Credit Card Tips for Newlyweds
Getting married is an exciting and joyful step in life. Your new marital status does come with fresh financial considerations, though, which is why we have compiled a list of credit card tips for newlyweds.
Tip #1 – Have Honest Conversations
As with most things in a successful relationship, it is important to be open and honest. You and your spouse should have a conversation about any outstanding debt and spending habits. If you have debt on your credit card as a result of youthful spending sprees, talk to your spouse about it so the two of you can work on a plan to pay off the credit cards as soon as possible.
Not only should you talk about your own financial histories and habits, you should also discuss your parents’ relationships with money. Often, we mirror the spending behavior of our families, so being aware of whether your spouse had parents who were frugal or shopaholics can help you understand your partner’s own spending inclinations.
Tip #2 – Create a Budget Together
While it may not sound like the most fun activity, creating a budget together is important work. Both of you should spend a month tracking your income and expenditures. Then, sit down to see precisely how much money you are bringing in and exactly how much is going out. Remain respectful during these conversations and stay focused on how you can both spend more responsibly. Finger pointing and arguing over finances is common but is not the healthiest way to start a marriage.
As you look at expenses, consider your other goals. You should try to save at least 20% of your income each month, and put aside extra money to pay off any outstanding debt. See if there are places where you could cut costs so you have more money to devote to savings or debt reduction.
Tip #3 – Set Goals
To make budgeting a bit less dreary, set financial goals together. Instead of just saving for a rainy day, discuss what else you would like to do with your savings. Do you both dream of a trip to Europe? Figure out how much you will need for the vacation and create a savings plan to get there. Plan to have a family? Put an exact number on how much you would like to save before you have your first child. It will be easier for both of you to bypass your morning Starbucks fix when you have a concrete vision of where the money is going.
Tip #4 – Create Limits
Once you have your budget and savings goals set, you will also want to consider setting limits that work for the two of you. If your husband has a tendency to buy clothes he does not really need, set a monthly limit on how much he can spend on clothing purchases.
However, don’t be too restrictive. Yes, the two of you should be working together toward common goals, but you are also not your spouse’s warden, so they should have some freedom to spend money as they best see fit—within limits.
Tip #5 – Never Lie
While married couples should have freedom to spend money within predetermined limits, no one should ever lie to their spouse, which means no secret spending sprees. You should also not open secret bank accounts or credit card accounts without telling your spouse. When your spouse finds out, and they eventually will, it could erode the trust in your relationship, which can then seep into other aspects of your partnership.
In that same vein, opening new credit card accounts should be a joint decision. If you see a tempting credit card offer online or are offered a discount by the cashier in your favorite retailer, it is best to wait until you have the opportunity to discuss whether the card is a good idea with your spouse. Whenever you apply for a credit card, a hard inquiry is made on your credit report. Too many of these in a two-year period will lower your score, which can affect you and your partner’s long-term goals.
If you follow these tips, the two of you can build a partnership and reach your financial goals together instead of falling into the common trap of bickering over money.