Financial Advice for Young Couples

Communicate clearly about money.

Young couples have the opportunity to shape their financial comfort for many years with the decisions that they make in the early years of their relationship. Money can be a dividing issue for couples of all ages, so young couples need to be honest and to work with each other in financial issues.

Candor and Openness

Many new couples encounter problems when one spouse fails to be honest with the other about financial issues. Sometimes one spouse will hide debts or spending from the other. This almost always creates problems because it makes it impossible for the other spouse to adapt her spending or to budget accurately.

Budgeting and Planning

Young couples should budget to ensure that spending does not get out of hand. Likewise, planning and budgeting should include money for savings and investment for retirement. A budget will help assure that both spouses are on the same page regarding income, spending, and the lifestyle that is plausible given their financial situation. While one spouse may be more financially inclined than the other, both spouses need to understand and agree on the budget.

Don't Try to Match Your Friends' Spending

Many young couples fail to save enough, and they spend too much. Spending in order to match the consumption of others often will lead to debt and to too little savings. Budgeting and spending should be based on the needs of a couple and on not the habits of others.

Invest with a Long-Time Horizon

Young couples have many years during which to save and with which to invest. Consequently, young couples can be more aggressive in their investing than older couples. In fact, some financial advisers encourage young couples to invest exclusively in stocks and to bypass investments in lower risk instruments such as bonds. The long-time horizon also increases the likelihood that a large nest egg will amass, which will make later years more comfortable and will support spending.

References

• Selfgrowth.com: Financial Advice for Young Married Couples
• CBC News: Investing Tips for Young Couples