It took a while for Delhi-based Kirti Goel, 28, who is self-employed and financially independent, to realise that she now needs to manage her finances jointly with someone. That is, with her husband, Sishir Goel, 29. The couple had got married in 2017.
“I didn’t know up until then if Sishir was risk-averse or likes taking risks in his investments, how he spends, and so on,” says Kirti. Just two months into their marriage, and Sishir realised that they needed to talk.
Kalpesh Ashar, founder, Full Circle Financial Planners and Advisors is of the opinion that such conversations should be started when the couple starts courting and is serious about planning a life together.Shilpa Wagh, Chief Financial Coach at Wagh Financials says, “Have a financial plan either before wedding or immediately after settling down post the wedding.” Financial planners too are busy sensitising youngsters these days as the big-fat Indian wedding season gets underway.
Build a contingency fund
As with an individual’s financial plan, it’s crucial for a newly-married couple to have an emergency corpus. Make sure you and your spouse have one. A contingency fund is the foundation of any financial plan because it is a corpus for emergencies such as a job loss. Its presence in your financial plan ensures that you do not withdraw from your long-term investments and allow them to grow instead. Such funds should be parked in fixed/low-risk instruments such as bank fixed deposits and liquid funds, so that you can access the same as and when required.
Delhi-based Kumud Ratra, 26 who plans to marry her fiancée Kashish Malhotra, 28, is fortunate to have got a small push heading into her marriage. Instead of a grand reception, they have decided to hold a small ceremony, with only their immediate family members being invited, and save cost. “We’re saving approximately Rs 10 lakh and will now use part of the saving to build an emergency corpus and some near-term goals. We’ll put it in a fixed deposit,” says Kumud.
Kalpesh of Full Circle Financial Planners advises his young clients to share details of their earnings with one another, discuss spending habits, existing liabilities and if they wish to study further in future. The latter, he adds, can dent their regular monthly income, for which the couple should plan well in advance.
Even though the money goals of a couple should be in unison, it’s vital that married women work towards financial independence, simultaneously.
Discuss joint goals
It’s important that the financial goals of a couple are in sync. But it’s okay to have individual ambitions of how they want to spend their money; but common goals also need to be executed jointly. For instance, the Goels want to launch a start-up, sometime in the future, for which the couple is working together on the financial aspects.
Tanvi Goyal, Financial planner and Founder of financial advisory firm Wealth Aware says, “Now-a-days, couples want to keep some of the goals separate from joint goals; these include expanding a business or initiating a start-up; brides also want to build a corpus for their parents’ medical emergencies, etc.” You must plan for such needs by precisely understanding the time-frame of goals and corpus required.
Honesty is important, says Kalpesh. “Many husbands don’t feel like disclosing their real income due to various reasons and they sometimes try to dissuade the wife from spending more, or sometimes just to inflate their own ego. Some husbands also take financial decisions without consulting their wives. They think their partners won’t understand financial products. This is a fallacy,” he says.
Mrin Agarwal, financial educator and founder of Finsafe India says, “Disclosing all the assets and liabilities prior to the wedding keeps the surprises away. Also, this aids in preparing an asset allocation strategy for investments according to set goals immediately after the wedding.”
Don’t let liabilities burden marriage
It’s not just that the assets that ought to be synchronised in a marriage. Loans and liabilities can bring a lot of stress. Financial planners suggest that if one of the spouses is serving a loan, disclosing it upfront before the wedding would be ideal. Before heading into the marriage, try and pay off education, vehicle and personal loans. Focus on clearing your outstanding personal loans or credit card debt before marriage since interest rates are high. Beginning married life without the burden of debt would be ideal for couples.
After marriage, make sure you don’t give loans to friends and family. You might think it’s innocuous, but such behaviour if left unchecked, can create rifts.
Purchase adequate insurance cover
In the hustle and bustle of life, Sishir Goel procrastinated reviewing his existing life insurance policy after he got married in December 2017. This is a common problem with many couples. When the Goels consulted a financial advisor in December 2018, they got to know that the adequate life cover needed was Rs 2 crore and Sishir only had few traditional life insurance policies with life cover of Rs 25 lakh. So, Goel immediately bought a term plan with adequate life cover.
Both the husband and wife must buy pure term covers. These cover the financial loss caused due to a partner’s untimely demise. Next, buy a health insurance policy for the family. The thumb rule is to start early and healthy; insurance companies will be more than happy to offer policies to couples.
Moneycontrol’s take
There are many aspects that go into making a harmonious marriage. Money is one of the most crucial parts. Both the partners need to be financially independent, but there needs to be harmony and understanding in how their individual and joint money boxes are handled.
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