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Marriage and Money

Newlywed budget 101: Financial missteps to avoid

If you're looking to start your marriage on a strong financial footing, then you need to have agreement on a few basics like an emergency fund, a will and your credit.
The first few years of married life represent a crucial time for establishing your financial health as a couple. Merging the finances and personal debt of two people is a nuanced process, but as you navigate the murky waters of financial married life together, take special care not to avoid these three common money management mistakes.

Living without an emergency fund

Do you have an emergency fund established? Too many American families seem to live from paycheck to paycheck. It can be an exhausting monthly dance that doesn't allow much room for error. But even if you feel every dollar is stretched to its max, there are usually ways to cut back and save up for unforeseen financial burdens such as sudden unemployment or unexpected medical bills. The secret is careful budgeting. If you don't currently have a formalized family budget, or you think yours needs revisiting, you can reference our tips for creating a budget and prioritizing your spending.

Not having a will or planning for worst-case scenarios

Have you considered making a will? Newlyweds may loathe the need to discuss creating a will or buying a life insurance policy during the throes of the honeymoon phase, but protecting your loved one is likely at the forefront of your mind. Establishing a will isn't nearly as complicated as most would think, but if you're unsure where to start, we can help you learn more about the process of making a will in the Protective Learning Center.

If you and your spouse are currently both living without the safety net of life insurance, you're exposing each other to unnecessary risk. Life insurance can cover things such as end-of-life medical and funeral expenses, and may provide your loved ones with financial security to keep their lives as stable as possible in the event you were to die unexpectedly. If you think life insurance is too expensive for you, there are a wide range of coverage options available to suit every budget. You can read more about the types of life insurance, and find an easy way to calculate how much life insurance you need in the Protective Learning Center.

Living with poor credit or no credit

Newlywed couples often wait too long to get their credit in order, or to establish credit altogether. Debt-wrangling should be one of your top priorities in your first few years of marriage, especially if you plan to buy your own home. If your credit is in dire need of repair, it's important to know that you're entitled to one free copy of your credit report from each of the three national credit reporting services (Experian, Equifax, and Transunion) once annually. This will allow you to get comprehensive idea of the state of your credit, and allow you to dispute accounts that look suspicious or fraudulent.

Establishing good credit doesn't always mean taking out a credit card. If you're a renter that makes on time payments every month, you can use your rental history to establish positive credit.1 Another suggestion is to look into taking out a small loan from your local credit union. Many credit unions have special programs that are specifically directed at helping people establish good credit. These can be in the form of a small loan (often $1,000 or less), or with a loan that is secured by a vehicle.
Things like budgets, emergency funds, creating a will, buying life insurance, or establishing credit aren't as exciting as planning a wedding, but are a necessary part of establishing a healthy financial future.






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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

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