Money problems are one of the top reasons that marriages end in divorce, yet unfortunately, most engaged and newly married couples fail to prepare themselves.
Although you’ve likely had a lot of serious talks about life including if you want to have children, where you want to live, what kind of career you want to have, chances are you skimmed through the money talk.
Though you both may be juggling your finances separately, now that you’re joining together as one, being on the same page is critical.
Below, are some of the common mistakes newlyweds make that end up costing them big later.
1. Not Sharing Financial Habits and Debts
Once you’re married, your money and finances are a joint effort.
As such, you must know how your partner deals with their finances, and more importantly, how much financial baggage they’re carrying with them. Waiting to disclose this information can lead to serious arguments about money in the future.
Knowing if your partner is a saver or a spender, whether they pay bills timely or whether they procrastinate, and having a general idea of how much debt they’re carrying around can help you both to make a plan that will secure your financial future.
You’re ready to start your new lives together and want the perfect place to build from. Be that as it may, it is imperative to consider all expenses before purchasing a house.
Newlyweds fail to analyze the true cost of homeownership and essentially buy more of a home than they can afford. However, buying more home than you can afford is a surefire way to end up in debt or having your home foreclosed on.
Though getting a home is ideal for a married couple, it should be done with careful consideration. Review your options with a mortgage company to find the best loan rates and mortgage programs for first time home buyers. Then analyze your finances to ensure that you can afford the cost of owning a home.
If you’re unable to afford the big family home you’ve been eyeing, consider a condo or starter home and then relocate once you have the money to do so.
3. Not Having a Rainy-Day Fund
You never know what could come up that requires a large amount of cash to fix.
Newlyweds make the mistake of forgetting the plan for a rainy day. An issue with the house, the loss of a job, a need to pay for something for the kids, anything could occur, and unfortunately, they aren’t prepared.
This forces them to have to go deeper into debt by taking out a loan.
While you appreciate the sunshine, there will be rainy days that you need to prepare for. You never know when you’re going to need to repair or buy a new car, get the furnace replaced, or even worse, you may have to deal with you or your spouse losing a job.
Savings should be a staple in your financial plan. Putting aside at least 3-6 months’ worth of income can help to cover the costs of unexpected expenses.
4. Not Having a Budget
When you’re single, living on a budget may be less of a priority. You don’t have any other responsibilities outside of yourself and your own bills.
Many couples keep the same mentality that they’ll handle their own finances and make the mistake of not creating a budget. However, managing money separately can lead to miscommunication and misuse of household funds.
Creating a budget and sticking to it is not as hard as you think. You must be open and honest with one another about your debts, monthly bills, and your income. Then execute a financial plan that will cover all household bills.
Budgeting can help you to make informed decisions for the household and it most certainly keeps you out of debt.
Part of getting married is all about trial and error. It’s about finding your own way to make your union work. Be that as it may, when it comes to money matters, trial and error could be the very thing to tear your marriage apart.
Avoid these mistakes at all costs by openly talking to your spouse and creating a budget that will allow you to live out the life you’ve always dreamed of.
If you are like most people, you probably have some student loan debt that you are holding onto and now that you are married, it may have doubled.
Since you both share debt now, you may want to think about paying it off at the same time together to ensure both you and your partner are working towards a better financial future.
Below, we will explore some ways that you and your partner can team up and work together to pay off student loan debt as a couple.
Let’s take a look.
Consolidate Your Student Loan Debt
When you get married, you may automatically think that yours and your spouse’s debt instantly merge together. They do not.
When we mention that the amount may have doubled, we are saying that if you had $10,000 in debt and your partner had $10,000 in debt, you collectively have $20,000 in debt. If that is the case, you should look into consolidation if you want to put a ring on your debt.
But, there are limitations to this.
If you are your partner have student loans (federal or private), it is important to know that you CANNOT merge your loans together and consolidate them with a federal consolidation loan. Federal consolidation is offered to individuals only, so you cannot lump them together through the government.
