You’re back from your honeymoon, and the new chapter of your life as a married person starts to come together. Before you can fall into a routine though, you need to take care of a few things.
Once thank-you notes have been sent off and names have been changed, it’s time to address your finances together. Consider opening a joint account, and make your first deposit with the wedding gift money you’ve been carrying around in an envelope. Depositing that money will make it harder for you to spend it on impractical things, and you can put it to good use in your life together. If you’ve been unsure of how to make practical choices with your wedding gift money, we’re here to help.
Prevent Being Poorer While You’re Richer
Instead of blowing wedding gift money on a Jacuzzi or a night out, put some aside while you have it or invest it in ways that will enrich your lives in the future. Things happen every day, and life can change in an instant, so it’s best to plan ahead. Talk to an advisor or sit down with your spouse and discuss your financial goals as a couple.
After all, if you’re planning on having a child anytime soon, the extra money can be put toward a savings account specifically for that. If you’re hoping to buy a home together, put it in a separate saving account for the down payment. Your goals will determine where you put the money and whether it makes sense to invest or pay off debt.
Consider using the money to pay off all of your combined debts, one at a time. You’ll both feel a “sense of accomplishment” with each debt you cross off your list, according to Good Financial Cents.
Paying off debts should increase your credit scores, giving you access to better rates and opportunities the next time you apply for a home, car, or other loans. Prevent being credit poor or cash poor, and stash savings away for an emergency fund of at least $1,000.
Prepare For Sickness
It’s good to have a chunk of change on-hand just in case, but you can take preparing for emergencies a step further by investing the gifted money into insurance policies with coverage that will outlast your hard times.
Since you and your spouse have committed to taking care of one another, consider spending money on term life insurance, which you can buy in terms of 10, 20, and 30 years. In the rare yet possible event that one of you passes away unexpectedly, the surviving spouse needs to be able to continue paying bills and any remaining debt without your help. A term life insurance policy is a cost-effective measure that will allow the surviving spouse to grieve without the stress of potential financial ruin. Use an online calculator to figure out how much coverage you need and what the monthly premiums will be.
If you want to take it a step further and you have some wedding money left over, a final expense policy is also worth considering. While this is definitely a tough topic and often a policy geared toward seniors, a final expense policy, or burial insurance, provides additional funds to cover funeral costs, medical bills, outstanding debt and other expenses a young surviving spouse will have to manage. Best of all, final expense policies are a form of whole life insurance that never expire if premiums are regularly paid. Do your research and talk with a professional to decide which policy is best for you.
This Day Forward, Plan For Better
After you’ve come up with a plan to take care of everyone in the event of an emergency or sudden death, push the negative stuff out of the way and spend the rest of your money on something positive you can do together. If the two of you stick to your budget, you should be able to put some of your savings toward low-cost entertainment without letting your bank account suffer.
Put any remaining gift money you have toward date nights or a trip for your one-year anniversary. Give yourself something to look forward to together. Your journey together didn’t stop when you two were finally married or after the honeymoon ended. There’s a lot left in store for you both, plan on it.