Cheers to the newlyweds! You’ve gone through months (or maybe even years!) of preparation for the big day, and the wedding turned out to be even more fantastic than you imagined. Now that the wedding cake has been consumed and all the wedding gifts opened, it’s time to start planning that prosperous life you and your partner envisioned.
The real challenge now is making big decisions regarding money and family. If you're determined to grow your finances in the future, it's particularly important to discuss investments.
A lot of newlyweds may feel apprehensive about the topic of marital finances, especially with the endless list of advice that they get from family and friends. Don’t worry―here's a list of the best advice for a newlywed couple and tips on making investments.
Debts, Investments, and More: Best Advice for a Newlywed Couple
To get your married life off to a good start, make sure that you and your spouse take note of these things.
✔️ Start Getting Rid of Debt
As much as possible, settle it fully before making another major purchase or investment. Plus, if you have any credit card debt, take steps to reduce or eliminate it, especially since interest payments can accumulate and drag your finances down.
The best wedding advice for newlyweds is to remember that debts incurred when you were still single should be settled individually. Meanwhile, conjugal or joint debts include housing, child care, maternity and childbirth, wedding expenses, and other forms of financing borrowed after the wedding.
✔️ Set Your Investment Goals
One of the best pieces of advice for a newlywed couple is to set financial goals. These goals will guide you on how much money you should save, earn, and expend on your investments.
For instance, do you want to retire in 25 years? Or do you want to save enough funds for your future kids to go to college? Whatever it is, you both should be on the same page when it comes to your investment goals.
The earlier you do this, the better. When you know what you want to achieve, you're one step closer to getting it.
✔️ Make Good Use of Money Gifts
Got cash as a wedding gift? Decide how much to keep in your savings account for emergency purposes. As a good start, save emergency funds equivalent to six to eight months’ worth of your salary. Put your emergency funds in an interest-bearing deposit account―don’t just keep it in a drawer or safe at home.
Aside from your emergency fund, you can also set a portion aside for future investments. Later on, you may want to purchase big-ticket items to furnish your new home. You can also check out investment platforms to help your money grow.
✔️ Determine Your Investment Risk Appetite
Different types of investments, such as unit trusts and mutual funds, have different levels of risks and returns. Determine your risk appetite and your investment goals to figure out how much to invest and what to invest in.
Risk appetite is the amount of risk and type of investment you're willing to accept. It’s different from risk tolerance, which is the specific maximum risk you can take when making an investment. Your risk appetite and risk tolerance make up your risk profile.
|Focused on price fluctuations||✅||✅|
|Prefers low capital growth||✅|
|Accepts maximum risks for maximum returns||✅|
|Considers highly volatile investment assets||✅|
|Willing to accept low investment returns||✅||✅|
|Accepts huge possible losses||✅|
|Accepts little to no loss||✅||✅|
|Wants to maintain original investment amount||✅||✅|
|Balances approach on risk and returns||✅|
Naturally, investments come with different levels of risks and returns. Investing has potential losses. As investors, know how much money you’re willing to risk.
Here's one of the best pieces of advice for newlywed couples to keep in mind—the greater the risk, the higher the return. But you and your spouse should always make decisions together.
✔️ Set a Separate Budget for your Investments
You don't want your investments to eat up a chunk of your savings or emergency fund, so allot a separate monthly or annual budget for investments. You can even open a different account altogether for your investment budget.
Consider opening a joint investment account or a joint investment brokerage account. This way, you can track your investment performance and earnings together.
✔️ Learn How to Manage Investments
If you want to learn how to invest, you need to read up on the pros and cons of various investment pieces, ways to diversify investments, and investment scams to avoid. You can also consult with an investment broker.
But remember that money isn’t the only asset you have. Investing time in your career can also pay off through pay increases or promotions. Discuss with your new spouse how much time you can invest in new courses or new responsibilities at work.
✔️ Choose Your Investments Wisely
Ready to dive in? Here are a few of the best investment plans for newly married couples:
👉 Real Estate
One of the best investment plans for newly married couples is to buy a house. Most couples consider this as their primary investment goal—not only to get their own space but also to take advantage of real estate’s price appreciation.
Buying a house is a huge step for newlyweds. Applying for a loan can help with such a big purchase. Most housing loans cover the cost of the residential unit and its improvement and/or construction, depending on your needs. Compare plans and choose the right product that matches your needs and financial capacity.
In fact, you can save up for your real estate investment even before becoming husband and wife. This way, you can move into your new house immediately after the wedding.
In addition, real estate investments can create regular income and cash flow. You can purchase property to rent out. Whether it’s a townhouse or a condo unit, you can earn additional income and extra savings through this asset.
👉 Family Car
Buying your own car is both an investment and a necessity. Since there’s no need to commute or spend so much on fares, a car can be beneficial for couples starting a new life after marriage. With your own car, you can travel anytime, anywhere with your loved ones, or use it for errands or emergencies.
👉 Life Insurance
You never know when a tragedy can turn your finances upside down. This is why the best advice for a newlywed couple is to invest in life insurance.
Insurance companies offer various types of insurance products to secure the financial benefits of your loved ones. Aside from benefits that arise from premature death, life insurance can add to your retirement savings, too. As the cash value increases, you can also use it to cover other urgent or emergency expenses.
👉 Health Insurance
With all the challenges to the country's healthcare system, plenty of Filipinos pay out of pocket for or get into debt over medical expenses every day. With health insurance, however, you can prepare for any critical illnesses. You can also go for a family plan to ensure protection for your children as well.
No matter the diagnosis, you and your family can rest assured that you have a safety net. It's definitely one of the best investments in the Philippines.
Variable life insurance (VUL) combines a permanent life insurance policy (meaning you're insured as long as you keep paying your premiums) and an investment component into one product. This is a good first step if you want to simultaneously protect your family and get your feet wet in terms of investing since professional fund managers will invest your money for you.
👉 Mutual Funds
As is the case with VULs, professionals take care of the important decisions when it comes to mutual funds. They pool funds from different investors and invest them in stocks, bonds, and other assets. It's a good start for couples new to investing.
If you're ready for a little more risk, look into investing in stocks. When you buy stocks, you essentially become a part-owner of a company. You then get to enjoy a portion of the company’s value and income.
If you can allocate a lot of time and effort into investing, then trading stocks can be the right move for you. Make sure to read up on the best time to buy stocks.
On the other hand, buying only blue-chip stocks and letting them earn dividends and stock splits is perfect if you don’t have a lot of time to actively manage your investments.
The best advice for a newlywed couple in terms of investing in stocks? Returns aren't always guaranteed, so invest only what you can afford to lose.
The wedding only marks the beginning of your life together as husband and wife. Now, you’re embarking on a new chapter: building your future together. The best part about this is you can learn from each other and grow together.
Now that you have some of the best advice for newlywed couples, determine your investment goals, choose the right investments, and carry your plans out together.
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