There is a solution though. You and your spouse can consolidate your loans through a private lender which is more commonly known as student loan refinancing. There are many lenders out there who will consolidate your loans, so you and your partner can work on paying the debt down.
There are some advantages to consolidating yours and your spouse’s loans together. Some of those benefits include:
• Higher credit score is used to determine the loan
• No worry about annual recertification or tax filing statuses
• Lower your interest rate
• Decrease monthly payments and payment amount
• Adjust the length of the loan terms
Consolidating your student loans is a good idea if you have big plans in the future such as buying a home, a car, or even starting a family. Here is more on private student loan refinancing and its differences with federal consolidation.
Since federal consolidation is a bit different than refinancing your student loans through a private lender, so you must explore both options thoroughly to see which one will work for you.
Refinancing your student loans with your spouse may be a good idea and can help save the both of you thousands of dollars.
Refinancing works to reduce the interest rate that you pay on your student loans. When you head to a private lender, they will take all of your student loans and combine them into one loan.
From there, a repayment term, monthly amount, and interest rate will be generated.
Many people choose to refinance their student loans because you can get a rate that is substantially lower than that of which you pay now. For example, many borrowers, who qualify, receive an interest rate somewhere at 3% to 5%.
Things to Think about Before Making the Leap
Before you choose to consolidate or refinance your student loans with your spouse, you want to make sure it is the right idea.
You should think about whether or not you are ready to give up the benefits that come with the Federal Direct Loan program.
When you refinance or consolidate through a private lender, you will no longer have the option for deferment of the loan (which may be wise if you plan to go back to school and need aid), forbearance, or convenient payment amounts. This is something that needs to be discussed upfront, so that you can make sure it is within your budget.
In addition, you and your spouse need to be on the same page as to whether or not you both want to combine the loans and make payments together. Some couples determine that this is not the best option for them and it may or may not be the choice for you.
Lastly, take some time to think about how much the payments will be, how they will be made, and what your goals are.
For example, if your total monthly payment combined is $350, who will make the payment? Do you switch month to month, do you split the amount in half every month, or does someone take on the whole amount and the other pick up another bill in a similar amount?
How would your family benefit from an extra $250, $500 or even $1,000 every month?
In this post, I want to share why it’s so important that your family develop a side income and show you how to make it happen – complete with real-life examples of the many ways we’ve added to the bottom line in the Riechmann household.
Let’s start by outlining a few of the many benefits of developing a “side hustle” and bringing in an income outside of your 9-to-5 paycheck.
1. More Money 🙂
Duh, right? Let’s start with the obvious – just like a big raise at work, side income increases your bottom line.
If you’re doing the right thing and budgeting every dollar of your income, you probably know exactly where you’d plug in some extra cash. Even if you’re not that organized, I bet you could find some awesome things to do with 500 bucks.
You could pay off debt, give more to charity, save for emergencies, go on nice vacations…all the wonderful things that more income allows your family to enjoy.
Good stuff for sure, but this is just the start!
2. Greater Freedom
If you put it in the right context, more money is ultimately about enjoying more freedom. When you’re not stuck living paycheck-to-paycheck but instead start building more margin in your budget, it gives you options to do more of things you want to do as a family.
In practical terms, killing off debt payments and boosting your income to reclaim your monthly cash flow gives you the freedom to make choices about how to spend your money and your time.
It could also represent the opportunity to leave a job you don’t enjoy to do something you love.
3. Sense of Security
This is where a side income really starts to separate itself from a regular paycheck. The raw truth is that dependence on a single income source is really dangerous – you’re only an economic downturn or angry boss away from losing it all.
When you develop alternative forms of income, you can not only build a bigger emergency fund and nest egg, but you can enjoy the security of knowing that one change won’t wipe out your inflow of cash.
