Love and Ledger: 6 Smart Investments for Newlyweds

Newlyweds have a lifetime of dreams ahead of them. You’re likely picturing moving into a new home with your spouse, traveling, starting a family or even launching a business.

Goals require a financial commitment, so make a few of these smart investments to grow your savings. You’ll watch your financial portfolio thrive because you made a few simple lifestyle changes.

 

1. Flip Real Estate

You’re not a stranger to the concept of taxes. They’re on your paycheck stub and grocery store receipts but also apply to capital gains from real estate sales.

Imagine buying a small house for $250,000. If you renovate and sell the home for $350,000, you’ve made $100,000 in capital gains. The capital gains tax applies to that $100,000, but the rates differ for married and single people.

Married couples pay a 0% capital gains tax if they make equal to or less than $83,350 and file taxes jointly. Instead of giving the federal government the 15% standard rate of your $100,000 profit, you’d get to keep all the money and invest it in your next property.

Learn to watch real estate markets for trending geographic locations and rising home prices. You’ll know which areas are better for investing because you’ll know where people are moving.

 

2. Install Home Upgrades

Married couples already living in a house can make home upgrades that provide significant returns on investment (ROIs). Some renovations, installations and replacements add value to your home or property. When it’s time to move, you could get most of your investment back because the listing price will be higher than when you bought it.

You don’t even need to take on extensive renovations to see this financial profit. Buyers will pay more for properties with new hardwood floors, cabinetry and carpeting. Modern interior design could also boost your home listing price.

Even replacing your front door can increase your home’s property value. Experts estimate a new entry door has a 74.9% ROI, making your property more valuable to new owners because it will last longer. Selecting a high-end model or one with extra security features could increase that percentage even more.

Pay attention to regional ROI trends, too. A homeowner in Pittsburgh stands to gain a 114% ROI on flipping a home compared to places like Baltimore, where house flipping results in a 72.9% ROI. It’s all about where people want to move and what they’ll pay to live in that region.

3. Meet With a Financial Adviser

A financial adviser can chart your way forward if discussing finances stresses you out. They’ll explain investment strategies like these to maximize your returns:

• Individual stocks
• Index funds
• Individual bonds
• Exchange-traded funds
• Commodities

After making your initial investments, you and your spouse can continue meeting with your financial adviser over the years. You might form new goals like sending your teenager to college with a trustworthy vehicle, and your adviser can find the fastest way to save for that big purchase.

Your adviser will track your annual progress and recommend changes if stocks or bonds lose value. It could reassure you to make those first investments for your shared future.

 

4. Open a 529 Plan

Are you hoping to get a college degree one day? You may want your kids or grandkids to get an education without worrying about financial stress. Either way, a 529 plan could be one of the smartest investments you could make this year.

The 529 is a savings plan with tax advantages for education goals. The Education Savings Plan covers things like tuition, student fees and on-campus housing costs. Starting a Prepaid Tuition Plan would mean your money could cover the same financial expenses at select schools.

Both plans include application and enrollment fees, ongoing management costs and annual account fees. However, diversified investing would increase your savings, and the tax benefits for contributions make 529 plans worthwhile for many people.

 

5. Rely on Multiple Investment Options

Sometimes, people don’t invest their savings because they don’t want to potentially lose everything. If you’re nervous, spread your contributions into multiple investment options.

A broker could help you and your spouse make more traditional investments with expert guidance and advice. Meanwhile, you could put smaller contributions into investment apps to learn how to make stock market profits on your own. You could use the extra cash to start catering big events or bake cakes for weddings. It depends on your dreams and what kind of business you want to open.

Robo-advisers also exist for people who want to independently invest. They use the latest financial algorithms to make recommendations without human involvement. They’ll automatically rebalance your portfolio if your investments start losing value and send updated reports based on their 24/7 monitoring.

 

6. Open a 401(k) Account

You and your spouse should talk to your employers to discuss their 401(k) plans. They might help employees open individual accounts and match your contributions. 401(k) accounts are for retirement savings. If you put $200 away each month and the company has a matching program, you’ll save $400 monthly and double your investments.

This opportunity doesn’t exist with every employer, so take advantage of it whenever possible. You can always roll your accounts over to a future employer if or when you change jobs.

 

Make Smart Investments as Newlyweds

There are numerous reasons and ways to save money for your future. Make a few of these smart investments to create the life you want for yourselves. You’ll save money for yourselves, future children and annual experiences like traveling with savvy investments like these.

 

Author Bio: Oscar Collins is the editor-in-chief at Modded, where he writes about a broad spectrum of topics. Follow him on Twitter @TModded for frequent updates on his work.

 

 

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