From love and respect to compatibility, a lot goes into making a marriage right. With the wedding season around the corner, if you plan on tying the knot, here are a few things you should consider to make it financially stronger:
Even before getting married, it is a good idea to know the financial life of your partner. “It’s important to know how the other half handles money before the marriage. Know their income and spending habits.
For all you know, one could be a savings kind and the other a big spender,” said Mumbai-based Nisreen Mamaji, certified financial planner (CFP) and founder, Moneyworks Financial Advisors.
In the West, many people run a credit check on their potential partner. “Just like a couple seeks family planning advice from a doctor before marriage, it is good to get a professional for your financial planning as well.
It’s good to have a discussion around money matters such as retirement goals and investment goals before you get married,” said Mamaji.
Don’t start on the wrong foot
Wedding day is all about creating beautiful memories and having the time of your life. However, a lot of couples tend to go overboard with their wedding expenses, said Deepali Sen, CFP and founder partner of Srujan Financials Advisers LLP. “It’s imperative to stay within the budget and not go for something you can’t afford.
One lavish day paid on credit would mean your account in married life opens in the negative.” Avoid taking any huge debt for the big day. “A lot of people are getting tempted to spend using zero equated monthly instalment (EMI) offers, credit cards and personal loan for the wedding day.
Then they spend years repaying the debt. Why start a foundation with debt?” Mamaji concurs. Ideally, you should start saving for your wedding expenses at least a year in advance.
If you don’t have enough money to take care of your wedding expenses, borrowing from family and friends may work as such a loan would be interest-free. However, if that is not an option, selling your investments is marginally better than taking on a huge debt.
Update your paperwork
Once you have tied the knot, it’s time to start completing the necessary paperwork. “It’s important to get all your financial documents updated wherever you think you want to add your spouse as a nominee —from life insurance to other investments,” said Mamaji. Then there are other financial documents such as the address.
You may have to change it across your investments and bank accounts. If the woman or the man has changed their name after marriage, then the change needs to be made on all financial documents. You would have to start with updating your permanent account number card and passport.
Decide your style
When it comes to a couple’s money management, there are two schools of thoughts. “If both the spouses are earning, they may want to maintain their individual financial identities. But some financial aspects need to be looked upon as a team.
For instance, you could equally contribute towards household expenses and family vacations even as you maintain your individual financial identities with separate accounts and investments,” said Mamaji.
This style works well for many couple who prefer to not merge their financial lives totally. “We have seen many cases where a woman’s money goes towards all expenses and the husband’s money goes towards investments.
If the marriage failed, the woman was left with nothing in her account.” If you have separate accounts, you can work it out by mentioning co-ownership on the papers. Some experts, however, prefer a different style where financial lives are merged and everything is done jointly.
There’s no wrong answer here. It depends on the couple. We recommend you seek the advice of a professional advisor who will be able to help you with budgeting, financial goal setting, investments and a financial road map for your journey as a couple.