And as your side pursuits mature, you’ll likely find that you can automate (or hire out) much of the work and create passive income that supports you without direct investments of time – that’s true financial freedom!
4. Opportunity for Something BIG
What starts off as a modest attempt to make an extra $200 could grow into something much, much larger.
Many of the world’s most successful companies started off as side ventures or small solo pursuits…have you ever watched Shark Tank?
The fact is that you never know where the market may take you – a simple idea can strike it big and grow into a massive success. That’s exciting!
5. Help Others
One of the awesome benefits of doing good work is that you get to help others in the process. The best way to make money is to provide genuine value by helping people.
While you may feel this in your day job, there’s a good chance that your side hustle will connect you more closely with the value cycle and let you experience the real joy of helping others.
6. Lifelong Learning
One of the surprising benefits I’ve found in developing side businesses is that it’s incredibly intellectually stimulating. It’s much too easy to get bogged down in the day-to-day demands of a regular job and never stretch your thinking.
When you do work on the side, you’ll gain entirely new skills, feel excited to learn something new, and then get to implement it right away to grow your income.
7. Fund Your Dreams
When you think about your dream marriage, there’s a good chance that money will play a role in the lifestyle you desire. I’m not necessarily talking about sipping drinks by the beach, but enjoying the freedom to live life on your terms.
In our case, it was our side income that was instrumental in allowing Bethany to stay home with our kids several years ago. Only through side gigs were we able to pay off $54,500 in debt and position our family for the future we desired.
BONUS: Family Bonding
Are you thinking that developing a side income is going to steal too much quality time away from your family? I totally get that, and it’s a legitimate concern.
It’s all about how you set your business up both in terms of how many hours it requires of you and how much of that time is solo.
When you see the list of former and current businesses we’ve done below – you’re going to think I’m insane and that I must have an extra 8 hours in the day…but the reality is that each side gig is set up strategically to minimize the time required (and we’ve dropped most dollars-for-hours tasks over the years).
One surprising benefit that we’ve found with our side pursuits is that we can actually enjoy some very high-quality time together. As I note below, my son is my “partner” on one business, and Bethany is absolutely involved in Engaged Marriage.
You should view your side business as a real opportunity to connect around an interesting project that benefits the whole family!
How to Make It Happen (and What We Do)
If generating a side income was easy, you’d already be doing it, right? Maybe.
It can certainly be intimidating but it’s probably not nearly as hard as you think. Here are the three main suggestions I have for you as you consider how to generate side income:
Start With What You Know
Go Low-Cost & Low-Time
Get Your Spouse & Family Involved
We’ve built different streams of side income throughout our 17 years of marriage. When we started out, we traded more time directly for dollars, but we’ve learned along the way and also taken advantage of the power of the Internet.
Here are several examples of side income streams that we’ve enjoyed in our household along with a short description of each.
This was one of the first side businesses I did, and it was quite profitable with more than $1,000 a month in income. The model works for lots of different items, but I got into golf clubs when I was trying to find the right set for myself (this is often how I find business opportunities).
In a nutshell, I bought clubs locally (through Craigslist mostly), cleaned them up, and sold them nationally through Ebay. It’s a classic case of buying low in a local market and selling higher to a broader audience who will pay true market value.
I only quit doing this because it was too time consuming for me to travel around the region buying the clubs, and we discovered more passive income streams.
Both Bethany and I have tutored kids in various subjects, and it’s a nice way to make extra money. I still tutor a neighborhood high school student in math occasionally as a favor – I enjoy it and we use the money to pay our kids for household chores.
Teaching (online and offline)
There are SO many opportunities to teach what you know to others. One the best ways to do this is to create a simple course on a platform like Udemy where you can reach the world. You can create the course once and sell it many, many times. I have one course on Udemy currently.
I’ve also taught engineering courses at a local University, which I found quite fulfilling. This is more dollars-for-hours in scale, but you may find it’s a great fit for you to teach locally or for a college online.
