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| From budgeting to insurance the ultimate financial guide for newly married couples |
Financial security is a crucial issue for any couple after marriage that cannot be ignored. If you are about to tie the knot or have recently gotten married, this article is a must-read.
After marriage, when two people pledge to share the joys and sorrows of life together, they should be careful in managing their financial matters from the very beginning to ensure a secure future. Marriage brings with it many new responsibilities that must be shared. Therefore, both of you should work together on financial management, sharing expenses, and investment plans. Proper financial planning from the beginning is crucial for a happy couple.
Transparency is essential
Some couples lack transparency in financial matters or are hesitant to discuss this issue. Both of these situations can be detrimental not only to financial management but also to your relationship. Therefore, if you had any savings or investments before marriage, have outstanding loan obligations, or have multiple credit cards, be sure to inform your partner about them.
Communicate openly with each other about all matters, such as holiday planning, business planning, family planning, future childcare and playschool expenses, car and home purchases, and retirement planning. Assess how you can find a middle ground and mutually agree on a goal that satisfies both of you.
Create a family budget
You should work together to create a budget for your family. Aim to ensure that your family's fixed household expenses consume no more than 50 percent of your total income.
After marriage, you should definitely open a joint bank account where you can both deposit money and use it to pay for joint family needs, such as grocery shopping, utility bills, paying domestic help, etc. Keep a complete record of your monthly spending and savings.
division of responsibilities
Now the question arises: how should a couple manage their financial responsibilities after marriage? To do this, first, calculate the investments and debts you both made before marriage. Then, consider the income, expenses, investments, savings, and insurance premiums you will receive after marriage.
Then decide how you will manage your financial responsibilities. Where both husband and wife are working, the one with higher income should bear the expenses like electricity bill, payment for any expensive shopping, travel expenses etc. On the other hand, the one with limited income should bear the kitchen related expenses. Where the wife is a homemaker, the traditional method proves to be ideal that the husband should regularly give a fixed amount to the wife every month for running the household expenses. In such a situation, it is the responsibility of the wife to spend frugally, so that she can save some part of the same amount for emergency situations. During the Corona period, this method proved very useful for those who became unemployed.
Make sure to create an emergency fund
Money can be needed at any time in life. This emergency could be related to job loss or a serious illness. Establish an emergency fund for such needs. Gradually accumulate a sum equivalent to six months' salary in this fund. Continue depositing a small amount each month so that you can support your family in the event of a serious illness or job loss.
Insurance policy is necessary
Having a solid health plan is crucial. Therefore, first, you should purchase a health insurance plan for both of you. Insurance companies also offer family floater plans, which are relatively inexpensive.
It's best to buy a long-term insurance plan. If you buy a term insurance plan of up to ₹1 crore upon marriage, you'll pay a much lower premium because you're still young . Keep in mind that insurance is essential for both husband and wife. Experts believe that a person should have 10 to 15 times their annual income as life insurance cover. If this isn't possible, consider purchasing an insurance policy , even if it's at a lower premium.
Long term investment is beneficial
If you 're thinking about buying a bigger house or car, or starting a new business in the future, it's important to invest early. The sooner you start investing, the better, because with the help of compounding, your funds will grow rapidly over time. Let's explore some of the best investment options:
House or Flat: If you've decided to buy a house soon after marriage, that's a good idea. The sooner you buy, the cheaper it will be. Furthermore, you'll also be free from home loans much sooner. Just be sure to ensure that your wife applies for a home loan jointly with your husband, as this will benefit both spouses from income tax exemptions. Furthermore, most banks offer loans to women. Therefore, women should be the primary applicant and their husbands co-applicants.
Mutual Funds: Mutual funds are considered an excellent investment vehicle for the long term. Therefore, both of you should definitely invest in mutual funds. Investing in a tax-saving fund will also help save you taxes. By the time you reach middle age, you will have accumulated sufficient funds to invest.
Public Provident Fund: The Public Provident Fund (PPF) is also a great long-term investment option, offering excellent returns and guaranteed returns due to its government-funded scheme. You can deposit up to $1.5 lakh annually, with a 15-year lock-in period.
Some important tips :-
1. Make sure to get your marriage certificate made, because it is always required in investment related work.
2. Make a clear list of all your movable and immovable assets and financial responsibilities.
3. Be sure to open a joint bank account.
4. Keep your debit card PIN number, net banking password, or other important confidential information on paper and secure it in a file. Your spouse should also know it.
5. Make sure to name your spouse as a nominee in your bank account, loan and any investment.
