A financially smart start for newlyweds

With the loosening of novel coronavirus gathering restrictions, weddings that had been postponed are now starting to take place.

Calculating taxes (photo credit: INGIMAGE)
Calculating taxes
(photo credit: INGIMAGE)
To keep your marriage brimming, With love in the loving cup, Whenever you’re wrong, admit it; Whenever you’re right, shut up. – Ogden Nash

So we were sitting at my in-laws for Shabbat lunch a few weeks ago, enjoying my mother-in-law’s salmon, when the topic of my oldest daughter starting to date became the focal point of the conversation. While some of her siblings kept up the pressure to start going out, she held her ground consistently saying that she is not ready to get married. Then suddenly – out of nowhere – my 11-year-old son yells out, “Get married already. We want babies!” Needless to say we were all rolling in laughter, except for one person; whose face color was indistinguishable from her savta’s famous beet salad!
With the loosening of novel coronavirus gathering restrictions, weddings that had been postponed are now starting to take place. I would like to give a few financial tips to newlyweds so they can start off their marriage on solid financial footing and learn the habits needed for a secure financial future. But before I get to the tips, we are actually starting to see a trend which I wholeheartedly support. Due to the gathering restrictions we are seeing smaller, less elaborate weddings. I really hope that this continues, as it means less financial burden on the parents, the bride and groom, and perhaps most importantly, less peer pressure to have elaborate weddings for those who can’t afford them.
Back to our topic. More often than not, young newlyweds have very little, if any, experience managing financial issues. After the wedding, they are plunged into a new world, with running a household and taking care of finances. As this can be a very daunting task, here are a few tips on how to live in a financially disciplined manner.
Budget
Learn how to budget. Keep track of each shekel spent and each shekel earned. Tracking each expense by using an app or writing it down in a notebook can be very helpful to understanding what money is being spent on. Make sure that monthly and annual expenses do not exceed income to avoid going into overdraft. As I have written many times, I do a lot of volunteer work with Mesila, an organization that assists families with financial difficulties, and I have seen many couples who have accumulated as much as $25,000 in debt within six months of their wedding simply from setting up their home. A newly-married couple should realize that they are just starting out and to have the same standard of living as their parents is unreasonable. It took their parents years of saving and hard work to get to where they are now. Do not attempt to do it overnight, especially if you are living on a shoestring budget. Live within your means.
Where is money going
Communicate with your spouse about what is important. Every spending decision can have a crucial effect on staying out of debt. When you were single if you felt like buying a cup of coffee and a danish, you wouldn’t hesitate about making the purchase. Now you also need to be financially accountable to your spouse and if you are living on a small salary, you need to prioritize expenses. It is always a good idea to ask yourself if a purchase is necessary. When shopping, stick to a specific list to prevent the purchase of superfluous, unnecessary luxuries.
Couples who are being supported by their parents and/or in-laws should not take this generosity for granted. The use of a parent’s credit card doesn’t mean that the couple should go out to restaurants or cafés for lunch multiple times a week. The parental support is a privilege, not a right, and needs to be treated as such. For this reason, it is always important to show gratitude. Many parents who are supporting their married children complain to me that they feel as if their children take this gift for granted. They are happy to provide the financial help, but are disappointed that they have never received a simple thank-you for their support.

Save
As soon as possible, a new couple should start a disciplined monthly/annual savings plan. It is a good idea to use some of the wedding gift money for this purpose. Whether for a down payment on an apartment or thinking about future expenses such as a bat/bar mitzvah or even marrying off children and retirement, if a couple starts saving immediately, it makes future expenses much easier to deal with.

Mazel Tov!
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.
The writer is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing. www.aaronkatsman.com or email aaron@lighthousecapital.co.il.