If you enjoy writing, there are pretty much limitless opportunities to get paid to write. One of the best places to find work is through blogs you enjoy – we employ four awesome writers here at Engaged Marriage.
I’ve written for other blogs for pay in the past, and I’ve also written articles for magazines. They pay better, but of course this requires more work and specialized skills.
If you want to take it to another level and develop more passive income, you can absolutely self-publish a book! The Kindle platform in particular makes it easy, and you can also have Amazon convert your ebook to paperback. I’ve written three books personally, and they all generate a nice passive income through Amazon (and other platforms).
This very site is a robust business with income from books, workshops, advertisements, affiliate relationships and coaching. It is FAR from passive with nearly 400 posts written mostly by me and a continuous effort is required, but it’s a true labor of love getting to help others live a married life they love.
Coaching & Consulting
You can get paid really well for sharing your expertise and guidance with others. I don’t even advertise these services, but I’m able to generate a very nice side income through coaching and consulting.
You can coach/consult on just about any topic that you have specialized knowledge in.
In my case, I help married couples achieve their dream marriage through strategic planning (set big goals and follow a step-by-step plan to achieve them), and I consult with folks on getting control of their schedule and being more productive.
I also do consulting to help others get started or ramp up their online businesses. It’s so fun to apply what I’ve learned in six years of online business to help others generate real income to help their families.
Like I said, I’ve never even advertised these services (people contact me), so there’s clearly a real demand out there for help. If you’d like to chat about working with me in either of my specialty areas, shoot me a message. 😉
Shin Splints Treatment Kit
This is my latest venture, and I love it because it’s really specific, pretty passive and I get to teach my 10-year-old son about business. When I got into running about 18 months ago, I suffered BAD from shin splints.
Long story short, I found a quick treatment regime that really helped me and some of my friends (I actually just ran my first marathon two weeks ago).
In the process, I found an opportunity (you develop this mindset once you start a side business) – all the materials I needed to do the treatments were only available from random sources and at pretty high prices.
I simply created a short guide on how to do the treatments, then found wholesale sources for the materials needed (foam roller, ice packs, resistance band).
My son Braden packs the boxes for me and helps me with shipping. I pay him $1 from every sale, and he loves it.
This is an awesome way to teach about the entrepreneurship and have fun together while helping others!!
OK that’s quite a list – so we clearly LOVE side businesses!
Keep in mind that we’ve had small children in our home that last 12 years, and I still work a demanding full-time engineering job (that I love).
You can totally do this. You’ll notice that a lot of our endeavors have been centered online, which we love for the flexibility it provides, but I know many other couples who thrive with “real world” businesses helping those in their community.
It all starts with one simple idea and a smart action plan…and I know just the guy to lead you on that front!
Want The Exact Steps We Use to Make Extra Money On the Side?
I can only share so much in a blog post before it becomes ridiculously long, but if you’re interested in learning more about creating a side income for your own family – we’ve got you covered.
Now that the wedding bells have rung, the preacher has pronounced you man and wife, and the honeymoon is over, it’s time to settle down in the real world.
For most newlyweds, that means everything from buying new furniture to combining their lifestyles, from clearing out the clutter to combining their resources.
Combining finances can be a struggle because, as newlyweds, one of the biggest points of contention seem to be money issues and keeping their independence.
However, there are a few ways that you can combine your resources and still keep your independence.
Nine times out of ten, when it comes time to move in together, you are going to need new furniture, especially a bigger bed.
In most marriages, it’s out with the old and in with the new, if you can afford it.
One of the best ways to ensure that you don’t fight over the money you spend on a bigger bed is by going shopping together. Instead of heading out to shop for a bigger bed alone, make the time to go shopping together.
Stores like Bedding Mart carry a large variety of everything from mattresses to bed frames so that you can get what you need in one fell swoop. In this way, you know exactly what your budget is and what you both agree is affordable to spend, which will avoid arguments later on down the line.
