Written by: Chaim Schmerhold

The period of time immediately after getting married is one of tremendous financial transition.

No longer are your primary expenses the cost of hotel lobby drinks and mini-golf.

You’re now responsible for another person, and financial responsibility is a big part of that.

With that in mind, here are some areas to address sooner rather than later:

Cash flow management:

• Do: Before thinking about where you want to be in the future, you need to know where you stand now. Get clarity in exactly what your monthly income is (post-tax). Then begin keeping track of EVERY expense you have. Some couples can do this in one sitting, others will need to keep a running score over a month or two. It doesn’t matter how you do it, just that you do it!
• Don’t: Try to plan for the future without understanding your present!

Budgeting:

• Do: Once you know what your cash flow looks like, make any necessary adjustments. If you’re running a monthly deficit, making immediate changes is essential. If you have a monthly surplus, think about the best use of that extra money.
• Don’t: Think that a credit card is your get out of jail free card. If used irresponsibly, it can be quite the opposite!

Emergency fund:

• Do: As much as we’d love to see all our assets grow quickly, it’s important to leave some of our savings liquid. The typical recommendation is to have 3 months’ worth of expenses set aside. This amount can be left in a stable account such as a high yield savings account, and should be your buffer for unexpected expenses.
• Don’t: Leave all your savings in cash. Even in a high interest rate environment, consider the effects of inflation and taxes on your longer term goals.

Invest wisely:

• Do: Consider investing additional assets and income. Responsible investing does not mean trying to get rich quick or making unusually high returns. It means exposing yourself to a portfolio that reflects your personal situation and goals.
• Don’t: Think you’re too young to plan for the future. And don’t confuse investing with gambling!

Defensive planning:

• Do: No one enjoys paying for insurance. But being properly insured can help protect you from a catastrophic loss. It is important to make sure you have the health, life, disability, car, home/renters insurance that you need.
• Don’t: Try to “Wait until you need it.” The hope is that you’ll never need it! But it’s always better to be safe than sorry.

It goes without saying that much of this is likely unfamiliar territory for many young couples. So remember to always speak to a financial professional with any and all questions you may have!

Chaim Schmerhold is a financial advisor at Northwestern Mutual. He can be reached at chaim.schmerhold@nm.com