forms during an emergency.

About Tennessee State Bank

Tennessee State Bank has been serving our local community for over 45 years. With branches in Sevier County, Knox County, Cocke County, and Jefferson County, we offer convenient banking services in East Tennessee. Whether you’re looking to open a checking account, obtain an auto loan, or apply for a home mortgage, we make the process as simple and straightforward as possible. Tennessee State Bank’s motto is “Banking at its Best!”SM, and we strive to live up to that creed every day. Let us know how we can help you by sending us a message via our Contact Form.

Tennessee State Bank is Member FDIC and an Equal Housing Lender.

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References

“Personal Finance Tips for Newlyweds.” American Bankers Association, www.aba.com/Consumers/Pages/FinanceTipsCouples.aspx