10 Common Financial Mistakes Newlyweds Make (And How to Avoid Them!)

Are you a newlywed couple? Congratulations! A lifetime of love and joy awaits you, and I want your journey to be long and fulfilling. Throughout my career I've collected a mountain of data that makes it clear newlyweds need to get on the same page when it comes to money. Finances are cited by many experts as the leading cause of divorce in the United States.

I'm going to share 10 common financial mistakes that tend to curse newlyweds. Equally important, I'm going to share with you how you can avoid them. Stay tuned.

Welcome to another edition of We're Talking Money. I'm Phil Clark, wealth advisor and founder of OmniStar Financial Group. Getting married is a major step, and making it last, it's not automatic. Just because you vow till death do us part, that doesn't make it a guarantee. Lest we forget, the rate of divorce in the United States consistently stays around 50 percent. Finances are one of the most critical components of a lasting marriage.

Before we get into the 10 mistakes, don't forget to like, share and subscribe for more videos on various topics related to personal finance, budgeting, investments and so much more. Now let's get into it.

Mistake number one: not talking about money before tying the knot. Long before the I do's, you should spend some time discussing your finances. Communication is key. Discuss your financial goals and expectations, make a budget together, and commit to sharing the good and bad of each other's finances. Marriage is tough enough without the added stress of learning your life partner has excessive debt or maybe poor financial habits. Remember, marriage means becoming one flesh, and that means all debt and financial decisions, they belong to you as a couple.

Mistake number two: keeping separate bank accounts. Now, I cannot tell you the number of couples that take this route. Marriage requires transparency. Remember, you're now one flesh. Without it, your marriage unfortunately will run into problems. Merge your finances to avoid confusion and ensure greater transparency. That is checking and savings, as well as credit cards and brokerage accounts. They should be open to each spouse. It's a lot easier to manage your financial house when you have fewer moving parts.

Mistake number three: overspending on the wedding and honeymoon. If you are blessed with a family fortune, this one may not apply, but most couples don't have that luxury. Remember, the wedding is just one day, and I'm not trying to say it's not important. It is, but it's one day and probably just a few hours. Yet the cost of weddings, they have continued to rise. Did you know that the average cost of a wedding is above thirty thousand dollars? That may not sound like a lot, but thirty thousand dollars invested over 20 years could ultimately be worth two hundred and forty thousand dollars. I'm not saying to forgo a beautiful wedding, not at all, but don't break the bank. Be reasonable, responsible, and think about your future. It will be here before you know it.

Mistake number four: failure to create an emergency fund. Start saving from day one to prepare for those unexpected expenses. Many couples are so focused on their new life that simple things are forgotten. Emergencies happen all the time, and unfortunately they don't give a warning just ahead of them happening. Make your emergency fund a top priority. In general, you want your emergency fund something around three to six months of household income.

Mistake number five: racking up credit card debt. This is dangerous, but it's an easy one to miss. Be mindful of your spending and pay off credit card balances in full each month. It's okay to use credit cards, but you don't want to let them grow with these large balances. You want to be able to pay them off every month. Credit cards are easy to get and so easy to use. Unless you're paying off this kind of debt every month, your purchase will continue to rise, and generally most things that we purchase go down in value. So with the added interest of a credit card, you're actually spending more and more and more for every purchase. So that purchase will keep costing as you pay the outrageous interest on your credit card. Use credit cards only if you can pay it off every month.

Mistake number six: neglecting to properly ensure risk and update beneficiaries. Review your insurance policies and retirement accounts either just before being married or immediately after. You're doing this to ensure that your new spouse becomes listed as the beneficiary. Now, don't stop there. Getting married usually means new responsibilities. Now, some of that's obvious, but things like paying for the mortgage, automobiles, college education for your kids, and that list can keep going. That's not what I'm talking about. What I am talking about is the unfortunate premature death of a spouse that can lead the survivor in a very difficult situation. Short of winning the lottery, the best and least expensive way to control this risk: buy some term life insurance. That is the responsible thing to do.

Mistake number seven: putting retirement savings on the back burner. Post wedding vows, couples have a lot on their minds: buying a house, starting a family, paying for that amazing honeymoon that's probably on the credit card that I just talked about. Little time then is left to think about retirement savings, yet so many people fall short when it comes to having enough to enjoy a quality life in retirement. It's a good thing to think about this one sooner rather than later. Retirement planning doesn't automatically happen as you get older, so start saving early, as quickly as you can, and save as much as you can.

Mistake number eight: not having a will. There's a common misconception about estate planning. It is not reserved for wealthy people only. Having a will is one more way to help control risk regardless of your wealth or age. A simple will is designed to ensure your assets move to the right person in the right way at the right time. If you die intestate, now that means dying without a will, then the state in which you reside, they will decide what happens to your money, property and other assets. If you want everything divided according to your wishes, get a will drafted and get it in place immediately.

Mistake number nine: not seeking financial advice. Setting financial goals together as a new couple and tracking your progress regularly can pay huge dividends, yet building a financial plan early, that's a step that is rarely taken. Now, I realize you might be a do-it-yourself kind of person, and that's okay. On the other hand, unless you are a seasoned veteran, an expert, it would be impossible to know the best strategies for your particular set of circumstances. Financial advice, it's not free, but the cost of a good advisor is worth every penny.

And finally, mistake number 10: failing to communicate about financial matters. Just like mistake number one, we started the show urging you to talk about money before you tie the knot, and now we're talking about it after you've tied the knot. Money can be stressful, and often couples will opt to sweep it under the proverbial rug. This rarely leads to a good outcome. Making the most of your marriage, it requires a lot of things. Communicating about financial matters, that one ranks near the top. Remember, the purpose is to help each other set goals and then encourage each other to reach them.

Thank you for watching. I hope this video has inspired you to have a conversation about financial matters with your new or soon to be spouse. If you found this video helpful, please subscribe to our channel, smash that like button and ring the bell so you never miss another great episode on financial tips and advice. I'll see you next time on We're Talking Money.

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