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Knight Kiplinger’s Advice for Newlyweds

Posted by McDonald & Osborne Posted on Oct 13 2015

Each month, Kiplinger Magazine’s Editor in Chief, Knight Kiplinger writes a column entitled “My Point of View”. This month he offered newlywed couples 5 pieces of advice:

  1. Don’t jack up your lifestyle
  2. Live on one salary, save the other
  3. Max out retirement savings
  4. Get some insurance
  5. Enjoy life

Marriage is obviously a major life-changing event – more often than not occurring in the earlier years of one’s life. We have all seen young couples (or singles for that matter) spend to their hearts content on new cars, homes, furniture, vacations, etc. and fall majorly behind the eight ball before they have even really gotten started in their new life. And before you know it… kids, the most expensive blessing on earth.

Although two cannot live as cheaply as one, combining households can help save money on items such as rent, home-cooked meals, and transportation. As Mr. Kiplinger states “… it’s like found money. This surplus income can make you feel as if you’ve hit the jackpot”. His advice is simple: Leave your spending as is (or ideally, trim it a little). He suggests that if you can, live on one spouse’s salary while saving the other (or at least a large portion of it). Saving often and early can make life’s unexpected bumps in the road much smoother (loss of a job, unpaid maternity leave, further education).

Young people (newlyweds and single alike) also don’t often give much consideration to the thoughts of retirement. Search the web and you will find article after article about the lack of retirement savings accounts in America today. Although the issue of whether Social Security will be there for you or not is debatable, I think most would agree that the check you will receive from the government one day will not provide for the kind of retirement you dream about today (see our articles Social Security Benefits < Contributions and Social Security Overview for more related to Social Security).

Insurance is also often overlooked by young couples. While you can probably do without life insurance for a while (if you both are working and don’t have any children yet), protection against catastrophic medical bills and long-term disability can be vitally important. The loss of income associated with disability and injury can be a huge challenge if you are not prepared.

My favorite bit of advice Knight offer’s is #5 – Enjoy life. I know what you’re thinking – living within a budget, saving for retirement, and buying insurance doesn’t sound like a real thrill. And no, it probably isn’t as enjoyable as the temporary satisfaction associated with an exotic vacation or new big-screen TV charged to your credit card. But living within your means does provide security and better sleep at night. Plus, the two of you just might be partying it up one day while those who weren’t as wise are just trying to scrape by on their social security checks in retirement.

Stephen Osborne
Accountant
sosborne@mo-cpa.com