With marriage season around the corner, we would like to remind you how marriage is all about combining forces, and how large a role your finances play in it. Keeping that in mind, we’ve put together a financial checklist for couples looking to tie the knot.
With wedding season around the corner, we would like to remind you how marriage is all about combining forces, and how large a role your finances play in it. After all, money has the power to bring you domestic bliss and help achieve your dreams.
While some couples stick to managing their finances in their own individual ways, we think if managed smartly (and together), money can help you bond better with your spouse. While managing money right can help strengthen your bonds, mismanaging it can also affect your relationship negatively.
Just like any other aspect of a relationship, this front might need some work as well to ensure compatibility.
To make your job easier, we’d like to share a financial checklist to handhold soon-to-be-married couples through their planning before they walk down the aisle to make sure they take the right step.
1: Share Current Financial Status With Transparency
If you haven’t started discussing your finances yet, we recommend you get to it soon, since it is important to know each other financially before you go ahead and tie that knot. How much you earn, and how much from what you earn is spent or saved, is something that needs transparency right from the time you finalise your wedding.
If you fail to open up early enough, and understand each other’s spending and investing patterns, it will reduce mutual trust, which would be damaging to your relationship in the long run.
Transparency over money matters will also help your partner know how you like money to be managed.
Additional Reading: Financial Blunders To Avoid In A Marriage
2: Shortlist Your Mutual Goals
Once you have a fair idea about each other’s financial status, chalk out your short-term, medium-term and long-term financial goals. While your short-term goals could be all about planning a holiday, your medium-term goals could help you buy a vehicle or finish your higher education. Alternatively, long-term goals could be aimed at buying a house or building a retirement corpus. If you are planning an early retirement, it’s important you put your minds together to make that happen. Your immediate mutual goal could be to plan your wedding by tailoring a budget through shared expenses.
We also think you should not sacrifice your personal goals in order to make space for your mutual goals. So, make sure you split your money well between the two.
Additional Reading: Retirement Planning For Everyone
3: Have A Post-marital Expenditure Plan In Place
When you are single, your expenses are usually unplanned, although your earnings are limited. While you might be overspending on certain unnecessary things, your Savings Account might be lying empty. We suggest you set your priorities right once you are married by getting rid of your bad habits and sharing responsibilities based on your incomes. Also, divide chores such as keeping track of Insurance premiums and paying EMIs to reduce the burden on one person.
Understand each other’s spending habits and plan ahead on how you want to deal with your expenses and investments. The money you pool in together should be in proportion to your individual earning potential.
Additional Reading: Creating And Managing A Joint Account With Your Spouse
4: Seek Services Of A Financial Advisor
To meet your goals in time, it’s important you pick the right investment instruments. We suggest you rope in a financial advisor if you are unable to chalk out a plan by yourself. A good financial planner will understand your short-term, medium-term and long-term goals, and help you attain them through suitable investment options.
For example, if you are looking at long-term goals, your planner will recommend you invest in risky assets such as equities or stocks. For medium and short-term goals, you might be advised to stick to debt funds. A good financial planner will ensure you are well protected by investing in Life and Health Insurance plans.
Additional Reading: 10 Things You Should Ask Your Investment Banker
5: Maintain A Financial Budget And Update Nominations
The sudden financial transition might be hard to handle initially, which is why we say make a budget and try to stick to it. You can also use some debit and credit tools to break down your expenses per category. Do revisit and revise your financial asset allocations at regular intervals to suit changing incomes and expenditures. Once you’re married, you would also want to update your insurance and investment plans to reflect your marital status, as well as any addition of dependents. You may also want to update your nominee name on your insurance policies, accounts, and investments.
Additional Reading: Your Guide To Financial Compatibility
While we know money matters are tricky, we suggest you start off on the right foot by being honest and transparent about your financial status. If you are able to come up with a stable, combined financial plan that works for both of you, and you manage to stick to it, we know you will make it through whatever comes your way.