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Budgeting Tips for Young Couples

The honeymoon is over! How times have changed from those glory years when you and your spouse-to-be were footloose and fancy free. You were dating, having fun, planning your dream wedding, the vacation on some exotic island and then living happily ever after.

Now, you've settled into the routines of life: work, paying the ever-increasing bills, and perhaps you have been blessed with a child (or two). The priorities have certainly changed! And, so has the financial picture. Your planning horizon has shifted from month-to-month to building a long-term future for your family.

What I am describing can be a very large burden on young families. This was a very difficult time for my wife and me, but with almost twenty years of experience under our belts, I now feel equipped to offer you some advice.

1) Share The Budget Burden - Budgeting decisions shouldn't be made in a vacuum! Both husband and wife must set up a monthly budget together. If one person is not involved in these important lifestyle decisions, there is bound to be bitterness and anxiety. I have found that, in most marriages, the husband and wife will have opposite habits which tend to balance each other out. In other words, one may squeeze the money so tight that George Washington would cry while the other has a hole in their pocket! It is usually a healthy thing to meet in the middle somewhere.

2) Pay Yourself First - Nearly all couples have a checking account where the paychecks get deposited. All bills are paid from this account using check, check card or even online. As long as you stay above zero until the next payday, you're OK. Right? WRONG! Unexpected big bills will come up and you need to have some cash reserves. What happens when the water heater breaks or you need the transmission fixed? The best way to manage this is to have a separate bank or investment account set up. Write a check to this separate account on each payday or at least once a month. Stay disciplined to this program! Treat it like a payment to any other bill collector. Then, you will have money available to pay cash for those inevitable surprises and you will not have to use the evil credit card. This leads me to my next piece of advice...

3) Credit Cards: NO! - While I believe in using debt to buy a house, I do not endorse the use of credit for most other purposes. If you can't pay off those bills on a monthly basis, don't charge it! Credit card debt will kill your long-term financing, will create a bigger and bigger financial burden, and will put more pressure on your marriage relationship. To illustrate this, let's take a simple example. Let's say you decide to "loosen the belts" a little and charge a big screen TV and take a nice vacation. The $5,000 bill doesn't seem very big and besides all your friends are doing it. After you get back from the sunny beach, you start writing monthly $200 checks to your credit card company. You didn't realize it would take 32 months to completely pay for those two purchases. Your credit card company is happy because, with your 18% interest rate, they will make about $1,400 in interest. That's money that could have been earning interest in your investment account. It could get worse. What if, during month 16 of your repayment plan, your car breaks down and you are facing some major repairs. Since you don't have money in the bank, you need to pay the $2,500 bill with your credit card! Now, you are in roughly the same position you were when you started paying off the TV and vacation 16 months ago! So, plain in simple: If you can't pay it off each month, don't charge it!

4) Start an On-line Business - Sometimes, managing your expenses isn't good enough. In today's day of outsourcing and tightening corporate budgets, some creativity may be necessary. You could get a second job outside the home, but this will eventually take its toll on family life. I would recommend researching various internet business options. As with most journeys, the hardest part is taking that first step. You should start your research in various on-line business forums, web sites and discussion groups. You will soon find that there are many reputable on-line resources available to help get your business started.

About the author:

Dave Keegan has been married to his wife, Dawn, for 17 years. They have two teenage children. Dave works full-time as a systems analyst for a large corporation and has quality ideas for helping people get started in internet marketing. For more information, visit: http://www.dkeeganonline.com

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