2. Start paying down debt immediately. If you're starting off your marriage in debt, now is the time to start paying that down. It's easier to pay off debt now, than to wait when you have more responsibilities (like children). There are two different methods of paying off debt: the avalanche method (paying off higher interest rates first) or the snowball method (paying off the smallest debt first). Talk to spouse and get on the same page about which method you want to use. Prior to our marriage, I got into credit card debt and paid it all off before our wedding. Having debt is stressful, and paying it off was such a weight off my shoulders!
3. Live off one income and save the other. One of my co-workers told me during her pre-marital counseling their pastor recommended only living off one income. If you decide that one of you wants to stay home with children, this is easier to do financially if you're already used to living off one income. We're not planning to have children anytime soon, and I don't think I'll want to be a stay at home mom when the time comes, but I still think this is great advice. If one of us loses our job, we'll still be okay financially since we only live off one income.
4. Save! Have you ever been really excited about getting a raise, only to realize that the additional money just seems to disappear? Most people increase their standard of living whenever they get a pay raise. You don't end up accumulating more money because you're spending more money. Instead of spending your raise, invest it instead. My husband just got a raise last week, and he increased his retirement savings with the extra money. We never got used to having more money, so we never missed the money that was now going to retirement. It's so important to start saving money when you're young because of the magic of compounding interest. Those people who say they aren't saving for retirement in their 20's because they have "plenty of time" don't understand the magically powers of compounding interest, which this charts explains pretty well:
The earlier you start saving for retirement, the less you'll need to save thanks to compounding interest. If you want to learn more about compounding interest, this article explains it really well.
5. Agree on your goals. When it comes to short term and long term goals, finances play a huge role in the decision making process. Whether you want to buy a new car, go on a European vacation, or retire at 40, you need money for everything. Discuss your goals with your spouse and come up with a plan to meet your goals. Before we got married, my husband and I agreed that we wanted to buy a house and travel. To achieve these goals, we set up additional saving accounts and have money automatically deposited into these accounts on pay days. I also recommend writing down your goals, because people who write down goals are more likely to accomplish them.
Follow Rebecca here: