7 Money Mistakes Newlyweds Make
To be honest, this doesn’t just apply to newlyweds. It applies to anyone in a committed relationship – whether it’s new or been around for some time. However, I say newlyweds because the vast majority of these mistakes are done at the beginning of the relationship. I have newlywed friends experiencing some of these now.
# 1 – Starting the Marriage in Debt
Perhaps I’ll understand better once I’m in a position to want to get married, but I don’t understand why people choose to get married when they’re drowning in debt. Now, I’m not talking having a mortgage, car, or student loan debt – unless it’s out of hand. I’m talking credit card debt and other consumer debts that tend to bog folks down. Why would you want to start a life-long relationship that way?
My friend who just got married was in debt. I didn’t understand why they didn’t wait until the debt was gone. My friend’s fiancé was pushing to wait, but she wanted to have the wedding. In her mind, she felt like they’d never get married if they waited until the debt was paid off. She felt like they’d spent the five years they’ve been together working on paying off debt and they had barely made a dent. She would rather just get the marriage ceremony over with.
I don’t know, to me it sounds like there was more going on there, but that’s not for me to decide. But, it’s causing some challenges now because she expects her husband to take overtime opportunities when they arise so they have extra money to pay off debt. He feels like he should be able to keep a little of that money since he’s doing all the work and it’s her debt in the first place. He has a valid point. But, bringing debt into the marriage can cause resentment and more money problems once you’ve paid for the wedding.
# 2 – Letting One Person Handle the Finances
I’ve talked about this before to some degree. It is a bad idea to let only one person handle the financial goings-on for both partners. What if something happens to them, then the other doesn’t know what’s going on. It can also lead to unnecessary fights if the one not handling the finances doesn’t realize there’s a money problem and spends money, while the one handling the finances is trying to save. Everyone needs to be on the same page.
My friends from above are experiencing similar issues. She handles the money, he doesn’t care. Her and I have both talked to him about it because he should care and he should want to know what’s going on. He’s the first to get mad when my friend tells him they can’t afford for him to spend money and it’s because he just doesn’t understand. If he took a look at their bills and how she was dividing the money up, he might be in a better frame of mind, but he refuses. This will be a big problem later down the line.
# 3 – Failing to Budget
This is such an easy thing to do, yet so many people fail to do it. I think it may come from not being taught about the household budget from when we were kids, at least in my case. When I left home, I never knew anything about a budget. But, as I began to learn about personal finance, I realized it was an important tool.
But, in a relationship, if there is no budget in place, how will you know what’s an acceptable amount of money to spend and what’s not? Having a budget can help keep debt down, allow you to save for retirement and emergencies, and keeps both partners on the same page – provided both parties are willing to have open communication regarding the finances. Budgeting also helps you find the money leaks so you can plug them up…that’s always sounded like a gross analogy to me, don’t know why I keep using it. Anyway, the point is, if you’re spending way to much in electricity each month, a budget will help you monitor your spending and cause you to look at your habits overall. You budgeted $150 based on the last 6 months average of your bills, yet this month you spent $175. Why? It makes you aware and accountable for your actions.
# 4 – Failing to Plan for an Emergency
This one is a pet peeve, as you all well know. You should have 3-6 months worth of expenses saved up in an emergency fund – and I’m even inclined to agree that you should have more now due to the unemployment rate. But, newlyweds often forget to plan for these things. Most of the time they think they’ve got it covered with credit cards, or worse, they think they’re invincible and it won’t happen to them. This is a big mistake, especially since money problems are the number one reason for divorce in the U.S.
You should sit down with your spouse and devise a plan to save for an emergency. Discuss your options and how you’ll go about saving the money, then do it. Commit to yourselves and your financial future and avoid the blame game when an emergency occurs.
# 5 – Not Picking Your Financial Battles
We all do this, not just financially, but in general. Something at work irritates us and we come home, ready to pick a fight over the littlest things. But, when it comes to money arguments, don’t sweat the small stuff.
