Establishing a Budget

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While buying a home or a new automobile are some of the biggest financial purchases a couple will ever make, it’s the daily financial decisions that make those purchases possible.

Sometime before the wedding, the couple should determine how much money they will make and how much they will spend during their first year together. Expenses every couple should itemize include fixed costs: shelter, food, clothing, transportation, insurance and utilities. Other expenses include entertainment, travel, hobbies and the like.

By subtracting expected expenses from net income, the couple will begin to realize how much they can spend. Of course, expenses relate directly to the couple’s goals. They must choose together what is important to them and manage their money accordingly. Today’s husband and wife, typically both wage earners, wisely discuss how having children will affect earnings. Will both spouses continue to work when a child is born? If not, they should be wary of becoming accustomed to living off both incomes.