So you have just tied the knot and might still be basking in the
excitement of your special day. But once your honeymoon is over, it's time to
sit down and find out what each other's more substantive financial goals might
be. Because one of the most critical changes you encounter after getting
married is the financial reality. Single income can convert to double, but so
can the debts; buying assets may become easier, but insurance liability could
increase; your spending or saving habits could be a disastrous mismatch, but
your long-term goals may be the same.
While it's not easy to find a snug financial match, it's not impossible to home in on feasible solutions either. These can work for or against you depending on how you deal with them. You not only need to harmonize the different financial ideologies and habits that you bring into a new relationship, but also streamline your individual finances in a way that you can work towards the combined goals. . Here we take a look at some of the important things newly-weds need to consider while preparing a financial plan:
1. Reveal your cards
My money, your money;
everybody is possessive about his or her money. But as a couple, this equation
changes. It’s important to talk about
your finances; preferably even before you get married. So be it your income or
expenses, savings or debts, liabilities or assets, proclivities or aversions,
habits or cravings, lay them all on the table. List out your outstanding debts
like car loans or credit card bills and assets like jewellery, real estate or
stock investments. Talk about your attitude towards money, your values, what
you plan to do with it after marriage. While you should
retain your individual bank accounts (this is especially necessary from the
point of view of convenience in paying tax if both the partners are working),
you need to open a new joint bank account with an initial deposit equivalent to
the wedding receipts in it.
2. Managing Household expenses
Both the partners need to work and to arrive at any conclusion,
the newly weds should take into account all the things impacting their life, as
there are lots of things and issues which determine this factor. Another
important thing to do is to make a list of household expenses (regular as well
as one-time) that you expect to incur. You are just beginning to share your
life with your partner. So it is advisable to add a bit extra to the initial
estimates.
3. Frame a
budget, fix the goals
If, after the revelations and discussions, you
have not already set your goals, it would be the next logical step. Frame your
short- and long-term goals in accordance with your priorities and earning
capacities. So whether you plan to buy furniture, car or houses, establish a
time frame. It is imperative to describe each
long-term goal in financial terms in black and white and they should be
reviewed atleast once a year. You should also discuss the financial implications of having a child,
savings required for his/her education and marriage, vacations and, of course,
your retirement. It's never too early to start planning and saving for such
goals because the compounding effect of investments works in your favor.
4. Risk Management
After marriage one needs to review one's coverage to take adequate
life cover in a bid to protect one's spouse and family from the risk of
premature death. If the spouse is working, then her income earning capacity
also needs to be protected and if she is a housewife, she needs to be given
adequate protection which could safely tide her over any financial crisis that
might occur in the absence of the breadwinner.
As the person matures and gets married, he/she needs to take an
adequate life cover to protect his/her spouse and family from the risk of
premature death of the breadwinner. At this time some critical illness cover is
also required, so as to cover one against any mishappening which may lead to
non-performance of job for some time. Medical treatment is getting more and
more expensive thanks to the scary inflation. Your health is your most
important asset. Buy health insurance when you don’t need it so that you can
have it when there is a need.
When it comes to
the matters of money, investments and your dreams and goals, two people may not
have the same opinion. At times like these, it is best to visit a certified
financial planner and recognize the best tools to invest your resources that
will help you realize your dreams. Your certified financial planner can give
you unbiased opinions and tools, which will work to fulfill your dreams. All
the best. Stay Blessed!!