Money matters present great challenges for young couples embarking on their new journey together. Each spouse enters the relationship with different ideas and upbringing. Newlyweds are faced with tough decisions such as where to live, how to meet the expense of rent/mortgage, how to navigate money and track expenses, and few young couples embark on their new journey with a savings plans in place. Moreover, expenses grow as the family expands, and saving money is set to become an even bigger challenge.
Why is saving so important for young couples, and how is it best done? Setting money aside, however small the amount, will grow as it accumulates interest. The profit from the savings (the interest) will gain compound interest. Sounds complex? In the simplest of terms, the earlier you start saving, the more you gain in the long run.
Throughout our lives many of us are likely to experience unpredicted events, such as losing jobs, damage to homes, car failure or health related expenses etc., therefore emergency funds are essential for coping with financial complications. To do so, select an affordable minimum monthly rate and plan how to set aside, so that its available and at hand. Through this period, you can plan ahead without falling into debt.
Dream big! Dreams are not just for children. They motivate us to save. Many stop dreaming because they don’t have the funds to realize dreams. It’s actually cheaper to save than it is to take a loan, since payments and high interest are avoided. Pa’aamonim, which provides financial education and guidance to families in Israel, recommends saving between 5%-10% of your income, so that you can reach your goals.
Raising a family also entails expenses. Start a savings plan for each child to help meet cost of higher education or other desired goals.
As a young couple, you should make joint decisions and converse on money matters like how much you can afford to save, how to make upcoming financial decisions, and how to track expenses. Starting a married life with regular habits entailing mutuality and financial transparency will help establish a healthy and resilient financial household, allowing you to thrive, succeed and overcome imminent financial obstacles.