Seven Steps to Finacial Health for Newlyweds 9/23/07

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Seven Steps to Finacial Health for Newlyweds 9/23/07

Stewart H. Welch III, CFP, AEP
Founder, The Welch Group, LLC

Seven Steps to Finacial Health for Newlyweds

“Seven Steps to Financial Health for Newlyweds”



Summer is a busy time for preachers as couples rush to the altar to formally become newlyweds.  By now, most of the newlyweds have adjusted to their new lives. Unfortunately, this is around the time the impact of wedding bills begins to hit home. While there are many keys to a successful marriage, one of the most important is a healthy knowledge and understanding of financial management.  Here are eight steps to get you started on the right foot:


  1. Compile a financial statement.  The financial statement provides a snapshot of your assets and liabilities at a given point in time and should be updated at least once per year.  For a sample, go to the Resource Center at 
  2. Develop and write down short, mid-term and long-term goals.  As a couple, decide which goals you’re aiming towards as you allocate your financial resources.  Short-term goals may include paying off credit card debts, saving for some furniture or building some immediate emergency reserves.  A typical mid-term goal might be saving for the down payment for a home.  Long-term goals should include investing at least 10% of your combined income towards retirement, preferably through your employer’s retirement plan.
  3. Consolidate finances.  Now’s the time to take a fresh look at your finances.  Should you consider a debt consolidation loan? This strategy makes sense only if you can get a lower interest rate. Also, review your credit cards and reduce the number of cards to two or three for each of you.  For ease of managing expenses, I often recommend a joint bill-paying account plus a personal checking account; the latter will be used to pay for your personal items. 
  4. Reach an understanding on how you will use debt and credit cards in your personal finances.  Ideally, you should agree that neither of you will take on any new debt unless you discuss it and include it in your budget.  My debt rule is, ‘Don’t borrow money to purchase anything that is going down in value’.  This means that if you are using credit cards to dine out, buy clothes or other personal items, make certain that you will have the funds to pay off your credit card each month.
  5. Set up a budget.  As best you can, estimate your joint expenses as well as your separate expenses and then match that total against your paycheck to determine how much margin you’ll have.  To review my recent article on ‘The Simplest Money Management System in the World’, go to the ‘In the News’ section of and click on ‘Stewart’s Weekly Column’.
  6. Commit to monthly financial reviews.  Establish the habit of sitting down together once a month to review your finances.  It’s best to have a set date such as the first Thursday of each month.
  7. Do basic estate planning.  As you begin to accumulate assets together, it will be necessary to have an attorney draw a will for each of you.  In addition, you’ll need a Durable Power of Attorney and an Advanced Directive for Healthcare.  For a full explanation of these documents, go to the ‘In the News’ section of and click on ‘Stewart’s Weekly Column’ for my article titled ‘Estate Planning is for Everyone’.