Mrs. L. Hershkowitz – Supervisor of Financial Coaches
How did RSK become involved in Financial Coaching for Newlyweds?
Our involvement began with a call from a concerned mother in the community. She shared that her daughter had just become a Kallah, and we congratulated her with a heartfelt “Mazel Tov!” But then, the mother explained why she was reaching out. She said, “We didn’t have the tools to manage our finances responsibly, and we unknowingly made choices that ended up hurting us. I don’t want that to happen to her.” This conversation made us realize how important it is to provide newlyweds with the financial knowledge and tools they need to build a stable financial future.
Why do newlyweds often overlook financial management?
A young couple may think, “We have enough money, so why worry about the details now?” The reality is that when a couple gets married and starts their own household, there are many areas of adjustment, one of the most crucial being financial management. Before the wedding, most couples will arrange the basics, such as how much each side will contribute toward setup costs and monthly support. However, the day-to-day financial practicalities often get left for the couple to figure out on their own. This lack of preparation can lead to confusion and stress as they start managing not just rent but also utilities, insurance, food, clothing, medical expenses, transportation, and more. All these new responsibilities can become overwhelming if not addressed early on.
Why can’t newlyweds just figure out finances as they go along?
While couples can navigate finances as they go, this can lead to costly mistakes. Take, for example, young couples who are persuaded to purchase expensive Whole Life Insurance policies, marketed as a way to fund future children’s wedding costs while offering life insurance benefits. These policies, however, are often overpriced, offer inadequate life insurance coverage, and grow at a slow rate, making them a poor investment choice. Informed decisions early on can help avoid such mistakes and ensure that financial resources are used wisely for long-term security.
Similarly, credit cards—often marketed as a way to “buy now, pay later”—can easily lead newlyweds into debt. Credit card companies spend billions convincing consumers that they are receiving “free money,” when in reality, it’s a high-interest loan that can quickly spiral out of control. Even when credit card bills are paid in full each month, studies show that using plastic encourages people to spend 12-18% more than they would with cash. By educating themselves early on about these pitfalls, couples can avoid these traps and build a strong foundation for their financial future.
The importance of building good financial habits early on
When a young couple learns essential financial habits early on, they’ll be able to adapt those habits as their family and finances grow. Just as a solid foundation is key when building a home, having healthy financial practices in place can ensure that a family’s financial situation remains stable, regardless of their circumstances. The opposite is also true: if their financial habits are disorganized or unsustainable from the start, these habits will likely grow alongside their family, magnifying the problems. Money is a magnifier—if your foundation is strong, your financial habits will grow healthily with you, but if it’s weak, it will only become more problematic as time goes on.
Who should manage the finances?
This question often arises due to personal values or prior experiences. Some couples may feel it’s more natural for the husband or wife to manage the finances based on what they grew up seeing. However, the best approach for developing financially healthy patterns is for both spouses to actively participate in managing the family finances. Even in families where the husband is the primary earner and the wife tends to handle the spending, both partners need to stay involved in managing the financial aspects of their household. Financial transparency is crucial for clarity and understanding, which is key to fostering a harmonious relationship. When both partners are aware of the income and expenditures, it leads to better decision-making and financial peace of mind. This joint involvement is not just practical; it enhances the overall relationship, contributing to a healthy and cooperative marriage.
How can couples ensure they spend money responsibly when they are partially supported?
Many newlyweds receive financial support from their parents or extended family. It’s important to acknowledge this support with gratitude and clarity. First, understand how much support you’re receiving, when it’s being provided, and in what format. Once that’s clear, it’s essential to treat this support as income—allocating portions for steady monthly expenses, such as rent or utilities, and separating it from funds for irregular or seasonal costs like Yom Tov expenses, traveling, or family simchas. Couples should also begin planning for the time when this support might end. Having a clear plan for the future ensures a smoother transition to full independence, preventing financial strain when the support stops.
Creating a written budget is key to ensuring financial stability. A couple can track their income, allocate funds to necessary expenses, and make adjustments as needed. For example, if they want to go on a trip but don’t have the funds, they can consider short-term job opportunities or adjust their expenses temporarily to make that vacation possible. Taking ownership of your finances and being proactive about your budgeting gives couples control over their financial future and reduces unnecessary stress.
Is now the right time to start saving, or should we focus on enjoying life?
The decision to save or spend largely depends on each couple’s financial goals. Many newlyweds are tempted to spend their savings on short-term pleasures like multiple expensive vacations, but this can lead to regret when the money is gone. The real advantage newlyweds have is the luxury of time and relatively low living expenses. This period provides the perfect opportunity to practice smart financial habits, start saving for future goals, and build a solid foundation for the years ahead. Learning how to save money, plan for the future, and invest in healthy financial habits now will pay off exponentially in the long run.
How can newlyweds stay on track financially?
The key is developing good financial practices early on. Couples should commit to regular financial discussions and create a monthly budget together. Tracking actual spending and comparing it to the budget helps identify areas for adjustment. Planning for seasonal and annual expenses, as well as unexpected life events, also prepares the couple for financial surprises. It’s also important to get into the habit of living within or below their means. This practice will help avoid financial strain later on when family expenses increase. Finding free or low-cost entertainment options can also help keep costs down while still enjoying quality time together. Creating a family mission statement and setting long-term financial goals provides a shared vision for the future, helping guide decisions and maintain focus.
What should a couple do if they disagree about money?
Differences in financial priorities often arise because each spouse brings their own experiences and values about money into the marriage. These differences can lead to conflict if not addressed openly. The key to resolving disagreements is to have open conversations about financial values and to compromise on a plan that both partners can agree on. Building a budget together helps ensure that both spouses are on the same page and that financial decisions are made collaboratively.
Should we work with a financial coach now?
Working with a financial coach early on is one of the best investments a young couple can make. It’s an investment in time and knowledge that will pay off in countless ways. A financial coach helps a couple avoid common financial mistakes, learn essential financial principles, and build healthy habits that will support their marriage and family for years to come. Instead of waiting until problems arise, couples can start with a solid financial foundation, ensuring a smoother and more successful financial journey.
What are the signs of a couple with a healthy financial lifestyle?
Healthy financial habits include tracking spending, paying bills on time, and paying off credit card balances in full each month. A financially healthy couple also saves for long-term goals, avoids living paycheck to paycheck, and feels in control of their finances. If these signs are absent, it may be time to seek financial coaching.
Why does managing money get challenging?
Money is one of the top sources of stress in relationships because it is tied to emotions. Different backgrounds and experiences with money can trigger strong emotional responses when financial decisions are made. Developing awareness of each spouse’s financial sensitivities can help couples navigate these challenges more smoothly. Financial planning doesn’t have to be perfect, but a commitment to work through it together is key to maintaining peace in the marriage.
Closing message
Finances are not something most people intuitively understand, as they are rarely taught about money in childhood. That’s where financial coaching comes in. By learning the key financial principles early on, couples can set themselves up for long-term success and avoid common pitfalls. Simple tools and practices can change a couple’s financial life for the better, helping them avoid mistakes and make smart decisions from the start.
