On their first trip to the grocery, newlywed Shaindy excitedly fills her cart with meats and exotic ingredients while chattering to her new husband Nachi about the gourmet meals she is planning. Nachi’s looking forward—until he sees the bill.
“Um, is this how much groceries are supposed to cost?” he asks awkwardly.
Shaindy assures him that this is what her mother always buys, so it must be normal.
Three months and several shocking credit card bills later, however, they start to realize that their blithe spending habits can’t go on. They need to have a conversation about money—fast.
What does every young couple need to learn about the realities of family finances?
Opening the Conversation: Welcome to Real Life
The first step toward financial maturity is simply awareness that this is real. Things cost money, and you’re no longer swiping Daddy’s credit card with abandon. Every spending decision has ramifications; if you choose to go on a fancy vacation, you might not have enough money to pay your rent next month. Mature adults need to take responsibility for saving, investing, insurance, and other money matters.
Budgeting 101
With her newfound awareness, Shaindy calls her mother. “Ma, did you realize that it costs $250 to make a Shabbos with salmon and roast? I never knew food was so expensive!”
Ma just smiles to herself.
To stay out of debt, you can’t spend more than you earn; the equation may seem intuitive to us, but you’d be surprised to know how many young people don’t grasp this simple fact. Every couple should have a basic idea of their general expenses—their rent or mortgage, car, food, etc.—as well as their monthly income, in order to ensure that their expenses are in line with their income. They can use a budgeting app for this, an Excel spreadsheet, or even a pen and paper—but they can’t have financial stability without it.
Don’t Blow the Chasunah Money…
Part of reaching adulthood is the ability to think about the future rather than fulfilling the desire of the moment. Ideally, every couple should be putting aside at least 5–10% of their income to save for future expenses such as a house purchase, bar mitzvahs, and weddings. Good financial habits start early on; a newly married couple should get into the habit of putting money into savings each month. (If they are a kollel couple being supported by someone else, the equation may differ.)
As an addendum to this, it can be tempting to invest your chasunah money in a high-risk, get-rich-quick scheme that the guy in shul assures you is foolproof. A young and inexperienced couple should be encouraged to consult with someone knowledgeable and unbiased before investing their money.
Or Fall Into a Credit Card Trap
Points! Miles! Cash back! We all know how tempting credit card offers can be. Those of us who are more experienced also know how easily credit cards can suck you into a black hole of debt and how hard it is to climb out of there—which a newlywed couple may not know. That’s why it’s up to the trusted mentors in their lives to explain this to them and teach them to approach credit responsibly.
Insurance Decisions
Another set of important financial decisions a newlywed couple needs to make relates to insurance. While for a young couple, health, disability, or renter’s insurance might seem like an unnecessary expense, it’s important for them to understand the purpose of insurance: to protect oneself from exposure to a financial risk that can cause great hardship. Renter’s insurance, for example, is very cheap, and to replace the contents of one’s modest rental home in case of fire or theft, chas v’shalom, could easily cost $50,000 or more. Yet many forgo the coverage due to lack of knowledge.
Ignorance Isn’t Bliss
For a young couple, taxes and other legal matters they may bump into can seem like something far too overwhelming for someone in their age and stage. (It can seem that way for older couples too!) They can easily adopt the attitude of “We don’t understand it, so let’s just close our eyes and pretend it doesn’t exist.” But the US government doesn’t accept ignorance as an excuse for noncompliance. Whether you’re 20 or 50, if you have income, you’re obligated to report it accurately, and not doing so can be treated as fraud. All citizens must try their very best to learn about and comply with all relevant laws.
A (Financial) Partnership for Life
Nachi and Shaindy will be dealing with a lot of adjustments, and one of those adjustments is learning how to make financial decisions together. Each spouse comes into marriage with his or her personal approach based on their personality, their family of origin’s financial situation and attitude toward money, and more. One spouse may be a natural saver and the other a natural spender.
Marriage is a long-term partnership; getting on the same page about your approach to finances at the beginning of your marriage can save years and decades of heartache. Unfortunately, too many couples don’t do this, and the friction caused by their mismatched money habits creates serious shalom bayis problems down the road.
Invest the time now, at the beginning of marriage, to hammer out a joint approach. Sometimes it can be helpful to enlist the help of a third party to do this.
Thank You, Mom and Dad!
Finally, as the young couple gain an understanding of all that goes into running a financially sound household, it’s a great time to express newly strengthened appreciation to their parents, who raised them and supported them for so many years (and may still be supporting them now). Exercising the gratitude muscle is a great way to get their marriage off to a strong and healthy start!
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