The 8 Step DIY Financial Plan for Newlyweds

September 16, 2015


As newlyweds, my husband and I are just getting started on our money journey. To get and stay on the same page, we have a bi-weekly money meeting where we dig into our finances, which saves us from money fights and also keeps us accountable to completing tasks needed to get us to our goals. One thing we’re working on is creating our family financial plan to make sure we are fully aligned on money going forward, using these 8 steps. Even if you’re not a newlywed, you can follow these steps to get a plan in place for your family.

1. Have the talk. Hopefully before you got married, you and your spouse spent some time discussing money in some capacity. If not, or if you’re still not feeling on the same page, the first (and sometimes the most challenging) step  to creating a financially secure future together is simply talking about money. Discuss your earliest financial memories, your fears about money, your personal definition of financial security, how much you have/make/owe. This is a judgment-free zone and 100% honesty is essential. Lay it all out before you start talking practical money moves to make together.

2. Figure out your money management method. Will you combine money? Keep it separate? Use a hybrid method?

My husband and I decided on the hybrid for now. We both still have our own accounts but we also have a joint account where we pay all our bills and any joint activities, gifts for family, vacations, etc. The amount we each put in is proportionate to our income after we both max out our respective retirement savings accounts. This allows the “leftover” money that’s in our separate accounts to be a similar amount, which feels fair.

I personally don’t think that just because one partner earns more that they should have control over more of the money. We’re on the same team now in every way. It was honestly a tough mental adjustment, but we got there and it actually made our bond stronger.

3. Set your goals. This is where we get into the traditional steps to financial planning. Lay out some short-term goals such as funding a vacation or furnishing your place as well as your long-term goals like retirement or purchasing a vacation home, then calculate how much you need to get there.

4. Establish your budget. A budget is nothing more than a plan for your cash. Figure out what’s coming in (earnings, gifts, etc.), what has to go out (needs) and what you want to go out (wants). This will tell you what’s left over to put towards the goals.

Not sure where to start? Use a tool like to categorize the last six months. That’s a good benchmark to start with. We used a budget to determine how much we should each contribute to our joint account.

5. Set up emergency savings. The rule of thumb is three to six months of expenses in a separate account, only to be touched in case of a true emergency. If that’s too much to wrap your head around, then start with three months’ of rent/mortgage, then tack on three months’ car payment and insurance, then three months’ utilities, etc. You get the picture. Having this account in place is one of the foundations of financial security.

6. Protect yourself. This is where a lot of people lose steam and the step that we are currently working on: insurance. If you’re both young and working, disability insurance is a must. Check to see if you have coverage through work and if not, you need a separate policy.

If kids are on the horizon, life insurance also comes into play. We used to calculate how much we need. We then made an appointment with an insurance rep to find out pricing and apply for coverage.

7. Draft your documents. Everyone should at least have a healthcare directive in place if they ever plan to leave the house. Each state has its own form, which you can generally find online by searching “advance directive” plus the name of your state. This gives directions on whether or not you wish to be kept on life support should a tragedy occur.

Beyond that, a will is essential if you have kids to direct who would be their guardians. Finally, a power of attorney gives authority to manage your affairs should you be unable to. (This can come in handy even in non-emergency times like if your spouse needs to sign for you and you’re out of town.) Sites like or an estate planning attorney can assist with this step.

8. Automate. Make it easy on yourselves and automate as much of your finances as you can. Even if you find bill-paying therapeutic (some people do!), at least make sure your savings are automated so you aren’t tempted to spend the money ear-marked for your goals. I set up automatic transfers to various savings accounts to happen on payday so I’m not tempted to spend the money.

These eight steps cover the basics that all couples should be tackling together. Remember that a financial plan is just that: a plan. In order to make sure you’re staying on plan, it’s important to revisit once a year or so to measure progress, celebrate successes and adjust for changes. Set a reminder to go back and check in on these steps, perhaps on your anniversary or at tax time.