How To Set Financial Priorities When You’re Just Married

Life may never seem so full of potential as on your wedding day. Your wedding celebrations and honeymoon quickly transition to a new normal maximum of struggles, remarkably similar to the challenges you had before you was married. Taking the time to set financial priorities can help to ensure a long and happy marriage.

Consider the following financial priorities and discuss them with your spouse:

1.  Buy a home. If your education is complete, your first priority should be to make into a home. Getting a home, staying in it for a long time, and raising families there will likely have a greater influence on your children than any other financial decision you will make as parents. Over the long term, home ownership tends to strengthen families financially as well. Making this your top priority is an effective means of start your lives together.

2.  Save for your children’s college. If this is the first time that marriage for both of you, chances are there are no children involved at this point so you may think it is premature to start saving for college. It’s not. If you hope to be able to have children someday, do yourself a favor and start saving for college now. By saving earlier you radically reduce the pressure to save later. Eighteen years do not represent a long time to save for college; by starting now, you may get 25 or even 30 years of saving doing before your youngest children will start college.

3.  Save for retirement. If you are on your twenties, with about forty years before retirement, you have an extraordinary opportunity to start putting money away for retirement. One dollar you save today will likely become $15 by the time you retire. If you contribute a dollar ten years from now, that dollar will become just $7.61 when you retire. If you wait twenty years and contribute a dollar, it won’t quite become $4.00. If you wait until you’re in your mid-fifties, just ten years before retirement to contribute $1, it will become a mere $1.97 in ten years. Start saving now for retirement, even if it is just in modest amounts.

4.  Save for a rainy day. It will rain. A major appliance will break. Someone will need surgery. The car will need another transmission. You or your spouse will be out of work. Don’t worry; something will be wrong. One day it would be nice to get a full year’s expenses in savings as a cushion against almost any foreseeable disaster. For now, work on getting $2,500 set aside specifically for a rainy day. That emergency cushion can turn the vast majority of life’s challenges into financial nuisances. When you use the rainy day fund, do not forget to replenish it.

5.  Save for a car. If you have a car payment now, commit to each other that it will be the latest. When the car is payable for, keep making the payment into your savings account. Drive the car as long as possible and then use your savings to purchase a replacement. Keep saving for the next car.

If you focus on these priorities—in the order presented—you’ll find that you’ll empower your lives with a combination of discipline and dividends that will make your lives together as fortunate as you hope.