Monday, September 10, 2018

6 Money Mistakes Newlyweds Should Avoid

McHenry Savings Bank offers tips for managing money together 

Summer wedding season is in full swing and newlyweds will soon be managing their finances as a pair. McHenry Savings Bank (“MSB”) is encouraging couples to waste no time addressing how they will handle money issues as spouses and financial partners.

“Developing a financial plan can often take a backseat to the excitement of a wedding,” said Jim Zak, Vice President of Retail and Small Business. “But it’s important to remember that this is not only a marriage of hearts but also a marriage of finances.”

To help couples start their journey on strong financial footing, MSB warns consumers of these post-wedding money mistakes:

1. Avoiding the money talk. Discussing your finances can be a bit uncomfortable for many couples, but those who tackle it head on will be better for it. Understand your partner’s financial goals and spending habits. While you may have different answers, this conversation can help you develop an approach to money management that works for both of you.

2. Not setting a budget. A mistake many couples make is not establishing a budget early on. After assessing your finances as a pair, determine how you’ll spend your money each month. Are there certain expenses you should be cutting back on and others you should be saving up for? Coming to an agreement on these things and setting a budget will be beneficial for the health of your bank accounts and your relationship.

3. Not having a plan for your accounts. There is no ‘right’ way to manage your accounts. Couples can choose to have exclusively joint accounts, a joint account as well as separate accounts for saving or personal spending, or keep things entirely divided. Discuss your preferences together and decide what makes you both the most comfortable.

Newlyweds Finances

4. Failing to set up an emergency fund. Life is full of surprises and unfortunately, some of these surprises can be expensive. Having an emergency fund will help you avoid precarious financial situations should something come up. It’s important that you decide together how you’ll set aside the money.

5. Not establishing a minimum cost for discussing big expenses. While not all purchases demand a conversation, more expensive ones that impact the family budget should. Determine what that threshold is as a couple. For any expenses above that cost, you both should be in agreement on whether it’s a necessary purchase.

6. Forgetting to update your beneficiaries. Now that you’ve officially tied the knot, you should likely identify your spouse as the person who will receive the benefits of your will, life insurance policy and financial accounts like your 401(k), checking and savings. Don’t make the mistake of waiting for an emergency to arise to handle this.

MSB offers a Personal Finance Manager tool to all personal customers via online eBanking. Consumers can use “Personal Finance” on eBanking to determine their net worth, create budgets, manage spending and cash flows, get alerts and more. This is an excellent tool for all customers, and especially for newlyweds who are beginning their lives together.

MSB is committed to providing tools and services that educate and protect consumers. To learn more on what MSB can do for you, contact a Personal Banker today at 815-385-3000 or customerservice@mchenrysavings.com. Visit us at our McHenry, Richmond or Johnsburg Branch or via the website at www.mchenrysavings.com

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