Advice for Newlyweds

Dear Catherine and Eric,

Congratulations on becoming man and wife. Mom and I could not be more excited for you.

Thanks to both of you for asking for our opinions on certain things. We will only provide when asked and only in the context that you ask them. Please put us back in the appropriate parental box when the questions have been answered and don’t let me answer without first being asked.

Your first question dealt with what should be one of the first financial priorities of all families—the emergency fund.

You cannot predict an emergency. It happens to everyone. The car breaks down, the air conditioner goes out, the ice machine breaks. You could find yourself in credit card debt or a really bad financial jam early on without a fully funded rainy day fund. There is very little that can add more stress to a marriage than a financial problem. So here we go:

• Make savings a priority– It’s a necessity, not a luxury. It is your way of dealing with what the world sometimes leaves on your doorstep or under your hood.
• Know how much to save- Get the first $1,000 saved. Do not do begin any other types of savings plans until that minimal goal is accomplished, then build on that. Advance then to three to six months of your income in an emergency fund. Like your marriage, it will take time and discipline and love and attention to make it happen.
• Decide where to save– This money is for you in the time of need. It is not an investment. Go to the bank or credit union and open a money market or an add-on CD account so funds are accessible in an emergency.
• Find money to save– You may need to work at trimming some things in your life such as cell phone plan or cable TV features, or eating out. You may even need to drive your current car another year to make it work but with a sharp eye on your budget you will find the funds to save.
• Automate your savings– Allocate a specified amount to save automatically each and every pay period. You will never miss it if you do not see it.
• Celebrate your accomplishments– Apply advice 1-5 and you will be pleased with your results when you celebrate your first anniversary together.

Remember, everything that we share with you is because either we did it ourselves and it worked out well or we did not do it and wished that we had.

We love you.

Mom and Dad

Tim Eichhorn is a Senior Financial Advisor with Rather & Kittrell. He can be reached at [email protected]