2436: The 8 Step DIY Financial Plan for Newlyweds by Kelley Long with Financial Finesse on Strengthening Marital Bonds

[00:00:00] The newest Trash TV Gossip, the depths of True Crime, the next gaming universe. You never know where a new podcast is brought to you. And with Tinder it's very similar, because nothing is going to be a new connection with a cool person. And in addition you may find a nice hobby or new Szene restaurants in your city. So, let's go. Say bye to your comfort zone. Tinder. It starts with a swipe.

[00:00:25] This is Optimal Relationships Daily, the 8 Step DIY Financial Plan for Newlyweds by Kelley Long with FinancialFinesse.com.

[00:00:36] As newlyweds, my husband and I are just getting started on our money journey. To get and stay on the same page, we have a bi-weekly money meeting where we dig into our finances, which saves us from money fights and also keeps us accountable to completing tasks needed to get us to our goals.

[00:00:53] One thing we're working on is creating our family financial plan to make sure we are fully aligned on money going forward using these 8 steps. Even if you're not a newlywed, you can follow these steps to get a plan in place for your family.

[00:01:07] 1. Have the Talk

[00:01:10] Hopefully, before you got married, you and your spouse spent some time discussing money in some capacity. If not, or if you're still not feeling on the same page, the first and sometimes the most challenging step to creating a financially secure future together is simply talking about money. Discuss your earliest financial memories, your fears about money, your personal definition of financial security, how much you have, make, owe.

[00:01:36] This is a judgment-free zone, and 100% honesty is essential. Lay it all out before you start talking practical money moves to make together.

[00:01:46] 2. Figure out your money management method

[00:01:49] Will you combine money? Keep it separate? Use a hybrid method? My husband and I decided on the hybrid for now. We both still have our own accounts, but we also have a joint account where we pay all our bills and any joint activities, gifts for families, vacations, etc.

[00:02:05] The amount we each put in is proportionate to our income after we both max out our respective retirement savings accounts. This allows the leftover money that's in our separate accounts to be a similar amount, which feels fair.

[00:02:18] I personally don't think that just because one partner earns more that they should have control over more of the money. We're on the same team now in every way. It was honestly a tough mental adjustment, but we got there, and it actually made our bonds stronger.

[00:02:33] 3. Set your goals

[00:02:36] This is where we get into the traditional steps to financial planning. Lay out some short-term goals, such as the funding of a vacation or furnishing of your place, as well as your long-term goals, like retirement or purchasing a vacation home. Then calculate how much you need to get there.

[00:02:52] 4. Establish your budget

[00:02:55] A budget is nothing more than a plan for your cash. Figure out what's coming in, earnings, gifts, etc., what has to go out, needs, and what you want to go out, wants. This will tell you what's left over to put towards the goals.

[00:03:11] Not sure where to start? Use a tool like Mint.com to categorize the last six months. That's a good benchmark to start with. We used a budget to determine how much we should each contribute to our joint account.

[00:03:23] 5. Set up emergency savings

[00:03:26] The rule of thumb is three to six months of expenses in a separate account, only to be touched in case of a true emergency.

[00:03:33] If that's too much to wrap your head around, then start with three months of rent-slash-mortgage, then tack on three months of car payment and insurance, then three months utilities, etc.

[00:03:44] You get the picture.

[00:03:45] Having this account in place is one of the foundations of financial security.

[00:03:50] 6. Protect yourself

[00:03:53] This is where a lot of people lose steam, and the step that we are currently working on. Insurance.

[00:03:59] If you're both young and working, disability insurance is a must.

[00:04:03] Check to see if you have coverage through work, and if not, you need a separate policy.

[00:04:07] If kids are on the horizon, life insurance also comes into play.

[00:04:12] We used lifehappens.org to calculate how much we need.

[00:04:16] We then made an appointment with an insurance rep to find out pricing and apply for coverage.

[00:04:21] 7. Draft your documents

[00:04:24] Everyone should at least have a health care directive in place if they ever plan to leave the house.

[00:04:29] Each state has its own form, which you can generally find online by searching advanced directive plus the name of your state.

[00:04:36] This gives directions on whether or not you wish to be kept on life support should a tragedy occur.

[00:04:42] Beyond that, a will is essential if you have kids to direct who would be their guardians.

[00:04:47] Finally, a power of attorney gives authority to manage your affairs should you be unable to.

[00:04:52] This can come in handy even in non-emergency times, like if your spouse needs to sign for you and you're out of town.

[00:04:58] Sites like NOLO.com or an estate planning attorney can assist with this step.

[00:05:05] 8. Automate

[00:05:06] Make it easy on yourselves and automate as much of your finances as you can.

[00:05:11] Even if you find bill paying therapeutic, some people do, at least make sure your savings are automated

[00:05:18] so you aren't tempted to spend the money earmarked for your goals.

[00:05:21] I set up automatic transfers to various savings accounts to happen on payday, so I'm not tempted to spend the money.

[00:05:28] These 8 steps cover the basics that all couples should be tackling together.

[00:05:33] Remember that a financial plan is just that, a plan.

[00:05:37] In order to make sure you're staying on plan, it's important to revisit once a year or so to measure progress,

[00:05:43] celebrate successes, and adjust for changes.

[00:05:46] Set a reminder to go back and check in on these steps, perhaps on your anniversary or at tax time.

[00:05:56] You just listened to the post titled,

[00:05:58] The 8-Step DIY Financial Plan for Newlyweds, by Kelly Long with FinancialFinesse.com

[00:06:05] Such an important post by Kelly today, which we thank her for.

[00:06:09] We all know that money can be a touchy subject, so yes, having a conversation like this is absolutely key.

[00:06:16] And what I really love about these suggestions is that, beyond the practical stuff,

[00:06:21] Kelly reminds us of the bond that this establishes.

[00:06:24] Like she said, once you're married, you're now a team.

[00:06:27] Regardless of who is earning what, everything is now to be shared.

[00:06:31] At least that's what's customary in marriages, though each couple is welcome to their own approach, of course.

[00:06:36] A talk about money is just very important, and it also puts into practice the idea of exposing everything

[00:06:42] and being truly vulnerable about all things in life.

[00:06:46] While money is a big subject, being completely open about it is still a stepping stone

[00:06:51] for many people who have a harder time opening up about other things.

[00:06:55] So, if this is you, consider that being open about money may help you be open about something else

[00:07:02] that you haven't been able to bring up to your partner yet.

[00:07:05] Typically, this is done before marriage, though we are always learning about each other.

[00:07:09] So, with that being said, don't be afraid to start money talks before getting married.

[00:07:14] Yeah, they may not have to be completely in-depth, but it is a subject that many hold privately,

[00:07:19] and exposing it can be a good gateway.

[00:07:22] So, that's going to do it for today's post, everyone.

[00:07:24] I love posts like this where we can touch on different parts of relationships.

[00:07:28] So, if you like what you heard, we do read from Financial Finesse a lot over on Optimal Finance Daily,

[00:07:33] so check out that show if you've not done so yet.

[00:07:36] But other than that, we're done here for now on ORD.

[00:07:38] I hope you have a great rest of your day, and I hope you'll be back tomorrow for another post.

[00:07:42] That's where your optimal life awaits.