My friend just told me a story about how they went grocery shopping and had a big argument because he wanted to buy beer, and while she said that was fine he wanted to get his favorite beer which was on sale, but still a $1 more than the cheap stuff he normally gets. So, I asked my friend if they were fighting over $1 and she said no, it was the principle. I said no it’s not, it’s a $1. You have to pick your battles in a relationship or you’ll spend the majority of your time fighting rather then enjoying each other’s company. Saying that you’re fighting on principle is usually when the fight is over something small. Let it go, life’s too short for that and you’d feel terrible if something happened to them before you made up.
# 6 – Keeping Money Secrets
Here’s a good way to end your marriage…keep secrets. I’ve never fully understood this, either. You chose to marry this individual, and for better or worse, they should be there for you. But, if you or they have a spending problem and you’re hiding receipts or money from them, it’s not going to solve the problem. It’s only going to make things worse when the truth is discovered.
For this, I’ll use my parents as an example. My dad is a little weird about money, I think I’ve mentioned that before. He’s very generous, but if you borrow money, he expects that it will be repaid. Well, my mom is not as strict with her own money as she is my dad’s. So, when she was working, she used her credit card for all kinds of things she wanted, but she’d never tell my dad about it. She made her payments on time, she kept her balances reasonable, but she wouldn’t tell him because she knew he’d be upset over what she was spending money on. Well, before they left for Kuwait, my mom quit her job and had to come clean with my dad. It caused a big fight because he felt she couldn’t trust him and that bothered him. He was more upset over the lack of trust then the fact that she’d spent money, though he was annoyed with that, too.
It comes back to maintaining open communication and the willingness to talk about problems before they get out of hand. Avoid blaming anyone and always keep the discussion to a neutral time and place, but make sure you’re not keeping things from each other. If you are, it may be time to evaluate the relationship as a whole because you shouldn’t want to keep money secrets from the person you share your life with.
# 7 – Wanting What Your Parents Have
This is a big one for a lot of newlyweds and my good friends are no different. What you have to understand is that your parents are established and have spent many a year accumulating the things they have, as well as the money they may have. When you’re starting a new life with someone, you may not have everything you’re used to, but you have to accept that or you risk putting yourself in massive amounts of debt.
This is instant gratification at it’s worst. We talk about comparing ourselves to the Joneses, but sometimes the Joneses are mom and dad. If you want to be successful in both your marriage and your finances, you have to start small and work your way up. The good things will come in time with the right combination of work and patience, but if you expect everything to be the way it was when you were living at home, you have a rude awakening coming. Ask your parents. Nine times out of ten, they started off the same way you did.
What other money mistakes can you think of that newlyweds make? Did you and your spouse experience any of these growing pains when you started out?
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Amen on picking your battles. My wife and I agreed on a maximum amount for “no questions asked” purchases. Anything below that amount doesn’t require consulatation with spouse; anything above does. It works pretty well – neither of us abuse it. But it’s nice that I can buy a dozen books on half.com without consulting with her … but it’s also nice that neither of us can spend $500 without consulting with the other. I can’t remember ever arguing about grocery items.
Luckily we haven’t had the problem of wanting what our parents have. We got married when we were about 30, and we are in better financial shape than either set of parents, simply because our income dwarfs that of our parents. So we pretty much can afford what our parents have. Obviously, that’s atypical for most newleyweds. Also, we did follow the rule of starting small when we we fresh out of college. The furniture I had before I got married would probably make a lot of people cringe – but it was very functional :)
great post Kristy… I agree with all the points you made, However I would slightly add to #2 that there is always going to be one spouse that is more suited to handle money. Sometimes it’s the guy and sometimes it’s the gal and you cannot make the other person interested in money matters if he or she is not inclined.
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For the benefit of such spouses there should be a folder that details all our accounts, loans, life insurances, credit card balances, investments and passwords to online investment accounts and it should be kept in a locker or any other place the spouse can easily reach in the event of an emergency
I think a big mistake is not having a PLAN. Not just a budget, a PLAN – that encompasses how are the finances going to be handled, what constitutes Kosmo calls “no questions asked” purchases, what the financial goals are and how those goals are prioritized, and addresses what we would consider the basics of PF topics – saving, spending, giving, insurance, etc…My premarital counselling (required by my pastor) spent three (of 9) sessions addressing the above list. And then many of the other sessions addressed finances by association (family planning for one)…If you and your intended spouse are not on the same page prior to marriage, how can you expect to establish a home and build a future together?
