5 Financial Mistakes Made By Young Couples
By: Kalpen Patel
Tags: Money Mindset, Money Management, Young Couples, Financial Mistakes, Money

Hi everyone, thank you for coming back to my blog. I hope you found my last blog interesting and useful, where I went through ‘7 Steps To Choosing An Affiliate Product For Passive Income’.

In today’s blog, I am going to cover the mistakes young couples make when it comes to their money and finances because when you’re newly married or decide to settle down with your partner, you’ll probably face some new challenges and might not feel that you’re ready for these new responsibilities. A lot of young couples don’t anticipate how different managing their finances can be once they get married or decide to live together.

It’s important to understand how merging your finances will impact the way you spend and manage money. There are common mistakes most couples make, and you can avoid some difficulties by being aware of these errors.

These are the five most common money mistakes young couples make:

1. Not communicating about money

It’s crucial to talk about money and agree on how you wish to spend and save money as a couple. You’ll find yourselves fighting over money issues if you avoid this for too long or if one spouse isn’t upfront about money.

2. Failing to build your savings

You might feel that you’re not earning enough to save money, but most couples can find at least a little to save by cutting back on the more flexible expenses, like eating out or ordering takeaways more than once a week.

Cover your bases and prepare for a brighter future by saving for these events together:

a) Starting a family — Raising a baby is expensive and the more you plan to have, the more expensive it will be!

b) Buying a house — When you’re ready to settle down, you’ll need a down payment to buy a house. This is normally 10% of the value of the home you are buying (due to COVID, this has been brought down to 5% in the UK) and you will need to pay for stamp duty (which will be more if one of you already has a property in their name), plus any legal expenses.

c) Children’s education — You will need to have a discussion as a couple, as to what type of school you want to send your children. Private education is expensive compared to a state funded education. Nursey can also be expensive, especially if you are planning of sending them full time until they hit the age to move to primary school, so it is never too early to start saving.

d) Retirement — Being young means you can take more risks when you invest and saving up early will help you retire more comfortably. It also gives your savings time to grow from the interest you’ll earn over many years.

3. Failing to effectively manage debts and credit cards

Some couples encounter challenges because one person wasn’t upfront about how deeply they’re in debt or because they use their credit card too often.

Even though both of you still have separate credit scores, both should be responsible for managing debt and credit:

· Set some goals and strategies to raise both your credit scores

· Decide what your credit cards should be used for and how much you can charge on them

· Make paying off your loans or outstanding credit card balances a priority

4. Buying a house before you’re ready

You’ll see benefits in waiting until you’re financially stable before purchasing a house.

There are still some costly mistakes to avoid once you are ready to buy a home:

· Buying a house that is too expensive to fix or maintain

· Applying for a mortgage you can’t afford

· Not making a down payment that is large enough to lower your mortgage

· Failing to take advantage of the help available to first-time buyers

· Buying a house before taking the time to raise your credit score

5. Not looking for ways to strengthen your financial standing

You can set some financial goals and do your best to save money, but most young couples eventually need to find a way to earn a higher income to meet their goals.

You could, for instance:

· Make some plans for both your careers by; going back to school or doing a qualification that will get you a better job, or allow you to progress in your current job

· Move to an area where there is more opportunities for both of you to get better, well paying jobs

· Rent out a room in your current home to help to get additional income

· Start a side hustle that will bring in regular passive income (I highly recommend this 30 day course to get you started — One Funnel Away Challenge)

· Start investing in Index Funds to take advantage of compound interest, which will benefit you in the long run