Now that you're married and all the excitement of your wedding and honeymoon has come and gone, probably too quickly, it's a good idea to begin implementing a financial savings plan. If you don't already have one, it's never too early to start. If you do, you're already adding financial security to your new lives together. I've always been interested in finances, so I've done research and spoke to advisors over the course of the years. Here are three good ways newlyweds can start putting money away for savings. Keep in mind, that this blog is intended as informational and not advice and that every couple's situation is different and would benefit from receiving financial counseling for their specific needs:
1) 401(k) or 403(b)- If you work outside of the home, look into signing up for your employer's retirement plan. For 2014, you can sock away $17,500 pre-tax dollars in a 401(k) plan. That's a huge chunk of change! And if your company matches your contributions, definitely try to put in enough to get the match. That's free money that will build up each year to serve as a pretty nest egg once you retire. Plus it grows tax deferred as long as it's in there!
2) Roth IRA- If your company doesn't offer a retirement account or you're a small business owner, consider opening a Roth Individual Retirement Account. Your annual contribution limit depends on your income and can be up to $5,500. The great thing about a Roth is that once you retire and meet the appropriate guidelines, the money you receive is tax free!
3) Emergency Fund - Most advisors would agree that having a savings account for emergency purposes is essential in your financial plan. Life is unpredictable. Think layoffs, new baby, or other unplanned expenses. It's best to be prepared...12 months prepared. Having a year's worth of salary in liquid cash set aside will keep you comfortable and less stressed out while you get back on your feet.
If you're thinking, "I don't have that kind of money to save," don't be discouraged. The key is to start saving whatever you can. You can always add more, as you are able. Once you get in the habit of saving, you'll find it becomes easier and will enjoy seeing your new wealth accumulating together!