Is it better to keep your accounts separate or combine the two accounts into a joint bank account instead?
Many couples, women especially, feel that giving up their bank account is giving up their independence. They like to keep their own money so that they know if things get tough they have it to fall back on.
If you want an open and honest marriage, however, studies show that a joint bank account is the best way to go. There are no secrets, and the money is right there on the table for both of you to see.
The choice, of course, is up to the couple and every marriage is different.
Always be Honest and Open
One of the easiest ways to destroy a marriage is by keeping secrets.
Sit down together and be honest and open about your finances.
While it can be a little embarrassing to sit down and talk about debt that you incurred before you got married, trust is very important early on in a marriage, so it’s best to put it all on the table, so you both know what you are dealing with.
Sitting down together and coming up with a plan to get out of your combined debt is your best option.
There is no his and hers once you are married. All debts become one, and you have got to have a plan and the motivation to get out of debt so that you can move on to a secure future together.
Start Planning for Retirement Now
You may be a young newlywed now, but in a blink of an eye, you will be reaching retirement age and need a nest egg.
If you don’t want to have to struggle in your golden years together, it’s best to start a retirement fund now.
Sit down together, once again, and decide how you want to plan for your retirement and how much of your budget each month is going to be devoted to the future. You will be glad that you did when the time comes.
These are just a few of the ways that you can ensure combining your resources goes well once you are married.
From shopping for a new bed together to saving for retirement in your golden age, marriages take work, and the best ones are built on trust, that starts with getting out of debt and working to secure your future together.
It is intended that you’ll live in your home for years.
Therefore, you want to opt for a place that encompasses features that you need and perhaps some that you want. Sit with your partner and discuss your needs and wants.
For instance, are you interested in 3 bedrooms or 6? Would you prefer a finished basement, an attic, or both? What location do you want to live in? Does it need to be near transportation?
Keep in mind that you might not find everything you want under one roof.
While you may find a place with the right number of rooms, two bathrooms, a decent backyard, and near public transportation, it could have a kitchen that needs some TLC. Instead of writing those houses off, the two of you can price the renovation yourself. Companies like Gilmans Kitchens & Baths in San Mateo make it easy for customers to see kitchen and bathroom styles online and get a quote.
Do Some Online Research
Before applying for a mortgage pre-approval, it is advised that you do a little online research.
Review the real estate market where you intend to move to see what houses are going for in that area. Remember to add in your needs and wants list from above to ensure you’re getting estimate sale prices on compatible properties.
Any mortgage company you apply to will want to know how much you need to borrow so a little preparation in advance allows you to clearly state what you’ll need.
Get a Pre-Approval
Typically, before going to visit a home or put in an offer, you need to have a pre-approval notice from a mortgage company.
Sellers are only interested in conducting business with individuals who are serious about purchasing a home and if you’ve gone through the initial loan process, this shows your intent. A pre-approval is easy to get and generally just requires both of your financial information.
If you’ve been making financial mistakes like keeping secrets about debt or mismanaging money, now is the time to speak up. When the mortgage company runs your credit history all delinquent information will pop up which could prevent you from purchasing the home you’re most interested in.
Work with a Real Estate Agent
Unless you’ve both purchased homes in the past, hiring a real estate agent is ideal for finding your dream home.
Real estate agents are not only skilled in finding the perfect homes for couples, they also know the area and market better and therefore can prove valuable during various phases of the home buying process.
Get a Home Inspection
Once you’ve found a home that you’re interested in buying, make sure that you have it inspected.
A complete home inspection done by a professional will provide you with insight as to what’s going on with the property. They will inspect every inch of the home and make you aware of red flags and improvements that need to be completed.
Your home is going to be part of the foundation from which you start your new lives together as a married couple. It is a decision that needs to be taken seriously and reviewed carefully.
Be sure to work together as partners to find a home suitable not only for now but one that has the potential to grow with you and your family for years to come.