Getting married is one of the most important events in your life. There is so much to consider—the flowers, the jewel, the dress, the venue, the photography—the list goes on. Once you are back from the honeymoon, the daily life of marriage begins and also begins the challenges of managing the finances of a new household with your spouse.
In recent studies, many couples ranked financial matters as one of the most essential factors when it comes to happiness in a marriage. It is one of the key factors causing marital stress.
Money Compatibility
First thing to do is to check how compatible you and your spouse in money management. You may be conservative and your spouse may be aggressive. You may think that the best place to invest is stock market and your spouse may think bank FDs.
You should communicate your money management style to your spouse as well as you need to understand the money management style of your spouse. Both of you need to analyse the merits and demerits of money management style of each other and their own. Then you need to create a mutually agreed combined money management style.
This will be vital to you both throughout your married life to help minimise stress from disagreements about money.
Update Your Records
Change of Address: You could have shifted to your in law’s place or both of you could have shifted to a new place. So you need to make necessary change of address requests to your bank accounts, demat accounts, mutual fund accounts and so on.
Change of Name: Generally the women change their initial or the last name after their marriage. This need to be updated in all the accounts.
Change of Nominee/Beneficiary: You may like to change the nominee to your spouse for the investments, accounts, insurance policies which you have taken before marriage.
Changes in Will: You also need to create a will if you have not created one so far. If you have already a will, then you need to revisit your will now.
Assign Financial Responsibilities
You need to decide, who is going to take care of day to day money management i.e. paying bills, monitoring investments and the like.
Develop a Family Budget
You need to create a workable budget for your family that gives extra money and life. This budget should take into account both of your income, the individual expenses and family expenses.
Create an Emergency Fund
You need to accrue savings for some surprise situations like loss of job, break in job or sudden expenses like a major repair to your car or house. Generally the emergency fund need to be in the range of 3 to 6 month of family expenses.
Insurance Coverage
So far, you may not be having any dependents or less number of dependents. You could not have considered life insurance or take for a less coverage. This is the time to look at life insurance seriously. When I say life insurance, I am talking about only term insurance and not the ULIPs. Ulips have been rejected by the market for its heavy front loaded charges.
Debt Payoff Plan
Suppose, if you are already on debt, you need to create a debt payoff plan. This plan will help you in getting out of debt and staying out of debt.
Spend Smarter and Save More
Spending habits will be different from individual to individual. Both of you need to align your spending pattern and learn how to spend smarter and save more.
When both are working and not having kids yet is the stage you have more income, especially more disposable income. Couples need to be careful and avoid overspending and save as much as possible during this stage. This will ease you out when you have more expenses at the later stage of your life.
Set Combined Financial Goals
Both of you need to spend some quality time discussing about the financial goals like buying a home, international vacation and the like. This is the right time to plan your retirement.
Chalk out a Financial Plan
Once you have set the combined financial goals, then you need to chalk out a financial plan to achieve these goals. You need to take into account growth rate of your income, inflation on your expenses, time set to achieve various goals, rate of return expected from various investment options.
This is slightly a complicated procedure and this plan need to be review periodically. That is why it is better to outsource it. You may seek assistance from a professional financial planner.
To financially succeed, it needs teamwork from both the partners. As a newly married couple, you have enough time and plenty of opportunity. I am sure that with this checklist and the guidance from financial planner, you will reach your life goals together.
The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.
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