RE #1: Getting married is based on emotions, paying off debt is based on logic. Emotions usually win.
It also helps if you talk about the situation and come to an agreement beforehand. Your friends, for instance, should have discussed how they would go about paying off the debt, which should have led to discussing the overtime and how that overtime money is allocated. Instead, they both have different expectations which causes the resentment.
@ Kosmo – I think it’s a great idea to have a set dollar amount that you can spend without having to discuss it! But, at the same time, I think if you have separate spending accounts anyway, you don’t need to have that rule, so it just depends on what works best for the couple. It seems to work for you guys, so that’s great! I think those who get married later in life tend to be a little more settled and situated, but they’re also used to doing without, so what they’re parents have isn’t that big of a deal. I think the parent thing really hits those who marry young and haven’t really experienced what they’ll have to sacrifice to get ahead financially yet.
@ BM – I see your point, but I still think it’s important to discuss it – whether they want to do not. If we let the other person not be involved it opens up a whole lot of problems later down the line. And while I agree that you can’t force them, there are other matters of persuasion. Most people are at least open to the idea of a monthly meeting to go over financial information and give input. If they’re involved in some way, then things are likely to be a bit more smooth financially.
@ Michelle – Absolutely! I couldn’t have said it better myself!
@ Slinky – I agree completely, I just don’t understand it! lol. I think because I’m more logical then emotional in a lot of ways, putting oneself in that kind of position just doesn’t make sense. But, in my friend’s case, they did talk about – if you call my friend telling her fiance ‘that’s just too bad, we’re getting married’ a talk. Even still, talking about it doesn’t solve the problem. Taking on massive amounts of debt that isn’t yours is likely to make anyone resentful – whether you talk about it or not.
I wouldn’t consider that talking about it at all. That’s issuing an ultimatum and those are much more likely than the debt to make someone resentful. I don’t understand putting up with someone who would talk to me like that!
Talking is good, but you also have to come to an agreement about it. In your case, you’re completely unwilling to help with the debt, so you would discuss things and come to the agreement that the debt is entirely his responsibility. Perhaps, you’d not combine finances completely until the debt is gone as well. Would you still resent it in that situation?
My fiance and I both have some debt. I have student loans and a car loan. He’s got a CC balance. We manage our finances separately, so it’s very simple for us. His debt is his responsibility, and mine is mine. That said, I’ve offered to help him pay down his CC. Completely of my own free will without resentment. Why? Because I love him, and I’m keeping him. He’s learned his lesson, he’s paid off half of it, and it’s just in the way now. He’s doing it himself though (and quickly too!)
@ Slinky – I agree that my friend and her husband didn’t really talk about it. I don’t understand how their relationship functions half the time for the way they talk to each other, but it seems to work for them, so I don’t know. But, in my case, it’s not that I’m totally opposed to debt. I agree that talking about it is the right thing to do, but when someone is so immersed in debt and struggling to get out of it, I don’t think that’s the right time to add the pressure of a marriage to it. I think overall that makes things harder. Marriage takes commitment, work, and a lot of good communication. However, money problems are one of the biggest reasons for divorce. I think walking into a new marriage with a ton of debt puts more burden on the relationship then is necessary. In my opinion, if I truly loved someone and wanted to spend the rest of my life with them, I’d say we should work on that debt first. I’m not opposed to helping with the debt if it was needed. I just don’t think it’s a good idea to take it into a new marriage, especially when the wedding itself may add to the debt – or at least slow down the repayment.
I see where you’re coming from now. Stress of combining two lives into one + stress of debt = bad news. That’s very true.
Like everyone else, I tend to think of things from my own point of view. My fiance and I have been (living) together for years and are very settled into our relationship. That isn’t always the case for newlyweds. I’m guessing it isn’t for your friends either.