Congratulations on your marriage! While you might have discussed everything with your partner before marriage, money would be off the table. Financial intimacy is what you should consider!
Though you may find it unromantic, the truth is that money can make or break any relationship. As per the survey conducted by the Economic Times in 2015, spending habits were one of the main causes of disagreement among couples.
As you have started a new chapter, it is time to talk about money to avoid conflicts later. Tips are here to give your financial (or marriage) partnership a good start:
1. Start Talking About Finances
It is crucial to craft your financial plan in such a manner that it suits both partners. This is possible only if the couple discusses their present financial liabilities, like loan EMIs, credit card payments, and other expenses. It is important to understand that you no longer remain a solo traveler; one more person has joined you on life’s journey. Therefore, get an idea about each other’s financial state soon after the wedding rather than wait until things turn awry.
2. Set your Goals
Discuss your financial goals in-depth once you understand each other’s financial state. This may include your aspirations, change in lifestyle, major investment (like home, car), foreign travel, etc. Have an open discussion with your partner to prioritize these goals.
3. Create a Monthly Budget
With your goals set, frame an optimum family budget accordingly. Identify your expected expenses and chart ways to manage them judiciously. Allocate a fixed amount towards your living expenses, medical expenditures, investment, insurance, etc. Unexpected expenses, like doctor’s appointments, vehicle maintenance, special occasions, etc., should be considered while creating a budget.
Make sure enough money is kept aside for personal needs. Nobody would be interested in giving the count of every penny spent. Up to 5% to 10% of each person’s salary should not be calculated. If your spouse wishes to surprise you or wants to help their parents financially, this spare money will help.
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4. Build an Emergency Fund
Like an ant saves for a rainy day, you should also build a contingency fund for emergencies like job loss, medical crisis, etc. Try to create a contingency reserve fund equal to your six-month salary. Keep raising your contribution towards your rainy-day fund in proportion to the increase in your paycheck. However, ensure your amount is in cash or near cash assets, like bank fixed deposits.
5. Update Nominee Details
Update your current investment and insurance documents, including corporate insurance policies, to make your spouse a joint holder or a nominee.
6. Track Your Budget
A couple should follow the budget, find gaps, and make necessary changes if required. Monitor your budget and expenses for a few months and see if you can stick to them. Make sure to do a thorough scrutiny to find out where you are lacking.
7. Buy Useful Insurance Covers
Now you are married and have an added responsibility, purchasing the necessary insurance policies to deal with life’s uncertainties is essential. The first and most important insurance is an online term insurance policy, offering financial coverage to your spouse after death. Then, some term insurance policies cover critical ailments like cancer, chronic kidney ailment, heat issues, etc. These policies make a payout if the policyholder is diagnosed with an acute condition. The payout can be used to meet both medical and household expenses.
Next, use a family floater health insurance to cover yourself and your spouse. Moreover, most health insurance plans cover maternity only after a waiting period of 2 or 3 years. If you buy a health insurance policy early, you can use it for family planning after a few years.
- Start Investing: Saving money is a nice idea, but it would be wonderful if your money works hard for you. Invest in long-term avenues like equity-linked mutual funds, PPF, ULIPs, etc., and generate enough returns to beat the inflation impact.
- Start Retirement Planning
Start working as a team towards a financially secure future!
You might be wondering why we are asking you to consider retirement so early in your life. Time flies so fast, and years will pass before you realize it. You are already late, as you should’ve started investing for retirement when you got your first salary. Planning your retirement together in case you are working is always good. Also, if one of you wants to retire early, timely retirement planning would make it feasible. You can start retirement planning by investing a small amount towards equity funds, giving you high long-term returns. Keep increasing more as per the hike in your income!
