There are many things to love about Lunar New Year celebrations. We get to wear new clothes, visit family and friends at their homes, and the food — the glorious food! Collecting hongbaos, or red packets, is fun too, but only if you are unmarried. If you are a newlywed, Chinese New Year may come as a minor surprise on the financial front.
As a newlywed, you switch from being a receiver to a giver when it comes to hongbaos. All of a sudden, you have to think about whom to give red packets to and how much to give, not to mention the cost of buying new clothes, transportation and that reunion dinner you may host in your brand new home.
To help you take your first steps, here are a few choice tips:
1. Plan Your Savings1
First up, and it’s a big one, you and your spouse need to have a monthly savings plan. Instead of paying for everything — from phone and internet bills to cable television and Starbucks coffee — first and then saving the rest of your salary, make it a point to save a part of your income before doing anything else.
One way to do this is to set up a separate joint bank account where both of you deposit part of your monthly income. Look at this as your long-term savings account, and the money is there to accumulate over time. It can even be your liquid emergency fund, which may come in handy during times of need.
2. Plan Your Investments
If you are wondering what you should do with the accumulated wealth in the aforementioned long-term savings account, the answer is this: invest. But how? Investing in stock or real estate can be tricky because newlyweds generally have many financial uncertainties. So, if you are looking to invest your funds wisely, start with an investment with relatively low or moderate risks, such as a certificate of deposit. According to business publication Forbes2, certificates of deposit are more secure than stocks, with interest rates much higher than a regular savings account.
Insurance savings plans are another great investment. If you are planning to have kids, childcare and schooling can be expensive. Look for plans that have been specifically tailored to provide guaranteed payouts at pre-determined educational milestones in your child’s life.
3: Plan Your Insurance3
Even as newlyweds, insurance plays a huge part in your family’s financial security. For example, should something unexpected happen to your spouse, you may find yourself under tremendous pressure to provide for the entire household. Life insurance helps you tide over these difficult financial times. During medical emergencies, health insurance may also help to cover mounting medical bills. And just because you are aged in your twenties, does not mean that you do not have to worry about retirement. In fact, it’s the best time to start thinking about retirement as you will give your investments more time to grow. Endowment plans, for example, allow you to decide how much and for how long you want to save towards your retirement years.
To learn more about the topic, contact your insurance agent for more information.