Hyderabad: Marriages are made in heaven, but have to be sustained on earth!
And on earth, there is Covid-19 pandemic, there is the new normal of social distancing and then there is the distress due to limited economic activities, which has a gradual cascading effect on everyone.
So, other than the nuptial effects of leading a happy married life, one has to show some financial prudence and do some planning.
From bank account details to smart investments, from assessing the financial situation of both partners to setting up of an emergency fund and then thinking about the far and near future, planning is the key.
Here are a few tips that will guide you and your partner to blissful life, financially. Read on and enjoy a financially happy married life.
Assess each other’s existing finances
To ensure you are not in for a rude shock when you come to know about your partner’s financial habits, it is best to openly speak about the money matters before you walk down the aisle. This will help you understand if your partner holds any existing loan or credit card overdue payments; it will also help you get an idea of the existing investments.
If the partner is in a debt situation, then openly talk about how he/she plans to repay the loan. Ideally, loan repayment and credit card debt clearance should be your priority.
Bank account details
Getting married does not mean that you can no longer have the right to manage your finances alone. You can have sole ownership of the money you hold and can open a joint account with your partner to take care of daily expenses or make joint investments in property.
Opening a joint account will help you keep track of each other’s finances and make it easy for both of you to jointly share the responsibility of the house. Decide on opening the join account before marriage to avoid financial clashes in the future.
Figure out each other’s financial goals
Before you tie the knot, you and your partner must be aware of each other’s financial goals. This is important as it will help you understand the direction in which the finances of your partner are heading and if you can contribute towards it or not.
For instance, if your partner plans to buy a house in the next 5 years and you desire to go on a trip to Europe in the next 7 years. Keep each other informed to ensure both of you are on the same page and can allocate your finances accordingly.
Set up an emergency fund
Another prerequisite to meet before you plan marriage is that you have an emergency fund. The money in the fund can be used to take care of various financial emergencies like unemployment, hospital bills, accident, and other events that can land you in financial trouble. You must have at least 6 months of your savings stocked up in your emergency fund.
Figure out the investment avenue
One of the common questions that most married couples have today is where they should invest. Depending on the investment horizon, risk and goals, couples can look to invest in avenues like PPF, mutual funds, insurance, and other investments. However, this has to be done keeping in mind the risk appetite of both the partners.
For instance, buying a TV or any other electronic item can be a short-term goal, buying a car or a house, planning for retirement or child’s marriage can be a long-term goal. Depending on the term of your goal, your income, risk-taking capacity, plan your investments.
While recurring deposits, fixed deposits can be considered a safe investment option; you can also look to invest in equities, which are likely to offer you better returns in the long run in comparison to other investment options.
Decide who will handle the finances
If you both are earning, then you can decide on who will handle what expenses. For instance, you can manage household expenses and your partner can handle loan EMI payments or vice versa.
Also, if your partner is the only earning member then you can decide on how the expenses will be handled and if you will have any say in it or not. It is necessary to have a chat regarding this to avoid any hassles in the future.
Buy health insurance
Even if you and your partner have employer-provided health insurance, you must buy a separate health insurance policy. This is because if you or the partner quits the job, the health coverage is no longer provided and the employment coverage won’t be sufficient.
Due to the rising health care costs and inflation, you must buy a health insurance policy. Buying a family floater health insurance plan offers coverage to you, your parents, spouse as well as your children.
The above tips will ensure that you don’t and your spouse doesn’t get into any matrimonial dispute due to financial issues. Remember, besides love and respect towards each other, financial planning is also an important aspect without which you won't be able to live happily ever after with your partner.
Invest in a term insurance plan
A term insurance plan is a type of life insurance plan that offers you financial coverage for a fixed period of time. This type of plan offers you high coverage at a low premium. In case of the death of the policyholder anytime during the tenure of the plan, the insurance company pays out the death benefit to the nominee. For instance, a term insurance plan of 1 crore for a 25-year-old, a smoking male would cost a premium of just Rs. 930/- per month.
(Written by Viral Bhatt. Author is a personal finance expert. Views are personal.)
Disclaimer: The views expressed above are solely of the author and not those of ETV Bharat or its management.
If you have any queries related to personal finances, we will try get those answered by an expert. Reach out to us at businessdesk@etvbharat.com with complete details.
