found the one to start a life with. You now share home,
love –– and your financial backgrounds with your new
partner and family. Here’s what to know and how to
tackle debt, budgeting and other aspects of your newly
merged money matters.
couples and families often begin the journey together
with a large amount of debt from student loans, car
payments and perhaps one or both partners’ past credit
card debt. The responsibilities of starting a family
only deepen the hole.
you are a young adult still looking for a high-paying
job, who can’t afford a home or car and who constantly
struggles with debt, then financial planning and
effective debt management can help you. So can
dispensing the following preconceived money notions
common to young families.
don’t need professional help: Young families with debt
– especially those with children – need to think
hard about meeting a financial planner to put finances
in order. A planner can not only set a proper budget for
you, but also advise you on how to invest for the best
example, planners can advise you on saving for a home,
setting up a college fund for your kids and establishing
a fund to handle unexpected emergencies.
wrong with a little credit card debt?: The greatest
financial blunder a young family can make is carrying
too many credit cards – and the accompanying huge
bills and balances.
and managing credit card debt becomes particularly
tricky when these balances typically carry one of the
highest rates of interest (often more than 17 percent).
Inexperienced young adults with fresh plastic frequently
make the mistake of paying only the monthly minimum.
Continuing to do this means paying off the entire
balance – assuming a family racks up no more debt on a
given card, which is unlikely – will take more than a
to make at least $100 more than the minimum payment on
each card account and try to use cash instead of plastic
as much as possible. If you or a member of your family
has difficulty controlling card use, you can look for
assistance from a credit counselor.
fly without a budget: Poor budgeting is close kin to any
debt issue. Young couples tend to overspend mostly
because they often underestimate expenses and practice
the flawed habit of spending first and then planning to
save what’s left. Unfortunately, spending incessantly
rarely leaves anything at the end of the month.
(and follow sincerely) a frugal budget, keeping in mind
all your daily expenses and saving plans, needs and
is far away: Many young adults just don’t understand
the significance of saving for retirement and skip
investing in 401(k) workplace retirement plans or
individual retirement accounts. These youngest wage
earners labor under a misconception that the future is
too far away to worry about, and instead focus on such
short-term goals as buying a new car.
you invest at least 15 percent of your income in
retirement savings consistently from an early age, you’ll
remain far ahead financially after retirement. Here’s
timeless advice for all young adults: You’ll need that
money sooner than you think.