7 Ways You and Your Spouse Can Survive Recessions – Expert Advice
7 Ways You and Your Spouse Can Survive Recessions
Entering married life is an exciting and pivotal moment for newly wedded couples, but it can also raise up questions related to money, joint accounts, saving for the future and so on.
Here at BCME, we pride ourselves on bringing our readers informative and useful content that not only helps during the planning process, but also offers guidance and advice in preparation for the marriage itself.
Our expert panel has recently seen some exciting new additions, and we are delighted to announce that our latest panel member in the area of finance and marriage guidance is Janelle Malone, the founder of www.womenmoneyandstyle.com, a popular website dedicated to female empowerment. She runs her own communications business, and writes for major newspapers and magazines in the UAE and the US about lifestyle finance.
Below, Janelle offers her first BCME editorial contribution, on surviving recessions together as a married couple.
As difficult as the Great Recession was, it taught all of us (single or married!) a lot about protecting our cash flow and keeping our heads above water. If you were single, then you probably had your own survival methods, whether they involved tightening your budget here and there or selecting particular debts to slash before any others.
If you’re getting ready to tie the knot, however, you should be prepared to discuss all the relevant areas of your financial life with your partner – and this includes what you’ll do in cases of job and money loss. No matter how well the economy is doing, every couple can become susceptible to its own personal recession. Going over your income, debt and investments with your spouse will keep both of you from sinking when your boat starts to rock.
2. Have a Joint Emergency Fund
Experts recommend keeping an emergency fund of three to six months’ worth of money. When you’re young and just starting out, this concept sounds nice, but possibly too idealistic. After you’re married and another person might suffer thanks to your lack of preparation, it’s time to get serious about your emergency savings account.
Emergency funds should be used for unexpected occurrences such as car repairs, doctor’s bills, veterinarian services and other shocks that most people don’t expect to budget for every month. Paying for these emergencies via credit or loan isn’t as easy as you may think. Interest charges and monthly installments will eventually cost much more than the few extra dollars you can put into this account after depositing your paycheck. Make sure both of you commit to replacing the funds in this account whenever they need to be spent.
3. Find Additional Sources of Income
If you’ve ever been unemployed or otherwise without a paycheck, then you probably remember thinking, “This would be easier to deal with if I had a second job.” In today’s age of online entrepreneurs and e-commerce, developing a second source of income alongside your spouse is easier than you think. Is there an extra room in your home? Consider renting it out to a college student. Are you an animal lover? Start walking dogs on the weekend.
Just as with other projects, it’s easiest to budget and plan for a new financial venture when your life is going well. Don’t wait for unemployment to start. For instance, if you rent out a room in your home, invest in a coat of paint for the walls while you can do so comfortably. If you plan on starting a personal business, apply for a licence and pay your start-up costs when your finances are still doing well.
4. Double-up on Fighting Debt
In 2014, debt is excessively common. Many individuals have deeply personal beliefs about debt. Some consider credit cards and loans to be irresponsible, while others are comfortable using these lines of credit in a responsible manner. It’s very possible that your spouse’s opinions on debt and debt management are different from yours.
Don’t be secretive when discussing personal debt with your partner, and don’t get frustrated with the amount of debt your partner accumulated before your marriage began. Focus instead on what you can both do to limit your debt and, most importantly, keep it from growing in the future. Just like all things in your marriage, you should fight debt together as a team. Be smart about your debt together and don’t agree to any loans the two of you can’t handle.
It’s much easier to handle financial hardships when you don’t have to worry about debt. If you have the means to pay off debt while still enjoying your standards of living, consider that a luxury. Not all loaning institutions will be understanding about your job loss, and might not offer minimum payments – especially if there’s a worldwide or local recession occurring.
5. Go Over (and Keep) Your Investments
The consequences of the Great Recession made a lot of young people disillusioned with the stock market. But now that it’s picked back up to 2008 levels, you and your spouse should consider the facts, and look into why it’s been a trusted source of money for many generations of families.
Staying in the stock market through its ups and downs is still one of the best ways to acquire long-term wealth. Despite the market’s challenges, its vitality has stayed strong, and will surely remain a smart investment for years to come. However, it’s very important that you and your spouse start paying off your debt before investing. Consider meeting with a stockbroker or your accountant after your wedding to go over stock options that may be right for you and your husband.
6. Keep Your Investments Safe
The stock market is a great plan for long-term investing. However, low-expense, high-quality mutual funds are an excellent way to diversify your assets. Get a diverse allocation for your investments. This should include stock mutual funds as well as bonds. Diversifying your portfolio will help you and your spouse take bigger risks with your stocks – or any investments, really!
If you’re getting married young, then you’ll be able to save a greater percentage in your equities. If you’re an older bride or are even retired, then you and your spouse might want to maintain a larger percentage in stocks.
7. Get Educated Together
Add financial education to the list of activities you and your partner are passionate about. Educating yourselves about investing, the international economy and your particular field’s economy will help you stay one step ahead of the game.
No matter how much you trust your financial planner, nothing beats having a solid plan with the person you’ll be spending the rest of your life with. After all, no one knows which savings systems and investments will work better for your family than the two of you. Remember to always keep your finances transparent and work together as a team.
Thanks Janelle! Watch out for more contributions from Janelle every month, here on Bride Club ME. You can read more about Janelle over at www.womenmoneyandstyle.com.