Budgeting Tips for Young Couples
The honeymoon is over! How times have changed from those glory
years when you and your spouse-to-be were footloose and fancy
free. You were dating, having fun, planning your dream wedding,
the vacation on some exotic island and then living happily ever
after.
Now, you've settled into the routines of life: work, paying the
ever-increasing bills, and perhaps you have been blessed with a
child (or two). The priorities have certainly changed! And, so
has the financial picture. Your planning horizon has shifted
from month-to-month to building a long-term future for your
family.
What I am describing can be a very large burden on young
families. This was a very difficult time for my wife and me, but
with almost twenty years of experience under our belts, I now
feel equipped to offer you some advice.
1) Share The Budget Burden - Budgeting decisions shouldn't be
made in a vacuum! Both husband and wife must set up a monthly
budget together. If one person is not involved in these
important lifestyle decisions, there is bound to be bitterness
and anxiety. I have found that, in most marriages, the husband
and wife will have opposite habits which tend to balance each
other out. In other words, one may squeeze the money so tight
that George Washington would cry while the other has a hole in
their pocket! It is usually a healthy thing to meet in the
middle somewhere.
2) Pay Yourself First - Nearly all couples have a checking
account where the paychecks get deposited. All bills are paid
from this account using check, check card or even online. As
long as you stay above zero until the next payday, you're OK.
Right? WRONG! Unexpected big bills will come up and you need to
have some cash reserves. What happens when the water heater
breaks or you need the transmission fixed? The best way to
manage this is to have a separate bank or investment account set
up. Write a check to this separate account on each payday or at
least once a month. Stay disciplined to this program! Treat it
like a payment to any other bill collector. Then, you will have
money available to pay cash for those inevitable surprises and
you will not have to use the evil credit card. This leads me to
my next piece of advice...
3) Credit Cards: NO! - While I believe in using debt to buy a
house, I do not endorse the use of credit for most other
purposes. If you can't pay off those bills on a monthly basis,
don't charge it! Credit card debt will kill your long-term
financing, will create a bigger and bigger financial burden, and
will put more pressure on your marriage relationship. To
illustrate this, let's take a simple example. Let's say you
decide to "loosen the belts" a little and charge a big screen TV
and take a nice vacation. The $5,000 bill doesn't seem very big
and besides all your friends are doing it. After you get back
from the sunny beach, you start writing monthly $200 checks to
your credit card company. You didn't realize it would take 32
months to completely pay for those two purchases. Your credit
card company is happy because, with your 18% interest rate, they
will make about $1,400 in interest. That's money that could have
been earning interest in your investment account. It could get
worse. What if, during month 16 of your repayment plan, your car
breaks down and you are facing some major repairs. Since you
don't have money in the bank, you need to pay the $2,500 bill
with your credit card! Now, you are in roughly the same position
you were when you started paying off the TV and vacation 16
months ago! So, plain in simple: If you can't pay it off each
month, don't charge it!
4) Start an On-line Business - Sometimes, managing your
expenses isn't good enough. In today's day of outsourcing and
tightening corporate budgets, some creativity may be necessary.
You could get a second job outside the home, but this will
eventually take its toll on family life. I would recommend
researching various internet business options. As with most
journeys, the hardest part is taking that first step. You should
start your research in various on-line business forums, web
sites and discussion groups. You will soon find that there are
many reputable on-line resources available to help get your
business started.
About the author:
Dave Keegan has been married to his wife, Dawn, for 17 years.
They have two teenage children. Dave works full-time as a
systems analyst for a large corporation and has quality ideas
for helping people get started in internet marketing. For more
information, visit: http://www.dkeeganonline.com
written by: Dave Keegan
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